Content area
Full Text
One of the Chicago area's hottest computer stocks in recent years has crashed.
Dauphin Technology Inc., a Lombard-based company with a highly touted line of laptop and palmtop computers, has been dropped as the primary supplier for a Department of Defense contract that accounted for 85% of its revenues last year.
With sales diving, a purchase agreement with IBM Corp. is forcing expenses to skyrocket. The result was a second-quarter net loss of $37.1 million--this from a company whose annual sales have never topped $24 million.
Dauphin's stock, which hit $15.25 in 1992, is now trading at less than $1. The company has laid off 25% of its 55-person workforce. It doesn't have enough cash for interest payments or payroll taxes. And its auditor, Arthur Andersen & Co., says there is "substantial doubt about its ability to continue as a going concern."
Dauphin is now fighting desperately to survive. The company recently cut a new deal with IBM Corp. that gives it more financial breathing room. It's also pushing to sell additional computers to the government. And it's trying to tap other markets, such as the health care, transportation and retail industries.
"We still feel very strongly about the potential of our products," says President and CEO Alan Yong.
Dauphin's expertise is...