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VTSS Investor Forum

Last Q for Gardner and Yonker to deliver

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Board now has another member who can vote them out. Rogas and Hanson probably don't have the balls to, but now with LaRosa, Huger and Lyon, they have the votes. Talk about an incompetent management team. Pissing away millions on restatements that did no good.....still not relisted after all of that. It is truly unbelievable.

Then Yonker has the gonads to say yesterday that they're still working on remediating material deficiencies in their accounting practices after 4.5 years!!!!! No wonder he had about 5 jobs in 2 years before we found this shining star of the accounting profession. They lie and mislead (remember the "we're going to get this done and we have options" related to the debentures?) and are way over their heads. 4.5 years after the delisting and stock is about at an all time low, with relisting still not accomplished while at the same time losing business. This should be the last chance for these two bozos. They have not delivered, yet make big bucks and continue to blow smoke up our asses and put spins on all of their incompetent actions and strategies. All of us have over the years drank the kool aid to some degree. Their press releases always claim that their products are an "industry first", "fastest", "use the least power" etc. etc. Well how come no one is buying? Is the sales force that lousy? Get off your ass board of directors and do your job at protecting shareholder interests. With Gardner and Yonker overseeing accounting and sales execution, this company has gone nowhere but down. I'll be glad to see them go. Keep the technical guys if the products are in fact any good.

Posted by sharpinvestments - 14 years ago

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Hi Sharp,

Unless the BOD acts, it will be more of the same until the end of time . . . whenever that is. CRG and RY ain't going nowhere. They have no incentive to do anything and we are basically fucked. We can either sell at massive losses; wait for the BOD to react (less than 10% chance of that IMO); or this POS files Chapter 11. I see no one buying them as they obviously do not have cutting edge products as evidenced by their latest numbers. Even our new forum is a shadow of its former self as many of our best minds of obviously moved on.

G

Posted by G - 14 years ago

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Hello fellow happy campers!

I think Mr. LaRosa is a BH'er/Whitebox pick and if so will do what they want him to do. I think they get 1 more, which means a current BOB member (Rogas, Hansen or CRG are kaput). The Whitebox loan is due in little over a year.

I will make a guess and say if the BH'ers and Whitebox view it is in their best interests to see this thru Vitesse will continue to plug away. If revenue doesn't increase quite a bit and BH'ers/WB think it benefits them more in the longer term for Vitesse to default they will really pump up R&D, burn cash to under under $30 million and voila!, default!!!.... and they can eliminate the pesky dilution caused by shareholders who aren't them. It won't be like CRG and the previous BOD pissing away all that cash on the restatement. Investing in R&D is investing in the future. It just won't be the shareholders who aren't bondholders future.

I would think Vitesse needs a minimum of $40 million by next October to pay off the debt and have working capital.

Posted by altrfan - 14 years ago | Updated 14 years ago

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altrfan: good post. Unfortunately the whitebox loan evidently will now hang over this company until it is refinanced or taken care of in some fashion. I don't think anyone is going to buy the "We have options" this time around. If the loan isn't taken care of by early 2011 it's here we go again. Hopefully management is addressing this now and if not they will be focusing on it immediately.

This failure to relist and putting it off until December (my reading of the comments on the conference call) is not normal. There is something going on there.

Posted by dlog - 14 years ago

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Here is an email I sent to Richard Yonkers this morning:

From: cdiamico@mac.com
Subject: Investor recommendation
Date: August 11, 2010 5:15:13 AM PDT
To: ryonker@vitesse.com

Richard, since you are the CFO of VTSS, I thought I would offer you some free advice, as I am an Executive Coach and Investor. I can't tell you how disappointed I was in this latest earnings report. I have been an investor in VTSS since 2002. I have lost significant money on VTSS, but hung in there waiting for the return to financial health of the company over the past few years. I look at the dollars in R&D spent this quarter and, if it wasn't as high, you guys would have been profitable. If it takes shedding some folks there, it should be done with haste. Having 30 new products a year as a Goal isn't the issue, it's can you afford to develop that many and so far the answer is a resounding No. You had the same problem, as a company, before the debacle with the previous leadership and it doesn't seem anything has been learned these past 5 years. It shows what happens when a company like this is run by Engineers instead of Business leaders. I am a former Engineer, so I know what I am talking about.

You and Chris must show investors you have discipline. If you have a $35 Million quarter in Revenue, then you must pair down the company accordingly. It is fiscal irresponsibility to do otherwise. There is no excuse for a negative quarter even in tough times. We are already 1/2 way through this quarter and there is time to make adjustments. Do it!

If you remember I have been an Executive Coach for over 35 years. I did so when I worked for IBM, your major Customer. If I can be of help by phone, I am willing to do so free of charge. But when you guys are in trouble you must learn to ask for help. I was the one who advised Chris to get himself an Executive Coach when he became CEO. Whomever he hired has apparently not helped him enough and you should get your money back. I was one of the Founders of the VTSS Forum web site with Dennis Paulson. My name there was Grandpubha.

Please take a stronger stand with Chris in making the numbers or leave the company, if you can't influence him. When I am being paid as a Executive Coach for advice from my clients and they don't take my advice, it's time for me to leave, because if I stay, they are then paying me for not taking my advice and that is plain stupid. Same is true if you are an insider like yourself. I think the company has only a couple of quarters left for Street credibility before you guys lose all investors.

