Bishop Graphics Explains Auditor’s Qualification

Bishop Graphics said its financial results for the year ended Sept. 30 were qualified by its auditor, Arthur Andersen & Co., because of three wrongful termination lawsuits pending against it.

Bishop, a Westlake Village-based company that sells drafting supplies used to make printed circuit boards, said in a statement that the qualification was issued because its attorneys are unable to predict the outcome of the suits and estimate potential losses that might result.

Richard Drysdale, Bishop’s president and chief executive, said the suits were filed by Lawrence Peacock, the company’s former executive vice president and chief operating officer, and two lower-level employees. He said the company in the past few weeks settled two similar lawsuits for a total of $82,000.

Bishop said it lost $538,000 in the fiscal year, or 23 cents a share, contrasted with a profit of $492,000, or 21 cents a share, a year earlier. Annual sales fell 12.1%, to $11.8 million from $13.4 million.

For the fourth quarter, Bishop lost $481,000, or 21 cents a share, which included a $525,000 one-time charge for severence pay for its former chief executive, Martin Salvin. Bishop earned $124,000, or 5 cents a share, in the fourth quarter a year earlier.