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Red Ink Reduced by Alpha Micro : Computer Maker Cuts 3rd-Quarter Loss Despite Turmoil

January 08, 1987|KEN CHAVEZ | Times Staff Writer

Despite a year of management turmoil, failed mergers and continuing losses, Alpha Microsystems Inc. managed to reduce its fiscal 1987 third quarter's red ink, posting a net loss of $383,000 compared with a $559,000 loss for the same period last year.

For the first nine months, ended Nov. 23, losses for the Santa Ana computer maker totaled $938,000, less than half the $1.99-million loss reported for the first nine months of its fiscal 1986.

Sales of $12 million during the third quarter of fiscal 1987 fell a mere $48,000 from last year's third-quarter figure.

For the nine-month period, sales of $34.9 million were down 5% from the $36.8 million in sales reported for the first nine months of Alpha Micro's fiscal 1986.

Dennis Trombley, Alpha Micro's director of corporate communications, attributed the company's decreasing losses to "a lot of cost efficiency things (that) were done," including reductions in manufacturing costs and the costs of imports from overseas suppliers.

The computer firm still is losing money, however, because of "the standard stuff," Trombley said, referring to the ongoing slump in the personal computer industry brought about by a steep decline in computer purchases in recent years. "The industry's still in trouble. We're trying to fight our way back to profitability."

Turmoil erupted among Alpha Micro's management in August when founders Richard Wilcox and Robert Hitchcock, unhappy with the company's faltering finances and the management of the then-chief executive, Richard Cortese, were ousted as chairman and vice chairman of the company by Cortese supporters on the board of directors.

But the two men remained major shareholders and board members and last month won control of the board--and Cortese's resignation--after threatening a bitter proxy battle. Hitchcock was re-elected board chairman on Monday and also was named president and chief executive officer, replacing Cortese. Wilcox was named vice president and chief technical officer.

During the months after Hitchcock and Wilcox were removed from their corporate offices, Alpha Micro, which has lost more than $4 million in the last year and a half, fended off a takeover bid by Point 4 Data Corp., a Tustin-based computer maker, and entered a merger agreement with TeleVideo Systems Inc. of Sunnyvale--an agreement that later was canceled. Hitchcock and Wilcox reportedly opposed both deals.

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