TECHNOLOGY : MAI Systems Reeling From Losses; Management Considering Bankruptcy

MAI Systems Corp. is on the ropes.

The business software maker has been hurt over the past two years by a heavy debt load, an aborted 10-month takeover fight with a minicomputer company and a rocky transition from making proprietary minicomputer systems to providing “open systems” business software, which can run on standardized computers.

During 1992, the Tustin-based company laid off 564 people, or 21%, of its 2,685-person work force, according to a Jan. 21 filing with the Securities and Exchange Commission.

For the year ended Sept. 30, MAI reported a loss of $187 million, or $5.75 a share, compared with a loss of $76.6 million, or $2.36 a share, for the previous 12 months. Annual revenue fell 20% to $279.4 million from $336.3 million. For the fourth quarter, the company took a $147.7-million charge against earnings to cover costs of a restructuring started two years ago.

Since November, the company has been in default on $77 million in debt. The company’s auditor, KPMG Peat Marwick, said in the SEC document there is no guarantee that the company can continue as a going concern.

Management, which has been depleted by departures in recent months, is considering its options, including filing for bankruptcy protection, according to the filing.