Kaypro Posts $2.5-Million Loss, 44% Drop in Revenue

Kaypro Corp. on Tuesday reported a $2.5-million net loss and a 44% drop in revenue to $14.1 million for the first quarter ended Nov. 29. Despite the red ink, Kaypro officials said the Solana Beach, Calif.-based computer manufacturer had broken a string of inventory-related charges and write-downs that pushed the company’s fiscal 1985 loss to $15.5 million.

Kaypro officials linked the first-quarter loss to costs generated by the November introduction of a 16-bit computer. Kaypro reported a net profit of $72,872 for the same quarter a year ago.

In November, the company introduced a 16-bit, IBM-compatible PC, giving it “a complete product line of 16-bit computers which are fully IBM-compatible,” according to Kaypro Chairman Andrew Kay.

The $2.5-million net loss was generated by the “usual manufacturing start-up costs, which reduced gross margins for the quarter,” Kay said, adding that “volume production should bring improved margins.”

Driven largely by inventory-related charges and write-downs, Kaypro recorded a $9.3-million loss on revenue of $14.8 million during the fourth quarter ended Aug. 31.

Kaypro has reduced its inventory to $13.7 million from $17.1 million at the end of fiscal 1985, according to Kay.

He added that the company has reduced its total long- and short-term debt to $1.3 million from $5.4 million at the end of fiscal 1985.