Value of Quarterdeck stock rises eightfold following reorganization.

The value of Quarterdeck Corp. stock has gone up eightfold in the past year since a major restructuring brought in new management and eliminated one-third of the work force at the business software company.

In the past year, the stock has repeatedly hit new highs on the Nasdaq board and last week was trading in the $16 to $17 range, up from about $2 a share last September. The company's 52-week low is $1.88 and as of last week the high was $17.50.

Ten days ago Santa Monica-based Quarterdeck announced its latest quarterly results, which showed a 110 percent increase in revenue from the same 1994 period to $17.2 million. Net income for the fiscal third quarter ended June 30 was $24,000 compared to a loss of $2.2 million in the same 1994 period.

"It's a terrific turnaround story," said Orin Hirschman, managing partner of Adam Smith & Co., an institutional money management firm in New York. "The company is doing very well and I expect it will continue to do well."

A year ago Quarterdeck Corp., which recently changed its name from Quarterdeck Office Systems Inc., was in the middle of a major upheaval after going public in 1991 and becoming a rising star on Wall Street. For the 12-month period of fiscal 1994 ended Sept. 30, 1994, Quarterdeck reported a $21.2 million loss, as revenues dropped from $44.9 million to $26.8 million.

In fiscal 1992, Quarterdeck revenues had topped at $55 million.

CEO leads revival

Wall Street and high-tech industry analysts said Quarterdeck's turnaround could be attributed to several factors. Most analysts said the primary reason is Gaston Bastiaens, who was named chief executive officer last January.

Shortly after Bastiaens was named CEO, Quarterdeck's stock almost doubled to $4 a share.

Bastiaens succeeded King Lee, whom the Quarterdeck board of directors had hired in August 1994 as an interim chief executive.

Lee, who is still on the board of directors, was brought in after founder, President and CEO Therese Myers left the company, along with Quarterdeck's two other top executives - Gary Pope and Stanton Kaye.

Circumstances of the trio's departure are not exactly clear. Company representatives said the three left voluntarily, but industry sources speculate they were forced out by tbe board.

Bastiaens took over after 100 of the company's 300 existing jobs were eliminated. Since he took over, Bastiaens has formed a new management team that concentrates on marketing, in addition to continuing Quarterdeck's traditional strengths in technology-related areas, said the analysts.

Accent on marketing

Bastiaens. who is 48, an engineer by training and a native of Belgium, worked for Apple Computers and Philips NV before joining Quarterdeck.

"What he brings to the company is a wide experience in international high-tech marketing," said Hirschman. "What was missing before was marketing. The company was good at technology but it didn't know how to properly sell its products."

Quarterdeck, founded by Myers and Pope in 1988, makes computer software for businesses. Its primary programs have been utilities systems that enhance existing computer operations, and remote computing that is used for such activities as telecommuting.

QUARTERDECK OFFICE SYSTEMS INC.
(QDEK/NASDAQ)

Qtr. June 30:                1995           1994

Revenues                   $17,198         $8,214
Net income                   ($24)        ($2,219)
Average shares
outstanding                 23,743         23,160
EPS                          $0.00         ($0.09)

Closing price Aug. 16

$15.88

Down $0.12

52-week

High           Low
$17.50        $1.88

All figures except for EPS and stock prices in thousands.

In addition to putting a greater emphasis on sales, Bastiaens has created a new division within the company to design software that will assist users in gaining access to the Internet, the worldwide computer communications system.

He has also begun something of a buying spree, making two acquisitions of small high-tech businesses, one of which had a big telemarketing system to sell its products direct to users. That company is Clearwater, Fla.-based Landmark Research International Corp., a software maker.

Telemarketing tapped

A spokeswoman for Quarterdeck said a key reason for the acquisition was Landmark's 75-person telemarketing department, which will now also sell Quarterdeck products.

Since the layoffs at Quarterdeck, employment has gone up to about 400, due primarily to the two acquisitions. The other acquisition was of Internetware Inc., a Sunnyvale, Calif.-based maker of computer products for the Internet.

In addition to the two acquisitions, Quarterdeck has also made minority investments in two other high-tech businesses - Limbex Corp., another Internet business, and Lernout & Hauspie Speech Products, a developer of speech products.

Company executives were traveling last week but a spokeswoman agreed with the analysts that the difference in the company vs. a year ago is the emphasis on marketing.

"Quarterdeck has reinvented itself into a market-driven organization that still has the best technology available," she said.

Quarterdeck currently has offices in several buildings in Santa Monica but recently signed a deal to move into a single building in Marina del Rey. When the company will move is not yet known, however.