4th-Quarter Profit Listed by Computer Automation Inc.

Although it continued a four-year string of year-end red ink, Computer Automation Inc. on Monday reported a fourth-quarter profit of $213,000, its second consecutive quarterly gain and its first operating profit in more than three years.

The performance for the final quarter of its fiscal 1986 also marked a considerable improvement over the company’s fiscal 1985 fourth quarter, when the Anaheim-based maker of test equipment for electronic devices lost $8.8 million.

The upbeat performance in the final quarters was not enough to offset previous losses, however, and for its entire fiscal 1986, ended June 30, Computer Automation lost $3.8 million. This included an operating loss of $6.2 million, partly offset by a one-time gain of $2.4 million from the termination of a building lease.

Still, the annual loss represented an improvement over the $12.7 million worth of red ink posted in the 1985 fiscal year.

Although the company fortunes appear to be brightening, President and Chief Operating Officer Douglas Cutsforth said it is too early to tell if Computer Automation, which has lost a total of about $25 million in the last four years, will be able to sustain the profitability established in the final half of fiscal 1986.

“We’d like to think the worst is behind us, but we don’t know if that’s true yet,” Cutsforth said. “But certainly life is easier here than it was a year or even six months ago.”

Cutsforth attributed the company’s improved operations to the dramatic cuts in staff and spending made over the last two years to accommodate Computer Automation’s steadily shrinking sales levels due to generally tight times in the computer industry as well as the company’s own miscues.

In the final quarter of the 1986 year, sales were $5.9 million, 38% below the $9.5 million recorded the year before. For the entire year, sales were $20.4 million, only slightly more than half the $40.4 million posted in fiscal 1985. All the sales figures exclude operations that Computer Automation has sold in the last year.

To accommodate the sales drop, the company began shrinking its operations about a year ago. For example, it currently employs about 240 workersf contrasted with 910 in June, 1984.

Earlier, Computer Automation said it had repaid all its outstanding bank debt as well as the $1.5-million debenture that was due at the end of August. The company’s current debt consists of a $1.5-million debenture due Aug. 30, 1987.