Takeover Cuts Into Archive’s Earnings

Citing the cost of acquiring Cipher Data Products in April, computer products maker Archive Corp. said Friday that it expects to report net income between $11.3 million and $11.9 million for its fiscal year ended Sept. 28, down from $15.3 million a year earlier.

The combined revenue of Archive and Cipher is expected to be $295 million, up 63% from $181.4 million a year earlier, according to preliminary financial results for the year, the company said.

Archive said its earnings fell due to costs related to its $123-million acquisition of Cipher, which resulted in the layoffs of about 95 people among Archive and Cipher’s combined 3,200-employee work force in May.

But D. Howard Lewis, chairman and chief executive, said the merged company is on target for its growth plans this year.

Lewis attributed Archive’s revenue growth to the Cipher acquisition, continuing demand for the company’s 0.25-inch computer cartridge tape drives and controllers, and growth in the resales market.

Cipher accounted for about 30% of the company’s revenue during the year.

Final financial results will be reported in mid-November.