Santa Cruz Sentinel from Santa Cruz, California • Page 13

Sentinel Wednesday, April 22, 1998 B-5 elects as CE April 21, 1998 DOW(Industrials) NYSE Michels Mohan NASDAQ AMEX WW company as long as I've been here. I'm part of the executive management team and have been for a long time, and probably know as much or more than almost anyone else about it." He's also the company's largest holding about 4 million shares, slightly more than 10 percent of the outstanding shares. "I'm obviously very emotionally and intellectually attached to the company, the employees and our business partners. We want to make sure we have success for all of them. For his part, Mohan said the move has been in the planning stages for the past six months for family reasons.

His wife of 23 years and his sons, 17 and 13, never moved from Dayton, Ohio, after the former NCR computing executive joined SCO in 1994 originally as chief financial officer. "Going back and forth was starting to wear on me," he said. "I decided it was in the best interest of the company and our stakeholders that we come up with an alternative arrangement." Mohan plans to keep his By STEVE PEREZ Sentinel staff writer SANTA CRUZ A changing of the guard was announced Tuesday at Santa Cruz Operations Inc. The board of directors of the Santa Cruz-based software company elected company co-founder Doug Michels to the post of president and CEO. Michels, 44, previously served as executive vice president and chief technical officer and is the son of co-founder Larry Michels.

He replaces Alok Mohan, who was named chairman of the board after serving nearly three years as CEO, a time that saw the company refocus its efforts, roll out new products and institute stricter cost controls. Michels, 44, said in an interview that he never aspired to the role of CEO, but was probably the most qualified for the job. "I've been more interested in the technology and making products," he said. "The CEO role is a lot of hard work and not as focused on what I've done most of my life. "On the other hand, I've been hanging out with the CEOs of this erating system.

It's tailored for larger enterprises and supported by partnerships with companies like Compaq, Data General, IBM and Intel. A new product the company is excited about is Tarantella an "application broker for network computing." Basically, it allows any software application on any computer server to be accessed by any client computer, regardless of operating protocols. The combined research and development costs for both products totaled about $100 million, Michels said. Mohan noted both have received favorable reviews in the technical press. "Over the last three years Alok has done an excellent job in moving SCO from a company serving niche markets to an organization with a strong, new technology base," Michels said.

It was a busy day at SCO as the company announced the "strategic realignment" of its executive management team. SCO said the moves are designed to strengthen global sales, marketing and corporate de velopment. Reporting to Michels in a new and expanded role as executive vice president of worldwide sales will be David McCrabb, whose previous positions were senior vice president of market planning and vice president of marketing and channel sales. The company also announced slightly lower second quarter revenues but increased profits on Tues-. day.

Revenues for the second quarter were $50.5 million, down slightly from $54 million the previous perl-' od last year. Net profits though, jumped to $3.2 million, or 9 cents per share, compared to $974,000 and 3 cents per share in the second quarter of fiscal 1997. John W. Luhtala, SCO's chief fl--1 nancial officer and senior vice, president of operations, attributed the earnings improvement to bet- ter gross margins and strict control of operating expenses. He said the company's balance sheet was also "healthy" with almost $55 million in cash and short term invest-, ments as of March 31, 1998.

