MAI Posts $46-Million Loss in Quarter; Failed Prime Bid Cited

Showing the effects of its unsuccessful hostile bid for Prime Computer, MAI Basic Four Inc. on Monday reported a $46.2-million loss and a 23% drop in sales for the quarter ended June 30.

The Tustin computer maker said the loss was largely the result of the $25 million it spent trying to acquire Prime and $14.2 million in expenses associated with a recently announced corporate reorganization and cost-cutting program.

MAI said sales for its fiscal third quarter dipped to $86 million, down from the $112.3 million it reported for the same period last year. Excluding takeover and restructuring costs, the company had an operating loss of $5.5 million; it had operating income of $18.1 million a year ago.

MAI said its results were also hurt by a slump in the mid-range computer market, which is also having an adverse effect on other companies such as Wang Laboratories and Digital Equipment Corp.

“The past eight months have been extremely difficult for MAI, which has been involved in an expensive, distracting and now discontinued effort to acquire Prime,” MAI President William Weksel said in a statement.

MAI lost its hard-fought bid to acquire Prime when the Natick, Mass., computer company accepted a $1.2-billion friendly buyout offer from J. H. Whitney & Co., a New York venture capital firm.

The takeover effort not only cost MAI $25 million in legal, consulting and administrative expenses, it also exacted a price in lost customers.

The company said Monday that the revenue decline for the quarter “is primarily the result of lost business and deferred buying decisions related to the uncertainty of the company’s tender offer for Prime.” Revenue dipped 1.5% to $298.4 million.