Tandon, a Chatsworth-based disk-drive maker that rode the personal computer boom earlier this decade and then tumbled this year with the industry's recession, said Tuesday that it lost $135.4 million in its fiscal year ended Sept. 27. The loss included a whopping $85.1-million deficit in the fourth quarter.
For the year, Tandon said its sales dropped 33% to $268.8 million. The loss contrasts to a profit of $29.4 million in its 1984 fiscal year.
For the final quarter, Tandon's sales plunged 43% to $54.7 million. The quarterly loss compares to a loss of $724,000 in the same period of 1984.
The company attributed much of the drop in revenue to a 60% decline in sales to IBM, which bought only $91 million in Tandon products in the latest fiscal year, compared to about $232 million a year earlier. The company also blamed its losses on the downturn in the personal computer business and intense price competition from other disk-drive makers, especially those based in Japan.
"They've suffered the full fury of the microcomputer revolution and its reign of terror," said Steven L. Ossad, who follows the company for the New York brokerage L. F. Rothschild, Unterberg, Towbin.
Tandon Vice President Ranjit Sitlani said the company made accounting adjustments of $163 million in the year, $90 million of which came in the fourth quarter. The adjustments included $137 million to increase inventory reserves and for write-downs, both related to its outmoded disk drives, Sitlani said.
The remaining $26 million was attributable to bad debts and legal expenses--most related to actions that Tandon took against Japanese disk-drive makers, which Tandon has accused of pirating its technology.
Ossad said he was surprised by the size of the loss and speculated that Tandon's new president, Dan H. Wilkie, may have decided to increase the amount of adjustments to clean up the company's balance sheet.
Sitlani, however, denied that the new management increased the size of the adjustments.
The company's founder and chairman, Sirjang Lal (Jugi) Tandon, disclosed in late November that the company is planning to shift the focus of its business to personal computers. Tandon hired Wilkie and H. L. Sparks, two key members of the team that helped launch IBM's PC in 1981.
James Porter, editor of the trade publication Disk/Trend Report, said the size of Tandon's loss shows the weakness in the floppy disk drive business.
"No wonder he (Sirjang Tandon) has decided he doesn't like disk drives and wants to sell computers," Porter said.
Separately, Tandon said it reached agreement to supply $300 million in personal computers and computer workstations over three years starting in mid-1986 to a computer manufacturer and an office systems manufacturer.
The company declined to disclose the names of the companies.
For detailed data and results of other companies, please see tables, Page 12.