Dly YTD Name DIvPEJ Last Pasatiempo home and spend about 25 percent of his time in Santa Cruz, leaving more time for his family. He called Michels well qualified to lead the company, having spent 18 years at the center of its development. Mohan said when he took over, the company was a "single product company selling to two niche markets," with UNIX software technology from Novell and selling to small and medium sized business. In the previous quarters the company has unveiled UnixWare 7, the company's next generation op vmj BankAms 1.38 19 8S7 -2 18.4 Canutes 1.28 20 tVM 12.9 DeanFd .80 19 47 Dowjns .98 33 52' -'A Golchk 25 8 7.8 GraniteC .30 19 297) 29.9 LockhdM 1.60 19 113'2 15.2 Penney 2.18 35 73 -Vt 21.3 Planlrn8 20 40' 1.1 SBC Com .93 51 41 Vie 12.1 Safeway 28 37' 18.4 Seagate 28 i 48.7 Texlnsts .34 83 1 40.0 WatkJn .48 7 27 Vk 8.3 WellsF 5.20 36 375 -7 10.5 Wrigley .80 35 BOW 1.8 jpleC 29 ...121.0 Botlnd 11V 52.1 Cisco 60 73' 1" 32.8 CstBncrp .56 44V 2' 19.3 Intel .12 23 78V 2' 12.4 MetaCreat 8 i MontBB .14 42 23V 19.2 Novell 1040 -Vie 38.3 Odwalla 9 -'A 50.0 PacCapB .60 18 43 -'A 3.0 SantCiz 4 -Vie 6.1 TeleComA 33 1 20.4 WstMar 31 26 Via 16.2 Microsoft attacks browser injunction vju io uui ui ivio ovji i iJui i Windows expansion plans rules of the game encourage innova The Associated Press 0w tion," he said. "It is our belief that absolutely nothing should hold them back or slow them down." Gates appeared in Denver as Microsoft and government attorneys squared off in a federal courtroom in Washington.

Microsoft and the Justice Department were debating whether a judge went too far in prohibiting Microsoft from forcing computer makers who offer Windows 95 to also offer its Internet browser. But Gates stood behind the company's practice of linking software programs to its operating system, saying that the widespread adoption of Windows by customers was proof the strategy works. DENVER Declaring that he won't be distracted by the Justice Department, Microsoft Corp. chairman Bill Gates on Tuesday pushed to expand the use of the company's software for running business computers. Gates demonstrated new software designed for use with Microsoft's Windows NT operating system that integrates business purchasing, production and financial functions.

Gates said at the Baanworld 98 convention that Microsoft should be judged by the way it responds to developments and problems in the industry, not by government standards. "We said to our engineers that the By ANDREW J. GLASS Cox News Service WASHINGTON With the threat of a far broader antitrust case hovering in the wings, Microsoft Corp. and Justice Department lawyers wrangled in court Tuesday over whether Microsoft unfairly sought to leverage its near-monopoly over personal computer desktops into controlling the Internet browser world as well. Douglas Melamed, the department's deputy antitrust chief, argued that U.S.

District Judge Thomas Penfield Jackson acted properly in blocking the software giant from forcing computer makers to tie its Internet Explorer web browser into sales of its popular Windows 95 software. Referring to Microsoft's practice of selling its browser as a stand-alone product, while bundling a pre-installed integrated version for resale by computer makers, Melamed told a three-judge panel of the U.S. Court of Appeals: "If they offer it standing alone, then they cannot tie it in." Microsoft attorney Richard Urowsky countered that in pressuring Jackson to issue a preliminary injunction last December against such forced integration, the trust busters got their facts all wrong and the judge failed to heed the legal rules of the road. "Incorporating this (browser) code is transforming the world of applications," said Urowsky, in opposing what he saw as Washington's bid to halt the march of technology. "Ultimately, the issue has been about a longer-lasting importance, a fundamental question of whether computer companies can keep adding new features to products," Microsoft General Counsel Brad Smith said.

The Associated Press Bill Gates announces Microsoft's expansion plans Tuesday. Melamed conceded that the market for Windows 95 after Windows 98 ships would be "very small." The department is pondering whether to move against the new operating system as well, a step that Microsoft attorneys say would require bringing a fresh case from ground zero. An even wider antitrust move, targeted against Microsoft's marketing and service practices, is also under active review by top Justice Department officials. The court's decision is expected in one to three months. "What's to prevent Microsoft from bundling a new browser, one that's never been marketed, with Windows 98?" asked Judge A.

