Corrections or additions?
These articles by Melinda Sherwood were published in U.S. 1
Newspaper on November 3, 1999. All rights reserved.
Base Ten: Life in the Fast Lane
How’s this for a corporate turnaround? Less than two
months ago Base Ten Systems was on the verge of being de-listed by
Nasdaq because its shares had fallen below the $1 mark. The former
defense contractor turned pharmaceutical software developer was saved
by a one-for-five reverse stock split that was effective September
23.
Then last week, after months of friction between major sharesholders
and management, Base Ten’s board made a change at the top. On October
29 Thomas Gardner, the 51-year-old president and turnaround CEO,
resigned
following discussions between shareholders and the board. The new
CEO and president, Stephen Cloughley, has been in charge of the
company’s
marketing and corporate development since 1996. The new chairman,
board-member Robert Hurwitz, is the former chairman and co-founder
of Office Max Inc.
The move drove the company’s stock price up 178.6 percent to $2.44
in trading, a surge that continued on Monday, November 1, when it
closed at $4.365, and traded briefly at around the $6 mark.
Trading as BASEA, the 32-year-old company at 1 Electronics Drive made
its name doing weapons control systems and custom electronic systems
for data handling. After the fall of the Berlin Wall in 1989 it lost
its major client, the Federal Republic of Germany, and in 1991 Mike
Kranzler, the CEO, began to broaden the company’s focus to
manufacturing
execution systems and services for the international pharmaceutical
and medical devices industries.
When losses in 1997 totaled $15.5 million, Thomas E. Gardner, a
marketing
specialist who had worked for Proctor & Gamble, J&J, Simon & Schuster,
and Dun & Bradstreet, signed on as CEO and the company floated a $19
million private placement. Already well underway was a spin-off —
an employee buyout — of the defense equipment side of its
business,
to be known as Strategic Technology Systems. Base Ten was to continue
developing FDA-approved compliance systems known as “cGMP.”
But the stock dropped from $10 to $6.
In November, 1998, the stock dipped below $2 and investors began to
scramble. By March, Jesse Upchurch and Drew Sycoff, who collectively
control over half of the company’s stock, called for Gardner’s
resignation,
complaining of poor management. Gardner, on the other hand, explains
his tenure in a more positive light: “Two years ago, the board
asked me to implement a transition of the company from defense
contractor
to commercial software developer of manufacturing execution systems
for cGMP regulated industries. While the strategy has taken longer
to implement and cost more in operating losses that anticipated, I
believe that company is now positioned for growth and profitability
in its new markets.”
Perception is crucial, indicates Gardner’s successor, who is both
a marketing expert and chemical engineer. “There’s nothing else
material — just the CEO has changed,” says Cloughley, who
received a degree in chemical engineering from University College
in his hometown of Dublin, Ireland, Class of 1981, and worked at
Simulation
Sciences in California before joining Base Ten. “There was
generally
a falling off in confidence in the company, but we now have a a
unified
management team and that’s a wonderful position to start from.”
Why was Cloughly the right choice? In his words: “There’s lot
of good many managers with good sales and marketing skills and good
technical skills, but not many people with both.”
