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Archive Posts $2-Million Net Despite Write-Down

November 21, 1986|JAMES S. GRANELLI | Times Staff Writer

Despite a recently revealed $5-million write-down in inventories, Archive Corp. posted net income of $2 million for its 1986 fiscal year ended Sept. 26, double the $1-million profit reported for the previous year. Annual revenues rose 36.3% to $78.8 million from $57.8 million last year.

As anticipated, the Costa Mesa data storage equipment manufacturer posted a sizable fourth-quarter loss, $845,000 contrasted with net income of $538,000 in the final quarter of its fiscal 1985. Quarterly revenues rose 2.8% to $18.2 million from $17.7 million in the last quarter a year ago.

Three weeks ago, Archive said that accounting errors discovered by its auditors would force the company to write down $5 million worth of inventories.

Archive said the write-down was necessary because the value of inventory from its Singapore manufacturing plant had been overstated. The discovery of the huge accounting error led to the Nov. 7 resignation of J. Peter Wilson as president and chief operating officer.

D. Howard Lewis, the company's chairman and Wilson's predecessor and successor as president, has said directors and officers will evaluate internal policies and procedures and will make changes.

An unspecified number of employees are expected to lose their jobs over the next six months as a result of the cost-cutting, but no more departures are expected because of the accounting foul-up, Martin said.

In prepared remarks Thursday, Lewis attributed the annual growth in net income to the company's decision, advocated by Wilson, to transfer all its high-volume manufacturing to Singapore.

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