Raymond Randolph. And Judge Stephen F. Williams, noted that there was a "complete overlap of code, or if not complete overlap then a large degree of overlap," between Windows 95 and Internet Explorer. Presiding Judge Patricia Wald questioned whether the complex case might simply be lost in a "time warp" after Windows 98 reaches the market, probably in late June. This longstanding dispute may soon become a sideshow, however, as Microsoft gets ready to roll out Windows 98 a upgraded operating system that binds its browser directly into the operating code.

In their questioning, the appellate judges focused on the larger monopolistic issues at stake. They soon moved beyond whether Jackson had issued an improper ruling to address the question of whether Microsoft's browser is an "integrated" product, and therefore exempt from a 1995 consent decree, or whether is merely "tied" to another product. FCC slams phone company shut Taking its strongest action yet against the illegal practice of telephone slamming, the Federal Communications Commission essentially shut down a small long-distance operator called Fletcher Cos. on Tuesday and fined the carrier $5.7 million. That was by far the largest fine the commission had levied for slamming, which is telecommunications-industry jargon for switching a customer's long-distance provider without explicit permission.

Since the breakup of the Bell system in 1984, the commission had assessed a total of less than $2 million in fines for slamming violations. Star Air buys Western Pacific Star Air Trading a privately held company with offices in West Palm Beach, is buying the federal flight certificates of the defunct Western Pacific Airlines, an airline official said. For $350,000, Star Air will get Western Pacific's certificates from the Federal Aviation Administration and U.S. Department of Transportation, its flight training manuals, maintenance logs and service record. The deal does not include aircraft that Western Pacific had leased.

FDA wants labeling on untreated fruit juices 'We want people to know that juices which are not pasteurized carry a small but nevertheless real added risk that a pathogen could be present' Donna Shalala, secretary of health and human services. Plantronics posts record revenues Sentinel staff report SANTA CRUZ Plantronics an international headset product manufacturer, announced record fourth-quarter revenues Tuesday and earnings of $63.5 million up 21.5. percent from the same period last year. Revenues for fiscal 1998 were up nearly 21 percent $236.1 million in fiscal 1998 versus $195.3 million in fiscal 1997. The company has been increasing its reach into the mobile headset market.

Robert S. Cecil, chairman and chief executive officer, credited a growing market for headset adoption. Plantronics' diluted earnings per share were $0.61 on 18.2 million shares outstanding at quarter-end, a 35.6 percent increase in comparison to the $0.45 per diluted share earned in the fourth quarter of fiscal 1997 on 17.7 million shares. Prior year earnings per share have been adjusted to reflect the two-forone stock split effected as a dividend in the second quarter of fiscal 1998. Record earnings per share were also achieved for the year.

Plantronics' diluted earnings per share were $2.15 on 18.2 million shares outstanding at year-end, a 28.7 percent increase in comparison to the $1. 67 per share earned in fiscal 1997 on 17.8 million shares. Plantronics was founded in 1961. It is headquartered in Santa Cruz and has offices in 14 countries. 1 juice is consumed on the spot a restaurant, juice bar or child's lemonade stand, for example would be exempt.

The other FDA rule would require fruit and vegetable juice processors to implement gradually their own anti-bacterial plans, similar to those taking effect in the nation's meat and poultry plants. These plans, known as Hazard Analysis and Critical Control Point or HACCP systems, are intended to identify where in the process contamination is most likely to occur and then install preventative measures. The goal is for a reduction in pathogens compared with untreated juice. To some in the industry, the proposed FDA rules don't go far enough. Allen Mathys, vice president of regulatory affairs at the National Food Processors Association, said the government should require that all juice be pasteurized.

"Unless FDA mandates pasteurization or an equivalent process for all juices, not just most juices, this rule will not be successful in advancing food safety in this country," Mathys said. Earlier this month, it was reported that Odwalla was negotiating a plea deal with federal prosecutors in which it would admit to food-safety violations for the 1996 E. coli incident and pay $1.5 million criminal fine. The Associated Press WASHINGTON Warning labels will appear on juice that is not treated to kill disease-causing microbes. Processors also will be required to take new steps against contamination under proposed federal rules announced Tuesday.

