Westborough, Massachusetts-headquartered Proteon Inc reckons its recovery is well-founded now that it has recorded its third successive profitable quarter, marking a dramatic return to form for a company that seemed in serious trouble two years ago. Proteon says one reason for its revival has been its OpenRoute internetworking router code licensing strategy, which has now attracted three licensees. The higher margins and lower operating expenses associated with the OpenRoute software business have had a major impact on continued profitability, said Proteon. It also notes that its strategic move to the remote router market segment – part of its plan to withdraw from being a router supplier across the board – is paying off. Remote router sales contributed 20% of product revenue in the first quarter this year, up from 11% last time and a 50% increase over last year’s levels, says the company. Not all is rosy in the garden however. Net sales this time were $22.1m, down from $23.8m for the corresponding quarter in 1994. The company attributes this to competitive pressures particularly in the Token Ring adaptor board line. In response, the company has initiated an aggressive repricing programme, according to Alan Swan, Proteon’s European general manager, to stimulate future demand. Revenues were also affected by lower average sales of internetworking products, itself resulting from increased demand for its remote site routers, says the company.
