Cullinet Software Founder, Chairman To Leave In September
WESTWOOD, Mass. (AP) _ John J. Cullinane, founder and chairman of Cullinet Software Inc., announced Thursday he would resign in September and be succeeded by David L. Chapman, the company’s current vice chairman and chief executive officer.
Cullinane, 52, an active Democrat, said he plans to continue his work in public affairs but has no interest in running for office. He said in an interview he would continue as a consultant to Cullinet and would like to start a company in the fall, but has not decided what kind.
Cullinane started Cullinet in 1968 and built it into a leading maker of software for mainframe computers, whose financial success included a string of 29 consecutive quarters of rising sales and profits.
However, the company went into the red last year, forcing Cullinane to postpone his plans to ease out of the company, analysts said. Cullinane said Thursday the company is on the path back to profitability and he feels he can step down.
″The management team is very aggressive and imaginative in pursuing new and exciting business opportunities,″ Cullinane said in a news release. ″The result is, I believe, that Cullinet Software is, after a year of transition, back on track.″
Cullinet’s string of profits was interrupted last year by the downturn in the computer industry and competition from International Business Machines Corp., which introduced a rival data base management system.
The data base program, Cullinet’s specialty, handles the retrieval of information from a computer’s storage. The cost for a single computer can range up to $350,000.
Cullinet probably lost about $22 million in the fiscal year that ended Thursday and should lose about $3 million in the current fiscal year, in spite of returning to profitability in the second half, estimated Charles Taylor, an analyst for Prudential-Bache Securities Inc.
Instead of focusing on big mainframe computers, Cullinane has moved the company to creating and selling software for smaller IBM computers and ones made by Digital Equipment Corp., said Ed Acly, an analyst for International Data Corp.
″He feels confident now that the future direction of the company has been set,″ Acly said. ″I don’t think John Cullinane’s going to make a big difference now.″
Cullinet said he owns 7 percent of Cullinet’s stock. It had a value of about $23 million at Thursday’s closing price. Cullinet stock fell 75 cents a share to $10.87 1/2 a share in consolidated New York Stock Exchange trading.