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
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,
following discussions between shareholders and the board. The new
CEO and president, Stephen Cloughley, has been in charge of the
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
execution systems and services for the international pharmaceutical
and medical devices industries.
When losses in 1997 totaled $15.5 million, Thomas E. Gardner, a
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
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
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
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
Sciences in California before joining Base Ten. "There was
a falling off in confidence in the company, but we now have a a
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."
Box 3151, Trenton 08619-3151. Stephen Cloughley, president, CEO.
fax, 609-586-1593. Home page: http://www.base10.com.
Just two months after going public, ITXC, a provider
of Internet-based telephone service, is keeping investors happy and
has earned a "most likely to succeed" award from the New
Venture Association. Revenues for the quarter just ended were 20 times
last 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, climbing
to $6.3 million versus $2.3 million in 1998. Officials recently
several new technological improvements that could upgrade call
and 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 capitalized
to the tune of $33 million, and it received half of that ($15 million)
this March. Investors include Chase Capital Partners, Flatiron
Intel, Polaris Ltd., Spectrum Equity Investors, and VocalTec
all of whom also invested in ITXC’s first round.
College Road East, Princeton 08540. Tom Evslin, CEO. 609-419-1500;
fax, 609-419-1511. Home page: http://www.itxc.com.
Two New Brands
Church & Dwight, which purchased several products from
Dial in 1997, continues to clean up after its competitors. On the
same day that the company announced profits of $11.4 million for the
quarter ending October 1 it also announced the purchase of two new
brands — Clean Shower and Scrub Free. For the company that already
manufactures Brillo soap pads, Sno Bol toilet Bowl cleaner, Parsons
Ammonia all-purpose cleaner, and many incarnations of Arm & Hammer
baking soda, these two brands give Church & Dwight the equivalent
of a full house in the household cleaning business.
Launched in 1995 by Clean Shower LP, Clean Shower is a daily cleanser
that holds approximately eight percent share of the bathroom cleaner
market. Scrub Free, which goes back to 1976, is a much older product
that does roughly the same thing in three versions that give special
attention to soap scum, mildew, and daily cleansing. It also holds
eight percent of the market. Purchased for a $55 million, the two
brands together total about $50 million in sales per year. Robert
Davies III, president and CEO of Church & Dwight, was quoted as saying
that the acquisition doubles the company’s revenue in the bathroom
cleaner business, bringing it up to $100 million, and "provides
us with important synergies and opportunities for future growth."
Street, CN 5297, Princeton 08543-5297. Robert A. Davies III, president
and CEO. 609-683-5900; fax, 609-497-7177. Home page:
08619. Conrad L. Druker CPA, managing partner. 609-689-9700; fax,
609-689-9720. Home page: http://www.drfcpa.com.
This accounting firm moved from 200 Canal Pointe Boulevard to a newly
renovated office at 3625 Quakerbridge Road, trading in 10,000 square
feet for 40,000 square feet. Half of the property is up for lease.
The phone and fax numbers are new.
1, 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 remain
the same, and the website has not yet been changed.
Drive, Princeton. George Luciani, president. 609-497-7500.
George N. Luciani packed up his financial planning office in
Commons but is still serving clients from an office in Yardley. The
phone number above is still active.
Janny, Elstner, a forensic engineering firm at 14 Washington Road.
worked with William Sword and Son and operated J.E.T. Carpentry.
United States Field Research and Development at American Cyanamid
Co. on Route 1.
president of clinical pharmacology at Bristol-Myers Squibb.
staff at the Sarnoff Center.
president of DeLuxe Travel Bureau on Nassau Street.
Corrections or additions?
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