EARNINGS : Buyout Costs Cut Quarterly Earnings at Archive by 77%

Archive Corp. of Costa Mesa, a manufacturer of computer storage products, reported a 77% drop in third-quarter earnings--to $962,000--and attributed the decline to costs associated with its $123-million acquisition of former rival Cipher Data Products.

Archive’s revenue for the three months ended June 29 doubled to $101.4 million from $50.5 million a year earlier. The increase largely reflected the addition of Cipher’s operations.

“Integration of the two companies is going well and is ahead of schedule,” said D. Howard Lewis, chairman and chief executive. “We must keep in mind that although we initiated major cost-saving steps in the third quarter, we will not see a significant effect on expenses until the next quarter.”

Peter W. Cole, an analyst with Dakin, Costigan & Welpton in San Francisco, said the lower earnings were not a disappointment, since he had expected the Cipher acquisition to result in a loss during the third quarter.

Cipher agreed to be acquired by Archive in April after a three-month hostile takeover fight. In May, Archive consolidated its manufacturing in Singapore and laid off 3% of its 3,200 employees to eliminate duplicate jobs after the merger.

Lewis said revenue was down, in part, because Cipher had suffered from the downturn in the minicomputer market. But he said conditions in that market are improving. He added that the company’s Maynard Electronics unit, which makes computer tape-drive subsystems, is building a new manufacturing plant in Orlando, Fla., which is scheduled to open in October.

For the nine months ended June 29, Archive posted earnings of $8.5 million, down 23% from $11.1 million a year earlier. Revenue increased 52% to $200.5 million from $131.7 million a year ago.