Tustin Computer Firm Nets $5.4 Million : MAI Turns Profit Under New Owners
In its first fiscal year under new owners and managers, MAI Basic Four Inc., once a money-losing computer maker, generated profits of $5.4 million and sales of $168.5 million, the Tustin-based company said.
Although the company was a subsidiary of Management Assistance Inc. until January and its fiscal 1984 financial record was not reported, the new management team said MAI Basic Four lost nearly $110 million on sales of about $260 million for the period ended Sept. 30, 1984.
For the record:
12:00 a.m. Nov. 28, 1985 FOR THE RECORD
Los Angeles Times Thursday November 28, 1985 Orange County Edition Business Part 4 Page 2 Column 3 Financial Desk 1 inches; 25 words Type of Material: Correction
In its 1984 fiscal year, MAI Basic Four lost approximately $10 million. Due to a typographical error, the annual loss was incorrectly reported in Wednesday’s edition of The Times.
In the final quarter of fiscal 1985, MAI Basic Four earned $3.6 million on sales of $70.9 million.
The latest results offer the first strong evidence that the strategy of MAI Basic Four’s new owner, Bennett LeBow, is working. LeBow, a New York investor, spearheaded a leveraged buy-out of the the once-profitable company last January for $105 million when the company, which developed the software language BASIC, was at the depths of its decline.
Within months, LeBow laid off about 10% of the company’s work force, fired all but four of its top 23 executives and sold faltering operations. Finally, he proclaimed the 15-year-old company to be the “new” MAI Basic Four.
LeBow’s strategy has called for the company to sell its medium-sized computers to specific business groups, such as hotel operators, rather than attempting to compete with the full array of general-purpose business computers.
In a prepared statement accompanying the earnings release, President and Chief Executive William B. Patton Jr. said the company is pleased with its first year’s performance and anticipates “continued improvement in both revenue and earnings for fiscal 1986.”
