Eagle Chairman Resigns; Company Posts Loss
Feb. 12, 1985
GARDEN GROVE, Calif. (AP) _ Eagle Computer Inc., a financially troubled personal-computer maker, said Tuesday that Ronald N. Mickwee resigned as its chairman.
Eagle also said it lost $1.78 million in its fiscal second quarter ended Dec. 29, compared with a $457,000 profit a year earlier. Sales fell to $5.78 million from $19.2 million.
However, Eagle noted that its second-quarter performance was an improvement from its $2.32 million loss in its fiscal first quarter ended Sept. 29, 1984.
Eagle did not name a replacement for Mickwee, 41, who was named Eagle's chairman last July when Eagle's founder and chairman, Charles Kappenman, resigned. Mickwee previously had been Eagle's president.
In a statement, Mickwee said he now planned to ''focus my energies on certain new entrepreneurial and professional opportunities,'' but was not specific.
Gary Kappenman, Charles Kappenman's brother and Eagle's current president and chief executive, also said in a statement that Mickwee had indicated last October ''that his long-term goal was not consistent with being chairman of Eagle Computer.''
Eagle and Mickwee made national headlines on June 8, 1983, following a freak coincidence of events.
That day Eagle, then a fast-growing company based in Los Gatos, Calif., quickly sold its first stock to the public, giving the shares held by the company's 40-year-old president, Dennis Barnhart, a paper value of $9 million.
Hours later, however, Barnhart was killed in an auto accident. And in a rare move, the stock issue was rescinded by Eagle and its underwriters.
Mickwee, then Eagle's chief operating officer, was quickly tapped to succeed Barnhart, and Mickwee orchestrated the reoffering of the new stock two weeks later. The renewed offer, at $12 a share, sold out immediately.
But Eagle has mostly struggled since then, and on Tuesday the stock closed unchanged at 68.75 cents a share in over-the-counter trading.
The company specialized in making IBM-compatible personal computers - those that could operate software designed for computers made by International Business Machines Corp.
IBM, however, has over the past two years become much more aggressive in pricing its machines, placing severe pressure on such companies as Eagle that primarily compete against IBM by undercutting IBM's prices.
In addition, Eagle was hurt in 1984 by an IBM lawsuit that charged Eagle with copying substantial portions of a program that is part of IBM's Personal Computer.
In March 1984, Eagle agreed to stop selling the line of computers with the program in question, and two weeks later began shipping machines containing its own program.
But the conversion caused delays in orders from major customers, and forced Eagle to take a $2.2 million charge against income. The company has since struggled to recover its earnings momentum.
n its fiscal year ended June 30, 1984, Eagle lost $26.4 million on sales of $48.4 million, compared with fiscal 1983 profit of $172,200 on sales of $28.7 million. Eagle also has had to seek agreement with its creditors to modify its debt-repayment plan after defaulting under an earlier pact.