Ultrasystems to Report Loss for 4th Quarter
Ultrasystems Inc., an Irvine engineering and construction company, said Monday that it expects to report a loss for the fourth quarter ending Jan. 31.
The loss comes on the heels of a 32% rise in profits for the third quarter, which ended Oct. 31, and predictions by Ultrasystems that its annual earnings would break last year’s record of 71 cents a share.
The company, which specializes in building alternative energy projects and developing space and defense-related systems, said it still expects to be profitable for the year. Phillip J. Stevens, Ultrasystems chairman and president, said he expects fiscal 1985 revenues to be about $145 million, up from $83 million in fiscal 1984.
Stevens declined to predict what the fourth-quarter loss might be. For the year-ago fourth quarter, Ultrasystems posted net income of $2.1 million on revenues of $27.9 million. In a telephone interview Monday, Stevens said the company’s projected fourth-quarter loss can be attributed partially to greater than expected start-up costs for two new Northern California wood-burning power plants.
He said Ultrasystems had also hoped to complete before the end of the year negotiations on a “significant” deal that would have boosted the company’s annual results. Although the deal, which he declined to discuss, probably will not close within the fiscal year, Stevens said it should be finalized shortly thereafter. The start-up costs included costly repairs of sophisticated air pollution control devices, called electrostatic precipitators. The plants, in Westwood and Burney, Calif., are the first in a series of wood-burning plants that Ultrasystems is building in California and Maine.
Closed for Repairs
The Westwood plant is operating and generating electricity for Pacific Gas & Electric Co., but the Burney plant is shut down for repairs unrelated to the air pollution system problems. Stevens said a different kind of air pollution control equipment is being installed on its other wood-burning plants to avoid problems in the future.
Ultrasystems’ stock has taken a drubbing since late last year, falling from about $16 per share to $6.625, down 50 cents in over-the-counter trading Monday. Stevens said in a previous interview that proposed changes in the tax code affecting investment tax credits and accelerated depreciation apparently have hurt Ultrasystems’ stock price.
“Despite the present difficulties . . . , we are confident that the problems are now understood and can be resolved,” said Stevens. “The company’s defense and space systems segment continues to deliver record levels of revenues and profits; the company’s contract backlog remains at a record level, and actions are being taken to improve future profitability.”
The backlog at the end of the third quarter ended Oct. 31, was $265 million. Stevens said the company will reduce the backlog to between $210 million and $225 million by the fiscal year’s end Jan. 31. About one-third of Ultrasystems’ work is space and defense related, with the remaining two-thirds in engineering and construction projects.
In December, Ultrasystems reported third-quarter net income increased 32% to $1.5 million, while revenues jumped 151% to $49.2 million. Net income for the first nine months of fiscal 1985 was $4.8 million, 56% more than the $3 million earned in the same period a year ago.
