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Microsemi Plans to Sell Non-Core Business Units : Divestiture: The Santa Ana semiconductor company will take a fourth-quarter charge against earnings of $9 million to $11 million.

September 06, 1990|DEAN TAKAHASHI | TIMES STAFF WRITER

SANTA ANA — Microsemi Corp. said Wednesday that it plans to sell some non-semiconductor businesses and as a result will take a fourth-quarter charge against earnings of $9 million to $11 million.

The company plans to sell five units that are not focused on its core business of manufacturing custom chips for the aerospace, military, medical and communication industries, said David R. Sonksen, vice president of finance. Since last year, the company has been trying to sell its non-core businesses.

The write-down will cover costs associated with selling the businesses, the sale of some units at prices lower than originally expected, and the liquidation of certain business units, the company said.

Microsemi said it expects to generate $6 million to $10 million in cash over the next year as a result of the asset sales.

Sonksen said the company will sell its Omni Technology unit, a San Jose chip-testing company, the Salem/Sertech distribution company in Beverly, Mass., and Bikor Corp., a power-supplies firm in Torrance.

Since last year, the company has also been trying to sell its Micro Ceramics unit in San Diego and Surface Mounted Technology Corp. in San Jose. If the sales are completed, Sonksen said, the company's remaining businesses will employ about 1,200 people, including 500 in Santa Ana.

Mark Matheson, an analyst with the Newport Beach investment bank Cruttenden & Co., said the write-down was not unexpected because the company has been trimming its operations for the past year.

"I think this is a good strategy since the company was getting too far afield in areas that weren't beneficial to them," he said. "Now they will start with a clean slate."

Matheson estimated that the company will lose $7.5 million on sales of $25 million for the fourth quarter ending Oct. 1, compared to a loss of $9.4 million on $25.2 million a year earlier.

For the third quarter ended July 2, the company posted earnings of $377,000 on revenue of $23.6 million, contrasted with a loss of $707,000 on revenue of $26.4 million.

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