Tandem tried to brighten up its $23 million year-end loss by appointing a new president and announcing plans to sell its networking subsidiary, UB Networks.
The new president and chief operating officer is Enrico Pesatori, previously the vice president who revitalised Digital Equipment's PC business. Pesatori takes over the two responsibilities from Roel Pieper, who remains chief executive.
Pesatori, who was at Compaq before joining Digital over two years ago, is known for strengths in channel building and in achieving corporate branding in PC markets. Both these skills may prove valuable to Tandem, which has agreed to run Microsoft NT and applications on its Himalaya high availability servers for the first time and is looking for a broader user base and penetration of the Microsoft world.
After months of speculation that Tandem would sell UB Networks - formerly Ungermann-Bass - the company said it was in talks with several potential buyers via Lehman Brothers.
The likely sale of UB fits in with a massive refocusing that Tandem has undergone in the past year, aiming to expand into the NT server market from its high end niche and to streamline its operations, divesting itself of non-core activities. Pieper, who came to Tandem as head of Ungermann-Bass, has spearheaded this change of strategy, which was largely responsible for the year-end loss.
Without the $52 million restructuring charge, Tandem would have been in the black for fiscal 1996, but nowhere near the earnings of $108 million it made last year. It also saw sales dip slightly, from $1.92 billion to $1.9 billion.
For the fourth quarter, the company made $40 million in profit, up 74 per cent from last year, on revenues that fell slightly from $547 million to $543 million.
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