Touchstone Expects Loss; Unicore Buy Pending

Touchstone Software Corp., the troubled Huntington Beach maker of PC diagnostic tools, said Monday it expects to post a fourth-quarter loss on sharply lower revenue.

The company also said its plans to acquire privately held Unicore Software Inc. are taking longer to complete than expected.

For the fourth quarter ended Dec. 31, the company said it expects its losses to total between $1.1 million and $1.3 million, or 14 cents to 15 cents a share. A year earlier, Touchstone posted a profit of $23,000.

Revenue fell to between $600,000 and $700,000 from $1.7 million for the same period in 1997.

The company blames its financial troubles on a slump in its retail sales, as well as its decision to refocus its product line and drop its anti-virus software offerings.

To shore up its bottom line, the company has been radically restructuring its staff. As part of an ongoing series of layoffs, Touchstone cut seven jobs last month, reducing the staff to 12.

The Unicore agreement, announced last month, is expected to close by the end of this month. Touchstone, which originally had expected the deal to be wrapped up by the end of January, gave no explanation for the delay. Once the acquisition is completed, the company expects to relocate its executive offices to Unicore’s headquarters in Massachusetts.

“Afterward, the company will push to reestablish its retail channels” and other sales opportunities, said Ron Maas, Touchstone’s executive vice president.

For the year, Touchstone expects its losses to total between $3.94 million and $4.12 million, or 49 cents to 52 cents a share. In 1997, the company lost nearly $2.1 million, or 26 cents a share.

Revenue for the year fell to about $4 million from $7.9 million.

Touchstone’s stock closed Monday at 84 cents a share, up 9 cents, in Nasdaq trading.