O.C.-Based Comarco to Lose Longtime Contract With Navy

In a move that will cost an Orange County contractor a large chunk of its business, Navy officials late Friday told Comarco Inc. that its contract for support operations will not be renewed.

Not clear was whether the Yorba Linda company, which provides engineering and facilities management at Naval Air Warfare Center facilities in China Lake and Point Mugu, will be forced to lay off employees. In a written statement, however, Comarco President Don M. Bailey said that the company’s China Lake work accounted for 15% of its revenue and 12% of its profit for the first quarter.

Company executives were not available for further comment.

A new Navy contract will consolidate eight existing pacts, including the one that was held by Comarco. The company has provided services at China Lake for more than 30 years.

Bailey said in the statement that company executives are “disappointed that we were not selected” but said Comarco will focus on its wireless communications business and on other possible government contracts.

He said the Navy will probably cover most costs associated with winding down Comarco’s presence at China Lake.

For the latest quarter, which ended April 30, Comarco posted earnings of $838,000 on revenue of $17.3 million. The company had a $3.3-million profit on sales of $68.3 million for its latest fiscal year.

In Friday’s Nasdaq trading, which ended long before the announcement was made, Comarco’s stock closed at $9.875 a share, down 12.5 cents.