This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Emulex CEO Benck Accelerates Changes to Boost Profitability

Stocks in this article: ELX

NEW YORK (TheStreet) - Four months after taking the company's top post, Emulex (ELX) CEO Jeff Benck has shifted the focus of the server components specialist in an effort to boost profitability and shareholder value.

Emulex, which was the subject of sale chatter earlier this year, announced a $200 million share repurchase on Monday while making changes to its board of directors and outlining plans to cut costs. 

"This is a very transformational move for the company because it's across a number of dimensions," Benck told TheStreet, in a phone interview. "This is a real step change in the company's strategy in that we're looking at every facet of the business, including changes at the board level to ensure that we're well equipped to be a leader into the future." 

Emulex shares received a boost after the company announced its new strategy and are up more than 25% over the last 6 months. Shares of the server and storage interconnect specialist, however, dipped 0.77% to $7.71 in Wednesday trading. 

"There's a lot of exciting things going on here, and we can use this as a platform to attract a bunch of new folks to our story," added Benck. 

The CEO is also wants to ensure that Emulex gets a return on its product development investments. 

"I have asked my team to kind of go through every inflight program and go understand - 'is it meeting its objectives'?" he said. "I want to stop doing anything that maybe looked great at the onset, but, as you look into it, you find that the return isn't there." 

With regard to board restructuring, Emulex wants to bring in three new experienced executives and will reduce the size of its board from 12 to 11 members. 

"I think, in general, our board was pretty large for a company our size - consolidating it down a bit is a good thing to do," he said. "Now is the right time for the company going forward to make these changes." 

The CEO also provided an updated on Emulex's $127 million purchase of NetScout (NTCT) rival Endace earlier this year. Endace is now fully integrated into Emulex, according to Benck, with revenue from the network monitoring specialist growing 20% sequentially last quarter. 

Nonetheless, Benck is putting "more feet on the street" to boost Endace sales, as well as exploiting Emulex's global reach.

In terms of the company's overall growth, Emulex is working to expand its channel and do more with business partners, according to the CEO. The firm is also focused on its partner ecosystem, recently announcing a connector to software from big data specialist Splunk (SPLK)

The CEO, however, was less forthcoming on the sale rumors that swirled around Emulex earlier this year. 

"I can't comment on speculations or rumors around M&A," he said, adding that Emulex's new strategy is "making a statement around shareholder value." 

"We demonstrated this week that there's value in this company and our focus right now is on executing our roadmap, being mindful of the spending, improving profitability and then having the mechanism for investors to share in that," he said. "That's 100 percent where my focus is now."

--Written by James Rogers in New York.

>Contact by Email.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs