Large Write-Down Cited in $15-Million Kaypro Loss

Kaypro Corp. reported a $15.5-million net loss for the year ended Aug. 31, the result primarily of a $14.2-million inventory write-down. Revenue for the computer manufacturer dropped 37% to $75.4 million.

Last year, Kaypro, headquartered in Solana Beach, in San Diego County, reported a $268,000 net loss on revenue of $119.6 million.

Auditors have pored over Kaypro’s financial statements “for the last couple of weeks,” according to company President David Kay. “Our loss is substantially due to the decrease in the price of certain parts that we had overbought in the distant past,” he said.

The company also said it had increased inventory reserves and written down inventory because it had revised sales forecasts for older computer models due to the “constant erosion” of component parts prices and because some components had become obsolete.

Despite two years of losses, Kay said “it won’t take long at all” for Kaypro to return to profitability.

“It could be a matter of just one quarter,” he said. “I guess I remain optimistic because we’ve had such a great acceptance of our new (IBM PC-compatible) product.”

Controller Robert Gorsky said that, based on its current assets, Kaypro is stronger than it was a year ago. Earlier this month, he said, Kaypro filed for a $9.1-million income tax refund. “We will be debt-free when we receive that refund.”