Song gives up Aris CEO job

FOUNDER will remain as chairman of the Bellevue computer consulting company, which also warns it will miss its earnings estimate for the quarter.

Aris is shaking up its top ranks.

The Bellevue computer consulting company, which has seen its sales slump and stock price drop, said founder and Chief Executive Paul Song will step down and it will miss its earnings estimates for this quarter.

The Aris board named Kendall Kunz, senior vice president of worldwide consulting, as interim president and CEO.

Song, who with his wife, Tina, retains about 33 percent of the company, will remain chairman.

The management purge also calls for Tina Song to give up her role as administration vice president. Chief Financial Officer Tim Carroll also resigned; his job will be assumed by corporate controller Diane Gamache until a permanent replacement is found.

Company officials did not return calls, but in a news release said, "Aris' recent performance has not met expectations."

"These management changes give us an opportunity to re-energize and reshape the company," Kunz said in a written statement.

Buried in the news release was the announcement the company will report a loss this quarter in the range of 15 to 20 cents a diluted share, excluding amortization charges. This exceeds analysts' average estimate of a loss of 6 cents a share.

Sales are declining, too. Aris warned that quarterly sales will reach $19 million to $20 million; analysts had estimated $33 million.

The income statement looked better in the year-ago period. Last year, the company earned $650,000, or 6 cents a share, on sales of $29.8 million.

Wall Street hasn't been kind to the company. Aris stock has lost 61.7 percent of its value this year. As recently as March, it hit a 52-week high of $16.438, but had dropped to $3 by late May.

On May 12, Paul Song filed to sell 50,000 shares.

The stock rose 63 cents yesterday, closing at $4.50. Aris' announcement came after the market closed.

This isn't the first time the company reported disappointing earnings, followed by a Song family member's resignation. John Song, Paul's brother and a vice president in charge of U.S. education operations, resigned July 15 after the company reported disappointing earnings partly attributable to poor performance of John Song's unit.

Aris renewed its pledge yesterday to shed money-losing units and focus solely on information-technology consulting, its bread and butter.

Aris had spent money to beef up software-training centers and to develop software, only to see both businesses falter. In 1999, training and software sales were down 17 percent and 25 percent, respectively.

Like so many of its peers, Aris blamed potential Year 2000 computer problems and even Microsoft for missing product-release target dates.

Its shift back to consulting does not surprise company watchers. Just last week, Aris sold or closed the rest of its U.S. training offices in five cities, which incurred nearly $3 million in operating losses last year.

Meanwhile, Aris' information-technology consulting business benefited from clients rushing to pursue e-commerce. The division's sales grew by 17 percent last year, to about $75 million.

And Aris - not unlike other traditional consulting concerns - has been touting it will make its mark specifically on "e-business," or database integration and Web-page creation.

But analysts say information-technology consulting is highly competitive and dominated by well-known names such as IBM.