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Technology Stocks : COMS & the Ghost of USRX w/ other STUFF -- Ignore unavailable to you. Want to Upgrade?

To: Moonray who wrote (17794)	11/27/1998 11:56:00 AM
From: Scrapps	Read Replies (2) \| Respond to of 22053

Modem Pioneer Fights for Survival By DAN SEWELL AP Business Writer ATLANTA (AP) -- A computer industry pioneer is struggling to avoid becoming one of its dinosaurs. Hayes Corp., whose founder Dennis C. Hayes invented the personal-computer modem 20 years ago, is in Chapter 11 bankruptcy for the second time in less than three years. Whether it will survive may be decided within weeks. ''We hope to be in position to have some definite information over the next two weeks ... we expect many issues to be resolved,'' said Ron Howard, chairman and chief executive officer of the company based in Norcross. Hayes management has been meeting with its creditors committee in the aftermath of the Oct. 9 Chapter 11 filing in federal bankruptcy court in Wilmington, Del. Chapter 11 filings provide temporary protection from creditors while the company reorganizes and tries to negotiate lower debts and restructure its operations. However, the fact that Hayes is back in Chapter 11 increases the odds against that. ''That's bad news,'' said Jocelyn Evans, a Georgia State University assistant professor of finance currently visiting Emory University. She cited a working paper by professors at Binghamton University and Virginia Commonwealth University that found that more than half of companies studied that went into so-called ''Chapter 22'' ended up liquidated. On Tuesday, Hayes idled two shifts of its manufacturing unit, laying off 100 people. The company will halt a third shift in the next few weeks, bringing total employment to fewer than 450 from a peak of 1,200. Howard, whose Maryland-based Access Beyond company merged with Hayes last year, said the company is making a transition from ''the old Hayes to the new Hayes.'' The company is focusing its future on digital technology and other new technologies. However, slow response to new, 56 kilobits-per-second modems and the Asian economic crisis have hurt sales. The company, scheduled to release third-quarter earnings this week, reported a net loss of $17.6 million for the first six months of this year, after net sales of $77.2 million, compared to $94.9 million for the first half of 1997. Dennis Hayes, who remains on the board of directors, was a 29-year-old engineer when he and a partner worked on his dining room table to create the first home-use modems. His company began in 1978, and soon, Hayes modems and ''Hayes-compatible'' became part of the industry language. However, after a decade of industry leadership, the company began heading downhill along with Hayes' personal life. He went through a costly divorce in 1988, and competitors cut deeply into his company's market -- with U.S. Robotics taking over as industry sales leader. George Benston, a professor at Emory's Goizueta School of Business, said boom-to-bust stories aren't unusual in the high-tech industry, as start-up companies expand rapidly, then find the products they are built upon overtaken. ''It's a tough business,'' Benston said. The company took shelter in Chapter 11 in 1994, and after Hayes (OTC BB:HAYZQ - news)balked at takeover bids, emerged from bankruptcy reorganization in 1996. Hayes remains as the largest individual shareholder, with about 38 percent of the shares, in a company that retains Hayes and brands that include Accura, Optima, Century, Ultra, Smartcom and Practice Peripherals. And while whether those shares will have value in the future remains in doubt, the company is offering a new product -- a limited-edition, 56K 20th anniversary modem, signed by Dennis Hayes.