Financial results for the second quarter and first six months at Anaheim's Pacific Scientific Co. were down from last year's admittedly lackluster performance, but company officials say a three-year decline in profits should end in the third quarter.
The maker of aircraft parts and products for the once popular nuclear energy industry reported net income of $1.3 million for the quarter ended June 27, down 18.7% from $1.6 million earned last year. Revenues for the quarter declined 3.8% to $22.7 million from $23.6 million.
In the first six months, net income fell 19% to $2.5 million from $3.1 million while revenues dropped 3.8% to $44,931,000 from $46,701,000.
The company sold about $32 million worth of products to the nuclear power plant construction industry in 1983, representing about a third of its revenues, but this market now accounts for about $6 million to $10 million a year, or 7% to 8% of revenues, said Peer Swan, Pacific Scientific's treasurer.
Swan predicted that the company's third quarter will show a higher net income than last year's third quarter because of various actions the company has taken in the last year.
Pacific Scientific, after cutting operating costs and bolstering its line of aircraft products, from seat belts to engines, has produced three straight quarters of increasing pretax profits, said Edgar S. Brower, president and chief executive officer.
Brower said the cost controls have not been applied to research and development programs, where costs are running at 11% of sales, up from 9% a year ago.
The company financial statement made no provision for any potential liability in two pending lawsuits filed by a previous shareholder.
The suits, one each in state and federal courts, seek unspecified damages and claim that Pacific Scientific made false and misleading statements in 1983 and early 1984 about the sales outlook for its mechanical shock arresters, which are used in nuclear power plants to support piping systems and protect them from possible ruptures.
The company's official position is that the claims are meritless and are not likely to have much impact on the company's financial position.