Wavetek Head Expects Flat Sales, Earnings : Sees Year as Rebuilding One After ’84 Problems

Sales and earnings this year at Wavetek Corp. are not expected to improve much as the company seeks to correct many of the problems that led to a fourth-quarter loss and depressed earnings last year, Chairman John Thornton said Thursday.

“This won’t be a banner year,” Thornton told shareholders at the company’s annual meeting. “Our mission (in 1985) is to rebuild the company.” Wavetek will be re-evaluating its products and will probably pare down its line of test and measurement equipment, Thornton said in an interview after the meeting.

“We won’t leave that market but we’ll be more selective” in the types of instruments offered, Thornton said. “If the rate of return isn’t good, we’ll stop (production)” of any particular instrument.

Among the products with large profit margins are the microwave and signal generator lines, which Thornton said will receive a greater share of product development efforts in 1985.

The sales and marketing organization is also in for a shake-up, Thornton said. “We had planned on a better 1984. When it wasn’t attained, we asked why and found our marketing is not what it should be.”

Slow sales forced Wavetek to write off part of its excess inventory in the fourth quarter ended Sept. 30, 1984, leading in part to a loss of $474,000 on sales of $21.2 million. For the full year, Wavetek’s net income was down 70% to $1.4 million.

Because of the rebuilding effort, Thornton declined to forecast sales or income for 1985, but said he wouldn’t argue with analysts’ predictions that sales would reach $90 million, compared to $81.5 million in 1984.