Hayes Q1 loss narrows, Bay pact set
Monday May 4, 5:56 pm Eastern Time
ATLANTA, May 4 (Reuters) - Computer modem maker Hayes Corp. said its
losses narrowed during the first quarter compared with a year ago even
though its Access Beyond acquisition and higher research spending
boosted expenses in the 1998 period.
In a statement, Hayes said it was ''not immune'' to industrywide
softness in the modem market, including in Asia. Even so, ''We believe
the softness in our Asia business bottomed out in the first quarter.''
The company expects its business there to begin recovering in the
second quarter.'' Separately, Hayes announced a wide-ranging pact with
Bay Networks Inc. (BAY - news) covering Bay's broadband cable modems.
In a joint statement, Bay and Hayes said they had agreed to a
comprehensive deal in which Hayes has been licensed to manufacture
Bay's current and next-generation cable modems capable of delivering
high-speed data to customer homes.
The agreement covers not only manufacturing but also marketing,
distribution and sales. The deal allows Hayes to sell Bay's
next-generation cable modem under the venerable Hayes brand name.
Hayes pioneered the personal computer modem business two decades ago,
although it has lost ground to rivals such as 3Com Corp. (COMS - news)
in recent years.
In the first quarter, Hayes' net loss applicable to common shares
narrowed to $0.20 per share from a loss of $0.69 in the corresponding
period of 1997.
First-quarter net sales rose to $44.2 million from $39.2 million in
the year-earlier period. Sales in the 1997 fourth quarter were $52.9
million.
In the first quarter, the company's operational efficiencies improved.
Despite the addition of new expenses from Access Beyond operations and
a 27 percent increase in research and development costs, total
expenses fell to $14 million from $18.5 million in the 1997 fourth
quarter and $15.1 million in the first quarter of 1997.
Looking ahead, the company said the adoption of a unified industry
standard for 56 kilobit per second modems was expected to spur upgrades
to its higher margin 56K V.90 PC modem products to replace older 33.6
kilobit modems.
In other announcements, Hayes launched a national retail distribution
strategy for cable modems with Tandy Corp.'s (TAN - news) Computer City
unit to distribute its products.
In addition, the company said it would announce later this week a new
class of low-priced V.90 access servers that combine exceptional
performance and features at extremely low prices at the industry's
Networld+Interop trade show in Las Vegas.
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