Printronix Suffers Big Loss Due to Write-Off
Printronix Inc., an Irvine computer printer manufacturer that has suffered through the prolonged slump in the computer equipment industry, said Friday that it lost $10.8 million in the third quarter ended Dec. 27, bringing losses for the first nine months of its fiscal 1986 to $13.3 million.
Only $848,000 of the third-quarter loss came from operations, however. The rest derived from the costs of consolidations, layoffs, a shift to overseas manufacturing of some products and a write-down of much of the value of another computer printer company Printronix acquired two years ago.
Printronix officials and at least one industry analyst said Friday that the computer industry slump has bottomed out and that the company should return to profitability in fiscal 1987.
David V. Radlinski, Printronix’s chief financial officer, acknowledged Friday that “we did make a mistake” in 1984 by failing to anticipate an imminent decline in the computer industry and, instead, purchasing Boston-based Anadex Inc. for $8.7 million worth of Printronix stock.
After seeing a sustained drop in Anadex’s revenues, Radlinski said, Printronix decided in the third quarter to take a $6.6-million write-off for what it had paid for Anadex’s good will--the value of a company’s reputation and its potential for attracting new business.
Printronix’s third-quarter loss compares to net income of $1.3 million a year earlier. Third-quarter sales of $33 million were down 17.5% from $40 million.
For the first nine months, Printronix posted a net loss of $13.3 million compared to a net profit of $6.2 million the previous year.
The company blames some of its poor financial performance on one-time costs associated with plant consolidations, layoffs and corporate restructuring. Those measures are part of Printronix’s goal to move increasingly more of its manufacturing operations to the Far East to reduce overhead and enable the company’s products to be more price-competitive with printers manufactured in Japan.
Radlinski said that in the last nine months, Printronix has moved 12% of its manufacturing to Hong Kong and Singapore and that, since November, 1984, it has reduced its work force from 2,419 to about 1,732. Most of the layoffs occurred at the company’s domestic plants.
Jim Stone, vice president of research for Shearson Lehman American Express in New York, said that for Printronix and the entire computer industry “this should be the end” of retrenchment.
