Pinkerton’s Inc. Records 65% Decline in Profits

Pinkerton’s Inc., citing the recession and its own management-restructuring efforts, said its fiscal third-quarter profit dropped 65% from a year earlier despite a 12% increase in revenue.

In the quarter that ended Sept. 4, the Van Nuys-based security services concern said its net income fell to $1.07 million from $3.06 million, while its revenue climbed to $163.8 million from $146.1 million.

The recession’s effects on Pinkerton’s clients created “significant pressures for cost reductions” in the company’s services, “dampening growth” in Pinkerton’s profit margins, the company said. Pinkerton’s operating expenses, meanwhile, rose sharply because of its acquisition of several other security firms in late-1991.

Also, Pinkerton’s took a one-time, $2.5-million pretax charge against earnings in the quarter to cover severance payments and other costs related to a reduction in senior management. The changes included the elimination of about 10 vice president positions.

For the first nine months of its fiscal year, Pinkerton’s profit fell 51%, to $3.58 million from $7.29 million, and its nine-month revenue rose 13%, to $485.7 million from $429.7 million.