Odetics Announces Tentative Accord on Stockholder Lawsuit

Odetics Inc., the Anaheim maker of advanced electronic products, said Thursday that it has reached a tentative settlement of a stockholder lawsuit stemming from its initial stock sale in 1981.

Although the company declined to divulge the cost of the proposed settlement, which is expected to be made final in two weeks, its fiscal 1987 third-quarter financial report shows that the cost of the all-stock deal is expected to be less than $400,000.

Odetics said charges against its earnings in anticipation of the settlement was instrumental in causing the company to post a third-quarter net loss of $238,000.

In all, the company said it took two “non-recurring special charges” totaling $589,000 during the quarter ended Dec. 31.

Besides the reserve for the proposed settlement, the company said it wrote off its investment in Infodetics Corp., an Anaheim maker of document storage devices that once was an Odetics subsidiary. Infodetics filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code last month.

Odetics officials declined to reveal the specific amounts of each charge.

However, the company said that without the special charges, it would have posted profits of $115,000 for the period. In the year-ago quarter, the company earned $181,000.

Revenues for the third quarter were $9.7 million, a new high for the company and 19% above the $8.2 million recorded the year before.

For the first nine months of the fiscal year, the company lost $165,000, compared to a loss of $307,000 the year before. Revenues for the period were $28.3 million, up 17% from the $24.3 million recorded in the year-ago period.

The company said the proposed settlement of the class-action shareholder suit calls for it to repay investors entirely with its Class A common stock rather than with cash. The number of shares the company will be required to pay and the final cost of the settlement has not yet been determined.

The final cost, the company said, will depend on the number of claimants, their actual losses, Odetics’ stock performance during the next two years and the amount the court decides to award the plaintiffs’ attorneys.

A hearing to complete the settlement agreement has been scheduled for Feb. 20.