EIP Microwave Reports Layoffs as Sales Drop

Beleaguered EIP Microwave said Tuesday that it has laid off 45 people because it lost $729,000 on a 56% drop in sales during its latest quarter.

EIP, a manufacturer of microwave test and measurement equipment, said all of the layoffs occurred in December and January at its San Jose manufacturing facility, which now employs 100 people. The company maintains a small corporate headquarters staff in Newport Beach.

EIP’s financial problems follow a federal grand jury’s indictment last month charging the company with illegal shipments of electronics instruments to England and Thailand.

EIP has contended that it broke no laws in making the shipments, which took place in 1984 and 1985.

Due in Court

The company is scheduled to answer the charges in federal court in San Jose on Thursday.

Sales for the first quarter ended last Dec. 31 plunged to $2.46 million from $5.58 million in the year-earlier period.

EIP’s $729,000 loss is contrasted with year-ago earnings of $92,000.

The company attributed the sharp quarterly decline, in part, to the absence of any federal government orders. A year ago, EIP recorded government sales of $1.6 million.

The company said in a statement that it believes “the softness in the test and measurement instrument markets will continue to persist.” Nevertheless, EIP said it is continuing to “invest heavily” in new product development.

Besides the sharp drop in sales, EIP blamed the loss on costs associated with development of a new “modular work station” product. The company said it expects to begin shipments of the product in the current quarter.

EIP’s stock closed Tuesday at $6.25, down 25 cents, on the over-the-counter market.