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EARNINGS

Battered Wespercorp Posts More Red Ink

May 17, 1987|JAMES S. GRANELLI

Working to win government contracts to replace one that is expiring, battered Wespercorp continued to post more red ink even though it has been laying off employees and cutting expenses at its computer peripheral manufacturing operation.

In its third quarter, ended March 31, Wespercorp reported a net loss of $408,000 on sales of $2.1 million, compared with a $26,000 profit on sales of $3.5 million in last year's third quarter.

In its first nine months, the company posted a $1.2 million net loss on sales of $6.7 million, compared with a $229,000 net loss on sales of $10.8 million in the same period last year.

Since January, the Santa Ana company has laid off 27 employees in its government division and another six have left for other jobs, reducing the division's total employees to 28. Companywide, Wespercorp has some 65 employees, about half the number at its peak three to four years ago, said Daniel T. Whelan, the company's chief financial officer.

About half of its nine-month loss was attributed to reserves set aside to settle lawsuits against it. The settlements, however, end all major litigation against the company, Whelan said.

The company's lower sales was caused primarily by the continuing decline in revenues from the company's federal systems group, said George Dashiell, the company's president. The government division, which used to account for two-thirds of up to $20 million in sales, has only one contract remaining and it expires July 1.

Dashiell said the company is continuing to bid on government contracts.

The company also is negotiating with Union Bank to restructure a $3.9 million loan that matured May 1. The loan, which had been at $4.5 million six months ago, has been restructured several times in the last three years.

Dashiell said the company has no way to pay the debt and needs to restructure it to survive.

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