FileNET Corp. has begun expanding into an additional 70,000 square feet of space at Harbor Gateway South in Costa Mesa and plans to add 120 or more jobs.
The 10-year lease signed earlier this year for the new space brought FileNET’s total at Harbor Gateway South to 260,000 square feet and made the software developer one of the larg-est tenants in the C.J. Segerstrom & Sons complex.
The company needs the extra room for engineers and plans to step up hiring, according to Tom Hennessey, a company spokesman.
“The new building is for engineering and software development,” Hennessey said. “We had another building a quarter-mile away. We want to bring the people in and have more of a campus.”
The company declined to say exactly how many people it plans to hire when renovations to the older, just-vacated building are complete in six months. FileNET is always hiring, Hennessey said. Engineers and software developers are “hard to find these days, and I don’t know how quick (hiring) will be,” he said.
FileNET has moved 120 of its 800 OC employees into the new space from a 60,000-square-foot building it also leases in the business park. When renovations to the just-vacated building are done next year, the company said it will have room for at least 120 more employees,and possibly as many as 200.
“We will definitely have significant growth potential,” said Linda St. Claire, FileNET’s facilities manager. “It depends on how we configure the space.”
St. Claire said renovations on the newly leased building started with a complete gutting and ended with state-of-the-art computer development labs, an “open landscape” area and private offices. Current renovations will be similar, she said.
“We tried to achieve a place that made people want to be there,” she said. “We want our employees to feel they want to be here long-term. It’s a major commitment on our part.”
QLogic Corp. previously occupied FileNET’s new building before the networking company moved to the Summit Office Campus in Aliso Viejo.
FileNET makes software and optical storage systems for managing and sharing information across corporate networks and the Internet. The company’s Web-based Panagon suite culls data from software programs, e-mails and databases to manipulate business information and automate workflows.
Under Chief Executive Lee Roberts, FileNET has shifted its focus from document imaging,scanning and managing paper-based information,to managing data online.
“Panagon has been the core product suite, and it’s really evolved from managing documents and images to managing electronic content,” Hennessey said.
Along with software, FileNET provides consulting, system implementation and training services, which account for a growing portion of sales. In the third quarter, services accounted for 44% of FileNET’s $99 million in revenue. FileNET clients include Hewlett-Packard Co., Seagram Co. and Providence Health System. The company has gone from 2,000 customers in 1997 to 3,100 this year, Hennessey said.
FileNET is in the midst of a turnaround. Third-quarter earnings more than doubled to $10.2 million, or 28 cents a share, beating estimates of 23 cents. Revenue increased 16% for the quarter.
The company had a slim profit of $1 million on $310 million in revenue in 1998,the result of swallowing several acquisitions, Hennessey said.
On Wall Street, FileNET shares have held their own while other technology stocks have slumped. Last week, FileNET shares were at 26, up 30% from September, though still off their high of 46 set in the spring.
FileNET competes with big players such as IBM Corp., Novell Inc. and Unisys Corp., and smaller rivals such as Documentum Inc., Open Text Corp. and InterWoven Inc. n
