Essex Corp. losses widen 1996 numbers somewhat bolstered by lawsuit settlement


March 29, 1997|By Greg Schneider | Greg Schneider,SUN STAFF

Essex Corp. of Columbia suffered an annual operating loss of $3.325 million on revenues of $12.939 million for 1996, causing it to close operations in Alabama and to consider broad restructuring or sales of assets, the company said yesterday.

The loss on operations was partially offset by a gain of about $2.2 million from the settlement of a lawsuit, so the final loss wound up at $1.33 million, or 37 cents per share.

"We are extremely disappointed by our 1996 results," Chairman and Chief Executive Officer Harry Letaw said in a news release.

The year closed with a $1.32 million loss during the fourth quarter, compared with a $20,000 gain for that period the year before.

Most of the 1996 fourth-quarter loss related to the closing of operations in Huntsville, Ala.

The 1996 annual revenues were down almost 9 percent from the $14.2 million logged in 1995, when the company suffered a net loss of $1.435 million.

The company, which performs electronic imaging and technical support work for the government, saw its backlog of business fall by more than half last year, to $20.1 million from $41.4 million the year before.

About $15 million of that decrease stemmed from an agreement with the government to cancel the remaining four years of a technical support contract. Essex wanted out because revenue volumes "were significantly below those anticipated by the company under the contract," the company said in a news release.

Coupled with ongoing efforts to find commercial markets for its patented electronic imaging technology, the results "have depleted our cash resources. We are reviewing several alternatives including restructuring of operations, asset sales and outside financing," Letaw said.

Letaw said that marketing of the ImSyn image processor has been slow to bring in sales, and he projected that the efforts would continue to cost money in 1997. Developed for secret government uses, the technology allows ultra-fast processing of electronic images.

Essex, which employs about 200 workers, has been touting the ImSyn device as a natural partner for magnetic resonance imaging machines used in hospitals. The company says its technology would create revolutionary real-time images of a beating heart or thinking brain.

Essex stock ended the week at 97 cents a share.

Pub Date: 3/29/97

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