Founder Vacates: Escalon Moves
A Better Way to Run the Railroads?
Corrections or additions?
Life in the Fast Lane: PVI
These articles by Peter J. Mladineo and Barbara Fox were published
in U.S. 1 Newspaper on January 7, 1998. All rights reserved.
In the sports world it could be the best thing since
sliced bread — or the worst thing since 3Com bought the rights
to rename San Francisco’s Candlestick Park. But either way, Princeton
Video Image’s live video imaging system could someday be the next
step in the unspoken campaign to commercialize just about everything.
The product, called L-VIS, electronically inserts advertising banners
into live television broadcasts so that the image is viewable only
to the public watching the game on TV, not the spectators or the
players.
PVI’s system uses a patented technique called pattern recognition,
in which a computer seeks out a particular area on a playing field
or stadium, and then pops a paid advertisement in that area every
time it appears on camera. So far, these virtual ads have appeared
on the backstop behind home plate or the midfield circle in soccer
matches, and in between the goal posts of a few preseason football
games.
An initial public offering has given Princeton Video Image the funds
to get its patented electronic billboards on more screens than ever.
On December 16, the company sold 4 million shares of stock and raised
$28 million to build more L-VIS units and hire additional employees.
Shares of the stock, sold on NASDAQ under the symbol
PVII, opened at $7 and within the month increased to roughly $9. For
PVI, this IPO couldn’t come at a better time. A perennial money-eater,
the seven-year-old PVI has not experienced a profitable period in
its history, and by June 30 had an accumulated deficit of $19.5
million.
A prospectus filed with Securities and Exchange Commission says that
PVI will “continue to incur substantial losses at least through
calendar year 1998 due to the significant costs associated with the
manufacturing, marketing and further enhancement of the L-VIS
system.”
The prospectus adds that for PVI to succeed, L-VIS will have to create
a new advertising paradigm that’s acceptable to a number of entities.
“The ability of the company to market successfully the L-VIS
system
will depend upon broad acceptance of its technology by at least four
distinct groups of participants in the sports advertising market:
television viewers, advertisers, broadcasters, and event rights
holders,”
it says.
PVI has three large competitors, Symah Vision, a French company owned
by the LaGardere Group; SciDel, an Israeli concern owned by Scitex;
and Orad-ISL, an American venture owned by ISL and Ormat. Orad-ISL
uses a different method of delivering the virtual ads: the ad is
inserted
into an on-the-field camera, although experts claim that this system
could be foiled by a stadium shaking from applause. PVI has also
acknowledged
that larger broadcasting companies will most likely get into the ad
insertion fray should electronic billboards become an accepted medium.
PVI was started in 1990 as Princeton Electronic Billboard by Brown
Williams, chairman of the board, and Sarnoff alumnus. Williams
received
the patent for pattern recognition in 1993, and in 1995 changed the
company’s name to PVI. In January of 1996, PVI elected a new president
and CEO, Douglas J. Greenlaw, an MTV Networks alumnus. Last fall it
moved to 16,000 square feet at 15 Princess Road (U.S. 1, October 22)
with plans to increase its staff from 30 to 50.
L-VIS hit the market in 1995 and was first used by Comcast during
a Trenton Thunder broadcast. Its first major league contract was with
the San Francisco Giants, and new contracts reportedly have been
signed
with the Giants and the San Diego Padres for this year’s baseball
season. Industry sources say that PVI has also approached the NFL
for possible deals. The company itself confirms that the opening of
the 1998 baseball season will mark the introduction of animation,
special effects, and 3-D, in addition to the static banners the firm
has previously produced.
Investing in PVI has been likened to providing
“public
venture capital” to a start-up — but this venture is fairly
promising. “They seem to have the best technology out there,”
says one investor familiar with the company. “You’d have an
opportunity
to make five to ten times on your money — if they perfect it and
the patents hold up.”
