MAI Reports Loss for Year of $39.9 Million

MAI Basic Four Inc., showing the ill-effects of its unsuccessful takeover bid for Prime Computer Inc. earlier this year, on Tuesday reported a $39.9-million loss and lower sales for its fiscal 1989 year.

The computer-maker blamed the loss and lower revenue on its failed 10-month attempt to take over Prime, a Massachusetts firm, and on a continuing slump in the mid-range computer market. It also said a stronger U.S. dollar dampened the value of its European sales.

MAI’s loss of nearly $40 million for the year ended Sept. 30 contrasts with earnings of $24.5 million in 1988. The company’s loss for the year was virtually ensured after it reported a huge $46.2-million deficit for the third quarter ended June 30. The third quarter loss included $25 million in takeover-related expenses and $14.2 million for the cost of a corporate restructuring program.

MAI dropped its bid for Prime in August, and slashed its loss in the fourth quarter to $1.6 million, contrasted with earnings of $5.8 million in the year-earlier quarter. But revenue dipped 16.5% to $98.5 million, down from $117.9 million.

MAI attributed the lower quarterly revenue to customers delaying or canceling orders because of uncertainty over the outcome of MAI’s bid for Prime, as well as the computer slump and strong dollar.

Nevertheless, William Weksel, president and chief executive, said he is encouraged by the improvement in financial results for the fourth quarter compared to the third quarter. “We expect further improvements in the company’s operating income to result from the restructuring program which the company commenced in the fourth quarter,” Weksel said.

Fred Anderson, senior vice president, said the restructuring program should slash corporate costs by $27 million in 1990. The program included the elimination of 400 jobs worldwide, or about 10% of MAI’s work force.

Anderson said the savings from the restructuring are not reflected in the fourth-quarter results because the plan was begun late in the quarter. He said he expects MAI to be profitable in the first quarter of its fiscal 1990 year and for the rest of the year.

However, Anderson said he sees “no indication that the industry slump is behind us . . . and we’re assuming there won’t be any improvement in the industry.”