CISCO SYSTEMS TO BUY PIXSTREAM
San Jose, CALIF. — Cisco Systems Inc., maker of computer-networking equipment, agreed to buy PixStream Inc. for about $369 million in stock to offer services that manage digital video sent across broadband networks. The transaction is expected to close in Cisco’s fiscal first quarter. Cisco will take a one-time charge of no more than 2 cents a share to account for in-process research and development it gets with the purchase of the closely held company. PixStream, based in Waterloo, Ontario, provides hardware and software that allows cable, digital subscriber line and wireless service providers to distribute and manage broadband video services like television and pay-per-view programming. “It’s a small but rapidly growing market,” said Ammar Hanafi, Cisco’s vice president of business development. The San Jose, California-based company sees “a multibillion-dollar opportunity in the future,” he said.
PixStream lists five customers on its Web site, including BCE Inc.’s Bell Canada International Inc. and Kingston Communications Plc. Its main competitors include Harmonic Inc.’s DiviCom unit, Motorola Inc.’s General Instrument and Scientific-Atlanta Inc., Hanafi said. Cisco hopes to sell the PixStream gear to customers such as SBC Communications Inc., the largest U.S. local-phone company, Hanafi said. The equipment works with products from Next Level Communications Inc., he said. PixStream was founded in 1996 and has 156 employees.
SIMULATIONS PLUS ANNOUNCES PRELIMINARY REVENUES
Lancaster, CALIF. — Simulations Plus Inc.( http://www.simulations-plus.com ), a leading provider of ADME neural net and absorption simulation software for pharmaceutical discovery and development, announced that preliminary revenues from its rapidly expanding pharmaceutical software and services business increased over 135% in fiscal year 2000 over the actual pharmaceutical software revenues in fiscal 1999. The company’s fiscal year ends August 31. “Revenues from our pharmaceutical software solutions increased from $377,000 in fiscal year 1999 to over $887,000 in fiscal year 2000,” noted Momoko Beran, chief financial officer for Simulations Plus. “While our audits have not been completed, we can safely project that we’ll show a substantial reduction in our per share loss over last year, as we’ve moved more and more from development to sales.”
The increase in preliminary pharmaceutical revenues in fiscal 2000 is attributable to the recurring revenues generated by the high percentage of annual license renewals (which affects nearly all of the company’s products), an increase in the average order size and new “best in class” customers. The increase in average order size reflects the introduction of new products, significant product updates and a move from licensing a single seat in a single site to multiple seats in multiple sites. “This is the kind of progress that shows us we’re on the right track,” said Ron Creeley, vice president for Marketing and Sales. “In this last quarter alone, we’ve added five new companies to our list of software licensees, as well as a number of license extensions and additional seats for existing customers. We have been increasingly approached to perform custom absorption and pharmacokinetic studies, which very clearly appears to be our next generation software solutions. Our services are now becoming as popular as our software, with several companies currently finalizing work statements for custom predictive modeling software and collaborations. We expect the new fiscal year to be very exciting.”
NOVELL TO CUT STAFF
Provo, UTAH — Business network management software maker Novell Inc. on Wednesday said it would cut its work force by 16 percent, or about 900 jobs, and take a fourth-quarter restructuring charge of up to $50 million. The announcement ends weeks of speculation and rumors of staff reductions that surfaced when the company said its third-quarter earnings dropped more than fivefold.
Novell said it would also write off certain other assets, and expects to take a pretax restructuring charge for the fourth quarter ending Oct. 31 between $40 million to $50 million. Novell said it expects the reductions to cut quarterly expenses by $25 million beginning with the fiscal first quarter 2001. After the reductions, Novell will have 4,600 employees worldwide.