Parent Company’s Troubles Hit Practical Peripherals Hard

Last month, when the parent of Practical Peripherals Inc., a Thousand Oaks producer of high-speed modems, filed a Chapter 11 bankruptcy petition, Practical’s more than 500 employees were assured that business would continue as usual.

That assurance turned out to be overoptimistic.

Since the bankruptcy filing, Practical, one of eastern Ventura County’s largest employers, has seen its president and two vice presidents depart, learned that 200 other jobs will be eliminated and, in effect, has ceased to exist as an independent concern.

Practical has been merged into the parent, Hayes Microcomputer Products Inc., which is based in Norcross, Ga., an Atlanta suburb. Practical’s administrative, engineering and marketing departments will be closed and their operations transferred to Atlanta. The merger, in effect, places Practical under the same protection from creditors that Hayes was granted as a result of its bankruptcy filing.

“All of these changes are a result of Hayes’ bankruptcy filing,” said Jack Murphy, who resigned earlier this month as Practical’s president. Murphy, who has already found a job as president of an Oregon company, is saddened by the impending layoffs at his former company. “The people at Practical are excellent,” he said. “Because of their dedication, in the past 12 months alone we were able to double our unit sales.”

Although Practical has become a division of Hayes, the Thousand Oaks firm’s products will continue to be marketed under the Practical Peripherals brand name, according to Practical spokeswoman Nancy Stokesberry.

The 300 employees who will remain on the payroll in Ventura County will continue manufacturing modems, which transmit data between computers. But the production line is all that will survive, Stokesberry said.

Some of those workers whose jobs are being eliminated will be offered a chance to transfer to Atlanta, Stokesberry said, “but it’s fair to say that everyone here is in shock.”

She said scheduling of the layoffs and departmental closures will probably be announced in January. “Some people whose jobs are being eliminated will be retained temporarily to help with the transition.”

Murphy has been replaced by Jim Owca, formerly chief financial officer. Owca’s new title is general manager.

Murphy, who joined Practical in November, 1993, has been named president of Prometheus Products Inc., a producer of modems and computer software in Tualatin, Ore. He’ll start his new job next week. “It’s a coincidence that I found something this quickly,” he said. “Prometheus has been talking to me for several months.”

Don Sweet, Practical’s vice president of product management, and Jim Saskel, vice president of sales, also left earlier this month. They, like Murphy, were told that their jobs were being phased out.

In announcing Practical’s reorganization, Dennis C. Hayes, Hayes’ chief executive, said in a statement that “it makes good business sense to consolidate resources in Atlanta over a carefully planned transition period.”

Hayes, a privately held maker of microcomputer modems, has worldwide sales of about $250 million annually. The company does not break out financial figures for Practical, which it acquired in 1989.

Hayes filed a bankruptcy petition in mid-November, saying it was having cash-flow problems even though demand for its products was strong. Reportedly, the company was having difficulty paying subcontractors.