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Technology Stocks : Adaptec (ADPT) -- Ignore unavailable to you. Want to Upgrade?

To: Quan Nguyen who wrote (3299)	8/1/1998 7:47:00 AM
From: Tobias Ekman	Respond to of 5944

Article about ADPT in SJ-mercury news : sjmercury.com Regards Tobias ---------- Adaptec plots steady course in wake of CEO's quitting BY K. OANH HA Mercury News Staff Writer Adaptec Inc. plans to narrow its focus to it core business and take a more cautious approach to growth, the company's founder said the day after the computer component maker's chief executive officer resigned. Late Thursday night, Grant Saviers quit as chairman and CEO of the Milpitas-based maker of adapter cards he had headed since 1992. Larry Boucher, the company's founder, replaced him on an interim basis as chief executive. The company says a search is under way to fill both positions. Boucher said the company's ''foundation'' of talent, technology and balance sheet remains strong and a recovery is around the corner. ''The board is looking at implementing whatever mechanisms that would more quickly and with less risk get to that foundation,'' Boucher said. ''The board senses that a more conservative plan will lead to an improvement of shareholder's value. The base business of the company is very solid. We need to focus on that.'' Boucher declined to give details of a new strategy but said some operational changes may be in the works. Analysts were mixed on whether the management shifts would turn the company around, but most agreed the company needs to do more than just concentrate on its main product, a technology called Small Computer Systems Interface, or SCSI, if it's looking for sustained, long-term growth. ''A return to basics is good ,'' said John Rossi, an analyst with BancAmerica Robertson Stephen, ''but they need to make a good bet on at least one other product.'' And if nothing else, this latest round of musical chairs will boost morale, he said. ''They're going back to the founders to recapture some of the spirit and inspiration of the organization in the early days, to see if Boucher has any visions for the future,'' said Rossi, who noted that internally the company has been in a state of discord in recent weeks. ''This might give some doubters a reason to believe again. This is a good first step.'' Some analysts weren't quite so enthusiastic. ''The problems facing the company now are not due to management,'' said analyst Scott Randall, a principal at SoundView Financial Group. The company's woes are a result of a sluggish personal computer market and lower sales. At its peak, Adaptec's SCSI technology was found in about 12 percent of desktops sold. Now that number is in the mid-single digits. And sales of high-performance workstations and servers, which most commonly require SCSI for high-speed data transfers, has slowed. Adding to Adaptec's woes is Intel's incorporation of a similar technology on its standard chip sets, making the technology essentially free. Profits have come in well below analysts' expectations in its last three quarters. In fiscal 1998, the company reported 8 percent sales growth rate, down from 25 percent the previous fiscal year. Shares of Adaptec stock rose $1 to $11.63 Friday. The stock was trading at more than $50 late last year. The executive shifts stem from differences between the board and Saviers concerning Adaptec's strategy forward, Saviers said. ''My plan for the company was a little higher growth and risk than the board wanted,'' said Saviers, who will continue as a consultant to the company. ''They wanted a more conservative plan. As a result, we all felt that it was time for a change in the leadership.'' Saviers said he and the board began re-evaluating Adaptec's future and who should lead it soon after the company scrapped its plan to acquire Symbios Logic Inc. last month after it became clear the Federal Trade Commission would block the move for antitrust reasons. Saviers' resignation follows last week's departure of corporate vice president and treasurer Chris O'Meara and last month's resignation of vice president and chief financial officer Paul Hansen, who left to head a Palo Alto company, TIBCO Software Inc. Boucher, who was a director on the company's board, currently heads networking products company Alacritech in San Jose. He said he'll continue his involvement with Alacritech, which he also founded, but he'll devote his efforts ''full time'' to Adaptec during the search for a new CEO.