PurchasePro Chief ResignsPurchasePro Chief Resigns

PurchasePro.com CEO and chairman Charles Johnson resigned Monday, and the software company has yet to name a successor. Johnson's resignation follows a disappointing first quarter in which the company missed financial targets; its revenue-recognition practices were questioned; and reports to the Securities and Exchange Commission were repeatedly delayed. The company is still sitting on its latest quarterly report, which was due to the SEC a week ago.

Johnson has been surrounded by controversy since he was slapped with a lawsuit by a former business partner who claimed Johnson stole the idea for PurchasePro from him. Johnson, a flamboyant Kentucky native with no high-tech experience prior to founding PurchasePro, is viewed as an industry outsider. "There is deep prejudice against businesspeople from the south along with the fact that we [PurchasePro] are in Las Vegas," said Johnson in an interview earlier this year.

Though the company's stock gained 15% Monday, closing at $2.97 a share, analysts say PurchasePro still faces many challenges. For one, it needs a CEO. Analysts hope it doesn't take the company as long to find a successor to Johnson as it did to find a finance chief. The company hired Richard Clemmer, former CFO of Quantum Corp., as CFO last week after a yearlong search. George Santana, an analyst at Wedbush Morgan Securities, remains concerned about the company's lack of financial guidance and its cash level. PurchasePro hasn't revised its 2001 revenue guidance, which it set at $225 million at the start of the year. Santana estimates PurchasePro's revenue this year will total $92 million.

Now guiding PurchasePro are Clemmer, chief operating officer Shawn McGee, and Todd Bradley, a board member who replaces Johnson as chairman. Santana says some in the investment community would have preferred to see Johnson stay on as chairman while relinquishing his duties as CEO. That is what happened to the CEOs of Ariba Inc. and i2 Technologies Inc. this month.