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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) DECEMBER 3, 1998
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PAIRGAIN TECHNOLOGIES, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-22202 33-0282809
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
14402 FRANKLIN AVENUE, TUSTIN, CA 92780-7013
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 832-9922
Not Applicable
(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
On December 3, 1998 PairGain Technologies, Inc. ("the Company")
announced in a press release the appointment of Michael Pascoe to the position
of President, Chief Executive Officer and member of the Board of Directors. In
addition, the Company announced that it expects that both revenues and operating
earnings for the fourth quarter will be significantly below current market
expectations. A copy of the press release issued in connection with this
announcement is incorporated herein by reference and is attached hereto as
Exhibit 99.1.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit No. Exhibit
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99.1 Text of Press Release dated December 3, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: December 10, 1998 PAIRGAIN TECHNOLOGIES, INC.
\S\ CHARLES W. MCBRAYER
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Charles W. McBrayer
Senior Vice President,
Chief Financial Officer and Secretary
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INDEX TO EXHIBITS
Exhibit No. Exhibit
- ------------------- ------------------------------------------------------------
99.1 Text of Press Release dated December 3, 1998.
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EXHIBIT 99.1
PAIRGAIN TECHNOLOGIES, INC. 14402 Franklin Avenue Tel 714.832.9922
Tustin, CA 92780-7013 Fax 714.832.9924
N E W S R E L E A S E
FOR IMMEDIATE RELEASE FOR MORE INFORMATION:
CLOSE OF MARKET 12/3/98
Charles McBrayer
Kim Gower
714-832-9922
PAIRGAIN ANNOUNCES APPOINTMENT OF NEW CEO;
COMPANY ALSO WARNS OF REDUCED EXPECTATIONS FOR
THE FOURTH QUARTER
TUSTIN, CA --- (December 3, 1998) --- PairGain Technologies, Inc.
(NASDAQ: PAIR) today announced the appointment of Michael Pascoe to the
position of President, Chief Executive Officer and a member of the Board of
Directors. Mr. Pascoe's appointment results from the execution of a
management succession plan adopted by PairGain's Board of Directors in
January 1998.
Separately, the Company announced that as a result of continuing price
erosion in the T1 access sector and the loss of primary supplier status at a
regional Bell operating company for its HiGain T1 access products, it expects
that both revenues and operating earnings for the fourth quarter will be
significantly below current market expectations. In addition, the Company plans
to write-off approximately $1.5 million of a minority investment it holds in a
privately-held telecommunications company to reflect that Company's current
-MORE-
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PAIRGAIN ANNOUNCES NEW CEO/2
market value.
Mr. Pascoe, 46, comes to PairGain from Newbridge Networks where his
most recent position was President, Newbridge Networks - US and Executive
Vice President, North and South America. He joined Newbridge in 1989 when it
had fewer than 30 employees and was instrumental in building Newbridge from a
startup to a $1.2 billion network systems equipment manufacturer to
telecommunications service providers, worldwide. He has extensive
management experience in both the products and markets which PairGain has
targeted for its future growth. This includes a direct exposure to the
development and marketing of managed access and core multi-service ATM
systems, the evolution of carrier frame relay and IP services over these
networks and the integration of these systems into the carriers' Operational
Support Systems.
Chuck Strauch, who formerly held the CEO position, will remain as
Chairman of the Board of the Directors. He played a key role in both developing
the management succession plan and in recruiting Mr. Pascoe as the new CEO.
Mr. Strauch will continue as an active member of PairGain's executive
management team assisting Mr. Pascoe in the transition, while continuing to
develop and maintain high level customer relationships and playing an important
role in developing the Company's strategic direction. Mr. Strauch commented,
"This is exactly the right time for the right individual to lead PairGain back
into a growth mode. Mike has been where we want to go. His in-depth experience
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PAIRGAIN ANNOUNCES NEW CEO/3
in sales and marketing responsible for pursuing worldwide markets is a huge
plus for PairGain."
Commenting on his new opportunity, Mr. Pascoe stated, "PairGain is
ideally poised to benefit from the expected dramatic growth in the world's
datacom markets. While it's true there are currently pricing pressures in the
company's market sector, the long-term potential for the company's markets are
significant. Global deregulation, the Internet and now E-commerce over the web
are all underlying dynamics that will reshape our industry. Broadband access
using DSL technologies holds the key to the world's incumbent and emerging
carriers' ability to tap into these markets. I am excited about becoming part of
the PairGain team that will pursue those opportunities in these high growth
markets."
Howard Flagg, co-founder of PairGain, who formerly held the President's
position, will become Executive Vice President - Business Development. He will
also assist Mike in the transition and concentrate his activities on
acquisitions and new systems architecture. Both Howard and his fellow founder,
Ben Itri, Executive Vice President - Chief Technical Officer, will continue to
be active members of the executive management team and remain as PairGain board
members.
-MORE-
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PAIRGAIN ANNOUNCES NEW CEO/4
PairGain is a world leader in the design, manufacture and marketing of
DSL (Digital Subscriber Line) networking systems. Service providers and private
network operators worldwide use PairGain's products to deploy DSL-based
services, such as high-speed Internet access, remote LAN access and
enterprise LAN extensions over the existing infrastructure of copper telephones
lines.
For more than ten years, PairGain has been recognized as a technology
leader and industry innovator. The Company offers the widest range of HDSL,
ADSL and SDSL-based systems available. Its product lines include HiGain(R)
T1/E1 access systems, small subscriber carrier systems, including PG-Flex(R)
and PG-Plus(TM), enterprise LAN systems and megabit access solutions, including
the Avidia(TM) system, integrated access concentrator and Megabit Modems(TM).
Currently, well over 1,000,000 PairGain DSL nodes are installed in over 70
countries.
# # #
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, MATTERS DISCUSSED IN
THIS ANNOUNCEMENT MAY CONSTITUTE FORWARD-LOOKING STATEMENTS INVOLVING RISK AND
UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THE
COMPANY'S CURRENT EXPECTATIONS. FOR EXAMPLE, ALTHOUGH THE COMPANY BELIEVES THAT
WORLD TELECOM MARKETS WILL CONTINUE TO GROW, VARIOUS FACTORS INCLUDING WORLDWIDE
RECESSIONARY FORCES COULD CURB THAT EXPECTED GROWTH. WHILE THE COMPANY BELIEVES
THAT DSL TECHNOLOGIES WILL CONTINUE TO BE EMPLOYED IN THESE DATACOM MARKETS, THE
COMPANY'S BUSINESS SECTOR CAN BE SIGNIFICANTLY AFFECTED BY RAPID TECHNOLOGICAL
CHANGE AND PRODUCT OBSOLESCENCE. FINALLY, WHILE THE COMPANY DOES NOT BELIEVE
THAT PRICING PRESSURES IN CERTAIN OF ITS PRODUCT SECTORS WILL CONTINUE
INDEFINITELY, THE COMPANY OPERATES IN A FIERCELY COMPETITIVE ENVIRONMENT AND IT
IS IMPOSSIBLE TO PREDICT WHEN THOSE PRESSURES WILL RELENT. A MORE COMPLETE
DESCRIPTION OF THE ECONOMIC, COMPETITIVE, GOVERNMENTAL AND TECHNOLOGICAL FACTORS
AFFECTING THE COMPANY'S OPERATIONS, MARKETS, PRODUCTS, SERVICES AND PRICES MAY
BE FOUND IN THE COMPANY'S PERIODIC FORM 10-Q AND FORM 10-K FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION.
