Xscribe Posts 4th Straight Loss; Co-Founder Departs
Xscribe Corp. on Thursday announced its fourth consecutive quarterly loss and said its co-founder and board chairman, Robert F. Mawhinney, is no longer an employee of the company. Mawhinney, who will remain as Xscribe’s chairman, was dismissed as chief executive Jan. 2 but remained on the payroll until Monday.
Xscribe’s loss for the three months ended Dec. 31 was $3.3 million on sales of $7.1 million, contrasted with a profit of $138,000 on revenue of $7.5 million over the corresponding three months the previous year.
The loss was attributed by the company, a manufacturer of computer-aided transcription (CAT) devices for court reporters and paralegals, to continuing delays in getting its Magnum series of products on the market. Delays in introducing updated versions of Xscribe’s previous generation of CAT machines were also blamed for the red ink.
Cut Work Force
The delays, which have stretched out more than one year, have cut sharply into Xscribe’s sales and earnings and prompted the company to cut its work force by 27% recently. After 94 layoffs over the last two months, Xscribe’s work force now totals 250.
Xscribe plans to make more, unspecified job cuts in coming months through attrition, chief financial officer Donald Quackenbush said Thursday. “We are looking for completion (of the Magnum line) in the near term, but I can’t be specific” as to when, Quackenbush said.
Xscribe, which has lost nearly $6 million over the last four quarters, posted a loss of $5.1 million on revenue of $22.2 million for the nine months ended Dec. 31, contrasted with a profit of $1.3 million on revenue of $24.5 million over the first three quarters of the previous fiscal year.
$12.2 Million Equity
Despite the string of losses, Xscribe’s shareholder equity is still substantial, at $12.2 million. The company has $658,000 in cash and cash equivalents on hand, in addition to an available bank line of credit.
In December, Xscribe announced that Suren G. Dutia was replacing Mawhinney as chief executive. Xscribe’s largest shareholder with 16% of shares outstanding, Mawhinney co-founded the company in 1978. His brother-in-law, Thomas Delahanty, resigned Aug. 30 as Xscribe president and chief operating officer.
