EDITOR’S NOTE: As The Boulder County Business Report celebrates its 20th anniversary in 2001, each issue will take a look back at major business events of the past 20 years. Each of these stories will be reprinted in a special Business Report 20th Anniversary issue in November. By Nancy Nachman-Hunt
BOULDER — While the rest of Colorado was getting a second economic wind, Boulder County in 1990 was still feeling effects of a technology sector downturn. Retail sales were some of the lowest in the Denver metro area, the commercial real estate market was still soft, and one more technology giant was about to fall.
That year, a story was unfolding that would ultimately tell the tale of the fall from grace of Necton Bylinnium Inc. The homegrown word-processing software and hardware maker had risen to fame and created several fortunes during the previous 15 years. By 1990, it was sputtering. NBI garnered the highly dubious distinction of tallying, at 17, the most consecutive quarterly losses of any company on the New York Stock Exchange.
NBI began in 1973 as the brainchild of Boulder entrepreneur and inventor Howard “Binx” Selby. He had developed a word-processing system that would count as its competitors in the late ’70s and early ’80s such industry names as Wang and Lanier.
During the Wang, Lanier, NBI era, so-called document-processing systems came complete with propriety, non-standardized, hardware and software, and cost $18,000 to $20,000 a piece. They were purchased almost exclusively by large business and institutional customers.
In 1975, Selby placed NBI in the hands of Tom Kavanagh, a co-founder of high-tech giant Storage Technology Corp. of Louisville, and the company began its rocket ride to success. Between 1975 and 1980, NBI grew annually at 150 percent. It went public in 1979 at $20 a share. By 1983, NBI stock worth more than doubled.
Businesses, law offices and governments were snapping up NBI word-processing systems as fast as the company could make them. Industry analysts were saying that the office automation equipment market would reach $100 billion by, ironically, 1990. By July 1981, NBI ranked ninth on Inc. magazine’s “Inc. 100” list.
When IBM introduced its personal desktop computer, or PC, in the early 1980s, it spelled doom for NBI as a maker of document-processing systems.
In 1984, seeing the handwriting on the wall, NBI tried diversifying into the office products business. By 1986, it had acquired office supply companies that sold everything from paper clips to expensive desks from Alaska to Hawaii to Washington State.
Diversification didn’t work. NBI could never get its office products division to become profitable. By 1988 it was history.
So was Tom Kavanagh.
Kavanagh had risen to the top of the roller-coaster ride the Boulder County technology sector had been on since the mid-1970s. By 1988, he found himself head of a company that had losses of almost $50 million during two years. Wall Street was calling for change. Change despite the fact that NBI in May 1988 had launched Legend, a new line of MS-DOS, Microsoft’s precursor to Windows, compatible desktop publishing software. At the time, Legend was considered to be the company’s salvation. Priced at $695, it was aimed at users of IBM AT desktop computers.
At the same time, NBI refused to let go of its former bread and butter — the hardware-software document-processing systems that ran solely on the company’s proprietary code. Stephen Jerritts, NBI’s new chief executive, the man who had just presided over Storage Technology’s successful emergence from Chapter 11 bankruptcy, was convinced NBI could still successfully provide those systems if it focused on niche markets such as law firms and municipal governments.
Unfortunately for Jerritts and NBI, such was not to be. By 1989, the company was more than $54 million in debt, had defaulted on its corporate bond interest payments and was forced to drop its proprietary computer systems product line. By 1990, it had put its corporate headquarters in Boulder up for sale to gather badly needed cash. NBI’s Mitchell Lane complex in Boulder ultimately was sold for $8.8 million to the National Center for Atmospheric Research.
In a last ditch effort to avoid bankruptcy, NBI tried to initiate a stock swap with its investors to alleviate the company’s bond debt. Investors didn’t bite. By February 1991, NBI was in Chapter 11 bankruptcy protection.
Here’s where the story really gets interesting. After it emerged from bankruptcy protection successfully in 1992, NBI evolved into something virtually unrecognizable from its former self.
Today, still located in Boulder County — in Longmont, to be exact — NBI bears no resemblance to the company of less than two decades ago.
NBI’s main enterprise is the antithesis of high technology; it’s glass. NBI owns L.E. Smith Glass Co. in Mt. Pleasanton, Penn., a company that makes hand-pressed glass into such things as crystal baskets. The company also owns, but is selling, a Holiday Inn in Belle Vernon, Penn.
Jay Lustig, NBI’s largest bondholder is now CEO of the company, which employs about 200 people, mostly in glass operation.
“We’re just a small business,” says Mert Cogan, NBI’s chief financial officer and a veteran of NBI since 1987.
Has NBI returned to profitability with the surprising evolution? Yes and no. With NBI, if it isn’t one thing, it’s another. For the first time in four years, the company has again slipped into the red. This time the blame rests not on a changing marketplace but on energy prices.
“We’ve been murdered,” Cogan says. “With glass, to melt the sand and the other components, we have a furnace that uses enormous amounts of natural gas, and our gas prices have almost tripled.”
Cogan is philosophical. “We will continue on in some form or fashion,” she says. “We still have about 3,500 shareholders. We just constantly have to change.”