Ashton-Tate makes a phoenix-like rise on strength of new management and software.

Ashton-Tate makes a Phoenix-like rise on strength of new management and software

Torrance-based Ashton-Tate Corp. gives the appearance of a corporate Lazarus, having miraculously risen from the dead after almost two years nearly in the grave.

With analysts predicting more devastating losses and saying anyone would have a hard time resurrecting the personal computer software firm, Ashton-Tate three weeks ago startled observers by recording a third-quarter profit of $1.1 million.

But analysts, investors and even the company president remain cautious about predicting the future of the former king of the database software market.

"I think it indicates they're on the right track. It's a start," said Mary McCaffrey, analyst with C.J. Lawrence.

In its most recent move, Ashton-Tate two weeks ago announced the promotion of David Proctor to executive vice president. Company president William P. Lyons said Proctor, as vice president and general manager of the firm's database division since May, was largely responsible for shipping out a reliable version of the company's flagship product dBase IV last summer. That release came two years after a defective version swept the marketplace.

"He kind-of shepherded it out in the end," Lyons said of the colleague he lured from IBM. Lyons, 46, who worked at IBM for 19 years, was hired seven months ago to rescue Ashton-Tate from its problems. It is his first time heading a corporation.

Proctor worked at IBM for 23 years before Lyons hired him away to head the shipping out of dBase IV 1.1.

The earlier error-ridden dBase IV release was partially to blame for Ashton-Tate losses of more than $50 million and massive layoffs. It was especially devastating for a company that only five years ago controlled 80 percent of the database software market.

"When you have a high market share, you attract a lot of competitors," said Lyons. And, he said he continues to be "cautious not to predict future sales."

"Our objective certainly is to maintain profitability," he said.

McCaffrey said that since many people had been waiting two years for a working dBase update, there was a lot of "pent up demand satisfied" when it was finally released in July. That accounted for much of the third quarter revenue. The question, said McCaffrey, is whether Ashton-Tate can maintain sales figures in this sluggish economy.

Some analysts said Ashton-Tate is lagging competitors in the development of new graphic products.

And retailers said dBase IV sales are slow. Even if the new software is bug-free, it is apparently still too expensive and complicated for the changing world of user-friendly graphics.

"It is still very, very slow (to sell)," said Alex Farr, manager of Computer Factory in West Los Angeles. "I suppose they should bring the prices down."

Howard Knight, manager of Software Supermarket in Los Angeles, said many customers are staying with dBase III, rather than spend $500 or $600 for an upgrade.

Lyons admitted that "sales into the channel" will be down again this year, compared to last.

But he said dBase IV sales are picking up with recent positive reviews in computer magazines. And Ashton-Tate is developing database programs to work with half-a-dozen different systems, including Macintosh and Sun Microsystems. Lyons said the company also is examining the possibility of less expensive products.

But despite Ashton-Tate's mythological Phoenix-type return and its soon-to-be-released product line, the company's stock price has yet to respond. The stock, which fell from $24 in 1989 to $8 to $9 in August (after release of the improved product) and $6.75 in October, has risen only about 25 cents per share on news of the first quarterly profit in 18 months.

"It's way too early to tell," said Timothy McCollum, an analyst with Dean Witter Reynolds. He called the profitable quarter "a movement in the right direction," but noted that it included an operations loss, albeit a smaller one than other recent earnings statements.

Lyons said the third quarter profit resulted partially from currency rates and interest income and was "a real profit." He blamed the company's stalled stock price on overall problems on Wall Street.

"Nothing surprises me on the market right now, with the downturn in technology stocks," he said.

Perhaps most optimistic about Ashton-Tate's future is Bob Therrain, an analyst with Paine Webber. He said even during the hard times, Ashton-Tate had a healthy cash position.

"A lot of people position it as a temporary paperwork profit, but the earlier losses were really temporary paper losses," said Therrain.

PHOTO : Lyons: New Ashton-Tate president makes progress