New Funding, Top Execs At CText p.58

By: JIM ROSENBERG CTEXT INC. HAS recapitalized and restructured its debt, hired a new president and elected a new board of directors.
The Ann Arbor, Mich., system vendor said last month it obtained private funding, consisting of long-term, low-interest debentures, to provide working capital, and that it had extinguished its shareholder debt and converted its institutional debt.
At the same time, the company announced that Anthony Peri, formerly vice president and general manager of Harris Publishing Systems, was appointed CText's new president and chief operating officer.
CText also elected a new board of directors that, in addition to Peri, includes James A. Schriemer, partner at Conlin, McKenney & Philbrick P.C., and Michael Pearson, chief information officer at Blade Communications Inc., a major CText customer.
The company will not name its financial backers, according to sales and marketing vice president Eugene Kiel, who said only that the investment, concluded in April, "came from several sources."
Neither Kiel nor Pearson would comment on the significance of the latter's election as a CText director. Asked if Pearson's seat on the board reflected a Blade investment in CText, William Block Jr., president of Blade (and co-publisher, with John Robinson Block, of its two dailies), said only: "We're naturally interested in the future success of this supplier because we're doing business with them in Pittsburgh and in Toledo."
Changing its debt structure was a major aim of CText, said Kiel, noting that its primary shareholders, "in addition to equity financing, had some debt financing in the company. That was effectively forgiven, extinguished," he continued, with "no change in ownership as a result."
The "primary shareholder" had been G.T. Products, a specialty parts supplier, primarily to the automotive industry. Kiel said GT agreed to convert its shares into nonvoting stock, "putting control of the company back into Mr. Moore's hands."
Larry Moore, who was president and CEO, is now chairman and CEO, taking over from G.T. Products officer and co-owner Amherst H. Turner. He vacates the president's post for 28-year industry veteran Peri, whose position at Harris was filled by Don Rogers, president of its Baseview Products subsidiary, also headquartered in Ann Arbor (E&P, May 24, p. 24).
The recapitalization finds CText with completed development of an NT version of its Dateline editorial system (and its Expressline editorial pagination) and an ongoing project to port its AdVision classified and ALPS ad pagination systems to NT.
In the early 1990s, Kiel recalled, "we were in fact going great guns." But with paper prices spiking at mid-decade, CText lost a couple of orders worth a little over $3 million when the prospective buyers lost their capital budgets. "Of course, we had anticipated that revenue," he said.
From about mid-1995 to mid-1996, he continued, "our sales were below expectations" as a result of newspapers "withdrawing their capital budgets and trying to cover rising newsprint costs."
As sales returned last year, advertising system orders included those from the Pittsburgh Post-Gazette (68 seats) and the Blade, in Toledo, Ohio (39 seats) ? both owned by Toledo-based Blade Communications.
Pittsburgh ordered its hardware last December, received administrative training in January, began taking ads on the AdVision system by mid-February, was fully live a month later and began classified pagination two weeks after that.
Post-Gazette project manager Dave Rivera credited the system's Intel-based Windows NT Server with the requisite fault tolerance and performance that brings response time to two-second storage on the busiest day, one-second account location and immediate WYSIWYG display, pricing and scheduling.
Kiel said CText hoped to have parts of its ad system running on NT in time for Nexpo. When the project is completed, Pittsburgh will be the beta site for AdVision on NT, according to Pearson, who said the paper is looking to add to the classified system and is already at work setting up remote sales offices linked to the central office over a wide area network.
The Post-Gazette also ordered one of CText's larger editorial systems, consisting of 240 Dateline NT seats and 30 Expressline pagination workstations.
Pearson said implementation commences in August. The capital budgeting process, he said, will allow about one-third of the installation to be accomplished this year, with the remainder to proceed "right after the first of the year" and completion anticipated "by the end of the first quarter."
Other recent editorial and advertising system installations and sales (through early May) include the Albuquerque Publishing Co., Daily Times, Salisbury, Md., at least seven Lee Enterprises dailies and two Brazilian newspapers.
By far the biggest installation is an older one just coming on line.
In a project with IBM Global Services (formerly ISSC), CText will see at least 300 AdVision workstations in use at the Los Angeles Times by the end of June, with more than 200 probably running by Nexpo, according to Kiel.
(The Times, he said, originated the idea for a Monday afternoon break-
out session at Nexpo, where CText, Times and IBM personnel will discuss installation of the large client-server ad system.)
offers, small daily editors expect well-rounded and technologically savvy job candidates.
More than 90% expect entry-level people to be able to use the Internet and nearly all want them to serve an internship with a daily paper.
Though the stereotype persists that editors of small dailies are contemptuous of J-school graduates, a solid majority of those surveyed ? 56.4% ? say a degree in journalism is important or very important.
Copies of the complete ISU data summary, conducted by Shelly and research assistant Rebecca King, can be obtained by calling Shelly at 309/438-7279.
?(Michael L. Pearson, chief information officer at Blade Communications and member of Ctext's board of directors) [Caption]

?( E&P Web Site:
?(copyaright: Editor & Publisher June 21, 1997)


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