Shareholder Suing Pacific Scientific Co.

Pacific Scientific Co. said Tuesday that a shareholder filed a lawsuit in federal court in Los Angeles alleging that the company made false and misleading statements about its sales outlook during 1983 and early 1984.

The complaint, which names certain Pacific Scientific directors and officers as defendants, contends that the company officers knew or should have known in 1983 and early 1984 that orders for the company’s mechanical shock arresters would decline significantly.

It also contends that during that period, certain directors and officers sold shares of the Anaheim company’s common stock while in possession of non-public information concerning the company and its financial prospects.

The lawsuit alleges violations of various federal and state securities laws and seeks class-action status. The action was filed by the A&J; Deutscher Family Fund of Fort Lauderdale, Fla., which said it bought 1,000 shares of Pacific Scientific common stock on March 16, 1983. The amount of alleged damages was not specified.

Pacific Scientific, in a statement issued Tuesday night, said, “The claims made in the complaint are without merit . . . . The company intends to vigorously contest the suit.”

The company said the decline in mechanical shock arrester orders was first disclosed in the six-month report to shareholders in July of 1983.

Later, in its 1983 annual report, Pacific Scientific said the decline in sales “had been anticipated, but not at the scale at which it occurred.” By the end of 1983, the backlog of orders for shock arresters had fallen to $6 million from $27 million a year earlier. The backlog of orders for all other company products remained unchanged during that year, according to the annual report.

Pacific Scientific’s mechanical shock arresters are used primarily in nuclear power plants to support the piping systems and protect them from possible rupture in the event of an earthquake and other events.

During 1983, Pacific Scientific’s net income rose to $10.8 million from $9.2 million in 1982. Sales increased to $81.4 million from $76.3 million.

Last year net income fell to $7 million but sales grew to a record $92.2 million. The drop in net income was attributed to the declining shock arrester business.

In the first quarter of the current year, net income rose to $1.5 million from $1.3 million, while sales jumped to $23.1 million from $20.4 million.