BEARS
2. Natural Microsystems

By Ronald Rosenberg, Globe Staff, 05/18/99

rom a record high of nearly 40 a share last year to 4 15/16 barely 12 months later, Framingham-based Natural Microsystems has experienced a free fall as it struggles through a strategic transition from serving corporate customers to selling its products to telephone equipment companies.

''Our older business slowed down a lot faster than expected, while our new business did not take off as we hoped until recently,'' said Robert P. Schechter, president of the 16-year-old provider of computer telephony products. It employs 385, of which 200 are in Massachusetts.

Natural Microsystems' woes began as early as April 1998, when its shares fell 35 percent after it warned Wall Street that first-quarter profits would be less than analysts' estimates. The forecast came just days after reassuring investors that speculation about sales and suppliers woes were unfounded.

Schechter said the first signs of balance-sheet improvement should occur in the second half of this year, noting the company made some significant investments in new products in 1998 along with the strategic marketing shift.

Natural Microsystems, which competes with Dialogic Corp. of Parsippany, N.J., and Brooktrout Technology Inc. of Needham, has forged new business relationships to sell its products to a subsidiary of Lucent Technologies Inc. and NEC Corp.

''We will weather this storm without having to do any new financing or borrowing,'' said Schechter, adding that the company has never had layoffs. ''We see 1999 as the pay-back for what we went through in 1998.''

This story ran on page D22 of the Boston Globe on 05/18/99.
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