The need for such a system is obviated by the rising costs of
broadcasting
rights, and unlike selling ad banners on the Internet, it requires
very little explaining to advertisers who are eager to find a way
to outsmart channel-surfers. Virtual ads could also, theoretically,
cover up mechanical billboards located at the stadium that carry local
ads — space that national broadcasters have historically begrudged
local merchants.
Andy Kienzle is the principal of a Hamilton-based multimedia firm,
Television Ideas and Software Inc., and was formerly president of
the video trade association, Moving Image Professionals. Kienzle feels
that PVI has found an promising niche. “They have something
unique,”
he says. “They have a technology that should be a big money maker
because it’s a way of generating additional revenue for a lot of these
sports teams and providing additional opportunities for sponsorship
and advertising that a lot of companies are looking for. Is this
something
that the viewing public will get into? That’s another question. But
I think the revenue drivers are there.”
PVI, he adds, should be a viable venture because there is no lack
of demand for places to stick ads. “These people have an ability
to put ads in front of a large audience, and that’s a valuable thing
for an advertiser, and for somebody who owns the space it’s a valuable
way to get revenue. I like the economic prospects.”
How intrusive are the virtual ads? A sample video of PVI’s work
suggests
that virtual ads may be little more than new entries added to the
omnipresent commercial clutter. If it’s any indication,
L-VIS-generated
electronic billboards will probably annoy viewers until they become
immune or desensitized. But, Kienzle adds, even if virtual ads are
somewhat intrusive, the public has a pretty high tolerance for
ad-generated
pain.
“Everybody accepts this encroachment to some degree,” says
Kienzle. “Everything has a commercial affiliation — that
hasn’t
stopped it from happening. I don’t think this is going to stop the
electronic billboard either.”
Like the TV time-out, virtual ads will probably not go away just
because
they bother viewers, nor will they replace commercials. Does this
mean that viewers may someday have to adjust to seeing cans of
Cheez-Whiz
superimposed on Cheeseheads or McDonald’s Fries fluttering through
the air under Grant Hill’s Air Jordans every time he dunks? Probably
not. One of PVI’s R&D-related tasks of the moment, say experts, is
locating reasonable spots for virtual ads. It’s up to the public not
to watch.
— Peter J. Mladineo
Top Of PageFounder Vacates: Escalon Moves
Escalon Medical Corp., 182 Tamarack Circle,Skillman08558. 609-497-9141; fax, 609-497-0948.After eight years Escalon has moved out of Princetonand its founding CEO has moved on to another endeavor. “I hadeight great years and enjoyed it, and now I am doing something Igreatlyenjoy,” says Sterling C. Johnson, the former CEO who left in Aprilto work for a Denver-based mergers & acquisitions firm, Grayson &Associates.Escalon can now be reached c/o Richard DePiano, the new presidentand CEO, at 351 East Conestoga, Wayne PA 19087, 610-688-6829; fax,609-610-254-8958. “This was basically a strategic move to minimizethe cost of operation and to become more efficient in terms of onsitepersonnel and manufacture,” says DePiano.A venture capitalist who was a long-time member of the board, DePianohas signed a lease for Escalon in the space that had been occupiedby his venture capital firm — Sandhurst Company — which hesays is being “wound down.” Of the seven people who workedat the Tamarack Circle office, four will remain with the company,including Shawn P. Mullen, director of sales and marketing. John T.Rich, vice president of finance and administration, will leave onJanuary 15.In November Escalon did a reverse split and reduced the number ofshares from 10.8 million to 2.7 million. At that time trading onNASDAQwent from below $1 to around $5, and in the last two weeks of Decemberthe stock went from $5 to $9.Though Escalon had merged with a laser technology firm in 1996, itsold off that business last year so it could concentrate on developingsystems for long term drug delivery to the eye that will eliminatethe problem of patients’ having to administer their own eyedrops aftersurgery. Escalon has three patents (another one pending) on a tinydevice that