MICROPOLIS TO SELL OFF OPERATION.Byline: Deborah Adamson Daily News Staff Writer After struggling in the disk drive business for years, Micropolis Corp. said Tuesday that it agreed to sell the bulk of its operations to an unidentified buyer. The undisclosed purchase price would include using the Micropolis name, leaving the Chatsworth-based firm to search for a new one. Company officials would not divulge the identity of the buyer, describing it only as a "world-class organization" with "tremendous financial strength" that can "rejuvenate re·ju·ve·nate tr.v. re·ju·ve·nat·ed, re·ju·ve·nat·ing, re·ju·ve·nates 1. To restore to youthful vigor or appearance; make young again. 2. the disk drive business." "For the last five years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time company has not grown as a business, while all of our competitors have," said J. Larry Smart, chairman, president and chief executive. "Over the last few years, we've had a lot of problems in the disk drive business. We felt we've fallen below the critical mass." The company said it has laid off 52 employees at its 500-worker corporate office, which will give rise to a $400,000 restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. in first quarter 1996 results. The company's work force has been dwindling dwin·dle v. dwin·dled, dwin·dling, dwin·dles v.intr. To become gradually less until little remains. v.tr. To cause to dwindle. See Synonyms at decrease. over the years, mainly through attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: , Smart said. The sale will take away about 75 percent of revenues at Micropolis. Instead, the company will concentrate on storage systems that include video servers, digital disk recorders, fault-tolerant disk arrays and external storage devices. Micropolis shares closed at 3-1/4 Tuesday, down 1-7/8. Smart said one focus of remaining operations would be on products for the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and office computer networks. Micropolis also expects to report lower fourth quarter earnings than the third quarter loss of $17.5 million or $1.12 a share. Revenues should be $43 million (approximately) for the fourth quarter ended Dec. 29 compared with the $58.8 million reported for the third quarter. Fourth quarter results do not include any impact from the proposed acquisition. In 1994, the disk drive maker lost $30.7 million ($2.03 a share) compared with a loss of $19.9 million ($1.34) for 1993. Revenues were $346.3 million vs. $382.9 million. Given its red ink red ink Health administration A popular term for financial losses. Cf in the Black. , selling the disk drive business is one way to keep the company operating, said Michael Geran, an analyst with Pershing in Jersey City, N.J. Also, "they concluded that given the capital intensity of the business and its rapid changes, they are better off with one business rather than the other," he said. |
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