Alpha Micro Posts Profit for First Time in 2 Years

After eight consecutive quarters of red ink, Alpha Microsystems Inc. on Friday reported fiscal 1988 first quarter net income of $98,000. The Santa Ana computer maker posted a loss of $298,000 a year earlier.

Revenue for the quarter ended April 30 was $11 million, down from the year-ago $11.3 million. The small quarterly profit followed two years of losses totaling $11.4 million.

Robert Hitchcock, Alpha Micro president and chief executive officer, attributed the turnaround to a restructuring plan adopted after he and Chairman Richard Wilcox regained control of the 10-year-old company they founded.

“We’ve been waiting for this day for a long, long time,” Hitchcock said. “This is the major shot in the arm that we needed to regain our momentum.”

The company enjoyed several years of rapid growth and profitability as a manufacturer of multi-user computer systems it had designed, and in late 1982, a year after going public, its board hired a professional management group headed by Richard Cortese. Cortese’s team emphasized marketing an expanding the line of products rather than concentrating on the company’s well-received original systems. After several years, Alpha Micro’s sales and earnings began to slip.

In August, 1986, Hitchcock and Wilcox mounted a successful proxy fight to depose the Cortese group and assume control. They launched a restructuring program involving the layoff of 55 workers and a refocusing on the company’s traditional product lines. Alpha Micro currently employs about 290 people.

Alpha Micro stock closed Friday at $3.75 per share, up 12.5 cents, in over-the-counter trading. The company’s earnings announcement was released after the close of trading.