Sale of Subsidiary Lifts Gradco Systems to a Profit

Gradco Systems Inc., a maker of copier machine products, said Tuesday that its fiscal 1991 first-quarter net earnings were $15.5 million, up from $223,000 a year ago.

But the company, which has seen operating earning plummet in recent quarters, said the first-quarter profit came from its previously announced $17.8-million after-tax gain on the sale of its Japanese subsidiary.

Without that gain, Gradco would have sustained operating losses of $2.3 million because of the decline in sales to Xerox Corp. and expenses for development, field testing and marketing of new laser printer paper handling products.

The company said revenues for the quarter ended June 30 were $20.3 million, down 17% from $24.6 million a year earlier.