Revenues are rapidly disappearing at Banyan Systems Inc and, with innumerable staff reductions and endless multi-million dollar restructuring charges, you begin to wonder who is actually left to run the business. The Westborough, Massachusetts-based networking software company has reported second quarter net losses of $13.7m down from profits last time of $186,000 on revenue down 43.5% at $17.1m and the balance sheet shows that Banyan is close to achieving negative net asset status. This quarter’s figures include restructuring charges of $9.7m including lay-off costs after a 22% reduction in staff. In the last few quarters, restructuring charges have totalled $31m, a high percentage of which relates to cash payments for lay-offs which never seem to end. Operating cash flows have been highly negative for too long now and recently appointed chief executive William Ferry is focusing hard on what he calls stabilizing the company. Ferry was appointed in February this year and has brought in a host of new faces in senior management positions. The old chief executive and company founder David Mahoney was sidelined last November when it became clear that he was failing to arrest the company’s decline. Banyan’s old core product was the ‘Vines’ Unix based network operating system which has rapidly gone the same way as Novell Inc’s Netware. The market for discrete network operating systems has been rapidly overtaken by all-inclusive operating systems like Microsoft Corp’s Windows NT and Banyan has had to re-invent itself rather quickly as a network services company. The latest research effort is going into new Windows NT-based products and directory and messaging services for the internet. But Banyan is the first to admit it has limited experience in developing or selling internet products. The company’s future may well depend upon the quality of the strategic alliances it can strike up with more experienced partners.
Content from our partners
