Traditional Reveals Loss, Seeks to Restructure Debt

Traditional Industries Inc., an ailing Agoura Hills marketer of photographic supplies, said it is negotiating with lenders to completely restructure its bank debt. The company also disclosed further losses, and said it’s in talks with federal regulators over a continuing dispute about Traditional’s sales practices.

Traditional said the debt talks include negotiations with Imperial Bank, one of its current lenders. Traditional said it is optimistic that an agreement could be reached, but warned that “there is no certainty” of a settlement.

Separately, Traditional said one of its former directors, William D. Walsh, filed for collection of a $3.5-million, unsecured debt, “which he claims to be due him.” Traditional responded by saying only that it had hired a lawyer to deal with the claim.

The company also is again in talks with the Federal Trade Commission, which has complained about some of Traditional’s sales practices. Traditional sells packages of photo supplies and equipment--which typically cost between $300 and $1,500--directly to consumers and often provides them with credit to make the purchase.

Last year, Traditional initially settled the dispute by, among other things, agreeing to let many of its customers cancel their contracts with the company. But last month, the FTC alleged that Traditional had violated the settlement by continuing to misrepresent the quality and value of its products.

Traditional said that if it can’t “resolve its differences” with the FTC through the new negotiations, it will ask a federal court for a formal hearing on the matter.

Finally, Traditional said it continued losing money in its fiscal fourth quarter, which ended June 30, and in the first quarter of its current fiscal year, which ended Sept. 30. The exact losses were not disclosed, pending the company’s quarterly audit.

In the nine months that ended March 31, Traditional lost $5.5 million on revenue of $40.8 million.