Ultrasystems Inc. Blames Write-Off for Quarter’s Loss

Ultrasystems Inc. is blaming a $10.1-million write-off of its entire investment in an ethanol refinery in North Dakota for a $3.9-million net loss in the third quarter. The Irvine-based engineering and alternate energy systems company posted net earnings of $3.2 million in the year-earlier period.

Revenue for the third quarter was $32.7 million, down 16% from $39 million a year earlier.

For the first nine months, the company recorded a $424,000 loss, compared with a $5.7-million profit last year. Revenues of $111 million were up 3.7% from $107 million last year.

Phillip J. Stevens, Ultrasystems’ president, said the one-time write-off in the third quarter was taken because of the slump in world oil prices, which have in turn affected the price of ethanol, a gasoline additive used to boost octane ratings. Because of this, Stevens said, the company has shut down production at the refinery and doesn’t plan to resume operations there until the price of oil has risen from the current price of $16 to about $20 per barrel, which he expects to occur by early summer.

Without the $10.1-million write-off, Stevens said, Ultrasystems would have posted a $6.2-million profit for the third quarter and $9.7 million in net earnings for the nine months.

In an unrelated announcement, Ultrasystems said that it has temporarily postponed an initial public offering for its defense and space subsidiary because of the current “bad market conditions.” Stevens said that the company has no specific plans for an offering at this time, adding that “we suspect it will be many months or the summertime at the earliest (before we make an offering) if at all.”