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News Release
[LUCENT TECHNOLOGIES LOGO]
Mary Lou Ambrus
908-582-3060 (office)
908-707-1147 (home)
[email protected]
Bill Price
908-582-4820 (office)
973-515-5038 (home)
[email protected]
LUCENT TECHNOLOGIES' BOARD OF DIRECTORS NAMES
HENRY SCHACHT CHAIRMAN AND CEO
-- Richard McGinn steps down
-- Company lowers guidance for first fiscal quarter 2001
FOR RELEASE: MONDAY, OCTOBER 23, 2000
MURRAY HILL, N.J. - Lucent Technologies' (NYSE: LU) Board of Directors
named Henry Schacht as the company's chairman and chief executive officer today,
replacing Richard McGinn.
Schacht, 66, returns to the role he held with Lucent from 1995-1997. He
will work with Lucent's senior leadership team to manage the company's
day-to-day operations and is initiating an executive search for his successor as
chairman and chief executive officer. Lucent has ended its previously announced
search for a chief operating officer.
In a meeting this weekend, the board reviewed Lucent's recent
performance and outlook for the current quarter and determined that an immediate
change in leadership was necessary. The company said that it expects pro forma
revenue from continuing operations(1) for the current quarter to decline about 7
percent and pro forma earnings per share from continuing operations to break
even. The company also said it expects
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sequential improvement in results from operations each quarter for the rest of
the fiscal year. This guidance does not include the effect of plans for a
business restructuring charge.
Lucent will be moving the release of its fourth fiscal quarter 2000
results, previously scheduled for tomorrow morning, to after the close of the
New York Stock Exchange at 4:00 p.m. today. The quarterly earnings conference
call will now take place today at 5:00 p.m. (EDT) and be broadcast live over the
Internet at [url deleted].
"This was a difficult decision made after considerable deliberation,"
said Franklin Thomas, Lucent's senior director, representing Lucent
Technologies' board. "Rich has made significant contributions to Lucent over the
past five years as he focused the company on the growth markets and key
technologies that would ensure its future prosperity. However, the board felt a
different set of skills was required at this point in the company's life."
"Lucent competes in one of the world's leading growth markets, and
remains a company with world-class products, people and knowledge of networks,"
said Henry Schacht. "Our issues are ones of execution and focus, and they are
fixable."
"I look forward to working with Lucent's senior leadership team and all
the very talented people of Lucent on this turnaround. Their hearts and talents
will be critical in returning the luster to Lucent Technologies' performance and
reputation. I have seen Lucent's people accomplish incredible feats before, and
I know we are up to this challenge," he concluded.
The company confirmed that it would move ahead with plans to spin off
the microelectronics business and sell its power systems business.
Schacht retired as chairman and CEO of Cummins Engine Company in 1995,
after 31 years with the company. He was then named chairman and CEO of Lucent
Technologies, which was spun off from AT&T in 1996. He stepped down as CEO in
1997 and retired from Lucent as chairman in 1998.
This past March, Schacht was named chairman of the Lucent spinoff,
Avaya, Inc. He will continue as a member of the board of directors of Avaya, but
will step down immediately from his position as chairman. "I am glad to have
played a part in launching Avaya as an independent company and I look forward to
continuing as a member of the board as the company builds a strong foundation
for future growth," said Schacht.
Schacht also serves on the board of directors of Johnson & Johnson
Corp., the Chase Manhattan Corporation and Chase Manhattan Bank, N.A., The New
York Times Company, Knoll Inc., and the Aluminum Company of America (ALCOA). he
is an honorary trustee of the Brookings Institution and a trustee emeritus of
the Culver
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Educational foundation. Schacht is a member of The Business Council. In
addition, he is a trustee of the Metropolitan Museum of Art, a Fellow of the
Academy of Arts and Sciences and a member of the American Philosophical Society.
Schacht graduated from Yale University with a bachelor's degree in 1956
and from Harvard University with a master's of business administration degree in
1962. In addition, he holds honorary degrees from DePauw University, Trinity
College and Yale University.
Lucent Technologies, headquartered in Murray Hill, N.J., USA, designs
and delivers the systems, software, silicon and services for next-generation
communications networks for service providers and enterprises. Backed by the
research and development of Bell Labs, Lucent focuses on high-growth areas such
as broadband and mobile Internet infrastructure; communications software;
communications semiconductors and optoelectronics; Web-based enterprise
solutions that link private and public networks; and professional network design
and consulting services.
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This news release contains forward-looking statements based on current
expectations, forecasts and assumptions that involve risks and uncertainties
that could cause actual outcomes and results to differ materially. These risks
and uncertainties include price and product competition, dependence on new
product development, reliance on major customers and suppliers, customer demand
for our products and services, the ability to successfully integrate acquired
companies, availability of manufacturing capacity, components and materials,
control of costs and expenses, international growth, credit concerns in the
emerging service provider market, general industry and market conditions and
growth rates and general domestic and international economic conditions
including interest rate and currency exchange rate fluctuations. For a further
list and description of such risks and uncertainties, see the reports filed by
Lucent with the Securities and Exchange Commission. Lucent disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
All earnings per share reported in this release are diluted EPS figures.
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(1) Pro forma net income/EPS excludes the enterprise networks business that was
spun off Sept. 30, the consumer products business, amortization of goodwill
and acquired technology and one-time events, including purchased in-process
research and development. Pro forma revenues exclude the enterprise
networks business, which was spun off, and the consumer products business.
