Entropic Communications, a maker of silicon for set-tops and high-speed coax-based networking, announced Monday (November 10) that president and CEO Patrick Henry is leaving the company and stepping down from the company’s board of directors, and that Dr. Ted Tewskbury (pictured) has been appointed Entropic’s interim president and CEO.

Entropic also announced a new product strategy that will involve a refocusing on its core “connectivity” business, which includes Multimedia over Coax Alliance (MoCA) technology, and a halt on all new set-top box systems-on-chip product development (see further below for more detail).

Henry’s departure comes about two months after the chipmaker announced a major restructuring that included authorization for the board to pursue “strategic options.” It also comes almost five months after a Utah court found Henry guilty of assaultingBeverly Hills Nanniesstart Ariane Bellamar, but reduced the charge from a misdemeanor to an infraction, while also dropping two other charges -- interruption of a communication device, and criminal mischief.

Henry, Entropic’s president and CEO since 2003, has led the company through an initial public offering and a string of acquisitions, including its $65 million purchase of Trident Semiconductor in 2012. That deal helped Entropic, once a company that specialized in MoCA technology, into a more diverse supplier of set-top silicon that included a focus on products based on the Reference Design Kit, a pre-integrated set-top software stack that’s now being managed by Comcast, Time Warner Cable and Liberty Global.

"On behalf of the Board of Directors, I want to thank Patrick for his many contributions to Entropic over the past decade," said Umesh Padval, Entropic's chairman of the Board, in a statement. "Under Patrick's leadership, the Company completed its initial public offering and developed a number of market leading technologies. With the change in strategy and business restructuring that Entropic is also announcing today, the Board believes it is the right time for a leadership transition. We are fortunate to have Ted available to serve as interim President and CEO. Ted has successfully led and developed executive management teams and possesses a proven track record as a semiconductor industry executive. We are confident that he will provide strong leadership for the Company."

Tewksbury, the former president and CEO of Integrated Device Technology, joined the Entropic board in September of 2010. 

As interim President and CEO, Dr. Tewksbury will work closely with Entropic's executive team and Board of Directors to oversee the Company's ongoing operations and strategic initiatives, including the ongoing review of strategic alternatives, the company said. Tewksbury will stay on the Entropic board, but will no longer serve on its compensation committee.

"I look forward to working alongside Entropic's talented team and contributing to the Company's future success," Tewksbury said in a statement. "With our refocused strategy and restructuring plan, we are targeting to reach non-GAAP profitability next quarter. We are continuing to explore strategic alternatives, and remain focused on product innovation, operational excellence, and enhancing shareholder value."

On Monday, Entropic also posted third quarter results – a net loss of $27.6 million (31 cents per share) on revenues of $43.2 million, down from $56.4 million in the year-ago period.

Entropic also shed more light on its product plan, announcing that it will refocus on its core Connectivity businesses, which include MoCA, direct broadcast satellite outdoor unit (DBS ODU) and broadband access. Entropic said it will continue to pursue design wins for all set-top box system-on-a-chip (SoC) products in production or already commercialized and will continue to invest to support those programs, but the company will discontinue all new set-top box SoC product development. 

The company’s set-top box SoC business “will contribute meaningful revenue for the next three years or more” based on design wins currently in the pipeline and on products already brought to market, Entropic said. 

Update: In August 2018, the judge in Summit County, Utah, who had dismissed two of the original charges and reduced the third charge to an infraction ordered the records of Patrick Henry's arrest, investigation and detention in the case to be expunged.

A Utah court found Entropic Communications president and CEO Patrick Henry guilty of assaulting Beverly Hills Nannies star Ariane Bellamar, but reduced the charge from a misdemeanor to an infraction, while also dropping two of the other charges – damage or interruption of a communication device, and criminal mischief.

According to multiple reports, the court fined Henry $400, and is requiring him to complete 40 hours of community service, and undergo alcohol and anger management assessment. Because an infraction is not considered a criminal charge, Henry will serve no jail time as a result of the court’s decision, which was handed down on June 19.

Entropic’s board of directors said it was confident in Henry’s ability to lead Entropic, a San Diego-based company that specializes in set-top silicon and Multimedia over Coax Alliance chipsets (see below for the company’s full statement).

The original complaint, filed in Utah’s Summit County Justice Court on February 11, alleged that Henry became intoxicated and, in a jealous rage, assaulted Bellamar on January 23 in Park City. She earlier told RadarOnline.com, a celebrity news site, that she met Henry through the MillionaireMatch.com dating site and joined him in Park City for the Sundance film festival. Henry was charged with three Class B misdemeanors: assault, damage of a communication device, and criminal mischief. Henry denied assaulting Bellamar, alleging she was intoxicated, and that her statements were not consistent with the facts.

In an 8K filed on June 23, Entropic noted the company and Henry amended the exec’s employment agreement on June 20 to clarify the conditions under which Henry’s employment may be terminated “for cause.”

“In summary,” the filing explained, “the Amendment updates the definition of “Cause” for termination to add that, in addition to the previously enumerated reasons, “Cause” exists if Mr. Henry is convicted of any felony or misdemeanor charge asserted after the date of the Amendment which, in the good faith judgment of the Company’s Board of Directors, adversely affects the business reputation of the Company.”

In a statement, Entropic said it is standing behind Henry, who has served as Entropic’s president and CEO since 2003:

“Entropic’s Board of Directors is confident in Patrick Henry’s ability to lead Entropic.  The Board closely monitored Mr. Henry’s personal matter. Two of the charges were dismissed and the remaining charge was reduced from a misdemeanor to an infraction, the lowest charge permitted under Utah law.  The Board continues to believe Mr. Henry has the right experience, track record, domain expertise and skillset to continue in his current role as Entropic’s President and Chief Executive Officer.  The Board did amend Mr. Henry’s employment agreement to add reasons that could allow the Board to terminate his employment without severance. Mr. Henry has assured the Board that he is 100% focused on running the business and keeping the Company focused on its strategic priorities. The Company does not intend to comment further at this time."