Two Ventura County companies have arranged major borrowings totaling nearly $30 million. In one case, it's hoped the financing will help halt a flow of red ink; in another, the plan is for continued expansion.
One of the companies, Xircom Inc., a Thousand Oaks producer of computer networking systems and equipment, has arranged a $15-million line of credit with CIT Group/Credit Finance of New York.
Jerry N. Ulrich, Xircom's chief operating officer, said he hopes the financing will help the company recover from recent setbacks.
"Securing this credit [agreement] is another important step toward our recovery," he said. "Our core business is strengthening, which should result in revenues this quarter near the level a year earlier."
He said increased revenues and cost reductions will combine to produce improvements in operating results and cash flow.
As previously reported, Xircom posted a loss of $17.1 million on sales of $30 million in the quarter that ended Sept. 30. This compared with a profit of $4.3 million on sales of $38.9 million a year earlier.
In the fiscal year that ended Sept. 30, Xircom lost $58.8 million on revenues of $126.6 million, in contrast with the previous year's profit of $15.9 million on sales of $131.6 million.
Xircom blames much of its recent red ink on write-offs related to excess facilities and the cost of an acquisition. Without these, the loss in fiscal 1995 would have been $14.9 million, the company says.
The new one-year credit line provides $9 million initially, with another $6 million to be provided later. The loans are to be tied to Xircom's accounts receivable and inventories.
The other company with new financing is Diodes Inc., a Westlake Village producer of semiconductor products for the automotive, electronics and computer industries.
Diodes, which enjoyed record profits and revenues in its most recent quarter, has arranged new financing totaling $14 million.
Most of the money will be used to expand inventory and provide additional working capital, according to David Lin, Diodes' president and chief executive.
He said the financing "will assist the company in executing its plans for anticipated long-term growth."
Lin did not disclose the identity of the lender, but said the financing package includes a $4-million loan to pay suppliers. The remaining $10 million is a line of credit that will be used for expanding inventory and providing additional working capital. In the three months that ended Sept. 30, Diodes earned $1.3 million on sales of $15.4 million. The earnings were twice as high as in the same period last year. Revenues improved 55% over the year-ago level.