PAIRGAIN ANNOUNCES APPOINTMENT OF NEW CEO;
COMPANY ALSO WARNS OF REDUCED EXPECTATIONS FOR THE FOURTH QUARTER
TUSTIN, Calif. --- (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.
Pascoes appointment results from the execution of a management succession plan
adopted by PairGains 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
companys current 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 PairGains 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 companys 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 in
sales and marketing responsible for pursuing worldwide markets is a huge plus for
Commenting on his new opportunity, Mr. Pascoe stated, "PairGain is ideally poised
to benefit from the expected dramatic growth in the worlds datacom markets. While
its true there are currently pricing pressures in the companys market sector,
the long-term potential for the companys 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 worlds 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 Presidents 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.
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 PairGains 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 T1/E1 access systems, small subscriber
carrier systems, including PG-Flex and PG-Plus, enterprise LAN systems and
megabit access solutions, including the Avidia system, integrated access
concentrator and Megabit Modems. Currently, well over 1,000,000 PairGain DSL nodes
are installed in over 70 countries.
Except for the historical information contained herein, the matters discussed in the
announcement are forward-looking statements which involve risk and uncertainties,
including but not limited to economic, competitive, governmental and technological factors
affecting the Companys operations, markets, products, services and prices and other
factors discussed in the Companys filings with the Securities and Exchange