The company said the loss stemmed from the recall of its core product, SoftRam95, last December and seeing its revenues come to a virtual standstill while it waited to resume shipments. Last year, the company reported net earnings of nearly $700,000.
Syncronys's SoftRAM, which had been a number-one selling software for many months, was found to be ineffective with Windows 95, and there was some dispute whether it worked on Windows 3.1. The product was then recalled, and the company has been working on developing a new version, along with other products.
Most of Syncronys's $12.8 million in revenues was made before the recall, and the company had $5.8 million in recall returns--nearly 50 percent of the sales generated during the year ending June 30.
The company also paid more than $3.2 million to settle several class-action lawsuits alleging misleading advertising over SoftRAM during the year, spokesman John Shaw said.
An investigation by the Federal Trade Commission was resolved last month, with no admittance of any wrongdoing and no fines paid, Shaw said. The company did, however, agree to certain requirements on the way it would market its products.
The company began shipping its RAM Charger 3.0 six weeks ago and will ship its MacAccess today.
The company expects to roll out its CD-RAM and SoftRAM 3.0, the new version of SoftRAM, in a few weeks. Meanwhile, it will post a first-quarter operating loss of $1.2 million to $1.8 million for the period that ends today.
Revenues are expected to increase as sales begin to ramp up with the introduction of new products, Shaw said.