Struggling company nabs turnaround specialist, new pact with Microsoft

RICHARDSON - For a company that specializes in games and entertainment, 7th Level Inc. hasn't been having much fun lately.

There was the $24.3 million loss in the 1996 fiscal year, right on top of a $14.6 million shortfall in 1995. And the stock price was in the 3 1/2 range this week, compared with 22 5/8 in September 1995.

There have also been delays in bringing to market the company's video games and educational software which, in some cases, haven't sold well.

But in the eyes of Wall Street, the company has taken a big step toward turning things around.

George Grayson, the chairman and CEO, resigned in mid-March. Bob Ezrin, the company's president, was named interim CEO. And Donald Schupak, a turnaround specialist, became chairman of the board.

Gene Ramirez, technology analyst at Southwest Securities, says Schupak has what it takes to put the company back on track.

"They're doing all the right things now," he said.

Ramirez believes the upcoming release of Return to Krondor, an action-adventure game based on a science fiction novel...