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EARNINGS

Gradco Systems Reports Loss for Third Quarter

March 01, 1987

Gradco Systems Inc. said it had a net loss of $894,450 for its fiscal 1987 third quarter ended Dec. 31, contrasted with net income of $1.3 million a year earlier. Revenue for the quarter of $14.2 million was up 13% from $12.6 million in the third quarter of the company's fiscal 1985 third quarter. Gradco, based in Irvine, makes copier equipment.

The company reported nine-month net earnings of $1.1 million, down 35% from year-earlier net earnings of $1.7 million. Nine-month revenues increased 27% to $42.2 million from $33.3 million.

The third-quarter loss and the lowered nine-month earnings, said Keith B. Stewart, Gradco's chairman and chief executive officer, came from non-recurring reserves and charges to earnings of $1.7 million, which included an extraordinary expense of $600,000 related to legal fees and litigation and $1.1 million in reserves set aside for potential legal settlements and other costs.

Without the third-quarter charges and the litigation expense, Stewart said, Gradco would have posted quarterly earnings of $666,530.

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