Microlog replaces chief after 3-month search

Germantown company hopes executive can halt earnings slide

Software industry

June 16, 1999|By Kristine Henry | Kristine Henry,SUN STAFF

Nearly three months after its president and chief executive officer resigned because of disappointing earnings, Germantown-based Microlog Corp. said yesterday that it has found a replacement.

Stephen D. Smith, 43, former vice president of sales at SpeechWorks in Boston, a company that provides conversational speech recognition technology and products, will take over Monday, after the annual shareholders meeting.

Microlog designs and manufactures software that transfers telephone calls and collects data for customer use -- such as accessing bank account balances.

This month it reported a second-quarter loss of $2.2 million on $4.3 million in sales.

Revenue in the corresponding quarter a year ago was $7.7 million with a net loss of $749,000. For all of 1998, the company reported a net loss of $8.4 million.

Smith came to Microlog's attention about four months ago when a consultant it had hired identified Smith as a potential candidate for a vice president-of-sales position.

"We went back to him and said, `Would you be interested in the CEO position?' " said David Levi, who has served as interim chief executive since late March.

"I felt he had an extremely good grasp on the market and that his views would succeed. And I liked his sales background; we do need to improve the selling atmosphere at the company."

Richard A. Thompson stepped down as president and chief executive officer March 29, saying the earnings in 1998 were "an extreme disappointment."

"As CEO, I hold myself responsible and accountable," Thompson said at the time.

Smith said he plans to "create a future" for the company.

"One of the things that attracted me is the very resilient core here," he said. "We need to do more zeroing in on our core competencies."

Microlog announced this year that will close its manufacturing plant in Gaithersburg by September, transferring the 20 people there to its Germantown headquarters.

The company laid off 30 people this year as it changed its product focus.

The company had focused on interactive voice response units and software that transferred calls to various locations within call centers based on which keypad numbers the caller pressed. Microlog customers include Xerox, KLM Airlines and the Internal Revenue Service, said spokesman David Burd.

About a year and a half ago the company began work on software that can collect data and transfer calls together. The software, called "uniQue" won four product-of-the-year awards from industry magazines in 1998.

Microlog announced a pending deal last week with TFX Equities Inc. -- the merger and acquisition arm of engineering and mechanical product manufacturers Teleflex Inc. -- in which TFX will buy $4 million worth of shares at $1.50 per share.

If the deal is approved by shareholders and regulators, Levi said, TFX would own about 38 percent of the company.

Microlog is also in negotiations with Nasdaq officials to remain on its national market listing. The listing is threatened, Levi said, because of the company's low stock price and the late filing of its annual report to the Securities and Exchange Commission.

Shares of Microlog closed at $1.9375 yesterday, down 6.25 cents.

Pub Date: 6/16/99

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