Japan Sales Help Gradco Increase Earnings 200%
Gradco Systems Inc., buoyed by strong sales in Japan, said its earnings jumped 200% in the latest quarter on a 65% gain in revenue.
The Irvine-based manufacturer of office copier and printer products said earnings for its fiscal first quarter ended June 30 were $1.3 million, up from $445,000 a year earlier.
Revenue was $26.8 million, up sharply from $16.3 million a year ago.
“Our first quarter results are on plan and all indications for another record year are positive at this time,” said Keith B. Stewart, chairman and chief executive.
Stewart attributed the improved performance to increased business across the company’s product lines. Gradco makes sorters and collators for office copiers and paper handling equipment for computer printers.
Growth in Japan
Stewart said the company’s Japanese subsidiary turned in an especially strong performance, with sales growing to $8 million in the latest quarter, up from $5 million a year ago.
Stewart attributed the gains in Japanese sales to the company’s decision in May, 1986, to reacquire marketing and manufacturing rights for its products from C. Itoh of Japan. C. Itoh had held the exclusive rights for Gradco products in Japan since 1983.
Gradco’s revenues have been growing rapidly during the past year due to increased sales of its core products and acquisitions of other companies. The company’s sales jumped 65% to $91 million in the year ended last March.
The Irvine firm was in the news recently as part of a Securities and Exchange Commission investigation of suspicious trading activity in the stocks of some companies that had been mentioned in Business Week’s “Inside Wall Street” column. On the Thursday before Gradco was touted in the July 25 Business Week column, its stock rose in heavy trading that was approximately five times the average daily volume.
When the Business Week investigation was revealed July 21, a Gradco official said interest in the stock could have been due to the company’s recent strong financial performance rather than insider trading.
Two investment brokers have been fired and another suspended as a result of the Business Week probe. On Friday, Prudential-Bache Securities Inc. fired broker Brian Callahan from its branch office in Anaheim.
On Monday, a Chicago company that prints Business Week fired a production worker at its plant in Connecticut and suspended another worker at its plant in Torrance for their alleged roles in leaking information about the Business Week columns before their publication.
