Dataproducts Hopes to Make Its Mark With Ink-Jet Printer
Dataproducts, a Woodland Hills computer printer maker, is counting on its new printers to put it solidly into black ink, literally and figuratively. But it may take some time before that happens.
The company said last week that its earnings fell 87% in the quarter that ended June 27, to $335,000 from $2.5 million a year earlier. Earnings were down largely because of about $450,000 in legal costs and about $2 million in start-up manufacturing costs associated with producing a new ink-jet printer, it said.
Dataproducts unveiled the product at a trade show in November but still hasn’t made major shipments to customers. John Laws, the company’s chief financial officer, said the product is several months behind schedule.
The printer works by heating wax-based ink that has been formed into crayon-like pellets. Once the ink is melted, the printer sprays the ink quietly onto paper.
Bhanu Bhattasali, director of electronic printer industry service for Dataquest, a San Jose high-technology market research firm, said Dataproducts is being cautious because it wants the product to be free of problems when it is shipped.
‘It Takes Some Time’
“Given the new technology, it takes some time to complete all the testing,” Bhattasali said.
Dataproducts, the nation’s largest independent maker of computer printers, clearly believes in the product. It bought out its former partners in a deal completed Friday. The price is believed to be less than $10 million.
The new printer originally was a joint venture of Dataproducts and Exxon Corp., the giant oil company, through Exxon’s former Reliance Electric Co. subsidiary. Reliance’s managers bought the subsidiary in December from Exxon. Dataproducts is acquiring the patents and technology by purchasing Reliance’s Imaging Solutions unit.
Patent Complaint Pending
Dataproducts’ legal costs with the printer result from a patent-infringement complaint pending before the International Trade Commission against Howtek, a company based in Hudson, N. H., that sells a similar printer make by Juki, a manufacturer based in Tokyo. A Howtek spokesman said the company denies the Dataproducts allegations.
Dataproducts’ first-quarter earnings also were hurt by another $1.6 million in start-up manufacturing costs for a new group of so-called line computer printers--those that produce entire, or fully formed, characters line-by-line--and another $1.2 million for costs associated with developing a printer used for airline ticketing.
Revenue was down as well, falling 8% to $77.4 million from a year earlier. Laws said part of the reason is that some printer sales are still slow, even though computer sales are picking up, and because the company has changed its investment strategy as a result of changes in the federal tax laws.
