Applied Circuit Discloses Record Quarterly Revenue
Enjoying a surge of new orders and the fruits of its cost-cutting efforts, Applied Circuit Technology Inc. on Tuesday announced record revenues for its fiscal second quarter and its first quarterly profit in a year.
For the quarter ended April 30, the Anaheim company, which makes testing equipment for computer parts, reported net income of $62,821, in contrast with a loss of $228,102 the prior year. Revenues were ahead 90% to $5.1 million from $2.6 million reported a yearago.
For the first six months of the current fiscal year, however, the company lost $436,152, compared to a gain of $391,789 the prior year. Revenues were $7.8 million, a modest 3% increase over the $7.6 million recorded in the prior year.
Walter R. Menetrey, Applied Circuit’s president, attributed the company’s recent success to a strategy of cost cutting, acquisitions of smaller companies and a rash of orders from its two largest customers: International Business Machines Corp. and Seagate Technology.
Menetrey said losses during the past year prompted the company to reduce its overhead and trim its staff, although he declined to reveal the extent of either cutback.
In addition, he said that during the past seven months the company has acquired two small companies, Certel Inc. and Dumont Magnetic Technology Inc. Both acquisitions allowed Applied Circuit to expand its line of testing systems into the floppy disk market. Within the last seven weeks, the company has received nearly $10 million in orders from IBM and Seagate Technology.
“I am pleased with our current performance and look forward to further quarter-to-quarter improvements,” Menetrey said in a prepared statement.
Menetrey said he expects a marketing agreement signed earlier this year with Mitsui and Co. Ltd. of Japan to begin producing orders within a few months. The agreement allows Mitsui to sell Applied Circuit’s full line of test equipment and services to the Japanese disk drive manufacturing market.
In addition, the company plans to move into the testing of semiconductors and integrated circuits through a recently announced tentative agreement to acquire SRL Inc., a small company that provides such services to the defense, aerospace and commercial industries.
“With our recent acquisitions and our agreement in Japan,” Menetrey said, “our product and market bases should continue to grow.”
High Power-Plant Costs Cut Ultrasystems’ Profits
Despite rising revenues, first-quarter profits at Ultrasystems Inc. fell 46% to $871,000 from $1.6 million a year earlier, largely because of continuing cost overruns at the company’s two new wood-fired power plants in Northern California.
For the first fiscal period ending April 30, the Irvine-based engineering and construction company had revenues of $32.6 million, a 32% increase over $24.9 million in the year-earlier period.
Although the latest results are behind those of a year ago, Ultrasystems’ chairman and president, Phillip Stevens, said the first-quarter performance represented a “significant improvement” over that of the final quarter of its 1985 fiscal year when the company lost $4.4 million on sales of $33.4 million.
Stevens attributed those losses to start-up problems at its wood-fired power plants in Burney and Westwood in Northern California. Stevens said that although the problems have since been resolved, they ate into the company’s profits during the last quarter. As a result, he said the company has trimmed about 12 employees from its work force of 1,200 within the last month.
Stevens said Ultrasystems should begin posting “progressively stronger quarters” for the remainder of the year and end its 1986 fiscal year next January with a “good profit.”
Noting that the power plant problems reduced the company’s profits last year to just $394,000, Stevens said, “We expect a strong rebound for this year.”
