Christopher: Sorry about the need for a password. Yes it is a free board. All you have to do is register. Registration gives you access to free real-time quotations and other services. I signed on about a week ago. I think there are some survey type questions that you can answer anyway you want.
Here's the article. It's sort of long:
"Dec. 12 (Daily Camera/KRTBN)--No one needs to remind Adaptec Inc. of how volatile the computer industry can be.
"Just a year ago, the Milpitas, Calif.,-based maker of computer adapter cards was on an extended roll. It had consistently met Wall Street's expectations for earnings for several consecutive quarters.
"Already established as the leader in Small Computer Systems Interface (SCSI) adapters, the company had several new projects in development with long-range potential.
"And in Longmont, where Adaptec had opened a new plant months earlier, the company was expected to eventually become one of the city's largest employers, with several hundred workers if not a couple thousand.
"Today, the picture is different, both in Milpitas and, to a greater extent, in Longmont. Several factors ranging from the advent of a cheaper technology that has displaced Adaptec's adapters in inexpensive computers to a downturn in the disk drive industry caused Adaptec to post financial losses for the past two quarters. In the wake of Adaptec's troubles, its chief executive has resigned, it has laid off 850 workers globally and it has spun off four divisions most with operations at the fledgling Longmont plant to get itself back on track.
"These are areas that one could argue will be successful ventures down the line, but you don't have too many successful companies that don't make money," Adaptec spokesman Bruce Frymire said. "First and foremost, we needed to make sure we're making money now, and that's what these divestments have involved."
"The divestments and layoffs have reduced Adaptec's Longmont staff from more than 200 workers to about 100. The prognosis for Adaptec someday becoming one of the city's largest employers is uncertain, at the least.
"However, Adaptec officials are keeping a positive outlook. The Longmont operations that Adaptec divested went to companies already established in the city, and those growing companies plan to keep the former Adaptec workers in Longmont. As well, Adaptec says it remains committed to keeping its own presence in the city.
"It's foolishness to say that it's not disappointing," said Steve Grant, Adaptec's site manager in Longmont following the departure of former manager Wayne Puglisi last month. "However, I think what we're trying to focus on is the future.
"No one has a crystal ball, and business climates change all the time. Our hope and desire here doesn't change. A lot of the reasons we came to Longmont in the first place are still here."
"A 17-year-old company, Adaptec has specialized in producing adapters, which are circuit cards installed inside a host computer that allow that computer to communicate with its peripheral devices. For example, adapters can be used to translate data flow between a server and a disk drive. The company also has branched into designing and making the semiconductors on its adapter cards and the software that runs them.
"So how did Adaptec, after logging net income of $172.9 million for its latest financial year, end up recording net losses of $24.2 million and $77.3 million in its past two quarters, and see its stock (Nasdaq: ADPT) drop from above $40 to below $20 in the past year? There are at least four major factors, according to the company and its analysts.
"First, after several years of dominating the SCSI adapter market, Adaptec started to branch into several new areas, such as semiconductors, satellite networking, fiber channel connectivity and ethernet cards.
"Meanwhile, a new technology for computer-peripheral communication Ultra DMA began to capitalize on the growing popularity of inexpensive personal computers, displacing Adaptec's main product in that market. Ultra DMA is a connectivity technology included in chips on computers' motherboards. The problem is that Ultra DMA has been integrated into Intel's chip-set solutions," said Scott Randall, an analyst with Stamford, Conn.,-based SoundView Technology Group. "So Adaptec's (products) are competing against what is admittedly an inferior technology, but what essentially now comes along for free."
"The added distraction of Adaptec's new ventures didn't help the company address the threat of Ultra DMA, some analysts say. Though Adaptec records most of its sales in the server market, Ultra DMA's impact on its smaller, PC business had a big impact on Adaptec's top line. As well, connectivity technology has been moving toward becoming a function of a motherboard chip rather than an adapter card. Even though Adaptec makes those chips, they produce less revenue than cards.
