Company could reach founder's goal of being a multibillion-dollar player in PC industry


April 06, 1992|By Tom Steinert-Threlkeld | Tom Steinert-Threlkeld,Dallas Morning News

Austin, Texas -- When Sears, Roebuck and Co. came here to visit for the first time last summer, CompuAdd Corp. had never built a point-of-sale terminal, the computer-age successor to the cash register.

One week later, when Sears came to visit again, CompuAdd had built two, from scratch. It took shipments of key components via Federal Express and a local metal shop bending iron. But the proof was on the table.

Such breakneck responsiveness has become the calling card for privately held CompuAdd, which appears on the verge of achieving founder and sole owner Bill H. Hayden's goal of becoming a "multibillion"-dollar competitor in the personal computer field.

Some analysts, however, question the company's profitability, particularly because its retail outlets have lagged.

"I can't understand how they're making money in their retail stores," said David Goldstein, president of Channel Marketing Corp., a Dallas distribution research firm.

Big deals, however, appear to be CompuAdd's ticket to the top. The day after Christmas, CompuAdd shipped the first 3,200 point-of-sale terminals to Sears, out of a total order of 28,000. The $53 million order was wrested from Sears' longtime supplier of cash registers, NCR Corp., recently purchased by American Telephone & Telegraph Co.

But the deal that really opened eyes was CompuAdd's selection as one of two companies to supply the U.S. Air Force and other federal organizations with as many as 300,000 computers. In just the first year of the five-year contract, CompuAdd would reap $398 million.

Easy come, easy go. The award was canceled, after challenges from such already billion-dollar suppliers such as Electronic Data Systems Corp., International Business Machines Corp. and Apple Computer Inc.

But CompuAdd does not stay with anything at which it can't make money. In September, the company launched a business called Sound and Sight Technologies to sell accessories that would add television, video, radio and other multimedia capabilities to personal computers. By the end of the year, the new venture was junked, because its potential appeared limited. "We flat changed our mind," Mr. Hayden said.

The company says it has been profitable not just every quarter -- but every month, save for the very first three, when Mr. Hayden was the sole employee and revenues were $10,000 a month.

Now, it runs 125 retail stores across the country as well as designing and manufacturing its own personal computers. Sales exceed $500 million annually excluding mail-order sale of computer products.

That operation, generating between $100 million and $200 million a year, was spun off in December into a separate company, CompuAdd Express Corp., also wholly owned by Mr. Hayden.

Last month, he went further. CompuAdd's software and systems group was spun off as a separate unit. Then he divided his core company into two units, one to handle CompuAdd's retail stores and international operations, the other to pursue corporate and government sales.

The idea: To reduce the demands on Mr. Hayden, who has been something of a one-man show throughout the company's history. There is no board of directors, since Mr. Hayden owns 100 percent of the stock. By Mr. Hayden's fiat, there are no secretaries and no vice presidents. Fourteen "directors" -- the highest rank a department head can attain -- report to Mr. Hayden instead.

His goal: to create companies capable of producing $500 million annually in revenues. By creating separate companies, Mr. Hayden can achieve his "multibillion"-dollar goal without the typical structure of a company that size.

He puts many directors and big chunks of his business under the control of a single individual -- whom he does call "president.

He also plots a relatively radical change for the company's retail operations. In the next few weeks, CompuAdd will announce that its stores will carry other computer systems besides its own.

"It's the model of the future, it's the model of the day," said Mr. Hayden. "We think the time has come for CompuAdd to add other lines."

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