Archive Posts a $49.3-Million Loss--a First
Struggling from the recession, heavy debt and a merger-related restructuring, Archive Corp., a manufacturer of computer storage components, Tuesday reported the first annual loss in its 10-year history.
The loss of $49.3 million, equal to $3.78 a share, was in line with recent company estimates. The result contrasts with a profit of $11.5 million, or 84 cents a share, a year earlier.
Revenue for the year was $345.6 million, up 18% from $293.2 million a year earlier. For the fourth quarter ended Sept. 27, the company reported a loss of $938,000, or 7 cents a share, compared to quarterly earnings of $1.8 million, or 13 cents a share, a year earlier.
“It was a disappointing year,” said B.J. Rone, chief financial officer. “But we have some signs that business is picking up a little with some of our customers in the current quarter.”
Rone said the outlook for the coming year is positive. He said the company expects to return to profitability in the first quarter and sustain profitability whether or not the economy recovers.
New products from each of the company’s five divisions are expected to drive sales during the next year, Rone said. Thanks to a revised repayment plan negotiated this summer, the company’s cash from operations should be able to meet its $15 million in debt payments in the coming year, Rone said.
Most of the 1991 loss was blamed on a $45-million restructuring charge in the third quarter. The charge was mostly related to reducing the value of assets on its books and laying off employees in the company’s Cipher Data Products subsidiary.
In the biggest merger in its industry, Archive acquired Cipher for $141.7 million in April, 1990. Since that time, Archive has cut its combined work force from 3,300 employees to about 2,500.
Archive supplies storage equipment that backs up data stored on computers. It sells most of its products to major computer companies, which in turn install them in computers.
When big computer companies such as International Business Machines Corp. face an industry slowdown, they place fewer orders for Archive’s products, said Robert Abraham, a vice president at industry consulting firm Freeman Associates in Santa Barbara.
“The problems with the rest of the industry have trickled down to Archive,” he said.
Archive’s Performance
In the fiscal year ended Sept. 27, Archive Corp. posted a loss of $49.3 million as its revenue rose 18% to $345.6 million. The company attributed the loss to a one-time $45-million restructuring charge in the third quarter.
Figures are in thousands, except per-share data.
4th Qtr 4th Qtr 12 Months 12 Months 1991 1990 1991 1990 Revenue $81,843 $94,931 $345,603 $293,234 Net income (loss) (938) 1,824 (49,340) 11,537 Per share (loss) (0.07) 0.13 (3.78) 0.84
Source: Archive Corp.