News & Analysis: In Brief
Private sale Sale of third Cabletron unit shows its value Concord Communications Inc.’s mid-January acquisition of Aprisma Management Technologies for $93 million in cash indicates that the third Cabletron Systems spin-off has fared far better than its two brethren. Cabletron - once the state’s largest employer - had spun off both Riverstone Networks and Enterasys Networks in 2002, but both of the public companies have struggled, mired in Securities and Exchange Commission investigations, class action lawsuits and a shrinking market share, employing only a fraction of the number of employees they had formerly employed. Each also left New Hampshire. But Aprisma, a third spin-off, remained privately held, intact and headquartered in Portsmouth with the same work force. Aprisma, with its Spectrum technology, was in many people’s eyes the jewel of the cluster, but all the regulatory scrutiny thwarted its launch as an IPO in 2002. Instead it was hastily sold off to Gore Technologies Group, an investment firm that specialized in turning troubled companies around. No one ever disclosed the amount of the sale, but one analysis estimated that it went for a song — no more than $15 million. Last year alone, Aprisma estimated it had $43 million in revenues — a 15 percent increase over the previous year. “Given that the industry has been on its back, a 15 percent growth rate is pretty good,” said Mike Fabiaschi, the company’s CEO. Obviously Concord Communications, a Marlborough, Mass.-based networking company whose shares sell on the Nasdaq, thinks so. While Fabiaschi said “Aprisma’s name will fade,” the Portsmouth facility - which currently houses 130 of the company’s 200 employees - will continue to develop the Spectrum brand name for Concord. That’s about the same head count it had three years ago. Meanwhile the number of Enterasys local employees was down to 383 at the beginning of last year and Riverstone no longer has a facility in the state. The engineers that are still employed here are working out of their home. At its height, Cabletron - co-founded by former Gov. Craig Benson — employed more than 6,000 people in New Hampshire. Tax talk Lynch mulls bigger hike in cigarette levy Only days after taking office, Gov. John Lynch has sent signals that he might seek to increase the cigarette tax even further to help balance the next two-year state budget. In December, Lynch revealed that he would propose a 15-cent increase in the state cigarette tax for his plan to reform state aid to education. The state’s tobacco tax is 52 cents per pack, which is less than half the rate charged by the other New England states. But, he said, “as we think about revenue, I am not ruling out a greater than 15-cent increase in the cigarette tax. I am not ruling it out, but I’m not prepared yet to talk about it because I want to make sure the cost analysis we are going through is rigorous, meticulous.” The 15-cent tax hike would raise about $21 million a year, which is the same amount Lynch would have to replace if he succeeds with his proposal to repeal the statewide property tax and do away with payments made by property-rich or donor communities. “It’s important for me as I go through this process to really focus on the costs first, and I don’t want to at this point talk about issues pertaining to revenue,” he said. Shipyard SOS Chamber seeks to rally support for facility The Greater Portsmouth Chamber of Commerce has issued a call for Seacoast business and civic leaders to raise their voices in support of the Portsmouth Naval Shipyard, which is under threat of closure by the Pentagon. Defense Secretary Donald Rumsfeld is required to issue a list of bases that might close within the next four months. By writing letters to members of the congressional delegation and supporting the Seacoast Shipyard Association, the yard’s advocacy group, businesses in town can help to preserve the shipyard, said chamber President Dick Ingram. “We’re going into a final phase of the process, and that makes it especially important that we don’t slow up the efforts,” Ingram told the Portsmouth Herald. “It’s important that we help them carry the fight.” According to the Seacoast Shipyard Association, 2,633 Maine residents and 1,821 New Hampshire residents worked at the yard in 2003. Massachusetts is home to 102 workers, and 41 reside in other states. The payroll totaled nearly $284 million in 2003. Out of work Teradyne announces 200 Nashua layoffs As conditions show no signs of improving in the electronic contract manufacturing business, Teradyne Connection Systems has announced plans to cut about 250 jobs worldwide, 200 of them in Nashua. The 250 jobs being eliminated represent 10 percent of Teradyne Connection Systems’ work force. The jobs being cut are in manufacturing, said Tom Newman, Teradyne’s vice president of communications. Some manufacturing will remain in Nashua, mostly in the form of prototypes and more complex, high-end products. “This has been going on for a couple of years now,” Newman said. “In order to remain competitive, we have to move more manufacturing to lower-cost areas such as Mexico and Asia.” Research and product development will be the focus of the company’s Nashua division and its counterpart in Dublin, Ireland, because developing new products is key to the company’s future, he said. Patrick Ho, a stock analyst for Moors & Cabot Inc., told the Nashua Telegraph that, while layoffs are difficult, in Teradyne’s case they are necessary, and he believes the company is doing a better job these days of handling its expenses. “This is something they have to do; it’s obviously necessary to help their business,” Ho said. The company may not be done cutting costs, including laying off workers, he said, if the market continues to get worse. But, he added, “I think that by the end of 2005, things will be a little bit better.” Partly cloudy Forecast for N.H. economy is mixed New Hampshire’s economy is poised to lead New England in recovery, but not at an exceedingly robust rate, a panel of economists told members of the House and Senate Finance and Ways and Means committees earlier this month. “New England and New Hampshire are in sustained recovery, and New Hampshire is the most resilient economy in the region,” said Ross Gittell, vice chairman of the New England Economic Project and an economics professor with the University of New Hampshire. Gittell described the economic outlook as a “good news, bad news” situation. The good news is the region is recovering well, but the bad news is this growth is going to be much less than what New Hampshire and the other regional states experienced during the 1990s. “The good news is better than the bad, which is what you want,” he said. For example, the job growth during the mid-1990s was 3 percent a year. Gittell said employment growth from 2003-08 in this state would be 2 percent a year, which is greater than the national average forecast of 1.4 percent. Another forecast - this one released by the Federal Deposit Insurance Corp. — is predicting that the state’s economy should pace New England in 2005 with a 4 percent growth rate. The FDIC’s quarterly “state profile” suggested “both labor demand and the rate of employment growth should improve” in 2005. “New Hampshire’s economy is perhaps the strongest in New England,” said Paul Driscoll, regional manager for the FDIC’s Boston area office. The forecast predicted a 4 percent increase this year in the gross state product. The estimated 2004 rate is between 3 and 4 percent. Driscoll also said the state has “a very healthy banking industry.” Ethics award nominations sought Nominations are currently being accepted for the ninth annual New Hampshire Construction Industry Ethics Award, an honor presented to “the individual, business or organization that, through its words and deeds, best demonstrates a commitment to upholding the highest ethical standards in construction.” David Wood, a nationally known writer and newsletter publisher and the award’s sponsor, says the honor goes to a person or company that “has taken an action or pattern of actions that exemplify the highest level of integrity and adherence to ethical behavior involving construction.” “Construction people aren’t always perceived in the most stellar manner by the general public,” said Wood. “However, the vast majority are good guys who play by the rules and treat their clients and building team partners with the utmost respect and honesty. I think we need to recognize and promote those people, and hopefully raise the standards for the entire industry.” Winners receive a plaque and $1,000 cash contribution to the recipient’s charity of choice. Anyone in the construction or related industries is eligible to be nominated. Nominating letters will be accepted through March 1, with the winner to be announced in April. For more information, call Wood at 800-439-9663 or e-mail, firstname.lastname@example.org.