Arbor Seeks A Comeback

Arbor Computer Corp. filed for bankruptcy under Chapter 11 two weeks ago, but this will not be the final chapter for the white-box manufacturer, said company executives.

Arbor, based here, plans to infuse more capital into the business and survive, said Frank Slovenec, president and chief operating officer.

"There are a number of things we're looking at. The key, from our perspective, is to maintain and continue to focus on the [white-box] market. We outgrew our ability to finance the business, but the model is right for this marketplace and it works," Slovenec said.

Arbor saw its finances dry up after it acquired three companies that were primarily distributors and tried to integrate them into a single white-box assembler model. Slovenec said Arbor intended to issue an initial public stock offering to raise capital, but market conditions last winter tempered those thoughts.

"We bought in a leverage fashion with our bank, but for a number of reasons, the market turned sideways on us," Slovenec said. "We did it all within the course of the year. We were going 80 miles per hour down the highway, changing tires while we were moving. We had to turn inside and work ourselves to finance the company."

Custom-configured, built-to-order white boxes make up 80 percent of Arbor's product mix.

Slovenec would not provide revenue figures, but said systems sales are increasing 6 percent each month.

The company sells white boxes to VARs and commercial dealers and does not market or sell to end users, said Slovenec.

Arbor gets as much as 60 percent of its orders through a configurator on its Web site. "We create a quote with their logo, their markup and services," said Slovenec. "Later, we can turn that quote into an order that goes through our credit department and into our assembly operation."

The configurator engine was built by Action Data, a Walpole-based distributor acquired by Arbor last June.

Arbor cut some redundant operations and reduced the number of vendors to a small group that Slovenec called "first tier," including Intel Corp. processors and motherboards, and Western Digital Corp., Seagate Technology Inc. and Samsung Electronics America Inc. drives.

For more on Arbor Computer, go to: www.crn.com/onlineplus

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