Report to Shareholders : MSI Data Corp. President Predicts Profitable Future
Last summer, when he took over the presidency of faltering MSI Data Corp., Charles Strauch said the company should expect results from him within a year.
The year was up a few days ago, and MSI’s most recent fiscal-year financial statement showed a $1.5-million loss.
Not surprisingly, Strauch fully expected to be reminded of his bold statement when he met Monday with shareholders of the inventory-counting-device maker at the company’s annual meeting. In fact, his notes included an answer for the expected question.
However, somewhat to Strauch’s disappointment, the 100 or so shareholders in attendance said nothing of the company’s recent slide into red ink. “But, if they had asked I would have told them that we’re working for the future,” Strauch said after the session. “Everything we’ve done in the last year has been designed to return us to consistent profitability and unquestioned leadership.”
Although he declined to predict when MSI would start turning a profit again, Strauch did say that the 1986 fiscal year, which ends next March 30, is expected to be stronger than the last one.
Throughout the past year, Strauch and other company officials have blamed new product development costs and delays in getting the new products off the assembly line for the sagging earnings and losses.
Analysts, many of whom have given up watching MSI closely during its recent troubles, have said the company must introduce new products and tailor-make its devices to specific industry groups in order to regain its market dominance. Over the last several months, analysts have said the company is suffering from years of complacency. “Everyone else has been working harder,” one analyst said last year. “MSI has got to start hustling.”
During Monday’s 90-minute annual meeting, Strauch ticked off for shareholders the steps he has taken in the last 12 months to help MSI regain the momentum it has lost to more aggressive competitors. Included on his list of accomplishments were a new, hand-picked management team, two new product lines and the purchase of a small competitor to expand and improve MSI’s product lines.
Executives’ Pay Cut
In addition, Strauch said the company’s top eight executives were told last week that their pay would be cut 10% to underscore the company’s determination to save money. He estimated that the cuts, which also affect MSI’s five outside directors, would save less than $200,000 annually.
Furthermore, Strauch said the company would introduce two additional product groups next year and is actively seeking federal government purchase contracts for its inventory-taking devices. The devices, which scan standard bar codes and other inventory-tracking symbols, are used in a variety of industries, notably supermarkets, where MSI introduced the first such scanner in 1967.
