Expansion at Micom Depresses Profit by 72%

Micom Systems said its earnings dropped nearly 72% to $1.6 million, or 9 cents per share, in the fourth quarter ended March 31 because of the costs of expanding its sales force and launching new products. The company also cited the establishment of a $1.3-million reserve fund as a hedge against possible losses caused by the cutoff of its business dealings with a distributor.

Micom’s sales for the quarter were off 9% from the corresponding period a year earlier, to $46.8 million.

The Simi Valley-based maker of computer communications equipment said profits for the year were down 58% from the previous 12 months to $10.8 million, or 62 cents a share. Sales for the year dropped 2% to $189.5 million. The company blamed the yearlong downturn on a general slump in the computer industry.