Be determined and get results. No more excuses or stories why you missed creating the results. It's time to have realistic Goals and live within the means of what you have. Take down some of the open positions on your web site as you can't afford to hire them. If you need critical skills, then get rid of some others. It's a very simple solution, and it is difficult for many to do, but it is necessary!

Good luck.
Charles Amico
Investor

Posted by Grandpubha - 14 years ago

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Great letter mr AMICO, i truly hope they consider its content.

thanks again.

Posted by GARIF - 14 years ago

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Here is an e-mail i sent Gardner after the latest cc. I doubt it will make a difference because i feel he will never step down unless he is taken out by the bond holders and even then he has his golden parachute.
Mr. Gardner,
I have been a shareholder of Vitesse for a long time now. It has not been good. While listening to the latest conference call I realized that you continue to tell us the same thing over and over every quarter. You tell us what you expect to do then when it is expected to play out you take us over a cliff. You need to step aside and continue to be an engineer or an engineer supervisor because CEO is not working out for the company. It may be working out for you but it is not working out for the company and the hardworking people that have invested in you. It is a shame for you to be in this position while the company is craving for the right individual to be running it. Please Mr. Gardner, step aside and do the right thing.
thank you,
Chris XXXXX
investor

Posted by christ3opher - 14 years ago

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My sentiments exactly on both issues. Thank you for taking the initiative and expressing our concerns in both a direct and eloquent fashion.

Posted by dlog - 14 years ago

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You are welcome Dlog. I just couldn't let Yonkers of the hook here as he is the CFO and either can influence or should resign. I would guarantee you I would be profitable every quarter if I were CEO at this point. Better to be conservative and deliver more than expected than to be the eternal optimist like CRG is. He sounds a lot like Chambers at times and I don't think much of him either. By the way, Cisco, a Customer of VTSS, also missed their top line growth and their stock got hammered.

Posted by Grandpubha - 14 years ago

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There is a post on the yahoo board that made me think. The poster commented that it has been 4 years and VTSS still doesn't have the inventory accounting in place. And this is the purported reason for delaying relisting.

To me this just doesn't pass the smell test. I have just seen this type of thing too often. There is some weak excuse developed for not attaining a much desired goal.

I am going on record saying that this "inventory" problem for not relisting is nothing but a cover for some bigger (and unfavorable) issue. That explanation just doesn't sound right. I have to believe we are not being told something.

Posted by dlog - 14 years ago

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Thanks also from me Grand and Christopher....however Mr. Grand, I may have spotted a flaw in your letter. You stated the following: ".......being paid..... and they don't take my advice, it is time for me to leave.....'

Of course you would, because you are a Professional (with a capital P) and that is how it is done.

Sadly, this is not how it is done at Vitesse. The debacle with Nasdaq re-listing is similar to the financial restatement fiasco, with the main difference being the restatement was an entry into the unknown where where by it's very nature Vitesse had no way of knowing exactly what they would find and how long it would take to find it. (Didn't stop CRG from issuing finish dates).

The re-listing process is quite different, unless Nasdaq is arbitrary and has no written guidelines on what is required, so Vitesse would have been well aware back in 2007 when this all started what Nasdaq required if Vitesse wanted to get back on their exchange.

Yet all at Vitesse continue to collect paychecks.

Posted by altrfan - 14 years ago

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I just left a message on Yonkers voicemail asking to speak with him regarding financials. I will actually be asking about relisting and the reason for delay. I doubt that i will receive a call back. 1-800-848-3773. If a number of us call maybe someone will receive a response.

I guess that Yonker did not take Grands advice on eliminating some of the help wanted ads. Today, a new job was added: New Product Introduction Engineer/ Camarillo

Posted by christ3opher - 14 years ago | Updated 14 years ago

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CC transcript is now on the Vitesse website. Reads better than listening to it. It pains me somewhat to say CRG makes a lot of sense in his descriptions of what happened with the revenue shortfall, especially with the 'turns' business.

One of the trade offs with outsourcing is what is gained with a lower fixed cost structure can be nullified at times in that there is no longer total control over manufacturing, as outside vendors serve a a variety of masters. Vitesse is already fab less of course, but they are new in the final test part of outsourcing and it doesn't take much delay in the last couple of weeks in the quarter for late June shipments to get pushed into early July, especially if there are new processes and Vitesse does have their sell thru model.

The analysts on the call, for some reason didn't share our concerns Dlog brought up with inventory and re-listing. Why, I don't know. To me it is a big deal, but then 8-12 weeks means 8-12 weeks in my world. The analysts were also far more positive.

Time to buy ???

Posted by altrfan - 14 years ago

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Lets hope and pray that the three newest board members don't put up with this lame performance much longer. Four and a half years of bullshit and excuses. The guys at the top obviously don't have what it takes, and the board up to this point has been the most impotent, asleep at the wheel bunch I've ever seen. Ed, wake up, you're still chairman. Are you alive?

I'll say it one more time.....Four and a half years, still not relisted, still talking about remediating deficiencies in their accounting department and still awarding each other bonuses and options. It's just beyond comprehension.

Posted by sharpinvestments - 14 years ago

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