First Quarterly Earnings in 21 Months Posted by ACT

Applied Circuit Technology Inc. reported its first quarterly earnings in 21 months, posting net income of $1.65 million for the second quarter of its fiscal 1987.

The earnings, however, did not come from continuing operations. Instead, they include a gain of $1.5 million from the sale of ACT’s computer electronics division and leasehold improvements at its former corporate headquarters and electronics manufacturing facility in Anaheim.

Also reflected in the second-quarter earnings, the company said, is a $565,950 tax benefit. In a restatement of its fiscal 1986 second quarter, ACT reported a net loss of $1.4 million.

Revenue from continuing operations for the period ended April 30 was $4 million, compared with $1.7 million a year earlier.

The fiscal 1987 second-quarter figures reflect only the continuing operations of ACT’s Gardena-based drug and pharmaceuticals business. Results for the year-ago period were restated to reflect only the operations of those subsidiaries from the date of their acquisition on March 21, 1986.

After divesting its Anaheim-based operations, ACT moved to the Gardena offices of its Whiteworth/Towne Paulsen generic drugs and pharmaceuticals subsidiaries.

“Generic drugs are now the company’s primary business,” said Don M. Sweatman, chairman and chief executive, in his announcement of the company’s first profit since the third quarter of its fiscal 1985.

For the first six months of its fiscal 1987, ACT reported net income of $1.5 million, compared with a year-earlier net loss of $2.9 million. Revenue from continuing operations for the period was $7.9 million, compared with $1.76 million for the second quarter of the company’s fiscal 1986.

Since December, when Locke-Sweatman Investments purchased a controlling 33% interest in ACT, Sweatman has focused its resources on the Whiteworth/Towne Paulsen subsidiaries and, as previously announced, has hired an executive team of drug industry veterans to manage the companies.