Linear Corp. to Consolidate Its Operations : Firm Hopes to Reverse Slide of Last 6 Quarters
Hoping to reverse a six-quarter slide that generated $2 million in losses, Linear Corp. said Tuesday that it will consolidate the administrative, marketing and sales operations at its year-old Carlsbad headquarters.
Linear, which in 1984 moved its 100-person headquarters staff to Carlsbad from Los Angeles, has slashed its labor force from a high of 1,090 in May of 1984 to about 670, said President and Chief Executive Ted Farrell, who added that the company is moving 50% of its production to Hong Kong.
Linear, which manufactures infrared sensing devices, electronic components for the home security market and garage door openers, is now “the right company in the right place at the right time to grow,” Farrell said. “We acquired a lot of companies and divisions (during the last two years) and we needed to pull everything together.”
But the company also “accumulated a lot of duplication in overhead costs,” Farrell acknowledged. “That’s what was taken out during the consolidation.”
Linear, which went public in 1983, reported a $398,000 net loss for the first quarter ended Aug. 31 and a net loss of $1.7 million for the year ended May 31. The company reported a $3-million net profit in the preceding fiscal year. Linear’s revenues fell 23% to $9.6 million for the first quarter, after increasing 2% to $48.3 million for the most recent fiscal year.
Losses will probably continue through the second quarter ending Nov. 30, Farrell said, but “we’ll make money during the third and fourth quarters.”
Linear’s red ink was linked to the loss of a major account and to the “overhead involved with transferring our production to Hong Kong,” Farrell said.
Farrell also said Linear will close its Englewood production facility, where only two years ago Linear employed 350 people.
The company, which also has closed production facilities in Los Altos and Oakland, will manufacture its products in Waupaca, Wis.; Hong Kong; Scottsdale, Ariz., and Boulder, Colo.