More than a decade ago, Bob Levine’s high school classmates voted him “Least Likely to Succeed.” In 1992, a different group of peers voted S. Robert Levine, president and CEO of Cabletron Systems, Inc. magazine’s “Entrepreneur of the Year,” an honor he shared with Craig Benson, the company’s chairman. Since 1983, the duo have taken Rochester, NH-based Cabletron, the world’s largest maker of computer networking cables, from a privately held firm launched in Benson’s garage to a public company employing 3,100 people in 18 countries worldwide. Today, the crewcutted, 36-year-old Levine resembles a squat Arnold Schwarzenegger-the result of hoisting weights, scattered around his office, when the mood strikes.
“I’ve done it for 17 years,” he says. “It relieves stress and makes me feel aggressive.”
As if the kinetic Levine-or Cabletron-needed additional pumping. Sales in the nine months ended November 30, 1993, soared 46 percent from the year earlier period to $429.9 million from $295.2 million. Net income of $83.5 million represented five-year growth of 120.6 percent. The company, which went public in 1989 with an initial offering price of $15.50 a share, recently traded on the New York Stock Exchange at $122, an eye-popping order of magnitude above its 52-week low of $74.
Cabletron’s roster of customers includes 80 of the Fortune 100. Its products, which allow computer systems to share information with others inside and outside a company, have won the respect of analysts and technology experts.
“Cabletron has an exceptional future,” says William Becklean, senior vice president and head of the technical analysis group at Boston-based Hancock Institutional Equity Services. “Levine and Benson make decisions quickly. If they’re wrong, they change them.” Becklean also praises Levine for a hands-on approach, including direct involvement in closing 25 percent of sales.
Doug Carey, a technology analyst with New York-based RAS Securities, says Levine’s aggressive salesmanship has enabled Cabletron to maintain relatively high profit margins. Carey sees the company riding an expected boom in demand for products linking computers and networks to the information superhighway. Cabletron, he says, has taken an early lead in the development of special ATM bridge products and internetworking devices to handle highspeed data traffic.
“There’s no reason the earnings trend should change,” Carey adds. “We’ll probably see another 30 percent increase on the stock price within another year.” Interestingly, there’s no computer in Levine’s small, cluttered office. “I don’t know how to use one,” he admits. In a swipe at such larger competitors as IBM or WANG, where thousands have been lopped from the payroll, he says: “We don’t spring clean every 25 years. Every day, we make sure our people are productive. If they’re not, they’re moved out.
“I’ve seen too many companies promote incompetence. I hire dedicated people, brighter than me, and give them the chance to succeed.”
No shrinking violet, Levine periodically duels with the state government in Concord, NH, over taxes and economic incentives. In 1991, he threw down the gauntlet over the Business Profits Tax, which, Levine argued, fell disproportionately on large firms.
The CEO took his case to the New Hampshire State Supreme Court. He was forced to set aside millions in escrow during the appeals process. Finally, last year the court ruled against the company. Still, the message was not lost on key politicos. Last year, Governor Steven Merrill introduced a new Business Enterprise Tax, under which the overall tax burden of large manufacturers was reduced. Ultimately, the levy was passed by the state legislature. Nevertheless, Cabletron opted last year to expand in Rhode Island instead of in homestate New Hampshire.
Weekends find Levine racing one of his two powerboats or roaring down a country road on one of his four Harley-Davidson motorcycles. He is the sole trustee of the Levine Family Charitable Trust, which he created in 1989. Since its inception, the trust has made sizable contributions to a host of charitable organizations.
For example, he recently presented country music singer Willie Nelson, president and chairman of Farm Aid, with $100,000 to help farmers battered by flooding along the Mississippi River.
“We’re all Americans,” Levine says. “I wanted to encourage other corporate executives to help.”