Datametrics Co-Founder to Relinquish Operating Role

Asserting that his struggling company is on the road to recovery, Garland S. White says that he plans to leave his day-to-day responsibilities at Datametrics Corp. but will remain chairman of the Chatsworth concern.

White, who in 1962 co-founded the manufacturer of rugged printers, printer/plotters and keyboards for the military, said he will leave April 27 to form a consulting firm but will return to Datametrics to serve as chairman at its board meetings. White already had turned over much of Datametrics’ daily management to Sidney E. Wing, its president and chief executive.

“I can comfortably leave and go do something else,” White said Friday on his 62nd birthday, citing Datametrics’ recent improvement. “I’ve been in this company for almost 28 years. I thought I’d do something else before I completely retire.”

White’s departure comes after Datametrics chalked up modest profits in the six months that ended March 31. Before that, during the first nine months of 1989, the company piled up more than $2 million in losses, and closed 1989 with a $2.1-million loss on sales of $29.9 million.

With Datametrics stemming its losses, its stock--which stood Monday at $1.125 a share in American Stock Exchange composite trading--is up 29% so far this year. But it remains well below the $3.25 a share it reached in 1988.

Indeed, Datametrics’ showing over the past several years has been inconsistent. In the mid-1980s, Datametrics ran seriously short of cash until early 1986 when two venture capital firms--Investments Orange Nassau Inc. in Boston and Alan Patricof Associates Inc. in Palo Alto--invested $2.75 million in the company on behalf of three private investor groups. The groups remain Datametrics’ biggest stockholders with a combined 33% stake.

That year, the company recorded a $1.9-million profit to bounce back from a $1.3-million loss in 1985. The earnings then dropped to $1.44 million in 1987, jumped back to $2.1 million in 1988 and evaporated completely last year.

Wilmer R. Bottoms, senior vice president of Alan Patricof Associates and a Datametrics director, remains upbeat about Datametrics despite its problems last year. “We are expecting that the company will continue to show the kind of improvement that we’ve had over the last three quarters,” he said. And that, according to Bottoms, means “the stock is unrealistically low.” He declined to project what price the shares should trade at, but said, “I’m not willing to sell my stock.”

Several factors led to the company’s slump in 1989. The slowdown in defense spending “stopped the growth” in the company’s sales, leaving Datametrics over-staffed relative to its incoming orders, White said. (Between 1985 and 1988, its sales had more than doubled.) Meanwhile, some of its existing contracts--most are “fixed cost” in which Datametrics agrees to make the product for a set price--ran over budget.

The company’s interest costs more than doubled--to $714,600 from $372,000--because of higher interest rates and Datametrics’ increased borrowing. Higher research and development spending--to $2.3 million from $911,000 in 1988--also contributed to last year’s loss. Among other things, Datametrics is developing color printers to augment its traditional line of black and white printers.

White said some of these problems are being fixed so that Datametrics can be profitable even if its sales remain flat. The company has slashed its work force by 30% since the end of 1988, to 255 employees from 365. It also improved its computer system, enabling managers of each of Datametrics’ programs can keep closer tabs on how money is being spent, he said.

“The company is more streamlined than it has been in the past,” Bottoms said.

White plans to help companies develop and market new products in the telecommunications, space and military industries. Without naming specific products, he said he wants to link small firms that have promising products with big companies that can finance development of those products in return for future sales royalties.

In the meantime, White said, he’ll draw a “deferred” salary from Datametrics of $60,000 a year for the next five years, and $30,000 a year for the five years after that. He earned $158,000 in 1989. White also retains a 5% stake in the company.