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Unit Shares Soar on News Company Might Be Sold

Electronics: Maker of semiconductor manufacturing products has lost $4.2 million for first three quarters of fiscal year.

June 30, 1998|JOHN O'DELL | TIMES STAFF WRITER

Unit Instruments Inc. shares soared Monday on word the Yorba Linda-based maker of semiconductor manufacturing equipment is in talks to be purchased by another company.

Company officials could not be reached for comment. They announced almost 10 months ago that they were seeking an outside investor or possible purchaser to help stabilize the company.

Unit, which lost $4.2 million for the first three quarters of its 1998 fiscal year, has been struggling in a depressed market that also has brought woes to companies such as Irvine-based Western Digital Corp. and the Newport Beach semiconductor unit of Rockwell International Corp.

Faced last year with a glut of semiconductor products, chip manufacturers--Unit's customers--mothballed some fabrication plants and postponed plans for new ones.

This year, just as the industry adjusted its output, the Asian economic crunch hit. As a result, worldwide demand for semiconductors has slumped, removing the incentive for chip makers to add more production facilities that would use Unit's specialized control valves.

The 400-employee company last turned a profit for the full year in 1996. Although it has had a few profitable quarters since then, they have been eradicated by substantial losses in other quarters. Cumulative losses for Unit's fiscal 1997 and the initial nine months of fiscal 1998 totaled $8.5 million.

The company's stock price has fallen in recent months to the low $7-a-share range. It hit a 52-week high of $14.50 in August after Unit announced that it was looking at the possibility of merging with or being acquired by another company.

Investors apparently believe the company has potential as a takeover candidate. After the announcement Monday that a sale was in the works, Unit's stock jumped to $10.75 a share before settling back to close at $9.13, a gain of $2.56 or 32%. Trading in the Nasdaq-listed shares was heavy, with 220,100 shares changing hands, almost 10 times the average daily volume over the past year.

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