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Platinum Software Offers Good News After 2 Bad Years : Recovery: The Irvine-based firm's common stock rises after a quarterly profit. Three new board members are announced.

October 25, 1994|JOHN O'DELL | TIMES STAFF WRITER

IRVINE — Platinum Software Corp. said Monday that income from a delayed $3-million order enabled it to post earnings of $51,000 for its latest fiscal quarter--its first profit after two years of multimillion-dollar losses.

The 10-year-old accounting software maker also announced the appointment of three new directors, enlarging its board to eight members as part of a restructuring.

Platinum has been striving to recover from the resignations of its founder and three top officers earlier this year in conjunction with the revelation that the company overstated its revenue by $10 million for a 15-month period in its fiscal 1993 and 1994.

Most stock analysts dropped their coverage of the company earlier this year because of its problems. Many of those reached Monday would not comment on the new developments, citing unfamiliarity with the company's condition now.

But J. Neil Weintraut, an analyst with San Francisco high-technology investment specialists Hambrecht & Quist, called Monday's announcements "a milestone for the company. It is getting back on track with a clear mission and operating structure that matches its size and a committed and highly skilled management."

Investors also greeted Monday's news enthusiastically, trading 462,600 shares of the Irvine-based software company's common stock--nearly twice the daily average of the past month. The price was up as much as 75 cents a share before retreating a bit to close at $13.875, up 39 cents, in Nasdaq trading.

In addition to a profit for its first fiscal quarter, which ended Sept. 30, Platinum reported revenue of $14.6 million for the quarter ended Sept. 30, up from $11.4 million for the same period a year earlier.

The company also reported that its operating expenses dropped significantly, to $9.8 million from $11.4 million.

The company had posted a $59 million loss for its fiscal 1994 and a $17 million loss in its fiscal 1993. For its first quarter last year, Platinum had a loss of $3.9 million.

New directors elected in an Oct. 17 board meeting were C. Vincent Prothro, chairman and chief executive of Dallas Semiconductor Co. in Dallas; Waldo (Jay) J. Richards, senior vice president of product operations for Mentor Graphics in Portland, Ore., and Richard C. Goeglein, a founder of Gaming Associates, the Napa Valley casino management company.

Goeglein also serves as a director of Boomtown Hotels and Casinos, San Francisco-based Hornblower Dining Yachts Inc. and AST Research Inc. AST, an Irvine computer maker, recently revealed troubles of its own when it announced that it expects a $40-million quarterly loss and will close its Fountain Valley manufacturing plant and lay off 440 workers there as part of a worldwide staff reduction of 700 employees.

The three new directors will be nominated for reelection to full terms at the company's annual meeting Nov. 28.

Carmelo J. Santoro, the turnaround specialist installed as Platinum's chairman and chief executive officer after the April resignations of founder Gerald R. Blackie and other top officers, said in a statement Monday that the three new directors are longtime associates.

Platinum Software's First Quarter

Profit for the first quarter of fiscal 1995, ended Sept. 30, totaled $51,000, contrasted with a restated net loss of nearly $4 million for the year-earlier quarter. Figures in thousands of dollars, except per-share data:

1995 1994 % Change Total revenue $14,580 $11,392 +28 Net earnings (loss) 51 (3,971) NA Earnings per share 0.00 (0.32) NA

* Source: Platinum Software Corp.

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