Moving to direct sales hammered Madge Networks? performance last year, chairman and CEO Robert Madge admitted this week, insisting he aims to return the networking company to growth within six months.
The company began selling Lan systems products directly but abandoned that policy last year when it saw its damaging effect on Var sales. Madge said: "We?ve had a dismal Q1. Our recent results have had a dramatic effect but we?ll show our business is better than that."
Madge told delegates at the Hambrecht and Quist Technology Conference in San Francisco that his strategy to return Madge to significant profit revolves around a programme of cost cutting, indirect-only sales and research and development.
"During the next quarter we?re getting our house in order," he admitted. "Profit comes after that." Madge merely broke even on turnover of $482.1 million in 1996, after making $1 million profit on turnover of $427.4 million in 1995.
The company's main businesses are in Token Ring adapter cards and Lan systems. "Now we?re shipping adapters for growth and volume to grow market share. Shared media is a flat to declining market - Lan switching is the growth segment," Madge said.
Madge?s future will partly depend on the voice and video processing market, as it plans to introduce products in this area along with its stackable Ethernet switching product, Visage.
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