"Second, Adaptec's once-promising Peripheral Technology Solutions Group, which makes microprocessor chips for installation in disk drives, suffered from a global downturn in the disk drive industry. The PTS group, which once accounted for 30 percent of Adaptec's revenue, was losing money by the time Adaptec announced plans last month to sell it.
"Third, the Asian financial crisis hurt Adaptec's server-related business, though the company declined to say to what extent. Asian sales account for about 35 percent to 40 percent of Adaptec's international sales.
"And fourth, Adaptec took some charges against earnings for the costs of its subsequent restructuring and for breaking off its effort to buy Symbios Inc. of Fort Collins.
"All of those factors left Adaptec looking to refocus its operations on its core SCSI adapter business. To do so, the company opted to spin off or sell four divisions, including three with promising futures that, nevertheless, would not produce significant revenue or profits for another one to three years. Adaptec kept minority interests in two of the spin-offs.
"Though the divestitures make financial sense for Adaptec in the short-term, some analysts wonder if the company might stunt its future growth. "They're taking the necessary steps to stabilize the core business, so I think they're doing the right things there," said SoundView's Randall. "But they've really backed away from a lot of efforts aimed at diversifying and generating growth in new areas. (Eventually,) I think the difficulty will be how quickly they can go from protecting and reestablishing the core business to driving to accelerate growth."
"Here's a look at the divestitures:
--Adaptec's Satellite Networking division was spun off to BroadLogic Inc., a venture capital-funded company in California. The Satellite Networking group was developing an adapter card to connect PCs with satellite dishes, thus bringing Internet access to the PCs. Most of the division's employees were based in Milpitas, but the spin-off also affected five Adaptec workers in Longmont.
--Adaptec's Fiber Channel division was spun off to San Diego-based Jaycor Networks Inc. That division produced an iput-output technology that would allow companies to build data-storage networks over large distances. The division employed few, if any, workers in Longmont.
--Adaptec's PTS Group, which makes the microprocessors for use in disk drives, will be sold to Swiss semiconductor giant STMicroelectronics for $73 million. The sale will affect 61 Adaptec workers in Longmont, but STM already operates a 15-employee office in the city that designs circuit boards and drive components for other local companies. STM had wanted to expand its Longmont office, but the addition of the Adaptec workers should fill that need.
--Adaptec's External Storage division has been spun off to Chaparral Technologies, a company headquartered in Adaptec's Longmont plant. Under Adaptec, the division had developed adapter cards for use with disk-based storage systems, or Redundant Array of Inexpensive Disk (RAID) systems. A year ago, Chaparral founded and directed by data-storage industry veterans, such as chief executive Gary Allison, formerly of IBM Corp., Seagate Technology and Breece Hill licensed Adaptec's RAID adapter technology to convert it for use with tape-based storage systems.
"When Adaptec opted to divest its External Storage division, it first contacted Chaparral, which finalized its deal to buy most of the division last week. Now, Chaparral will produce adapter cards for both diskand tape-storage systems. The company leases about 35,000 square feet in Adaptec's plant. Chaparral, which had less than 20 employees before buying the Adaptec division, now has almost 50. The company plans to have a contract manufacturer make the adapter cards it designs. Allison predicts the company can reach $80 million to $100 million in revenue by the end of 2000.
"Technically, we're not even really a start-up," he said. "We already have virtually all of the development done, and we're now in the final stages of testing and production ramp-up."
"Meanwhile, Adaptec remains undecided on what to do with its Longmont campus, which includes a 140,000-square-foot building on Fordham Street and 40 acres for expansion. The company is not resigned to selling the property, but does not rule it out. Such a consideration would have seemed implausible 18 months ago.
"We wouldn't have gone to that expense and effort had we not believed that wasn't the beginning of a much larger (operation)," Adaptec's Frymire said. "We could revisit this thing and decide we need more room out there."
By Kris Hudson"
Starowl
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