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Bryan Zwan returns to run Digital Lightwave after the departure of CEO Gerry Chastelet.
By KRIS HUNDLEY, Times Staff Writer
© St. Petersburg Times, published January 24, 2002
The founder and largest shareholder in Digital Lightwave Inc. has been reinstated as chairman, president and chief executive of the Clearwater company, replacing his handpicked successor.
Bryan Zwan, who ran Digital from 1990 through 1998, is back in charge after the sudden resignation of Gerry Chastelet on Wednesday. Chastelet joined the company in January 1999 as president and chief executive and added the title of chairman when Zwan stepped down six months later.
Zwan, who owns 58 percent of Digital's stock, rejoined the board last October. His return to a public role with the company came two days after he settled a charge of accounting irregularities with the Securities and Exchange Commission.
The company portrayed the abrupt change in leadership as Chastelet's idea and said he was resigning for personal reasons.
"Gerry picked this time to resign and the board came to me and I stepped up," Zwan said Wednesday evening. "I didn't anticipate it but I'm excited about the opportunities. It's a tough marketplace but there are lots of opportunities we're looking at."
Chastelet, who could not be reached for comment, said in a written statement, "I have thoroughly enjoyed my years at the company, in which we accomplished a great deal. However, I have decided that this is the right time for me to pursue new challenges and opportunities."
Though Digital, which makes testing equipment for fiber-optic networks, thrived during the telecom boom under Chastelet's leadership, it has flagged since the middle of last year.
The stock hit $139 per share in 2000 and traded for $50 a share as recently as June. But sales collapsed in the second half of 2001; by year-end, Digital was trading for $9.38 a share. It has continued the downward slide, closing Wednesday at $6.81, up 19 cents.
Last week, Digital said it would take a restructuring charge of up to $800,000 in the first quarter, outsource some of its production and manufacturing, and cut an undisclosed number of jobs. During 2001, Digital cut 42 jobs and now has a work force of about 150.
The company also said it expected fourth-quarter revenues to be between $5-million and $5.5-million, down from the $7.7-million estimated by analysts. Zwan declined to comment further on Digital's restructuring plans, saying details would be made public in the company's quarterly earnings release Jan. 29.
Zwan, a doctor of physics and former MIT researcher, had run into conflict with the SEC when he and his company were accused of filing false financial reports for two quarters in 1997. While Digital settled its part of the case in 2000, Zwan refused to settle until all fraud charges were dropped. In October, he agreed to an injunction prohibiting him from violating securities laws. Zwan did not admit or deny the allegations.
Zwan, a major contributor to the Church of Scientology, has consistently denied that his religion has any involvement with Digital's operations. During his career with the company, Chastelet, who was not a Scientologist, also repeatedly took pains to distance himself from the church.
Wednesday, Zwan once again said his religion would have no impact on how Digital will be run.
"I don't see it being an issue," he said.
Instead, Zwan promised to expand Digital's product mix and take advantage of what he described as new opportunities in the telecom marketplace.
Pressed for details, Zwan said, "We have our eye on some very key areas, but it's a little too early to play our hand."
-- Information from Times files was used in this report. Kris Hundley can be reached at hundley@sptimes.com or (727) 892-2996.