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Smith Corona Posts 4th-Qtr. Profits

Smith Corona reported a loss and lower sales for its fiscal year, but showed a profit for the fourth quarter.

For the year ending June 30 the company reported a net loss of $15.9 million on sales of $43.7 million, compared with a loss of $6.6 million on sales of $58.9 million for the same period last year.

Results this year included a non-recurring restructuring expense of $1.3 million, while last year’s results included gains of $3.9 million from the sale of manufacturing operations and $1.2 million from favorable claims resolution, the company said.

Sales declines in typewriters and related supplies were partially offset by newly sourced product sales of $6 million for this year, compared with new product sales of $3.8 million last year.

Expenses improved during 1999 to 42.9% of sales from 44.8% of sales last year. Gross margins for fiscal 1999 were 2.7% of sales, compared to 23% last year due to clearance sales for telephone and fax products, as well as inventory write-downs and manufacturing contracts.

During the fourth quarter Smith Corona reported net income of $600,000 on sales of $7.9 million, compared with a loss of $4.4 million on sales of $12 million last year.

Fourth-quarter results reflect an approximate 50% reduction in expenses, as well as a $300,000 gain from the sale of its former headquarters and tax benefits of $2.6 million from the final liquidation of one of the company’s international subsidiaries. Gross margins were 15.6% of sales versus 8.4% last year.