Firm to Change Its Image, Executive Says : Eagle Chief Quits; Losses Continue
Eagle Computer Inc., a microcomputer maker that has been teetering on the brink of bankruptcy for more than a year, Tuesday announced the resignation of its chairman, Ronald N. Mickwee, and reported continued losses for the second quarter.
Despite the losses and Mickwee’s resignation, Eagle is on its way to changing its image as a faltering firm, President Gary Kappenman said.
“The rumors of our death were exaggerated,” he said at a press conference Tuesday at Eagle’s Garden Grove headquarters.
Kappenman said the company is banking its long-term survival on catering to value-added resellers, who will package Eagle’s computer products with software programs written for specific industries. For the time being, however, Eagle is dependent on sales of microcomputers for the general business market.
Analysts doubt that Eagle, which moved back to Southern California in October, 1984, in a belt-tightening move, can make a comeback with its new strategy.
The strategy “would be very difficult to implement” considering Eagle’s current financial straits, said Joseph Kapka, vice president and analyst at the Santa Clara brokerage office of Bateman Eichler, Hill Richards Inc.
“It does not change their problem,” he said. “Competition is their main problem.”
Bret Maxwell, an analyst with First Analysis Corp. in Chicago, agreed, saying the niche Eagle has targeted already is overcrowded.
But Norm DeWitt, group director of personal computer research at Dataquest, a San Jose high-technology research firm, believes that the value-added reseller market is a good growth area and that Eagle can still play a role in the industry--”albeit a small one”--if it can curb costs.
Posted a Loss
In its first quarterly report since its move, Eagle reported a loss of $1.8 million for the three-month period ended Dec. 29, compared to profits of $457,000 posted during the like period a year ago. Revenues for the quarter were down nearly 70% to $5.8 million from $19.2 million in the year-ago quarter.
Kappenman said, however, that the second-quarter results represent a quarter-to-quarter improvement. In its first 1985 quarter, Eagle chalked up a $2.3-million loss.
Also, the company announced the appointment of Richard N. Thunen and K. Dino Sirakides to its board of directors.
Thunen currently is Eagle’s vice president of marketing. Sirakides is vice president-planning at Forsythe MacArthur in Illinois.
When Eagle moved from Los Gatos, Mickwee stayed behind. Mickwee was named president of Eagle after the death of Dennis R. Barnhart on June 6, 1983, the same day that Eagle made its initial public stock offering. Mickwee was named chairman in July, 1984, when co-founder Charles Kappenman resigned that position during a general executive shakeup.
Gary Kappenman, who co-founded the company with his brother, Charles, had been involved with the firm in varying roles since its spinoff from Audio Visual Labs in 1982. He succeeded Mickwee as president last November.
Gary Kappenman said Mickwee’s goals and plans “weren’t and aren’t simply to be chairman of the board.” In the meantime, the company will look for an outsider to fill the vacant chairman position, Kappenman said. Mickwee could not be reached for comment.
