Dense-Pac Recovery Continues As It Reports a Profit for Fiscal Third Quarter

Continuing its recovery after a recent bankruptcy reorganization, Dense-Pac Microsystems, a Garden Grove defense electronics company, reported net income of $457,619 for its latest quarter.

The company’s net income for the third quarter of its fiscal 1988 year included $462,000 from the sale of assets and technology to Electronic Memories Ltd., a British electronics firm. Electronic Memories acquired a 49% stake in Dense-Pac as part of the financial reorganization, which was completed in October.

The company had operating income of $196,000 during the latest quarter.

Dense-Pac’s third-quarter sales rose 85% to $1.4 million, from $757,038 in the year-earlier period. The company lost $2.1 million in the fiscal 1987 quarter.

Dense-Pac President James G. Turner noted that sales for the first three quarters of the current year exceeded sales for the entire previous year.

“The company only went into Chapter 11 (bankruptcy reorganization) in the middle of February, and we were able to come out of it” eight months later, Turner said. “This is our second consecutive profitable quarter. That’s a story that doesn’t occur very often.” The company recorded a profit of $128,112 in the second quarter.

During the latest period, Turner exercised options to purchase 1 million shares of company stock for 10 cents per share, or $100,000. The purchase increased Dense-Pac’s total shares outstanding to 4.2 million.

The company also said Electronic Memories had converted $324,960 of its debt into 3.5 million shares of Dense-Pac common stock and purchased $700,000 of preferred stock.

Turner said the company has a backlog of orders totaling $2.5 million, down slightly from three months ago. He said he expects the company to report a profit for both the fourth quarter and fiscal year, which end in February.