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Blaming a federal investigation of its Micronics...

Blaming a federal investigation of its Micronics subsidiary, Precision Aerotech of La Jolla reported a $1.4 million loss for the third quarter ended Dec. 31.

Last October, the Defense Department said it had launched a criminal investigation of the Brea-based Micronics unit for using a substandard manufacturing process for safety and arming mechanisms called “fuzes” which are used in Phoenix air-to-air missiles.

The allegedly substandard fuzes rendered the missiles useless, forcing the Navy to mothball 500 of the missiles costing $850,000 each, the Defense Department said.

Micronics said it had been making correctly manufactured fuzes since February 1988. Micronics officials previously blamed Navy designs for the failure of the fuzes.

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In releasing its earnings figures Thursday, Precision Aerotech said the third quarter loss was partly due to “diminished margins at the Micronics subsidiary caused by disruption in operations during a continuing series of government audits.” Other factors were accounting adjustments at its Speedring Cos. unit and a chemical fire at its Coast Aerotech unit.

The loss came on third quarter revenue of $17.6 million, up from $10.2 million sales over the previous year. The increase in revenue was largely because of Precision Aerotech’s purchase of Speedring. In last year’s third quarter, Precision Aerotech posted a $94,000 profit.

For the nine months ended Dec. 31, Precision Aerotech’s losses were $3.2 million on revenue of $44.4 million, contrasted with a profit of $533,000 on sales of $26.9 million over the same three quarters the previous year.


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