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Strategies & Market Trends : Three Amigos Stock Thread -- Ignore unavailable to you. Want to Upgrade?

To: KLAW97 who wrote (11210)	12/12/1998 3:13:00 PM
From: LTK007	Read Replies (1) \| Respond to of 29382

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