Improvement Cited in Automotive and Electronics Units : GTI Says It Has Abandoned Plan to Liquidate
Sparked by the recent sale of its unprofitable computer graphics operation, GTI Corp. on Friday said it had abandoned a previously announced plan to liquidate the company.
Citing continuing improvement in its automotive products and electronics divisions, the company has taken the two operations off the market, GTI officials said late Friday.
San Diego-based GTI late last year sold off an ailing computer graphics division for $1.4 million and, at the time, repeated its intention to proceed with the July 25 decision to liquidate the automotive and electronics divisions.
But GTI directors reconsidered the liquidation plan after proceeds from the computer division sale eased red ink and reduced debt, according to GTI Vice President Ron Lust.
Dissident GTI shareholders greeted Friday’s decision with skepticism.
“It’s no surprise,” said one shareholder, who said that he has “maintained all along that the (liquidation plan) was merely a ploy to ward off” a Florida-based dissident investor group that had requested representation on GTI’s board of directors.
“It’s obvious that they were making no real attempt to liquidate,” said one member of the Florida group. GTI had “just moved its headquarters into some very posh corporate headquarters in La Jolla, and I doubt that the (building) deals in month-to-month leases” that would match the needs of a company that is liquidating itself.
According to Lust, GTI’s automotive products division has been profitable during recent quarters, and the electronics division was bolstered during the fourth quarter by a $6-million order from AT&T.;
“Our fourth quarter was profitable, and, although I don’t like to forecast, we see continuing improvement in our operations,” Lust said.
In unaudited figures released Friday, GTI said it expected about $900,000 in net income during the fourth quarter, including $300,000 from the sale of the computer graphics division.
GTI reported a $341,000 net loss during the fourth quarter a year ago. The computer graphics division generated an $80,000 net loss during the fourth quarter of 1985, Lust said.
In July, GTI President James La Fleur said the liquidation plan made sense because “over the past several years it’s become obvious that our (remaining) divisions would do best if they were left to manage their own businesses.”
La Fleur, who had eliminated seven divisions at GTI since being named president in 1975, also suggested that “(the divisions) don’t need me, so my job is essentially finished.”
On Friday, Lust said GTI’s corporate staff had been trimmed in recent months from about 15 employees to a five-person staff, which moved last month to new offices in La Jolla. The corporate staff had been located in the computer graphics division building that was sold.
