Cushman Electronics Inc. on Monday reported its sixth consecutive quarter of net losses, forcing the Newport Beach-based firm to cancel its regular second-quarter cash dividend.
The radio and telephone test equipment manufacturer reported a loss of $450,000 for the second fiscal quarter ended March 31, compared with a loss of $349,000 for the prior-year period. Cushman's six-month net loss nearly doubled, to $711,000, from a net loss of $347,000 during the first half of its 1984 fiscal year. Revenues declined in the quarter to $2.2 million, from $2.3 million the prior year. For the six months, sales dropped to $4.6 million from $5 million a year earlier.
In a brief statement, Cushman said, "The board today determined that it is in the best interests of the company and its shareholders to retain revenues for use in the company's business, and accordingly, the company has suspended payment of cash dividends." The dividend would have been paid in June. The last dividend declared by Cushman was 3 cents a share, which was paid March 15 and totaled $31,290.
"All this has been caused by a phase-out of an old generation of products and the phase-in of a new generation," said Hugh R. McDonald, Cushman's secretary and treasurer. Over the past year, the company has converted its production line from a manual operation to one that is computerized.
Since the end of its last fiscal year, Sept. 30, 1984, Cushman has shrunk its work force by 49, McDonald said. An additional 31 positions were eliminated during Cushman's fiscal 1983 year and the company now has 120 employees, compared to the 200 workers on its payroll in September, 1983. Layoffs have been made among salaried and hourly workers, McDonald said.
McDonald said the company could not rule out the possibility of more layoffs but that other measures are being considered, including a reduced workweek and possible salary cuts.
He said Cushman is hoping its customers will rapidly accept its new product offerings. The company's key customers include city, state and federal government agencies that dispatch trucks with two-way radio equipment.
With costly research, development and installation of the computerized assembly line now completed, company officials expect to post a profit for the fourth quarter but still anticipate a loss for the year. "We've recently completed a quantum leap in technology and expect to see results before the year is out," McDonald said.
In April, Cushman sold a San Jose plant, using the proceeds to repay long-term debt of $2.9 million, reduce short-term debt of $500,000 and fund other working capital requirements.