Printronix Inc. Reports First Loss--$1.4 Million
Citing increased research and development costs and a continuing slump in the computer industry, Printronix Inc. reported a $1.4-million loss for its first fiscal quarter, the first loss in the company’s 10-year history, and hinted that a new round of layoffs may be in the offing.
The Irvine-based manufacturer of computer printers--which already has let go nearly 20% of its work force--said Wednesday that its loss for the three-month period ended June 28 compared with net earnings of $2 million for the same period last year. Revenues for the first quarter also declined slightly, dropping 2% to $33.3 million from about $34 million for the same period a year earlier.
Robert A. Kleist, Printronix president and chief executive officer, said the decline in sales is tied to the general malaise in the computer business.
“We haven’t been able to adjust to the decrease in sales fast enough because we were starting up two plants in the Far East,” Kleist said. Printronix’s new facilities in Hong Kong and Singapore will allow the company to manufacture a variety of printers at a lower cost and remain competitive, Kleist said.
Jonathan Art, an an analyst with the Gartner Group in Stamford, Conn., said Printronix has been “a very conservatively and well-run company.”
“We are in a recession in the computer industry today,” Art said. “Printronix can’t do well if all the companies they sell to aren’t doing well . . . . Until those companies do well, companies like Printronix will have to suffer.”
Until recently, Printronix employed about 2,250 people in seven plants around the world, and nearly 1,200 of the employees worked at the company’s Irvine plant. Because of the sluggish demand for computer-related products, however, Printronix has laid off about 400, including 250 who worked in Irvine.
Although Kleist said he was not planning further layoffs, he did not rule out the possibility.
“If sales keep going down, we will have to adjust to it,” he said, predicting that sales would continue to declineg for the next six months at least.
Printronix’s first quarter loss was almost double what company officials expected, he said.
