2 Avigilon Finance Directors Out, In Addition to CFO

By John Honovich, Published May 13, 2014, 12:00am EDT

Avigilon's stock has dropped more than 25% despite earnings meeting analyst estimates in the 3 days after Avigilon announced their CFO's exit.

Moreover, two Avigilon Finance Directors, in addition to the CFO, have also exited the company in the previous month.

In this note, we review these exits and the concerns that investors are raising about this.

2 Directors Out

The two financial directors out are Director of Financial Planning and Analysis Sue Werner [link no longer available] and Director of Finance Suzara Viray [link no longer available], both listed their exits on LinkedIn after, respectively, 21 months and 14 months at the company.

CFO "Health" Explanation Skepticism

Moreover, many are not believing the CFO 'health' explanation, according to analysts we have corresponded with and reports issued.


  • There's been no substantive explanation for the CFO's exit, not in the announcement, nor the investor's call nor the BNN TV interview, despite serious questions being raised.
  • The only thing said was that it was "in connection with a personal health issue." The 'in connection with' phrase is not clear (was the health issue the cause of the exit itself?) and could be used as a red herring.
  • If the CFO wanted to stay on and Avigilon wanted to retain him, even if he had a health issue, they would have likely put him on leave / disability.
  • If the health issue was really that bad to force an immediate exit, it would be sensible for the CEO to make a personal / human statement on the investor's call or TV interview (such as "We hope Brad gets better soon, etc.") even if only to make investor's feel better. However, none has happened.
  • Likewise, if the CFO was leaving on good terms, the company would be prudent to include a statement from him (like "Avigilon's a great company and I have been lucky to work here"). Despite no statement being made, the CFO did have time to update his LinkedIn profile [link no longer available].
  • Announcing the CFO exit the day before the earnings call have made many wondered if the exit was related to the financial report itself.

Investor Concerns

Given the timing of the CFO exit, the lack of supporting evidence for the explanation and the 2 Avigilon financial directors who exited around the same time, this has caused significant investor concerns.

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The key factor driving Avigilon's rapid stock price run of the last few years has been their far higher growth rate than the industry.

The worries we hear are about investors trusting Avigilon’s financial numbers, in light of this situation. Did 3 Avigilon senior financial managers leave in a month because they were simply not good enough, because they found other opportunities or is there some problem with the accounting policies? It is the latter fear that appears to be weighing down Avigilon’s stock price.


Regardless, Avigilon has quality products, as shown in our integrator surveys and tests. The challenge, for investors, is whether the products / business supports the massive growth levels that investors have been expecting and Avigilon has been reporting.

However, even for industry people, these exits and the resulting stock fall has a real impact. One of the key factors that has supercharged Avigilon’s growth is their ability to raise capital for expansion, such as the IPO and the follow up raises, including the $100 million raise earlier in 2014. Now, those latter investors who bought at ~$29, are down 34%. Plus, recent employee stock options are underwater. Without a stock turnaround fast, things will be harder for the company.

Avigilon has had incredible momentum up until now. Will this be the turning point or, as Avigilon’s CEO emphasizes, will their overall strength prove out and allow the company’s stock to rebound in short order?


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