$1-Million Profit in Third Quarter : Cost-Cutting Pays at Dataproducts

Dataproducts reported a $1-million profit Monday for the third quarter ended Dec. 28, reflecting a recovery by the Woodland Hills-based maker of computer printers after two unprofitable quarters.

The company said the profit was the result of cost-cutting measures, including plant closings and layoffs, taken in 1985 in response to the computer industry slump.

Dataproducts has closed or is closing plants in Irvine, San Jose and Puerto Rico, and has reduced its employment worldwide to 4,000 from nearly 6,000 a year ago. Those moves helped slash the company’s expenses in the third quarter by 20% from the same period a year earlier, to $87.9 million.

Nevertheless, the company’s third-quarter profit of $1.02 million, or 5 cents a share, was down more than 90% from last year. Third-quarter revenue also fell sharply, off 26% to $90.7 million.

Over the first nine months of its fiscal year, Dataproducts lost $32.2 million, or $1.55 a share, down from a profit of $25.1 million, or $1.20 a share, a year earlier. Revenue was off 28%, to $256.9 million.

Peter Anastos, an analyst for Alliance Capital Management in New York, said Dataproducts’ quarterly profit was small but about what analysts expected.

“They are only seeing a modest increase in orders. But what is important is that they have turned the corner,” Anastos said.

A possibly discouraging sign in Dataproducts’ earnings report was the decline in its order backlog, which often foreshadows sales volumes. The backlog fell to $110 million at the end of the quarter, down $10 million from the beginning of the third quarter and down $40 million from a year earlier.

John T. Laws, the company’s senior vice president and chief financial officer, said the lower backlog largely is a reflection of computer makers’ reluctance to place long-term orders for products such as printers because they are uncertain about when the industry will recover.

“No one is willing to say we are in a full recovery. They’re more confident that what we have done is bottomed out,” Laws said.

Laws said the company is not planning further plant closings or layoffs.