sits under the eyelid, not felt or seen by the patient,that can release drugs for two weeks or longer.When Johnson founded Escalon in 1989, he had been director of businessdevelopment at the Liposome Company for five years. He named thecompanyafter his California hometown, Escalon, which means “steppingstone” in Spanish. “One of the talents I have is buildingbusinesses, and now I am helping other companies do the samething,”says Johnson. “I’m happy for the company to continue to grow andthe price to go up. The company had been undervalued for a longtime.”Top Of PageMettler’s MoveMettler-Toledo International, 69Princeton-HightstownRoad, Box 71, Hightstown 08520-0071. Maurice Knapp, president.609-448-3000;fax, 609-586-5451. Home page: https://www.mico.mt.com.Once 200 strong, the East Windsor outpost of the world’s largest makerof scales and balances is now down to about 60 employees, and thosewill be gone by the summertime. The firm is building an 80,000 squarefoot headquarters in Columbus, Ohio. Fewer than 20 of the East Windsorworkers will move to Ohio and the rest are taking a severance package.Founded in 1954 as the U.S. headquarters of a Swiss firm, it mergedwith Toledo Scale in 1989, was bought by a prestigious privateinvestmentfirm, American European Associates, in 1996. It went public inNovemberand its stock, traded on the New York Stock Exchange (MTI) startedat 14 and now hovers at 16 and 17.Top Of PageNew Integra CEOIntegra LifeSciences Corporation, 105 Morgan Lane,Box 688, Plainsboro 08536. Stuart M. Essig, president/CEO.609-683-0900;fax, 609-799-3297. Home page: https://www.integra-ls.com.A 36-year-old Princeton University alumnus has been appointedpresidentand CEO of Integra LifeSciences on Morgan Lane, but Richard E. Caruso,the founder of the firm, remains as chairman. Stuart M. Essig wasformerly a managing director at Goldman Sachs, where he supervisedthe medical technology practice.Essig has an MBA and PhD in financial economics from the Universityof Chicago and was senior merger and acquisitions advisor to a widerange of domestic and international medical technology,pharmaceutical,and biotechnology clients. His 10 years of health care experienceincludes acquisitions, divestitures, strategic alliances, principalinvesting, and capital markets.”Stuart’s experience at Goldman Sachs will give Integra accessto a considerable wealth of relationships and business opportunitiesthat will help us to continue to fulfill our mission,” saysCaruso.The company’s stock trades on NASDAQ as IART; it develops andmanufacturesBioSmart absorbable materials-based products that aim to control thebehavior of cells within a patient’s body to regenerate. Integra’sArtificial Skin is the first in a series of products being developedto regenerate body tissues (such as articular cartilage and peripheralnerves) that usually do not regenerate themselves.Essig’s four-year contract with Integra includes options for 1 millionIntegra common shares plus deferred payment of 2 million Integrashares.The latter payment will result in a one-time, non-cash compensationcharge of about $6 million in the fourth quarter of this year.Intek Stock BuyBackIntek Diversified Corporation, 214 Carnegie Center,Suite 304, Princeton 08540-6237. Robert Shiver, president and CEO.609-419-1222; fax, 609-419-1221. E-mail: kmonahan@inteknj.com.After watching its stock drop from $5.75 to under $2 the mobile radioservices firm decided to buy back up to $1 million of its stock, whichtrades as IDCC on the NASDAQ small cap market.The firm offers specialized mobile radio services for public safetyfacilities and owns Midland U.S.A. and Roamer One, which represent175 markets in the United States, plus LMT and Securicor Radiocomin the United Kingdom. The corporate office moved from Moorestownto the Carnegie Center in September, 1997, and two staff positionshave been added for a total of eight.Robert Shiver, chairman and CEO, says that the buyback is supposedto be “another clear demonstrate of our confidence in Intek andits future growth.” The full stock repurchase would representabout one percent of the approximately 42 million common sharesoutstanding.The stock traded 12 months ago at $5.75. Purchases will be made, hesays, “from time to time in the open market, through block orprivately negotiated transactions or otherwise.”Top Of PageA Better Way to Run the