Diceon Reports $2.7-Million Loss for 3rd Quarter : Electronics: The recession and the Irvine firm’s fight to ward off an unfriendly takeover push down its quarterly revenue 23%.
IRVINE — Wounded by the recession and a continuing legal battle with an unfriendly suitor, Diceon Electronics Inc. said Tuesday that it lost $2.7 million for its third quarter, on a 23% plunge in revenue.
The computer products company reported revenue for the three months ended June 29 of $24.3 million, down from $31.7 million a year earlier.
The company called the results “unacceptable” and blamed the recession’s effect on the computer industry. Diceon makes advanced electronic circuit boards for various computers.
During the latest quarter, the company spent about $300,000 on expenses related to lawsuits with Calvary Partners Inc., a San Diego investment firm that waged an unsuccessful battle for control of Diceon’s board in January. Since December, Diceon said, it has spent $1 million fighting Calvary.
“The business issues haven’t changed,” said Peter Jonas, Diceon’s vice chairman. “Computer demand is weak, the industry has excess capacity and foreign competition is cutting prices. We are bringing our costs down, but we can’t bring them down fast enough.”
Last year, Diceon took a writeoff of $5 million and laid off 15% of its 1,500 employees to cut costs. No more layoffs are planned, Jonas said, but might be needed if sales continue to drop.
Calvary, led by investor James Arabia, controls about 2% of Diceon’s stock. Arabia said Calvary will continue to press its case in court to force Diceon’s management to disclose certain stock transactions.
“In fairness to Diceon, margins are being squeezed (by the recession), but their competitors are able to remain profitable,” Arabia said. “We think these results speak for themselves; the turnaround discussed at the annual meeting hasn’t occurred.”
Gerald Fleming, an analyst with Needham & Co. in New York, said the Calvary-Diceon battle will probably continue to be a standoff until the company can show a return to profitability or until Calvary comes up with financing for its $27.2 million.
“Unfortunately, there is not much of a case you can make for either side,” Fleming said. “Business is terrible, and Diceon is stuck with a lot of excess capacity.”
Diceon’s Performance
In the third quarter ended June 29, Diceon Electronics Inc. reported a loss of $2.7 million as its revenues plunged 23% to $24.3 million. The company attributed the loss to the recession, legal costs and intense competition.
Figures are in thousands, except per-share data.
3rd Qtr 3rd Qtr 12 Months 12 Months 1991 1990 1991 1990 Revenue $24,331 $31,682 $80,098 $91,120 Net income (loss) (2,680) (2,447) (6,981) (5,067) Per share (loss) ($0.51) ($0.47) ($1.34) ($0.91)
Source: Diceon Electronics Inc.
