LANtastic, which is generally regarded as an easy-to-install, small-office network operating system solution, has had disappointing sales since the version 7 release earlier this summer.
"It has recently become clear that the expense levels related to the LANtastic business are not commensurate with the product line's growth rate and prospects," said CEO William Kleiper in a prepared statement.
Artisoft will lay off about 50 people by Monday and will take a charge for the quarter, the amount of which was still unknown, the company said.
Since late 1995, Artisoft has been shifting its focus to remote communications, networking, and telephony products, including the purchase of three companies with expertise in those areas. The company has also said it plans to release Microsoft Windows NT-based products by the end of 1996, but at least one analyst wasn't convinced that the company's strategic redirection would bring immediate help.
"[We've] been neutral on the stock for a long time now, waiting to see how they prove out their strategy," said Steve Higgins, an associate analyst at Bear Stearns in New York. "LANtastic represents about 70 percent of [Artisoft's] overall revenues, and a shortfall in that arena doesn't bode well."
Artisoft reported fourth-quarter profits of $949,000 for the quarter, compared with a $3.6 million loss a year earlier. Revenue, meanwhile, increased to $16.5 million, compared with $14.5 million a year ago.
The company posted a widening loss of $18.3 million for the end of the fiscal year, compared with a loss of $5.8 million the previous year. Sales also declined during the year to $61 million, down from $84.2 million.