Irvine’s CMS Cuts Staff, Shuts Branch : Computers: Its Anybus components subsidiary is being closed and the firm’s new name is AmeriQuest Technologies.
In a bid to become a national distributor of computer products, CMS Enhancements Inc. said Monday it has closed a division, has laid off 25% of its staff, and will change its name.
The company is shutting down its Anybus personal-computer components subsidiary and taking a charge against earnings of $4.8 million to $5.2 million for its second fiscal quarter ended Dec. 31, said Stephen Holmes, chief financial officer.
For the record:
12:00 a.m. Feb. 10, 1994 For the Record
Los Angeles Times Thursday February 10, 1994 Orange County Edition Business Part D Page 2 Column 6 Financial Desk 1 inches; 28 words Type of Material: Correction
CMS Enhancements Inc.--Mike Rusert is executive vice president and chief operating officer of the computer products company in Irvine. A story Tuesday incorrectly stated his position at the company.
“Anybus is not consistent with the strategy,” Holmes said. “It was a venture outside of our core capability.”
The charge, which covers costs related to inventory, engineering and personnel cuts, will result in a net loss of about $5 million, or $1 to $1.10 a share, on quarterly sales of $20 million to $21 million, Holmes said. For the same period a year earlier, the company reported earnings of $100,000, or 1 cent a share, on sales of $18.9 million.
About 25% of the parent company’s 180 employees have been dismissed, Holmes said, most of them from the headquarters in Irvine.
CMS’ new management team, which replaced its co-founders two months ago, will change the company’s name to AmeriQuest Technologies Inc. to emphasize plans to grow into a national distributor. In contrast to general-purpose PC distributors like Ingram Micro Inc. in Santa Ana, the new company will focus on high-end computer products.
Harold L. Clark became chief executive after a private group bought a controlling interest in the company in December. Jamshed (Jim) Farooquee, co-founder and chief executive, and Jimmy D’Jen, co-founder and executive vice president, gave up their titles when Clark came aboard.
Under Clark, the company has acquired two regional computer distributors as part of an ambitious proposal to create a concern with annual revenue of $500 million by 1996--nearly seven times its revenue for fiscal 1993. Additional acquisitions are planned, Holmes said.
As a distributor, the company will spend more time shipping products made by other companies than developing its own. However, Holmes said, the company will continue to develop enhancements for computer components such as improved mass storage systems.
The subsidiary developed a technology that was designed to maximize the flow of data through any personal computer, regardless of the future technical advances by industry component makers. The company had planned to license it to other computer manufacturers.
Mike Rusert, president of the Anybus unit, in 1992 touted the technology as an opportunity for CMS to recover from a disastrous attempt at manufacturing complete PC systems in a joint venture with a South Korean company.
But Holmes said Monday that the subsidiary was losing $100,000 a month and generated little of CMS’ $73 million in revenue last year.
