Urethane Technologies Lays Off 10 Employees in Wake of Losses

Urethane Technologies Inc. said it has laid off 10 of its 86 employees as part of a plan to reverse four consecutive quarters of losses.

The layoffs, ordered Aug. 9, affected production, research and administrative workers at Urethane headquarters in Santa Ana and its manufacturing plant in Orange.

The company on Friday said that it lost $132,932, or 2 cents a share, in the second quarter, compared to a year-earlier profit of $66,013, or a penny a share. Revenue for the producer of specialty chemicals and polyurethane systems, rose 14%, however, to nearly $8.5 million from $7.4 million.

The company said its losses stem from soaring raw materials costs at a time when heavy competition has kept Urethane from raising its prices.

The second-quarter results also were affected by higher operating costs resulting from the acquisition earlier this year of a North Carolina chemical supplier and the decision in recent months to hire additional sales representatives to help increase sales volume, said James Frakes, chief financial officer.

For the first six months, the company lost $726,668, or 7 cents a share, compared to a profit of $73,184, or a penny a share, in the first half of 1995. Revenue rose 15% to $14.7 million from $12.8 million.

The company said that its layoffs will shave $50,000 a month from payroll costs and that a number of internal cost control programs are expected to add up to an additional $50,000 a month in savings.

Acquisition of Brin-Mont Corp. in Greensboro, N.C., also should help lower costs by enabling Urethane to produce some of its own raw materials and reduce its dependence on more expensive outside sources, Frakes said.

Urethane Technologies produces proprietary polyurethane systems used in roofing insulation, building panels, in-line skate wheels, exercise equipment, spa insulation, auto fender and body extenders, motorcycle seats, toys and office furniture.