EECO Reports Net Loss of $13.5 Million
EECO Inc., which recently sold a large money-losing operation as part of a reorganization, Tuesday reported a net loss of $13.5 million for its fiscal 1988 fourth quarter, which ended Jan. 1. It had net income of $717,000 for the year-earlier period.
In addition, the Santa Ana-based maker of keyboards and electronic switches announced that Chairman Robert B. Bonney will replace Robert C. Milo as chief executive officer. Milo will remain as the company’s president, overseeing keyboard operations in Arizona.
EECO’s large loss includes $7.7 million from operations of its video editing division, which was sold in December to British-based Paltex Editing & Production Systems Ltd. for an undisclosed price. In addition, the company recorded a $5.2-million loss as it reduced the value of its computer-keyboard inventory to reflect shrinkage and obsolescence.
In February, EECO agreed to sell its airline passenger entertainment business to Boston investors for $15 million in cash and notes. The company said it hopes to complete the sale of its avionics division later this year. In addition, the company is discussing selling its hotel computer property management subsidiary.
Revenue for the most recent quarter was down 6% to $13.9 million; it was $14.8 million for the year-earlier period.
For all of fiscal 1988, EECO reported a net loss of $13.2 million; it had $1.5 million in net earnings for fiscal 1987. Revenue for the year was up 10% to $85.1 million; the previous year’s revenue was $77.7 million.
“Their losses were very large, but the housecleaning is complete, and now they have a very good opportunity to soon be making money,” said Mark Matheson, an analyst at Cruttenden & Co., a Newport Beach brokerage firm.
Bonney, the company’s 74-year-old founder, described the performance as “very disappointing.” He said by selling its unprofitable businesses and cutting costs, the company can become profitable again.
He would not speculate on when the company will return to profitability.
Bonney said he will take over as the company’s chief operational officer “as long as is necessary.” He said there are no plans to seek a successor for the position.
