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Alpha Microsystems Foresees Return to Profit Next Year


Alpha Microsystems, one of Orange County's hottest stocks yet one of its most consistently unprofitable companies, said Monday that it finally will return to profitability sometime late next year.

But not before it posts more red ink, including a $6.2-million loss reported Monday, its 13th consecutive quarterly deficit.

The Santa Ana-based provider of Internet services to businesses also said it is considering spinning off its AlphaConnect business intelligence software division.

The company also will change its name to

"Microsystems is not what we do anymore," said Doug Tullio, president of the 22-year-old company.

The most recent loss, for its fiscal third quarter, is nearly nine times last year's $688,000 loss. Sales, however, jumped 77%, to $9.1 million, from $5.1 million.

The company attributed about $4.6 million of the loss to one-time charges related to the write-down of assets, including software, goodwill and notes receivable from previously sold operations.

Tullio said he expects the services side of the company to see a 30% growth rate this year.

By spinning off or selling its AlphaConnect business that, while promising, has dragged down profits, the company will be in the black by the second half of 1999. The AlphaConnect unit has annual sales of less than $1 million.

Alpha Micro announced the moves after the markets' close. Its shares, which are up more than 270% this year, rose another 22% Monday, to $4.81, in Nasdaq trading.

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