GTI Corp.'s strategy of using short-term profits to finance the growth of a computer graphics system is essential for the firm’s long-term survival, Chairman James K. La Fleur told shareholders last week.
But, in a candid deadpan, La Fleur noted that “obviously, the strategy didn’t impress the marketplace.”
Indeed, GTI’s stock has fallen to $3 from $5 7/8 a year earlier, and the Scripps Ranch-based electronics company last month reported a first-quarter loss of $16,000, compared with a $46,000 profit in the first quarter of the previous year.
On the positive side, La Fleur said, GTI installed 12 of its new POLY 2000 computer image generators during 1984. He added that GTI must install at least a dozen more this year to keep its place in the growing computer graphics market.
Hughes Aircraft Co. purchased five of those products, and the rest were sold to Rockwell International, IBM, Boeing and NASA. GTI officials expect those companies to include the POLY 2000 in military flight training and simulation products they are developing.
“We’re sowing the seeds now, but we won’t know how many systems our machines will be part of until the latter part of 1986,” La Fleur said.
“When those companies start to sell more systems, we’ll find out how many machines we’ll be able to sell,” he said, adding that once the military market starts moving, commercial airline customers will start to appear.
The low-tech side of GTI’s business was hurt by a cyclical downturn that sharply reduced orders for its circuit and electronics divisions. The company also was forced to boost its bad debt reserve when two customers--Atari and a French company--stopped paying their bills.