Dense-Pac Predicts Lower Sales, Net Loss for Third Quarter

Dense-Pac Microsystems Inc., a Garden Grove computer equipment company, said it will post lower sales and a net loss for its third fiscal quarter, ending Nov. 30.

Increased sales and marketing expenses and the costs of opening a manufacturing plant in Puerto Rico in July caused the maker of memory devices to post a $30,170 loss in its second quarter, ended Aug. 31.

Lawrence E. Taylor, the company’s chairman, had predicted last month that Dense-Pac would be profitable in its last two quarters. But now, the company says, a sales slump and expenses that continue at higher-than-expected levels will prevent a third-quarter profit.

Dense-Pac, a 5-year-old company that went public last January, is in the “final stages” of negotiations for licensing its module technology for sales in certain foreign markets, said Ed Arnold, the company’s president. He would not name the foreign markets or the selling agent, but he did say negotiations should be complete within six weeks.

The arrangement reached also could lead to a joint venture that would give Dense-Pac about $1 million in cash, the company said. Arnold would not divulge further information about the possible joint venture.

Dense-Pac specializes in making tiny memory modules used in computers, recording devices and other machines that require data storage. One of the more common applications is as a data storage microchip in cockpit computers of jet fighters.

Taylor said the company now has $1.9 million worth of orders on backlog, including $550,000 in three contracts that were signed in the last few weeks. While the company has devoted itself to the aerospace and defense industries, one of its recent orders is for a prototype for a computer manufacturer, a contract that could result in more sales next year, Arnold said.