Klaws here a dated article on OpenRoute,as I educate myself of where have they been and where they are going---what we see here is a company trying to resurrect itself and find a whole new direction--
they were formerly Proteon Inc.
06/12/98
Boston Business Journal
Pg. 7
Copyright P & L Publications Inc. 1998
Westborough, MA, US, New England --
WESTBOROUGH--Seeking to leave behind years of financial losses,
Proteon Inc. this week changed its name to OpenRoute Networks Inc.,
with a new focus on software network products for small- and medium-
sized businesses.
However, one local analyst believes the dominance of OpenRoute 's
competitors in the router market may make it a case of too little, too late
for the 26-year-old firm.
OpenRoute officials said the company's new business strategy is
twofold: to provide network services to firms that don't have all of their
employees connected to networks, and to become a service provider for
large companies that outsource their networks.
Both markets are estimated to be worth up to $7 billion by 2000.
Daniel Capone, OpenRoute 's chief executive officer and president, said
the change was necessary after seeing markets for the company's token
ring technology and enterprise network routers shrink.
"Token ring took a back seat to ethernets, and since 1992, Cisco
(Systems Inc. of Santa Clara, Calif.) has outpaced the competition in the
enterprise market," Capone said.
"We chose to take our routing software, move forward and take
technology to a new generation of users."
The move comes after the 120-employee company recently announced
losses for the first quarter of its 1998 fiscal year--its eighth consecutive
quarterly loss.
During the period ending March 28, OpenRoute lost $2.5 million, or 16
cents a share, on revenue of $4.2 million. For the same period in 1997,
the company lost $313,000, or 2 cents a share, on revenue of $9.1
million.
The first-quarter results continued two straight years of losses at
OpenRoute .
For 1997 the company lost $7.8 million, or 51 cents a share, on revenue
of $26.9 million, while in 1996 losses totaled $12 million, or 77 cents a
share, on revenue of $45.3 million.
Capone said most of the losses were due to OpenRoute having to
rebuild sales channels and product lines. The company began to develop
its new products about 18 months ago.
Despite optimism at OpenRoute , the company's new direction has yet
to positively impact its stock price.
Its stock traded at $9.38 a share in September 1995 before taking a
plunge from which it has not recovered.
Last week shares traded at $1.19 a share, down from a 52-week- high
of $3.50 on Oct. 15, 1997. Its low was 97 cents a share on March 2.
At Cambridge-based Forrester Research Inc., network strategies analyst
Maribel Lopez said she doesn't see OpenRoute 's efforts as being
significant enough to make the company a player in the router arena.
Lopez said the history of the old Proteon company, and the state of the
router market, will make it difficult for OpenRoute to truly make a new
name for itself.
"It goes back a long way," Lopez said."The router market was seeded
years ago by companies like Cisco and Ascend (Communications Inc. of
Alameda, Calif.). Even with the Internet, if you have a Cisco router,
there's really no reason to change from it."
"They are rebuilding because there is not a lot of brand value in the
Proteon name. Unless they come up with a completely new direction for
router products that's not developed yet, I don't foresee them having a
big impact on the business."
COMPANY AT A GLANCE *
OpenRoute Networks Inc. (formerly Proteon Inc.)
Headquarters--Westborough
President and CEO--Daniel Capone
Revenue (1997)--$26.9M
Net Income--($7.8 million)
Employees--120
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