NStor Technologies Announces
Staff Cuts of 20 Percent
Late last year, Online Asset Exchange looked like a winner, but today it appears the San Diego-based Internet exchange site for used industrial equipment may be in trouble.
Calls to its top executives, CEO Frank Berlage and President Norm Bastin, were not returned and a receptionist simply said the co-founders “were out for a few weeks.”
Another published report had the founders on “indefinite leave.”
Requests to speak to whoever is in charge were met with, “We are a privately held company and we have no comment.”
Sounds like trouble.
The startup formed in 1999 was able to attract $15.6 million in first-round funding from some heavy hitters, including Silicon Valley VCs, Sigma Partners and Delphi Ventures LP.
Last August, the company conducted a second round of funding, obtaining $25 million from other well-known VCs including Nomura Securities International, which led the round, and from some of the same VCs that invested in the first round, including Sigma, Delphi, Jafco American Ventures, and Athena Technology Ventures.
On top of that, it signed former Chrysler chairman and savior Lee Iacocca to its board of directors.
Although the company said the worldwide market for used industrial equipment is $1 trillion, it’s hard to figure how much of that figure OAE captured, since it never revealed its revenues.
The company had 122 employees at its offices in the University Towne Centre area, according to Berlage in an interview with the Business Journal last November.
It also opened an office in Tijuana to go after the Latin American market.
All that money might be gone, and when the firm tried to get more, it might have been turned away, speculated one industry watcher.
“Funding for these types of online exchanges was popular about a year and a half ago, but many never got off the ground at all,” said Peter Shaw, a partner in Windward Ventures and a San Diego Internet consultant.
With the capital markets extremely tight, many venture capital firms are pulling back and being far more selective about what they fund, Shaw said.
“It’s like choosing between their children, which ones to feed and which ones to not (feed),” he said.
– – –
NStor Cuts Staff By 20 Percent:
San Diego-based nStor Technologies, a maker of data storage area network equipment, said it reduced its staff by 28 persons in a variety of areas this month.
The company’s head count late last year was 170. It had about 100 in San Diego with the rest in a manufacturing site in Florida.
The company has had a rough time of late as the technology market continues to reel from a general pullback in spending for new equipment.
Last year, nStor lost $21.9 million on $40.2 million in sales compared to a net loss of $18.7 million on $41.1 million in sales for 1999.
For the first quarter, it lost $3.6 million on $6.2 million in revenues, compared to a net profit of $2.4 million on $12.5 million in revenues in the previous year’s first quarter.
Traded on the American Stock Exchange under NSO, the stock has fallen hard from highs last year above $6. Its 52-week range so far has been between 30 cents and $3.50, and hit 46 cents as of June 7.
In other company news, nStor announced a partnership with Donovan Systems, an Asian manufacturer of servers, to sell nStor products in Asia.
Prisa Doubles Its Space:
Prisa Networks, a San Diego supplier of systems and storage area networks software, said it expanded its space, taking over an adjacent building to its current Sorrento Mesa location at 6620 Mesa Ridge Road. The move brings the firm’s total space to about 30,000 square feet and accommodates a growth spurt in the firm’s staffing.
“In light of the recent technology sector slowdown, we are delighted to continue hiring in San Diego,” said Marc Friedman, Prisa’s president and CEO.
Friedman said Prisa has about 60 employees, about triple the number it had about a year ago. By the end of the year, he expects the headcount to reach 80. The newly created jobs are in engineering and sales and marketing.
Prisa, founded in 1994, makes SAN software sold through major OEMs and storage service providers.
– – –
Mitek Settles Suit:
Mitek Systems Inc., a San Diego-based maker of software for the document and check imaging market, said it reached a tentative, $2 million settlement in a federal class-action securities lawsuit filed last October. The settlement will be fully covered by the company’s officers and directors liability insurance policy.
The suit, which sought an unspecified amount of damages, alleged that Mitek shares sold between Dec. 29, 1999 to Sept. 29, 2000, were offered at inflated values due to improper reporting of quarterly earnings.
Mitek continues to dispute the allegations but approved the compromise to enable the company to concentrate on its core business, the firm said.
The firm’s shares, traded on Nasdaq, have a 52-week range of 50 cents and $7.05, and closed at 95 cents as of June 6.
Anacomp Ends Talks To Sell Unit:
Poway-based Anacomp, a provider of document management services, said it terminated talks with an unnamed corporate buyer for its docHarbor business unit. The negotiations had been going on since January.
Anacomp said it will integrate docHarbor into its existing Document Solutions unit, leaving it with two units. The other is Technical Services.
DocHarbor, which provides Web-based document storage and delivery services, had revenues of $1.8 million in the most recently completed second quarter.
CEO Phil Smoot said integrating docHarbor into Document Solutions will set the stage for capturing more sales and operating efficiencies. He also said Anacomp’s financial condition has improved in the last six months, but a look at its second quarter may leave a different impression.
For the second quarter ended March 31, Anacomp lost $15.7 million on $80.2 million in revenues. For the first quarter ended Dec. 31, it lost $7.6 million on $82.1 million in sales.
That means for its first six months, the net loss was $23.4 million on $162.3 million in revenues.
For its previous fiscal year ended Sept. 30, Anacomp lost $111.4 million on revenues of $383.2 million compared with a net loss of $67.9 million on revenues of $442.2 million in the prior fiscal year.
Investors haven’t been impressed with the performance, and the stock, delisted from the Nasdaq earlier this year, hasn’t budged much beyond the 4-cent low it dropped to last month.
The 52-week range was between 4 cents and $4.50.
Send high-tech finance news to mallen @sdbj.com.
