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Printronix Reports $1 Million Loss : Computer Sales Slump Blamed for Second Quarterly Loss

October 16, 1985|CARLA LAZZARESCHI | Times Staff Writer

Blaming its sagging fortunes on the continuing slump in computer sales, Printronix Inc. on Tuesday reported a $1-million loss for its second quarter of fiscal 1986. It was the second consecutive quarterly loss for the 10-year-old company, which, until this fiscal year, had not posted a single loss.

The Irvine manufacturer of computer printers posted a gain of $2.8 million for the second quarter last year.

As a result of its back-to-back losses--Printronix lost $1.4 million in its first quarter--the company has laid off more than 450 workers in the last six months, according to Robert A. Kleist, president and chief executive. The layoffs have affected all seven Printronix plants around the world, including corporate headquarters in Irvine, where 250 employees have been terminated. Kleist said the layoffs, coupled with an expected modest upturn in sales, should boost the company back into the black for the remaining six months of the fiscal year.

Kleist also said Tuesday that the company's board of directors has authorized the purchase of up to 500,000 shares of company stock on the open market or through negotiated sales. The stock represents about 10% of Printronix's 5 million outstanding shares.

To Retire Shares

Kleist said purchase of the shares, which then will be retired, is designed to increase the value of the remaining outstanding stock. Shares currently are trading at about $11.50 each, about $4 below what Kleist said was the $15.50 per share value of the company's assets.

Printronix expects to use surplus cash generated by its improving business operations to purchase the stock, Kleist said. No timetable for the purchases has been set.

For the quarter ended Sept. 27, Printronix had sales of $33 million, a drop of nearly 12% from the $37.4 million posted in the year-ago period.

For the first six months of the fiscal year, Printronix's losses were $2.4 million versus profits of $4.9 million last year. Sales were $66 million, down 7.5% from the $71.4 million posted last year.

Analysts said Printronix is far from alone in suffering from the slump in computer sales to both businesses and individuals over the last 10 months.

'Tough Industry'

"The printer industry is extremely tough right now," said David Glidewell, an analyst with Dataquest, a computer market research firm in San Jose.

Glidewell said Printronix's primary market, small to medium businesses, is especially difficult these days because businessmen are deferring purchases of computers until the market settles down.

Furthermore, Glidewell said, Printronix has not been able to penetrate the retail market with its printers for desk top computers as easily as it once thought.

Last year, Printronix purchased Anadex Inc., a Camarillo-based maker of small printers, in large part to gain entry into the retail stores specializing in desk-top computers and related equipment.

However, Glidewell said the retail market is still dominated by Japanese manufacturers.

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