Railroads?It could be a classic case of the parent company feelingabandoned by the spin-off, but no one’s saying it. Carl D. Van Dyke,the president of MultiModal Applied Systems Inc., paused a few secondswhen asked about his former employer and direct competitor, ALKAssociates,and then offered what he called a politically correct explanationof why he split off from ALK in 1992: “I felt that I wanted totry my wings,” he says.ALK of 1000 Herrontown Road had no comment, although the suspicionsshould be obvious: MultiModal, at 5 1/2 years old, is fast becominga major player in the transportation computing industry, the sameindustry in which he once helped to define with ALK, the 40-employeefirm that employed him from 1985 to 1991.Van Dyke, formerly a vice president at ALK, and fellow ALK alumnusIngrid Schultze Brandle have grown their company to 20 employees infive years and are moving it from 3,000 square feet in Somerset to6,200 square feet in Forrestal Village. MultiModal’s software packageis MultiRail, a Windows-based rail management system being used bythe majority of the major rail lines in the United States.MultiRail users number only about a dozen but, Van Dyke explains,he is aiming at the biggest rail companies. “Only 10 or 15railroadsrepresent 95 percent of the rail business,” he says. “Mostof them are our clients. There are 400 or 500 small railroads butthey aren’t the target of our business.”Steve Sashihara, the president of Princeton Consultants, which alsomakes software applications for the transportation industries, saysthat the rail industry presents a potential trove to softwaremanufactures.”Running a rail network is a very difficult problem,” he says.”You’re running the police, the repair crew, you’re runningeverything.It’s not someone else’s problem — it’s all your problem, whichcreates a great opportunity for railroads to optimize.”To help it compete with the road-based transportation industry,Sashiharaexplains, the rail industry was deregulated in the early ’80s andhas since bounced back and become competitive. “Part of thiscompetitionis learning how to run with the best asset utilization it can,”he says. “They’re looking for high powered tools.”MultiRail gets fairly high marks from those in an industry that talksa lot about “asset utilization,” says Sashihara.”Sometimesyou want to reposition your equipment to where the action is, butat what price and when,” Sashihara adds. “What MultiRail hasare models to help this planning and it’s worth a lot of money todo it right.”Paul Stevens, president of Transport Dynamics at 103 Carnegie Center,says that MultiRail is a “coherent way for the railroads to viewtheir scheduling requirements when planning the movement of freightthrough the rail network.” Within the railroad industry, he adds,MultiModal is “viewed as being a very competent, knowledgeableoutside consulting service.”MultiModal and Transport Dynamics might both be converging on thesame light coming at the end of the tunnel. Transport Dynamics, whichhas expanded from 5 to 18 employees since it was founded by DerekGittoes in 1995, specializes in real time decision support systems.This is an area, says Van Dyke, into which MultiModal is currentlylaying tracks. “The idea is to directly feed the databases thatdrive the real time applications of the railroads,” says Van Dyke.MultiModal Applied Systems Inc., 125 VillageBoulevard,Suite 270, Princeton 08540. Carl Van Dyke, president. 609-419-9800;fax, 609-419-9600. E-mail: carl@multimodalinc.com. URL:https://www.multimodalinc.com.Top Of PageScout to ChamberMiddlesex County Regional Chamber of Commerce,1 Distribution Way, Monmouth Junction 08852. 732-821-1700; fax,732-821-5852.After five years of raising money for the regionalchapterof the largest organization for women in the world, Nancy M. Ostinhas moved to take a job as the new executive director of the regionalchamber of commerce for Middlesex County. Though she knows most ofher constituents from previous volunteer work for the chamber, shewas introduced at a reception on Tuesday, January 6.Ostin was development director for Delaware-Raritan Girl Scouts, andshe is credited with setting up the department, achieving a 200percentincrease in donations, and establishing a corporate advisory boardheaded by Summit Bank’s Joe Semrod. Compared to other Girl Scoutcouncils,”we are now regarded as having