SAN JOSE, Calif. -- In a wide-ranging interview, the incoming chief executive of Exar Corp. told us that real analog men don't need fabs, fear of counterfeiting has stymied China's chip foundries, and the Internet of Things is one of his new growth engines.
Louis DiNardo has a long track record in analog. He started his career with Analog Devices, spent 13 years at Linear Technology, and served as chief executive of Xicor, which was acquired by Intersil. He spent several years as a venture capitalist before taking the reins at Exar in January 2012 to manage its turnaround. In his first few months, he laid off a whopping 40 percent of its staff and executed acquisitions in high-performance analog and data compression chips.
EE Times: What's it like being back in the corporate world?
Louis DiNardo: I enjoyed the venture business, but, frankly, it had a different cadence and activity level. At Crosslink Partners, seven of us reviewed 1,200 business plans a year, held 300 meetings, did deep diligence on 60 companies, and then made six investments, which means a partner in a good year did one deal. It wasn't enough to keep me busy and excited.
EE Times: The 40 percent layoffs at Exar were pretty shocking, even for a turnaround.
DiNardo: It was a very deep turnaround. Any layoff is sweet and sour, because you know it's necessary, but there are a lot of good, hard-working people.
The company had ballooned in 2010 and 2011 to around 400 employees for nominally $125 million in revenue. There were many acquisitions where things didn't pan out as expected, product lines and businesses were closed, but people stayed. Revenue per employee was about $290,000, which is pretty low, although there are different models in different parts of the world.
Today we have about 275 employees and $415,000 in revenue per employee, which puts us in a good class. Gross margins over the last six quarters improved from 40 to 52.3, .7 percent, so the impact of the layoffs was that we are more productive.
EE Times: What's the next step in the turnaround?
DiNardo: We've done the heavy lifting. There are two most important things to accomplish quickly when a company has been distressed for some time, and one is to size it right. The high-order bit is to pick your markets and define appropriate products. In January through April 2012, we did that, so we're done with the restructuring, picked the markets we want to serve, and we made the turn to focus on growth.