Eagle Reports 4th Quarter Dip in Losses : Officials Point to Improvement, See Increase in Sales
Eagle Computer Inc. said Friday that it lost $4.4 million for the final quarter of its 1985 fiscal year, less than a fourth of the $17.1-million loss it reported for the period ended June 30, 1984.
At the same time, the Garden Grove computer manufacturer said fourth-quarter sales plummeted to $1.7 million from $4.9 million a year earlier.
For all of fiscal 1985, Eagle reported a loss of $10.1 million, compared to the previous year’s $26.4-million loss. Annual sales plunged to $14 million from $48.4 million.
“We made a substantial improvement (in financial results for the year), but we are not very happy with the overall results,” said Richard Thunen, Eagle’s senior vice president for planning.
Thunen said the struggling company, whose shareholders last week voted to authorize issuance of 11 million new shares of stock to finance development of a new product, “doesn’t see any substantial financial improvement in the current quarter.
“But we do see a sales increase by the end of the year,” Thunen said, “and we expect profitability to come sometime after that.”
Eagle, founded in Santa Ana in 1978, was doing well as a maker of IBM-compatible personal and business computers until 1984, when IBM filed a copyright infringement suit that forced Eagle to pull its products off the market for several weeks. By the time the company got back onto the retailers’ shelves, it had been branded a troubled firm and was being avoided by distributors, retailers and customers alike.
Sales plunged and in September, 1984, just seven months after the suit was filed, Eagle announced that it was triming its workforce down to 65 from 330 and was moving back to Orange County from the high-rent Silicon Valley--where it had located a year earlier.
In May of this year, after a number of financial maneuverings that placed 35% of the company in creditors’ hands, Eagle cut a deal to sell its inventory to Aceco Electronics of South Korea for $5.4 million. It used the cash to repay creditors and finance work on its new business computer system--the system it hopes to finance with proceeds from future stock offerings.
Thunen said Friday that the thinning down of Eagle’s workforce and the sale of its inventory was largely responsible for the company’s ability to slash its losses in the face of it plummeting sales. “We are much leaner, and that is appropriate for a time like this” when the entire personal computer industry is suffering from sluggish sales, he said.