one of the premiere funddevelopmentefforts,” says Ostin. Because of her success she has been invitedto teach development workshops for the national organization, GirlScouts U.S.A.The Middlesex chamber’s former executive director, Joan Wisniewski,had come out of retirement last fall after her first replacement,Joseph Berger, left suddenly after one year.Ostin grew up near Albany, New York, where her grandfather had foundedan advertising agency. She graduated from Emerson College in Bostonin 1982 but also earned a master’s degree in foreign relations fromthe University of Aix-Marseilles. She has worked in various publicrelations capacities for Renaud USA, Rhone Poulenc’s agriculturaldivision, Parker-Meridien, and the National Needlework Association.”For me the chamber job was an opportunity to serve the communityI know and where I make my home,” says Ostin. Her husband, Dan,is president of National Software Resource Corporation, and they livein East Brunswick with their four-year-old daughter.Ostin believes she can transfer her five years of Girl Scoutexperiencein volunteer management skills, programs, and services to her newposition. “The real advantage is that I have worked for a verymission-driven organization. Lots of businesses — if they hadthat same kind of direction and focus — would benefit from clearlyknowing their mission.”Top Of PageAt 55 Plus, a New CareerDon’t talk to Murray Reich about retirement. He triedthat at age 55. Then he started a second career as a gerontologyeducatorand interviewed 70 retired corporate executives who were leadinguseful,productive, and influential lives. None had planned to do what theywere doing in retirement. All of their activities had resulted frombeing asked to serve.”You have to wait for someone who comes along who appreciatesyour capabilities for a particular task,” says Reich. “Eachof us, at our own level, are asked to do things. Some are reluctantto get out, saying `it’s too early,’ or `it’s too late.’ The peoplewho say yes meet other people and have fun.”The process, says Reich, “is being asked to do something thatyou don’t think you can do — which turns out to be interestingand challenging. The role each of us has is to be open, to makeourselvesmarketable, to put ourselves in situations where we get theseinvitations.”Reich practiced what he preached. Someone asked him to consult fora plastics firm. “But I don’t know anything about these kindsof plastics,” I said. “`That’s OK,’ said the owner of thefirm. `I think you can do it.'” What he didn’t know did turn outto be interesting and challenging. One thing led to another and nowhe is president of Tyndale Plains-Hunter, a firm that develops leadingedge plastic applications and that recently moved into space atPrincessRoad. Reich now works seven days a week, stopping only to accomplishan exercise program — walking and T’ai Chi.Reich’s career went like this: after graduating from City Collegeof New York he earned a master’s in polymer chemistry at AkronUniversity.He obtained a master’s degree in counseling at Trenton State at night,and, while doing part-time consulting in chemistry, a doctor’s degreein gerontology education at Teacher’s College, Columbia. With thatdegree he taught college courses in ethics, the psychology of aging,and human development, and worked with the Institute on Aging atRutgers.He helped found “55 Plus,” the group for men who are retiredor have flexible schedules that meets at the Jewish Center. His wife,Naomi, taught kindergarten and then worked in a retail toy store;they have two seven-year-old grandchildren.But when someone asked Reich to work on “degradable mulch”film he was lured back into plastics. It was serendipity, heemphasizes.”I never planned to do the things I did. I sold mulch film tofarmers all over the country.”When the technology was licensed to another company, the owner ofanother company recruited Reich as a consultant, Reich started adifferentpolymer project. Two years later the owner asked him to run thecompanyand now he is president of Tyndale Plains-Hunter. The firm had beendoing research in 900 square feet in Ringoes but for production workhas moved to 3,700 feet at Princess Road and has made a significantinvestment in equipment. The six-person shop designs and producesplastic granules (high slip, high water absorptive polymers) formedicaland cosmetic applications.We