Longtime Eastside tech firm to close [Applied Micro in Redmond, WA]

REDMOND -- One of the Eastside's oldest technology companies announced Monday that it plans to shut down.

Applied Microsystems Corp. CEO Stephen Verleye said the board of directors decided to recommend to shareholders that the company be liquidated after it was unable to raise funds to continue development of new products.

The Redmond company, which was founded in 1979 and went public in 1995, currently employs 25 workers, down from 250 in 1997, its last profitable year.

Up until recently, Applied Microsystems' primary business was making embedded systems development tools software used to create, test and debug microprocessors used in cell phones and other devices.

In 2000, Applied Microsystems was ranked by the Puget Sound Business Journal as the state's 100th largest public company based on revenues that year, when it generated $32.3 million in sales, most of which came from large telecommunications companies such as Lucent, Nortel and Alcatel.

The telecommunications industry slump resulted in a steep decline in Applied Microsystems' revenues. Last month, the company sold its embedded systems technology business to Metrowerks Corp., an Austin, Texas-based subsidiary of Motorola Inc., which has a plant in Bothell.

Applied Microsystems switched its focus in May by acquiring technology that formed the basis for a new division called Libra Networks, which Verleye describes as technology that improves the way the client's data traffic is managed.

In order to develop new products for its Libra Networks, the company sought to raise $5 million by the end of next quarter and up to $20 million over the next 18 months from venture capital investors.

Applied Microsystems was unable to generate much interest from potential backers, Verleye said, mainly because ``people were not interested in investing in a publicly held company.''

The way was cleared for the company to pursue liquidation when it successfully negotiated with its landlord, TIAA, to let it out of its lease on its 53,000-square-foot headquarters building at 5020 148th Ave. N.E., which had three years remaining for a total of $6.5 million.

With the company's biggest financial obligation removed, the board voted on Friday to recommend selling off Applied Microsystems' remaining assets.

``The sooner we could make the decision to liquidate the more money we could preserve to give back to the shareholders,'' Verleye said.

An independent committee, consisting of company directors Elwood D. Howse Jr. and Charles H. House, has been formed to oversee the process of selling Applied Microsystems' Libra Networks business.

Layoffs of the company's remaining staff are expected to occur gradually over the next couple of months. Verleye said he and chief financial officer Rob Bateman are committed to staying on ``until there is no company.''

Applied Microsystems has seen its stock lose 84 percent of its value in the past year. On Monday, its share price rose 4 cents to close at 21 cents.

This is sad news. There are probably few embedded systems engineers in the 80s who never used Applied's little EM series emulators. Even my current employer has one in the archive closet...

Yeah this is sad, another small tools company bites the dust.
What was their problem? Did they not adapt to the times? Something had to have gone terribly wrong to go from 250 employees in '97 to 25 now.

I suspect the technology outstripped them. Emulation is very difficult at the speeds processors run these days -- you can't hang the connector out on a cable, you can barely even afford a connector on the PCB to the target machine. And processors are beginning to come with some debugging capabilities in them.

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