Price Stern in Red; Firm to Study Options

Los Angeles specialty publishing house Price Stern Sloan Inc. on Tuesday reported an $8.1-million loss for the third quarter and said it had hired an investment banker to explore a possible reorganization or sale of the company.

Price, which publishes humor and juvenile books and games such as Mad Libs and the Murphy’s Law line of calendars, said it has hired Donaldson, Lufkin & Jenrette Securities to look at “various financial and strategic alternatives,” including merging or selling the company. The firm also retained Martin P. Levin, a director of the company, to assist DLJ.

Price’s financial vice president, Dan Reavis, said the company may try to raise new capital or refinance its $30-million debt. “It’s not a gloom-and-doom situation for us,” Reavis said. Donaldson Lufkin & Jenrette is “not just looking at us to sell.”

The company blamed the $8.1-million loss for the three-month period ending Sept. 30 on one-time charges, including $4.9 million to shut down its British subsidiary and $3.7 million to write off inventory and other items. Without these expenses, Price said it would have reported a net profit of $432,000 for the quarter. Last year, Price earned $1.8 million in the comparable period.

Reavis said the company expects to post another loss during the current fourth quarter, a traditionally weak period for the firm, before reporting a slight profit early next year.

The 25-year-old firm reported third-quarter sales of $14 million, not including results from the firm’s British operations. Last year, the company reported $21.4 million in sales during the period.

Price said it was still seeking a buyer for the British subsidiary after an anticipated sale collapsed in September.

“The fundamentals of our business remain strong,” Chairman L. Lawrence Sloan said in a statement. “We are undergoing a major restructuring of our publishing program, with emphasis on gross margin improvement.”