have three or four different materials that can makeup to 10 or 20 different products; we design the polymer compositionfor a particular application,” says Reich. “We make theplastichere and then granulate it for most customers for coatings, wounddressings, and one area of cosmetics.” The granules sell for $10to $50 a pound and might be used, for instance, in a solution thatcould coat a guide wire in a catheter.Reich is in charge of the bookkeeping, the marketing, supervisionof R&D, and writing the patents — everything but production andlab work. “It is challenging, exciting, and fulfilling,” hesays. “In small businesses, what you do is not filtered throughmeetings and conferences. You can make decisions much morequickly.”Flexibility of mind, body, and spirit is important for everyone, butparticularly for those who are aging. Reich believes the fear of beingembarrassed reinforces the general public’s view of old age assynonymouswith senility, rigidity, and disablement. “At a certain age youget concerned about how you appear to other people,” Reich says,”and then that’s the end of it. You don’t want to be embarrassed.You don’t ask stupid questions, so you don’t learn anything. You don’ttry something new, so you don’t develop new skills.”Reich was so venturesome about developing new skills that he enrolledin modern dance classes at Princeton Ballet School. He was often theonly man in classes with women of all ages and, in spite of his lackof skill, conducted himself with aplomb. “In modern dance youget embarrassed all the time,” says Reich. “But if you allowyourself to be embarrassed you can do different, interestingthings.”Says Reich, “In the `psych’ jargon, it’s OK to be stupid, to `notknow.’ The important thing is to have fun.”– Barbara FoxTyndale Plains-Hunter, 17J Princess Road,Lawrenceville08648. Murray Reich, president. 609-912-1050; fax, 609-912-1055.Kellogg Company, 206 Rockingham Row, PrincetonForrestal Village, Princeton 08540. Jim Scott, vice president.609-419-8760;fax, 609-419-8777. Home page: https://www.kelloggs.com.The world’s leading cereal manufacturer relocated its east coast salesoffice from Montvale because Princeton was more convenient.Top Of PageDeathsRose Pannell, 53, on December 10. She had worked atMathematicaPolicy Research.Don Young, 74, on December 12. He owned Don Young’sRestaurantand Cocktail Lounge in Ewing.Pabitra Datta, 55, on December 13. He was a senior memberof the technical staff at the Sarnoff Center.Gail H. Steinert, 61, on December 16. Head nurse ofLawrencevilleNursing Home, she retired in 1997.R.L. “Doc” Lenhart, 87, on December 19. The ownerof an advertising agency, he founded the Princeton Chamber, and wasits seventh president.Norma M. Greaves, 71, on December 19. She was a realtorfor Weichert Realtors and then for Coldwell Banker of Princeton.Frank J. Miotla, 49, on December 23. A member of theUnitedBrotherhood of Painters union, he worked at the Carnegie Center.William Byrd, 93, on December 25. He founded MagneticSpecialties Inc.Fredrick Aandahl, 78, on December 25. He was associateeditor of the Papers of Woodrow Wilson. A memorial service in theUniversity Chapel will be January 24 at 1 p.m.N. Gerald Sapnar, 62, on December 26. He owned the N.Gerald Sapnar Insurance Agency and the Office Cafe in Hamilton.Louis A. Conover, 64, on December 26. An engineer, hewas a consultant with Hopewell Valley Associates.Malcolm L. Diamond, 73, on December 27. He was a religionprofessor at Princeton University and a therapist at Corner House.A memorial service will be on Sunday, February 8, at 3 p.m., atPrinceton’sMcCosh 50.Gail M. Simpson, 58, on December 27. She worked forLockheedMartin in East Windsor.J. Richardson Dilworth on December 29. He had been seniorfinancial advisor to the Rockefeller family and director at theInstitutefor Advanced Study. A memorial service will be held at noon onSaturday,January 10, at the Princeton University Chapel.Richard A. Lester, 89, on December 30. A former PrincetonUniversity dean, he was a nationally prominent labor economist.Joseph Sheppard, 30, on December 30. A tennis pro atPrincetonRacquet Club in South Brunswick, he was a Comcast Cellular Onesalesman.David A. Rothbloom, 36, on December 31. He was a projectmanager for AT&T and at McGraw-Hill Corp. on Princeton-HightstownRoad.Corrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
