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Zenith Cuts Q1 Loss, Sales Off 46%

5/21/2001 02:00:00 AM Eastern

Lincolnshire, Ill. — Although sales at Zenith Electronics were nearly cut in half in the first quarter, compared with the year-ago three months, the company reduced its net loss for the period by nearly $16 million.

Sales in the first quarter ended March 31 dropped about 46 percent to $64.7 million, down from $117.6 million in the first quarter of 2000. The decrease, Zenith said, was primarily due to planned reductions in lower-profit analog consumer electronics products as Zenith implements its strategy to focus on digital products.

To this end, Zenith announced earlier this month the pending sale of its consumer electronics accessories division to Gemini Industries. (See story on p. 3.)

The company’s net loss dropped to $6.5 million in the first quarter, compared with a $20.8 million loss in the same three months last year. At the same time, Zenith’s first-quarter operating loss from continued operations narrowed to $1.2 million, compared with $16.3 million in the same quarter last year.

Major factors contributing to the company’s improved first-quarter results include lower operating expenses and higher other income. First-quarter results also include restructuring charges of less than $200,000 this year, compared with $2.6 million in the year-ago first quarter.

The Zenith Network Systems division, which was sold in August 2000, has been segregated from the company’s first-quarter financial results and treated as a discontinued segment, with the consolidated statement of operations restated to reflect results of continuing operations.