Distributed Logic Corp. has endured one disaster after another in the past year.
The computer products company's financial performance took a nose dive because of a failed merger, a shortage of working capital that forced the company to trim its product lines and a steep drop in sales, the company reported Friday.
Thomas R. Anderson, chief financial officer, said the company may be forced to file for Chapter 11 bankruptcy protection if its creditors grow tired of waiting for the firm to regain its financial health.
"Nobody has given us an ultimatum, so it's hard to predict what will happen," Anderson said. "It depends on how patient the creditors will be. We need to show some progress."
Dilog, which makes components for computer storage devices and other computer-related hardware, reported a loss of $4.4 million for its fiscal year ended Oct. 31, 1991, compared to a loss of $5.7 million a year earlier.
Revenue fell 35% to $29.4 million from $44.9 million. The decline was mainly due to the sale of the company's field-service operations and discontinued product lines. Some product lines were eliminated because the company could no longer buy raw materials at cheaper bulk prices.
Anderson also confirmed that the company's previously announced merger with Clearpoint Research Corp. of Hopkinton, Mass., has fallen through.
Anderson said the company has trimmed its work force from 238 in October, 1990, to about 110 people. About 20% of its full-time employees have been placed on part-time status, he said.
In February, the company's unsecured creditors, who are owed a combined $5.5 million, approved a 90-day moratorium on Dilog debt payments. The moratorium is due to expire on May 5, Anderson said.
The company has asked its bankers, who are owed about $6.8 million, for leniency in debt repayment. Meanwhile, Anderson said that the company will seek additional financing to continue its operations and launch new products. If such efforts fail, Anderson said the company might seek Chapter 11 protection.
Dilog stock will be be taken off the list from the National Assn. of Securities Dealers Automated Quotation system because of its failure to meet minimum net worth requirements.