COMPUTER RESEARCH, INC. DISCONTINUES CAD BUSINESS
COMPUTER RESEARCH, INC. DISCONTINUES CAD BUSINESS PITTSBURGH, March 5 /PRNewswire/ -- Computer Research, Inc.
(NASDAQ: CORE), (CRI) today announced that effective immediately it is discontinuing the Value Added Reseller (VAR) business of its wholly owned subsidiary, Computer Applications Division, Inc., which had marketed CAD/CAM (computer-aided design/computer-aided manufacturing) software and hardware since 1983.
James L. Schultz, president, said the action eliminates a total of about 20 jobs in CRI's Pittsburgh and Denver offices. The company is in the process of notifying its 20-plus suppliers of CAD systems and equipment and its customers, which are primarily engineers, architects, industrial designers and educational institutions in western Pennsylvania and the Denver area. Schultz said the company was forced to terminate the CAD/CAM segment of its business by a combination of economic factors. "The continuing recession has drastically reduced the market for CAD products," Schultz said. "Even more importantly, the continuing reduction in the cost of PC computer equipment resulted in lower revenues and income even if we could have maintained the same volume of unit sales. "Also, as our potential customers became more knowledgeable about computer hardware and software, they did not require the analysis, support and training we supplied. As a result, more and more of their business was going to high-volume, low-service superstores and catalog stores that can buy at substantially lower prices than CRI could obtain as a VAR. "Due to the large volume commitments these stores can make to suppliers, they can often sell equipment to end users cheaper than we could buy it from the suppliers," Schutz said. For the fiscal year ended Aug. 31, 1991, the VAR business produced revenues of $5,550,000 or 49 percent of CRI's total revenues of $11,416,019. The other segment of the company's business is providing computerized brokerage accounting services for securities broker/dealers and banks throughout the United States. Schultz said the elimination of the CAD business will not affect CRI's brokerage data-processing centers in Pittsburgh and Denver where the company has a total of approximately 50 employees. He said the company will try to sell off its inventory of CAD software and hardware. And, despite the elimination of its VAR operations, the subsidiary, Computer Applications Division, Inc., will continue to sell maintenance services and hardware and software to customers of CRI's brokerage business. In January, CRI reported a loss of $250,069 or a loss of 7 cents per share for the first quarter period ended Nov. 30, 1991. Revenues for the quarter fell to $2,240,256 compared to $2,930,034 the previous year, and about $500,000 of the $690,000 decrease was attributable to the VAR CAD business. Extraordinary costs associated with the termination of the CAD business, including severance pay and writeoffs on unsold equipment, will be reflected in results for the third quarter, ending May 31, 1992. -0- 3/5/92 /CONTACT: James L. Schultz, president of Computer Research, 412-262-4430, or Jack Maddigan of Maddigan Communications, Inc., 412-391-9360, for Computer Research/ (CORE) CO: Computer Research, Inc.; Computer Applications Division, Inc. ST: Pennsylvania, Colorado IN: CPR SU:
DM -- PG004 -- 5270 03/05/92 08:39 EST
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|Date:||Mar 5, 1992|
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