iPass (IPAS) Misses Q4 EPS by 1c; Concludes Review of Alternatives

iPass (NASDAQ: IPAS) reported Q4 EPS of ($0.06), $0.01 worse than the analyst estimate of ($0.05). Revenue for the quarter came in at $17.2 million versus the consensus estimate of $17.48 million.

The company also announced that is has formally concluded the strategic alternatives review process that was initiated in September of 2014. The company declared its commitment to remain independent and announced Gary Griffiths as chief executive officer and Patricia Hume as the newly established position of chief commercial officer. Mr. Griffiths will replace Evan Kaplan, who will step down as CEO, effective March 6th.

iPass announced the conclusion of its M&A exploratory process announced on September 8, 2014. "Together with Blackstone, Advisory Partners LP, we did a detailed and thorough examination of the strategic alternatives and have concluded that it is in the best long-term interests of the company to end this process now," said John Beletic, chairman of the board. "We always remain open and willing to engage in these types of discussions. While we will not be sharing specific details of this process, the most important learning we've taken from it is that it was too early in the development of our Open Mobile Platform and the broader market opportunity over the long term to attempt to sell iPass at this point."

iPass also announced that Gary Griffiths, currently a member of the iPass board of directors, will become president and CEO effective March 6, 2015. Griffiths was co-founder and CEO of Trapit, Inc., a leading provider of SaaS-based applications for sales and marketing automation. A 35-year veteran of the high-tech industry, Griffiths has led some of the Web's most innovative companies. Prior to founding Trapit, he was president of products and operations at WebEx, acquired for $3B by Cisco.

"Wi-Fi is a growing opportunity, and the iPass Wi-Fi network is well established and poised for growth," said Griffiths. "iPass' most important initiative is to drive compelling Wi-Fi adoption on our OpenMobile (OM) platform. The growth in Wi-Fi users, usage, and sessions over the last 18 months illustrate the benefits that our SaaS application provides our enterprise customers and OEM partners. Our focus in 2015 will be to secure the right products, pricing and packaging to grow top-line revenue for OM, while tightening operations and expenses in an effort to accelerate the time to reach profitability."

In addition, Patricia Hume joins the executive team as Chief Commercial Officer, where she will be responsible for all customer-facing activities. Throughout her 35-year career, Hume has held a long list of notable positions, including Chief Revenue Officer at Convio Inc., which was acquired by Blackbaud, SVP Global Channels at SAP AG, Group VP of Avaya's, SMB Division, CEO of VerticalNet, and numerous senior management positions during her 17 year service with IBM. Her most recent position was as President of Trapit, Inc.

"We believe Gary and Patricia will bring new energy and excitement to iPass as we continue our ramp to $100 million and beyond in OM revenues," said John Beletic. "Both Gary and Patricia have meaningful experience in relevant companies and in recurring revenue businesses."

Evan Kaplan, who has served as CEO and President since November of 2008, will be working closely with Gary and Patricia during the transition. "In his time as CEO, Evan transformed the company, developing our core Open Mobile business to its current $60m+ annual run rate, growing our network footprint from 100,000 locations to today's 18 million, bringing our Unity business to profitability and successful divesture, all while weathering significant declines in our legacy business," said Beletic. "We thank him for all the work he has done."

Finally, iPass announced its intention to appoint Michael Chang to the board of directors. Mr. Chang brings expertise in product innovation and digital marketing. He is currently President and CEO of YesVideo following a successful tenure as CEO of Greystripe, which was acquired by Valueclick. iPass also plans to add up to two new directors by the Annual Meeting in June. "With the addition of Michael Tedesco in October 2014, and Michael Chang now, and the prospect of two new directors, four of the six independent directors will be new to the company over a ten month span," said Beletic. "I will be soliciting input from our shareholders for their recommendations for the new directors."

For earnings history and earnings-related data on iPass (IPAS) click here.

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