Although 98 percent of juice sold in America is already treated to kill pathogens, the Food and Drug Administration estimated that up to 48,000 people are sickened each year by such microbes as salmonella in untreated orange juice and E. coli in apple cider and juice. In 1996, at least 66 people were sickened in the western United States and Canada from drinking untreated Odwalla brand apple juice tainted with E. coli. One 16-monthold Colorado girl died.

The Half Moon Bay company pulled its drinks that contained apple juice, later reintroducing most using a different mix of ingredients. Executives also offered to pay the medical expenses of anyone hurt by their products. The label, which FDA hopes to finalize by the fall apple harvest when more untreated juice is sold, would state that the product "may contain harmful bacteria which can cause serious illness in children, the elderly, and persons with weakened immune systems." China bans direct marketing giants China ordered an immediate ban on direct marketing in a move likely to close a multimillion-dollar market for Amway and other direct marketing giants. The ban, announced late Tuesday by the state-run Xinhua News Agency, reflected government concern about the system of Independent distributor networks, with their door-to-door sales and motivational meetings. Direct marketing companies have become hugely popular in China.

"We want people to know that juices which are not pasteurized carry a small but nevertheless real added risk that a pathogen could be present," said Donna Shalala, secretary of health and human SGrvicos. Only packaged products offered for sale would be affected. Locations where Dow at new high; IBM leads the way ceeded the reduced expectations of For Secretaries Week: ENJOY LUNCH ON THE PATIO Thank your secretary with a lunch outside on our patio this week. The weather Is beautiful and the food Is great. Reservations accepted.

most analysts, who had been duly warned by all three companies in advance. IBM's results helped spur big gains among bellwether issues such as Intel, up 2 716 to 78 1516, and Dell Computer, up 4 1116 to 74. straight day of closing highs for the Standard Poor's 500 and the technology-heavy Nasdaq composite index. IBM, which posted its latest results at Monday's close, jumped 6 1316 or the equivalent of 27 Dow points to an all-time best 118. The computer giant, hurt by PC price wars and the continuing economic turmoil in Asia, suffered a 13 percent drop in profits compared with a year ago.

But just like last week's reports from Intel and Compaq Computer, the results ex- The Associated Press NEW YORK A decent profit report from IBM and a gold rush for Internet-related shares boosted the stock market to another day of record highs on Tuesday. The Dow Jones industrial average rose 43.10 to 9,184.94, topping Friday's record close of 9,167.50. The blue-chip barometer, which had slipped 25 points on Monday, opened the day with a 43-point loss before reversing course. Broad-market measures also set new records, including a third LUNCH MON FRI 1 1 :30 4:00 SHOP for a home with a pre-approved loan. SoCal drivers pay more to run cars Car-loving Southern Califomians pay more than anybody else In the country to operate new vehicles.

It takes about $375 per year more than the national average to drive a new car In the region, the Automobile Club of Southern California said Monday. Costs include Insurance premiums, license and registration fees, taxes, depreciation, finance charges and maintenance costs. From Sentinel wire services 6.25 15 YEAR CONFORMING APR 6.52 RISTORAMTE k-v iit -fftm METRO GOLD AWARD 1 9 9 7 PACIFIC INLAND ITAUANO Financial, Inc. BEST if Sinn Cm i The Bird Feeder 347 Soqucl Ave. at Ocean Santa Cmz 457-8240 Bird Feeders Bird I louses Bird Baths Bonk Binoculars Field Guides JEMCO Business Machines 834 17th AVE SANTA CRUZ 10 YEAR ANNIVERSARY SPECIAL LEASE OPTIONS START AT S50M0 AUTHORIZED DEALER ROYAL C0PYSTAR 5161 S0QUEL S0QUEL pncltlcieti.nMcom.com aoH1798 555 SOQUEL SANTA CRUZ 458-2321.