Storage maker suffers
Pinnacle Micro reports a widening fourth-quarter net loss due to declining sales.
Pinnacle's fourth-quarter net loss was $3.9 million, or 42 cents per share, for the period ending December 28, compared with a net loss of $2.7 million or 34 cents per share in the fourth quarter of 1995.
Net sales declined to $15.9 million in the quarter from $19.7 million during the same period a year ago.
The company's stock fell another 11.5 percent in morning trading today. After announcing its results yesterday, the stock closed down 6.5 percent at 2-11/16. The stock's value has been in decline since January when it traded just above 7.
Pinnacle previously announced preliminary fourth-quarter and year-end results in February, but its net loss was not released as it awaited proper accounting for convertible debentures issued with a discount. In 1996, the company issued $15 million of convertible debentures at a discount from market value.
The SEC declared that the discount should be treated as additional noncash interest expense. As a result, Pinnacle also restated yesterday its third-quarter results to account for the additional interest expense. That gave the company a net loss of $9.1 million for the quarter, compared with its earlier stated loss of $7.8 million.
The company's year-end net loss was $20.8 million, or $2.52 per share, as compared to a net loss of $2.5 million or 31 cents per share in 1995.
Net sales for the year dropped to $59.9 million, down from $81.8 million in fiscal 1995. The company attributes the decline to a slowdown in the sales of earlier-generation RCDs and the end-of-life Sierra products. However, the drop was partially offset by the sales of Apex and Vertex lines.
The company's future prospects depend on Apex selling according to plan and shipments remaining on schedule. If Apex demand is significantly below forecast, there will be liquidity constraints, according to the company.