Ron,
Ampex essentially finished all its restructuring activities in early 1996 when they exchanged about $30.0M of zero coupon notes for common shares and effectively brought down their debt to about $1.0 million. At around the same time they completed the sale of their Redwood City campus for about $36.0 million ($17.5M in cash, $8.7M paid 12/96, $8.8M due 12/97). That sale really improved AXC's working capital position and allowed them to devote more resources towards marketing KM and their DST products. AXC currently has about $30.0M in cash and practically no debt to service.
KM-wise, in 1996 they put together a crew to sell the product to the drive industry. Part of the marketing effort involved placing articles in trade magazines like Data Storage and making presentations before peer groups like the Magnetics Chapter of IEEE. They also participated in a pre-Comdex head/media affair. It certainly helped that in 1994 and 1995 they participated in studies conducted by the University of Minnesota MINT(magnetic center) that basically validated the KM technology. Studies that, by the way, were funded by the likes of Seagate, Maxtor, and HMT Technology. A startup called Velocidata also validated the essential points of KM technology providing yet another third party review. So now that they are in selling mode they are really loaded for bear with all those peer validations.
DST-wise, they've had a direct sales model in place since 1994 and they've been slowly expanding their sales force. The Ampex web site,
for example, has positions open for regional DST sales managers. To support their sales effort they have been recruiting people to fill positions like the one below which you can find at the Ampex web site.
"...MARKETING COMMUNICATIONS - This is an absolutely fantastic opportunity for the right person pursuing a growth opportunity in marketing communications.
You will be responsible to:
-develop and produce product literature and other collateral material
-plan and coordinate trade shows act as liaison between our outside Public Relations firm and provide assistance when developing and placing press releases and articles
-provide marketing communications support to sales for presentations and sales aids
-help develop and coordinate direct mail campaigns ........"
This is only the latest sign that AXC is jockeying for a higher profile. During the restructuring from about 1990-1996, however, they kept their profile to a minimum (read: almost broke) so that meant no ads and few trade shows (the ones that they attended, I think, they even shared booths with other companies and split the costs). They did maintain their presence in the important peer societies and industry organizations like NAB (National Association of Broadcasters), SMPTE (Society of Motion Picture and Television Engineers), IEEE, National Media Lab and some NASA-related societies.
Getting feedback from AXC customers sounds like a good idea down the road. You'll probably have more luck getting feedback from the universities (U of Minnesota, Cal. State Univ. of San Diego, etc) and corporate customers than from the nuclear labs,the defense contractors and branches of the DOD which are significant consumers of AXC products. Rodney Van Meter over at comp.arch.storage does an excellent overview of the tape storage industry and regularly updates his web site with input from actual users of the products.
You do put your finger on a key marketing point when you raise the issue of AXC's longevity and viability. After all, customers for the five to six figure DST products will generally consider the vendor's ability to provide a technology roadmap and assurance of support in committing to a storage or instrumentation vendor.
In that regard, the continued acceleration of DST sales plus the initial low-cost but high quality earnings stream from KM (licensing and/or reselling efforts involve no substantial fixed costs) should translate into more cash flow that will let Ampex not only rev up its product development efforts (see R&D pipeline), but also increase its mind share in the different markets in which it participates.
Gus
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