Xscribe President Delahanty Quits
In a move the company said is unrelated to a first-quarter loss and a recently filed shareholder lawsuit, Xscribe Corp. President Thomas W. Delahanty resigned Tuesday to “pursue other interests.”
Xscribe Chairman Robert J. Mawhinney, who is Delahanty’s brother-in-law, said Delahanty had discussed his resignation “for some time” before the lawsuit and that his departure is unconnected to Xscribe’s $757,000 net loss for the quarter ended June 30. Delahanty was also Xscribe’s chief operating officer.
Shareholders Mark J. Lewis and Barbara London filed a lawsuit Aug. 11 in San Diego County Superior Court against Xscribe, its directors and co-managers of the company’s August, 1987, initial public stock offering. The suit alleges violation of state and federal securities laws and other statutes.
Xscribe shares have dropped steadily since the initial stock offering, when the company sold 1.5 million shares at $9 each. Xscribe stock closed down $.125 at $1.75 a share Tuesday in over-the-counter trading. Xscribe manufactures a line of computer-aided transcription (CAT) devices used by court reporters.
At the time of the filing of the shareholder suit, Xscribe described it as “without merit” and said it would contest the action vigorously.
On Tuesday, Mawhinney attributed the company’s first-quarter loss, which came on revenue of $7.2 million, to delays in the introduction of its new Magnum CAT product. The results compare to a profit of $510,000 on revenue of $7 million over the same quarter a year ago.
For the fiscal year ended March 31, Xscribe’s profit dropped to $485,000 on revenue of $32 million, from a profit of $1.4 million on revenue of $29.8 million during the previous year. Earnings were depressed by a fourth-quarter write-off of $796,000 in previously capitalized product development costs.
Delahanty was unavailable for comment Tuesday. An Xscribe executive since 1982, he had been president since 1985. Before joining Xscribe, Delahanty spent 16 years in executive positions with International Telephone & Telegraph.
According to the stock offering prospectus, Delahanty owns 453,479 shares, or 8.9% of the total Xscribe shares outstanding. His annual salary was listed at $128,654.
Mawhinney said Delahanty’s successor will be named within three months. Until then, Mawhinney will assume Delahanty’s responsibilities. Delahanty will remain on Xscribe’s board of directors.
