Kirschner says it will report 4th-quarter loss 9-month profit could be wiped out

February 06, 1991|By Timothy J. Mullaney

Kirschner Medical Corp. of Timonium said yesterday that it will report a fourth-quarter loss that could wipe out its $1.1 million profit during the first nine months of 1990, signaling more tough days ahead for the debt-hobbled maker of medical products.

The company also said that new chief executive C. Scott Harrison has imposed layoffs, a wage freeze and salary rollbacks to cut costs.

Company spokesman John E. Barham said Mr. Harrison took a 20 percent pay cut and that the pay of the company's vice presidents and president was rolled back to 1989 levels.

Mr. Harrison became CEO in December, and his salary has yet to be disclosed.

Publicly traded companies such as Kirschner report their top executives' salaries to the Securities and Exchange Commission as part of routine annual filings, which have not come due since the Penn State University medical professor took Kirschner's helm.

The company wouldn't disclose the size of the likely fourth-quarter loss, but Mr. Barham said it was a fair inference that the fourth-quarter deficit was about $1 million, since the announcement said "there is a possibility" that the quarterly loss might wipe out the nine-month profit.

The company plans to report earnings for the fourth quarter and the full year in late March, Mr. Barham said.

"It's fair to assume it's in that ballpark," he said.

But Mr. Barham declined to say whether the loss was incurred in the course of doing business or was the result of a yet-undisclosed one-time charge.

"That detail is being put together and will be in the report at the latter part of March," the company spokesman said.

Kirschner's stock fell about 11 percent in light over-the-counter trading, closing at $8 a share.

Mr. Barham said he also had few details of the layoffs, which were effective immediately.

The company did not disclose the exact number of layoffs among Kirschner's roughly 600 employees or the number of Timonium-based workers who were dismissed.

Kirschner has its headquarters on Deereco Road in Timonium. It also has a manufacturing plant nearby.

Mr. Barham said the cuts were spread through all levels of the company but that middle management was probably the most seriously affected.

"They are not real large numbers, but they are enough to fit the plan to cut costs," he said.

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