Verit Industries said Monday that Lavere G. Lund quit as chairman and president of the ailing Sun Valley company, and that the firm plans to abandon its mainstay businesses: the manufacture of stereo loudspeakers and the distribution of other electronic products.
No successor to Lund, who had been chairman and president since 1972, has been appointed.
Lund, 56, quit to run a new company he started, Lavcon Inc., which also bought Verit’s speaker-manufacturing equipment, said Verit Vice President Jeff Holmes. In exchange, Lavcon gave Verit a $1 million, 12-month promissory note, and will “use its best efforts” to buy Verit’s remaining speaker and electronic inventory that has a book value of $2.3 million, Holmes said.
However, Verit also is free to sell those products to others and plans to liquidate the inventory over the next year.
Besides making speakers through its Wald Sound subsidiary, Verit specialized in distributing other consumer products, such as electronic calculators and radios, and “close-out” merchandise purchased from other manufacturers.
Sold 40% Stake
Lund’s departure came three months after he sold nearly all of his 40% stake in Verit for $2 million to English investors Raymond Davey and Patrick Rory Bland. With Davey and Bland now directors, Verit’s board moved to shed the speaker and electronics businesses to search for acquisitions that “may have greater potential for profit,” Verit said.
In its fiscal year ended last June 30, Verit lost $781,000 on sales of $9.85 million, and in the first half of its current fiscal year, Verit lost an additional $350,000 on sales of $4.35 million.
Verit’s stock closed Monday unchanged at $4.875 a share on the American Stock Exchange.