Computer Automation to Undergo Evaluation
Officials of Computer Automation Inc. said Friday that they have retained an investment banker to explore business opportunities remaining for the company, which has been hit by nine consecutive quarterly losses.
“We want to capitalize best on what we have,” explained MacKenzie Paige, vice president and chief financial officer of the Irvine computer equipment maker. “We’ve been unprofitable and we can’t continue that way or we’ll go out of business.”
Paige said investment bankers from PaineWebber Inc. have been asked to evaluate the company’s management and three product lines and to develop strategies to exploit their potential. Paige acknowledged that the strategies could include a merger or a sale of a portion of the company.
Computer Automation recently moved back to Irvine, where the company had been headquartered until 1981. Then, its founder moved it to Boulder, Colo. Founder David Methvin complained at the time that California’s business climate and Orange County’s traffic-clogged freeways and high housing prices made it difficult for companies to succeed.
However, shortly after setting up corporate offices in Colorado, Computer Automation’s fortunes soured. Over the last three years, the company has lost more than $12 million, including $945,000 in its most recent quarter.
As a result of the losses, Paige said, the company has cut its manufacturing and sales work force by 20% to about 750 employees since the beginning of the year. In addition, the company trimmed about 20 members of the corporate staff from its payroll during the move to Irvine in May.
Company officials said Friday that Computer Automation also has consolidated its Irvine manufacturing operations into a single plant and intends to dispose of the one unoccupied facility. Furthermore, officials said the company’s Richardson, Tex., manufacturing plant will be consolidated into approximately one-half of its existing space, a move that will allow the company to sublet the unused space.