Supercomputer Maker Fires Founder, Two Executives
BOSTON (AP) _ Kendall Square Research, a maker of supercomputers, fired its founder and two other executives Tuesday in a bid to start anew after dramatically revising its revenue reports earlier this month.
Fired were President Henry Burkhardt III, consultant Peter Appleton Jones and former chief financial officer Karl G. Wassmann III.
Burkhardt had been stripped of his title as chief executive earlier this month and was to remain on as president. But William I. Koch, the company’s new chairman and CEO, said Tuesday it was in the company’s best interest to part with Burkhardt.
He will serve as a consultant on technical matters if needed, Koch said.
Wall Street had little apparent reaction to the firings. Kendall Square’s stock was up 12 1/2 cents, at $7.62 1/2 cents, in early afternoon trading on Nasdaq. However, that is far below its 52-week high of $25.75.
On Oct. 28, the company said accounting problems had skewed its revenue reports, giving a falsely optimistic view of its finances.
It boosted its estimated loss for 1992 by $4.5 million, to $17.2 million. In addition, the company said its 1992 product revenue was $16.3 million, not $20.5 million, as had been previously reported.
The company’s accountants declined to stand behind audits late last month and its officers were suspended Dec. 1.
The turmoil has shaken the confidence of investors and customers, an analyst said.
″It’s going to require a Herculean effort on the part of the board and the new officers to get back on track again,″ said Gary Smaby, president of the Smaby Group, a Minneapolis company that watches the supercomputer industry.
The company already is the target of 11 shareholder lawsuits that say Burkhardt artificially inflated Kendall Square’s stock price between Aug. 12, when he endorsed the earnings estimates, and Oct. 28.
Since taking control of the firm earlier this month, Koch has established an independent audit-and-finance department reporting directly to him.
In addition, Koch said Kendall Square will attempt to shift its customer base from 95 percent university and 5 percent private companies to 20 percent university and 80 percent commercial and industrial.