Storage Technology: Return From Near-Dead : High technology: The company’s rebound from Chapter 11 is surprising analysts.

LOUISVILLE, Colo. —  Ryal Poppa flashes a somber smile as he reflects on that day six years ago when he faced down an angry bunch of creditors who wanted to dismantle Storage Technology Inc.

The computer products manufacturer was in the midst of a Chapter 11 bankruptcy reorganization after posting a $505.5-million loss in 1984. The creditors wanted justice, and some takeover attempts were testing the waters.

Some of the creditors were “trying to break up the corporation . . . partly right, but a lot of it was wrong,” recalled the 57-year-old Poppa, Storage Technology’s chairman and chief executive officer.

“There were some very scary times. I had to make hundreds of decisions. A lot were on the fly. If you don’t do it, you die.”

Today, the company is out of bankruptcy and surprising analysts with its performance, largely due to Poppa’s head for business, his vision and a once unpopular robotic librarian that has set a standard for computer tape storage.

Storage Technology’s profit jumped 73% in the first quarter ended March 29 to $14.7 million, or 43 cents a share, from $8.5 million, or 32 cents. Revenue rose 9% to $282.1 million from $259.9 million.

Debra Silversmith, an industry analyst with Boettcher and Co. in Denver, said the company’s earnings were 3 cents a share higher than she had estimated.

The company’s improved performance hasn’t gone unnoticed by Wall Street. Storage Technology shares trade at around $42--near a high of $47 reached earlier this year--after trading as low as $11 a share in late May, 1990, on the New York Stock Exchange.

“We re-established credibility,” Poppa said. “We had to re-prove ourselves. Our history was to copy IBM, but we decided we will do things differently.”

Based in a sprawling complex in the foothills of the Rocky Mountains, Storage Technology was founded in 1969 by Jesse Aweida, a Palestinian refugee and International Business Machines Corp. alumnus who wanted to compete in the big leagues.

The manufacturer of compatible copies of IBM products did well and in a little more than a decade employed more than 15,000 workers in 14 countries.

But the Aweida dream for greatness eventually led to Storage Technology’s downfall. In the early 1980s, the company spent $300 million for research on new products that never made it to market, including a mainframe computer, semiconductors and disk drives using optical technology.

It also faced stiff competition from other companies and lagging orders. It literally ran out of cash, said Michael Klatman, a company spokesman.

In October, 1984, Storage Technology filed for Chapter 11 reorganization under federal bankruptcy laws. Three months later, Poppa took over from Aweida. A former IBM executive, Poppa helped rebuild BMC Industries in St. Paul, Minn., and Pertec Corp. in California prior to his arrival.

Poppa said Storage Technology was one of the most troubled companies he had ever seen.

He knew he had to work quickly. He ditched Storage Technology’s unsuccessful projects, put the sales force on commission to help collect outstanding debts and consolidated facilities.

Within six months, “the bleeding had stopped,” he said. Order rates were up, and creditors began working with him instead of against him.

In July, 1987, Storage Technology celebrated its emergence from Chapter 11 with a lavish employee party featuring a performance by the country-western group Alabama.

The company’s work force numbers about 9,000, with half based in Louisville. It also has subsidiaries in eight foreign countries and distributors in 21.

Storage Technology has also emerged with a new focus on high-end data storage, a market that is growing at a compounded rate of 30% a year, Klatman, the company spokesman, said. The company has become a leader in tape storage products, particularly with its 4400 Automated Cartridge System, or library.

Prior to Poppa’s arrival, the automated library was still on the drawing board. Creditors had wanted Poppa to scrap the project, contending there was no market for it. But Poppa saw its promise and began putting money into it.

The system was introduced in 1987, and more than 2,400 have been sold to date.

“I do have to give Ryal credit for realizing the potential of the library,” said Silversmith of Boettcher and Co. “It has been a revolutionary product in the tape arena.”

Shaped like a 7 1/2-foot silo, the 12-sided library cabinet houses up to 6,000 18-track tape cartridges that can hold the equivalent of 1.2 billion typewritten pages. The cartridges are retrieved for viewing by a robot that resembles the mechanical star of the “Short Circuit” films.

The library, which has a base price of $500,000 per unit, allows a company to store data that isn’t necessarily critical to an operation near a computer--or nearline as the industry calls it--but not on more expensive online devices, Klatman said.

The library is used by hundreds of companies and government agencies, including Ford Motor Co., the Canadian government and the U.S. Postal Service, for storing such documents as addresses and census and tax records.

“Storage devices essentially have been a slave to an individual computer. What we’ve demonstrated with the automated tape library is that storage can be a shared capability among the various kinds of computers,” Klatman said.

The company is hoping to expand by offering a wider range of products, from cheaper tape storage to solid-state direct access disk systems. The company wants to integrate various data storage devices so they interact with one another.

“That’s really a major part of our thrust in the ‘90s, working toward this concept of storage as a network resource,” said Poppa. “I want to be the IBM of storage.”