Pinnacle Micro’s Quarterly Loss Near $5 Million
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IRVINE — Financially strapped Pinnacle Micro Inc. said Tuesday that its second-quarter revenue fell 31% on weak sales of one of its major product lines.
The company, which makes compact disk storage systems, announced a net loss of nearly $5 million for the second quarter on revenue of $11.3 million, compared with a year-earlier net loss of $3.8 million.
Pinnacle said the orders for its Apex drives--a high-capacity optical system--were far lower than expected.
The company’s stock prices peaked last October at $8.75 per share, then plummeted below $1 a share over the past 10 months. On Tuesday, Pinnacle’s stock price dropped to 75 cents a share, down 9 cents a share, on Nasdaq trading.
Analysts said the company’s current problems date back two years, when it moved from the reselling business to manufacturing.
“They announced they would be producing this high-capacity optical drive in 1995, then waited a year to actually start shipping it,” said John Freeman, an analyst at Strategic Marketing Decisions in Los Gatos. “This was a company well known for its marketing strength, but just bit off too much to handle. You can’t sell things you can’t ship, and the market won’t wait.”
In another sign of Pinnacle Micro’s continuing struggle, the firm remains in default on much of its trade debt. Though it won a 60-day moratorium on paying its bills in June, the company has not announced an extension of this deadline.
Pinnacle said it has retained the bankruptcy law firm of Lobel & Opera to help it in dealing with creditors; the consulting firm of Kibel, Green Inc. to help with management solutions; and the banking firm of Houlihan, Lokey, Howard & Zukin to find potential outside investors.
So far, officials said, the company has not signed any deals with outside financial resources.
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Pinnacle Micro at a Glance
Headquarters: Irvine
President: Kenneth C. Campbell
Business: Computer hardware, information storage and retrieval systems
Employees: 166
Status: Public
Exchange: Nasdaq
52-week stock high: $8.75 on Oct. 11, 1996
52-week stock low: $0.59 on July 7, 1997
Tuesday’s close: $0.75
NET SALES
(in millions)
1996
1st qtr.: $17.4
1997
2nd qtr.: $11.3
NET INCOME
(in millions)
1996
1st qtr.: $-3.9
1997
2nd qtr.: -5.0
Source: Bloomberg News, Pinnacle Micro; Researched by JANICE L. JONES / LOS ANGELES TIMES
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