Briefs: April 25, 2005


Smith, who left Westcon Group in May 2004, teamed with private equity firm Caxton-Iseman Capital to buy Electrograph's parent company Manchester Technologies for $56 million in cash.

Under the agreement, Manchester shareholders will receive $6.40 per share, and the company will operate privately under the Electrograph name. The deal, which was approved unanimously by Manchester's board, is subject to SEC approval and should take 75 to 90 days to close, Smith said.

Manchester, a former reseller, sold its professional services and consulting business to ePlus for $5.2 million last June.

Electrograph President Sam Taylor will remain in his position and will invest in the company.

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Electrograph had about $150 million in revenue in its last fiscal year ended June 30, 2004, and employs about 100 people, Taylor said.


Security vendor Trend Micro posted consolidated net sales of $165.4 million, operating income of $69.8 million and net income of $43.6 million for the first quarter of 2005—gains of 27 percent, 42 percent and 45 percent, respectively, over the same period a year ago.

Trend Micro executives credited continued demand for the company's multilayered network protection products from both the enterprise and consumers, particularly in the Internet gateway, client/server and desktop solution segments Gateway products, which include Trend Micro InterScan Web Security and InterScan Messaging Security suites, saw a 73 percent gain in sales over the previous year, while consumer desktop product sales grew 35 percent and client/server products increased 28 percent.

"Our continued strength in delivering Internet gateway solutions and the momentum we are gaining in capturing desktop share demonstrates that our corporate customers want a layered approach to defend against increasingly complex threats," said Trend Micro CEO Eva Chen.

The company is projecting $163.6 million in consolidated net sales for the second quarter ending June 30, based on current exchange rates. Operating income and net income are expected to be $65.4 million and $39.3 million, respectively.

Xerox said its first-quarter earnings fell 13 percent, reflecting last year's gain on the sale of its ContentGuard business, and indicated that the company's second-quarter profit will be in line with estimates.

Earnings after preferred dividend payments fell to $196 million for the January-to-March period from $224 million last year. Revenue fell 1 percent to $3.77 billion from $3.83 billion.

"Our profit performance in the first quarter met the high range of our expectations through increased gross margins and operational improvements that help ensure Xerox is cost-competitive in every area of our business," said Anne Mulcahy, Xerox chairman and CEO, in a statement.

Qwest Communications International again upped its offer for MCI, increasing its cash-and-stock bid to $9.74 billion, about 30 percent higher than the buyout deal that MCI has accepted from Verizon Communications.

Qwest's latest bid of $30 per share injects fresh uncertainty into a deal in which MCI directors, who have twice embraced Verizon over Qwest, now could be forced to accept a far higher offer.

The Qwest bid consists of $16 per share in cash—about $2.50 higher than the previous offer—using $800 million in equity commitments from MCI shareholders, Qwest CEO and Chairman Dick Notebaert said in a statement.

The remaining $14 per share would be paid in Qwest stock, based on an exchange ratio of 3.373 Qwest shares per MCI share. A guarantee to protect Qwest's stock price remained in place.

It also includes an additional $1 billion in committed financing to ease concerns about whether the combined company would have the financial resources to compete, Notebaert said in a letter to MCI's board.

The latest bid, which Qwest described as its "best and final," was to have been withdrawn if it was not declared superior and Verizon was not notified by 3 p.m. EDT on Saturday, he said.

Juniper Networks predicted continued growth as the company's income and revenue both increased for its first quarter, beating analysts' earnings expectations by a penny.

"Part of the reason for the confidence we have in all this is that we see the growth across product lines, across industry segments and across geographies," said Scott Kriens, chairman and CEO of Juniper.

For the quarter ended March 31, Juniper reported earnings of $75.4 million, compared with earnings of $33.5 million the same quarter a year ago. The company reported adjusted earnings of $91.9 million, compared with $36.4 million a year ago.

Financial analysts expected the vendor to report adjusted earnings of 15 cents per share, according to Thomson Financial/First Call.

Revenue doubled to $449.1 million for the quarter, up from $224.1 million a year ago, and included $304.1 million in infrastructure product sales and $88.1 million in security product sales.