Base Ten Systems Inc. (BASEA), 1 Electronics Drive,Box 3151, Trenton 08619-3151. Stephen Cloughley, president, CEO.609-586-7010;fax, 609-586-1593. Home page: https://www.base10.com.Top Of PageITXC’s AscentJust two months after going public, ITXC, a providerof Internet-based telephone service, is keeping investors happy andhas earned a “most likely to succeed” award from the NewJerseyVenture Association. Revenues for the quarter just ended were 20 timeslast year’s third quarter revenues.As of September 30, revenues had reached $6.6 million, up from 1998’s$311,000. Net loss for the third quarter in 1999 was also up, climbingto $6.3 million versus $2.3 million in 1998. Officials recentlyannouncedseveral new technological improvements that could upgrade callconnectionsand enhance line capacity at hubs in New York City and Los Angeles.Founded by AT&T expatriate Tom Evslin, and originally funded by AT&T,ITXC started out at Evslin’s Princeton home. ITXC is now capitalizedto the tune of $33 million, and it received half of that ($15 million)this March. Investors include Chase Capital Partners, FlatironPartners,Intel, Polaris Ltd., Spectrum Equity Investors, and VocalTecCommunications,all of whom also invested in ITXC’s first round.ITXC: Internet Telephony Exchange Carrier, 600College Road East, Princeton 08540. Tom Evslin, CEO. 609-419-1500;fax, 609-419-1511. Home page: https://www.itxc.com.Top Of PageChurch & Dwight:Two New BrandsChurch & Dwight, which purchased several products fromDial in 1997, continues to clean up after its competitors. On thesame day that the company announced profits of $11.4 million for thequarter ending October 1 it also announced the purchase of two newbrands — Clean Shower and Scrub Free. For the company that alreadymanufactures Brillo soap pads, Sno Bol toilet Bowl cleaner, ParsonsAmmonia all-purpose cleaner, and many incarnations of Arm & Hammerbaking soda, these two brands give Church & Dwight the equivalentof a full house in the household cleaning business.Launched in 1995 by Clean Shower LP, Clean Shower is a daily cleanserthat holds approximately eight percent share of the bathroom cleanermarket. Scrub Free, which goes back to 1976, is a much older productthat does roughly the same thing in three versions that give specialattention to soap scum, mildew, and daily cleansing. It also holdseight percent of the market. Purchased for a $55 million, the twobrands together total about $50 million in sales per year. RobertDavies III, president and CEO of Church & Dwight, was quoted as sayingthat the acquisition doubles the company’s revenue in the bathroomcleaner business, bringing it up to $100 million, and “providesus with important synergies and opportunities for future growth.”Church & Dwight Co. Inc. (CHD), 469 North HarrisonStreet, CN 5297, Princeton 08543-5297. Robert A. Davies III, presidentand CEO. 609-683-5900; fax, 609-497-7177. Home page:https://www.armhammer.com.Top Of PageExpansionsDruker, Rahl & Fein, 3625 Quakerbridge Road, Hamilton08619. Conrad L. Druker CPA, managing partner. 609-689-9700; fax,609-689-9720. Home page: https://www.drfcpa.com.This accounting firm moved from 200 Canal Pointe Boulevard to a newlyrenovated office at 3625 Quakerbridge Road, trading in 10,000 squarefeet for 40,000 square feet. Half of the property is up for lease.The phone and fax numbers are new.Top Of PageName ChangeFirst Union Securities, 989 Lenox Drive, Building1, Suite 200, Lawrenceville 08648. Brian McGrath, vice president.609-896-0200; fax, 609-896-0714. Http://www.wheatfirst.com.This investment advisory firm, headquartered in Richmond, Virginia,changed its name from Wheat First Butcher Singer. Phone and fax remainthe same, and the website has not yet been changed.Top Of PageLeaving TownCapital Planning Advisory Group, 711 ExecutiveDrive, Princeton. George Luciani, president. 609-497-7500.George N. Luciani packed up his financial planning office inMontgomeryCommons but is still serving clients from an office in Yardley. Thephone number above is still active.Top Of PageDeathsRobert E. West , 73, on October 16. He co-founded Wiss,Janny, Elstner, a forensic engineering firm at 14 Washington Road.John E. (Eddie) Thorpe Sr. , 42, on October 23. He hadworked with William Sword and Son and operated J.E.T. Carpentry.Frank D. Tenne , 50, on October 30. He was director ofUnited States Field Research and Development at American CyanamidCo. on Route 1.Lester F. Soyka , 68, on October 28. He was a retired vicepresident of clinical pharmacology at Bristol-Myers Squibb.Joseph E. McGowan , 74, on October 28. He was on the technicalstaff at the Sarnoff Center.Clementine Christina Wintle , 76, on October 29. She waspresident of DeLuxe Travel Bureau on Nassau Street.Previous StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
