Ashton-Tate Corp. unveils new database program; company's 12 percent stock price gain holds its ground.

Ashton-Tate Corp. unveils new database program

Company's 12 percent stock price gain holds its ground

Hoping to remedy flaws in its flagship product, Ashton-Tate Corp. President Bill Lyons July 31 announced the release of a long-awaited, corrected version of dBASE, the nation's most popular data-management software.

The stock closed that day at $10.50 a share, holding on to the 12 percent gain realized immediately following reports a week earlier that the release was imminent.

"This may be the first step to regaining their lofty levels of profits and earnings," predicted high-tech securities analyst Al Tobia of Mabon Nugent & Co. in New York. "That company has been a lame duck since October 1988."

In that month Torrance-based Ashton-Tate introduced a revision to its software line, named dBASE IV 1.0, that offered new features and improvements. But with them came so many errors that the program was widely rejected by new buyers, crippling the company's balance sheet. A revision without the errors, or "bugs," was readied and then delayed several times as the company scrambled to control damage to its name and regain customer confidence.

"If it's got bugs . . . we'll probably know within a week or so," predicted analyst Peter Rogers of Robertson Stephens & Co. in San Francisco in a news report July 24. But even if the new version runs smoothly, he said, the company will be troubled for some time because it lost much of its consumer base.

Having earned $48 million profits in 1989, the company lost $29 million last year and $14 million during the first six months of 1990, largely attributed by officials to the snake-bitten product. The share price fell to the $10-to-$15 level from its high of $32 in 1987. Then-chairman, president and chief executive Edward M. Esber resigned this May after the annual meeting. Esber, 37, had served as president and CEO since November 1984 and was last earning $484,956 a year. He was retained in a paid position as vice chairman. No recruitment for the CEO post is currently underway, said a spokeswoman.

Historically, dBASE has brought in 60 percent to 70 percent of Ashton-Tate's total revenues, which fell from $307 million in 1989 to $265 million last year and only $105 million during 1990's first half.

"The company does not expect to return soon to its traditional revenue and profit levels, despite today's introduction," Lyons cautioned last week. He offered no prepared statement on how it might regain lost market share to competing software, like Fox's "FoxBase" and Borland's "Paradox." Nevertheless, Lyons called the new version "faster and more reliable." More than 5 million automated test runs were performed on the product, said Dave Proctor, Ashton's general manager for database products. "We believe it's the largest quality-assurance program ever undertaken in the PC software industry," said Proctor.

To compensate the approximately 150,000 users of the flawed dBASE IV 1.0, the new dBASE IV 1.1 will be offered free of charge. Owners of the next-prior version, dBASE III PLUS, will be charged $175 for the upgrade. New customers will face a suggested retail price of $795.

There are an estimated 2.5 million to 3 million users of dBASE.

Data-management software is used by businesses and individuals to store, index and retrieve large volumes of data. The newest dBASE version is compatible with mainstream computer systems: it runs on personal computers compatible with the IBM PC, XT, AT or PS/2 models. For networking, the new software requires a PC-DOS or MS-DOS operating-system version 3.10 through 3.31, 4.01 or another that is 100 percent compatible with one of those.

Esber and other executive officers collectively own 13,553 shares of Ashton-Tate stock, according to the last official report in a March 14 proxy. They were purchased at an average share price of $15.58, well above the current $10.50. Officers have been granted options to buy 1.8 million additional shares at an average exercise price of $11.88.

Lyons, who replaced Esber as president, has options to buy 130,000 shares at an average exercise price of $12.43 per share.

The 52-week high for the stock was $15.25 and its low was $8.125.

Whether the product is a success and helps rescue the company's declining revenues should not be evident until the fourth quarter of 1990, predicted Tobia. In the meantime, "It would be nice to see them diversify, to invest some of their $125 million of cash into a hot new product either through R&D or through an acquisition," said Tobia.

Last month Ashton-Tate made three major announcements at the PC World Forum in Moscow, where the company was demonstrating its PC and Russian add-on software products. The announcements included the signing of a Soviet joint venture document, the establishment of the Ashton-Tate Soviet Training Center in Siberia and the completion of its first formal database training program in Siberia. The week-long training program was attended by more than 1,000 software developers and programmers, the company reported.

Ashton-Tate develops and markets software for microcomputer business applications and for advanced connectivity. In addition to database management systems, its major products include word processing, spreadsheets and graphics. The company has operations worldwide, with products available in 20 languages ad in more than 50 countries.