General Automation Inc. finds itself in the black at year-end for the first time in five years, although the net income was due to an extraordinary gain stemming from restructuring and eliminating its long-term debt.
The Anaheim-based maker of business computer systems posted earnings of $2.1 million for the 11-month fiscal 1986 ended June 30, as contrasted with a loss of $8 million in the previous fiscal year.
The 1986 fiscal year and the fourth quarter were shortened to move the company to a year-end schedule comparable to other computer manufacturers, said John D. Murray, the company's vice president of finance.
Earnings for the two-month fourth quarter were $6.6 million--up from the prior year's fourth quarter loss of $1.3 million. But those earnings stem from a $10-million one-time gain realized when the company used cash and stock to virtually eliminate its $15 million in long-term debt which stood at a high of $48.3 million in 1980. By improving General Automation's fiscal condition, MacKenzie said, "we're clearing the board. Getting the balance sheet cleaned up allows us to sell more product to people who used to be worried about our financial stability."
Sales for the 11-month fiscal year were $29.1 million--down from sales of $52.8 million the prior year. Sales for the shortened fourth quarter were $4.3 million compared to $9.2 million in the three-month quarter last year.
MacKenzie said the fiscal 1986 refinancing and restructuring, combined with the introduction of new products in the company's ZEBRA computer system, allowed General Automation to make a common stock offering which garnered the company approximately $6.2 million during its first quarter of fiscal 1987.
Murray and Mackenzie also predicted a first quarter 1987 operating profit for the company that will be slightly enhanced by tax loss carry-forwards from General Automation's losses over the last few years.