lindsay@watnext.waterloo.edu (Lindsay Patten) (09/01/89)
From: Lindsay Patten <lindsay>
I was told by one of its competitors that Visual technology is
"in the throws of bankrupcy". Does anyone know any more about
this? I have already been burned once this year by a bankrupt
company and would prefer to buy my x terminals elsewhere if it
turns out they are in trouble.
Thanks,
Lindsay
P.S. Does anyone have any info on the Tek colour X terminals?
Lindsay Patten
Pattern Analysis & Machine Intelligence Group lindsay@watnext
Department of Systems Design Engineering lindsay@watnext.waterloo.edu
University of Waterloo {utai|decvax|uunet}!watmath!watnext!lindsay
--
Lindsay Patten "People are package deals - No substitutions allowed"
Pattern Analysis & Machine Intelligence Group lindsay@watnext
Department of Systems Design Engineering lindsay@watnext.waterloo.edu
University of Waterloo {utai|decvax|uunet}!watmath!watnext!lindsaymjb@xpiinc.UUCP (Michael J. Braca) (09/07/89)
In article <11353@watcgl.waterloo.edu> lindsay@watnext.waterloo.edu (Lindsay Patten) writes: : I was told by one of its competitors that Visual Technology is : "in the throes of bankruptcy". Does anyone know any more about : this? It is wishful thinking on the part of our competitors that we should simply disappear. I don't begrudge them a bit of sliming, but, personally, I prefer a more positive sales approach. The short answer is that we are currently undergoing a rather radical financial reorganization, part of which involved filing a voluntary petition to operate under the protection of Chapter 11 of the US Bankruptcy Code. When we emerge in October, we'll be in the strongest position we've ever been to compete in the X Window System marketplace. Here are the gory details. Visual was founded in 1978 to design, manufacture, and market integrated text and graphics display stations. We were successful until 1983, when we introduced an IBM-compatible "portable" computer, which did not sell well (you may have seen them in DAK catalogs) and resulted in significant losses. In late '86 Hambrecht & Quist stepped in to try to turn the company around based on a formula successfully applied in many previous turnaround efforts. The formula involves finding financially troubled companies that have a hot business opportunity strategy or new product (in Visual's case a line of "processing terminals" based on the MC68000 CPU) combined with a stable old business that can pay for itself and generate some cash as well (in Visual's case the old "dumb terminal" business). In late '87 Visual got involved in X terminals, pretty much as a sideline, by contracting with (and eventually acquiring) a software company called XPI Inc. to port an X server to the top-of-the-line 640 networked terminal. To make a long story short, the formula failed because the old terminal business was much weaker than expected, the processing terminals were only a modest success, and the really hot product turned out to be the X terminal, which we first showed at COMDEX in May '88. Enter new turnaround strategy: turn the whole thing into a company focused on X. To attract new investment into what is now essentially a startup operation, we needed to figure out how to get out from under the mountain of debt incurred by pouring cash into the old business black hole. I am greatly simplifying here, but the basic choice is between (1) selling the assets to a new, startup company, then liquidating the rest of Visual, or (2) undertaking a massive financial reorganization, with the primary goal of converting debt to equity. The main problems with option (1) are that you lose the leverage of having an 11-year-old company, and also that your suppliers who are creditors end up with nothing because the liquidation proceeds would all go to banks. If you want to continue in business, as we certainly do, it is not wise to piss off your suppliers. The main problem with option (2) is that the more unscrupulous of your competitors will undoubtedly try to scare off your customers during the reorganization. However, given our confidence in the quality of our products, the commitments of various investor groups (principally H&Q), the potential of the X business, and the willingness of the banks to sell out the secured debt, Visual's board of directors determined that the best course of action would be to run a financial reorganization through Chapter 11, from which we expect to emerge in mid October having settled amicably with our creditors. In the meantime, we continue to operate at full steam, having begun shipping a 19" terminal in July, and we expect to introduce three more products by the end of the year. Since further discussion of this topic seems inappropriate for this news group, anyone wishing to follow up can reach me at mjb@xpiinc.uu.net or at (508)459-4903. Mike Braca VP Software Engineering Visual Technology, Inc.