With a $12.7-million loss for fiscal 1985 and heavy losses continuing into the current year, Computer Automation officials said Monday that they are seeking an additional $3 million in private financing to cover the troubled Irvine computer equipment maker's bills.
Even as it announced its fiscal 1985 results Monday, the company said it expects to report a loss of more than $3 million in the first quarter of fiscal 1986, which ended Sept. 30. Such a loss would mark Computer Automation's 11th consecutive quarterly loss.
The company, which has lost more than $20 million over the last three years, said it is negotiating with its largest shareholder, Kansas businessman Larry Doskocil, for a new $3-million investment. Doskocil, who made his fortune in the precooked pizza topping business, bought $3 million worth of the company's debentures this summer following his purchase of 23.5% of its common stock.
Computer Automation's results for fiscal 1985 included $8.8 million worth of red ink in the final quarter ended June 30. In fiscal 1984, the company lost $7.8 million, including $2 million in the fourth quarter. Revenues for fiscal 1985 were $40.4 million, down slightly from $41.7 million.
In the final quarter of the 1985 fiscal year, the company had revenues of $9.5 million, 17% below the $11.5 million posted the prior year.
Computer Automation officials attributed a large part of the fiscal 1985 loss, the company's largest in the last three years, to write-downs and write-offs required by recent efforts to reduce and restructure the floundering computer and electronics operations.
Douglas L. Cutsforth, Computer Automation's new president and chief operating officer, said the company is trying to transform itself from a commercial computer maker to a manufacturer of computer testing equipment. If the transformation, including the sale of the company's computer-making operation and the closing of its Texas manufacturing plant, had been undertaken earlier, he said, the company would not be suffering as much as it is now.
Founder Left Company
"We waited too long to make the cuts," Cutsforth said. "But (company founder and former President David) Methvin felt he could make a business in the computer industry. And when he realized he couldn't do it, he decided he didn't want to be in a computer test equipment company." Methvin, who left the company in April, couldn't be reached for comment.
Earlier this summer, Computer Automation sold its ailing, 212-employee computer-making operation to Santa Ana businessman W. Norris Agee for $4 million in notes. It also announced that it would close its Richardson, Tex., plant by the end of the year to save money.
Since June, 1984, the company has reduced its work force from 910 to fewer than 700 employees.
Cutsforth said the company is also exploring the possibility of consolidating its European operations into a single facility. The company maintains a manufacturing plant near Dublin and a sales and service facility outside London.