Rosscomp Posts Heavy Loss Despite Strong Revenues

Rosscomp Corp., a Costa Mesa maker of computer storage products, announced Tuesday a first-quarter loss of $698,386, despite more than doubling its revenues for the period, which ended Feb. 28.

Officials said the 3 1/2-year-old company has “a severe liquidity problem” after sustaining a “significant reduction in working capital” during the quarter.

To solve its problems, Rosscomp is seeking a line of credit from a commercial bank and considering a private stock sale to raise capital, according to company officials.

For the quarter, Rosscomp’s loss of $698,386 compared to a loss of $800,314 for the same quarter a year ago. Total revenues increased to $281,781 from the $125,239 reported in the first quarter of fiscal 1984.

“Our market has been delayed beyond what we believed it would be a year ago,” said President Rod Hosilyk. He said sales of his company’s products depend on the market for high-capacity Winchester disk drives, a market that has been slow in recent months. Disk drives are turntable-like devices that hold the disks that store computer data.

To halt its continuing losses, Rosscomp recently halted production of one of its principal products and reduced its work force from 55 to 38.

In the last two months, the company has received loans totaling $220,000 from two principal shareholders. It also sold $300,000 worth of stock to the company’s Japanese manufacturing licensee.

The shareholders, who are venture capitalists, are willing to support the company and its negotiations for additional financing, according to Chief Financial Officer R. D. Blackwood.