Keystone Internet Security Systems, Inc.: Balance Sheet Management for Value Creation

Abstract

It was September 2015, Conrad Kirkpatrick's ninth month as CEO of Keystone Internet Security Systems (ticker symbol KISS). Kirkpatrick had overseen dramatic improvements in the operating and financial performance of his previous company in his first stint as a CEO, and he was hired by KISS's board of director~ with the expectation that he could engineer a similar turnaround at Keystone. After growing rapidly following its IPO in 2008, Keystone's revenue and profit growth had disappointed technology analysts in 2013 and 2014. As a result, KISS's stock price was in a multiyear decline, falling from its all-time high of $60.50 in late 2012 to a recent low of $18.15.