Strapped Distributed Logic Sells Its Service Operations
Under pressure from its lenders, financially troubled Distributed Logic Corp. said Wednesday that it has sold its computer service operations in the United States to Santa Ana-based Novadyne for an undisclosed price.
The cash-hungry company also sold its computer service operations in the United Kingdom, to British computer firm Sorbus Ltd. The purchase price was not disclosed.
Distributed Logic also said it expects to report a loss from operations for its fourth quarter and fiscal year ended Oct. 31.
The service business “has been distracting and the company has been under cash pressure,” said Thomas R. Anderson, chief financial officer.
The Anaheim firm supplies data storage and communications equipment, primarily for minicomputers manufactured by Digital Equipment Corp. The minicomputer market has been in a slump in recent years, caught in a squeeze between low-cost mainframe computers and increasingly powerful personal computers.
Distributed Logic’s competitors include two Orange County firms--Emulex Corp. in Costa Mesa and Micro Technology Inc. in Anaheim--and Digital Equipment itself, which has been slashing prices on peripheral products that boost the performance of its computers.
For the nine months ended July 31, Distributed Logic lost $2.2 million on revenue of $33.4 million, contrasted with earnings of $34,315 on revenue of $37.9 million for the year-earlier period.
The company, in its quarterly statement for the period ending July 31, disclosed that the losses had drained the company’s cash and that it was in danger of defaulting on its loan agreements if the losses continued. During 1990, the statement said, the company has cut its work force and renegotiated its long-term debt.
John Wilson, Distributed Logic’s president, confirmed the job cuts Wednesday but declined to say how many people have been laid off in 1990. The company currently employs 190 people, he said.
Pat Dwight, a spokeswoman for Novadyne, said the computer service company is “already in the DEC market, so this alliance is good for us.” Novadyne was known as McDonnell Douglas Field Systems Co., a unit of McDonnell Douglas Corp., until a management-led buyout earlier this year.
