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DATA SWITCH REPORTS THIRD QUARTER RESULTS

 SHELTON, Conn., Oct. 29 /PRNewswire/ -- Data Switch Corporation (NASDAQ: DASW) today reported a net loss of $676,000, or $.06 per share, for the third quarter ended September 30, 1993, on revenues of $26,164,000. This compares to net earnings of $699,000, or $.06 per share, on revenues of $21,919,000 for last year's third quarter. For the first nine months of 1993, net earnings were $281,000, or $.02 per share, compared to a net loss of $1,246,000, or $.10 per share, for the same period last year. Revenues rose 10 percent to $72,809,000 from $65,387,000 a year earlier.
 "Our revenue number -- the highest since fourth quarter 1991 -- masks the continued weakness in international sales," said J. Roger Moody, president and chief executive officer. "With the recent naming of a new, highly experienced vice president of international operations, we believe we can significantly enhance our position in key markets in Europe and the Far East, and we expect international sales to contribute to the company's growth in 1994."
 "The third quarter loss reflects a significant but expected decline in gross profit margin. Gross margins declined because of a larger than anticipated number of sales of our low-margin OEM products and continued pricing pressure in other product lines, aggravated by IBM's heavy discounting. We are taking steps to stem further erosion."
 "First, we are redirecting our product development efforts toward opportunities markets where we can be the leader and avoid excessive discounting. This strategy will build upon our advanced wide-area networking system and fiber-optic management systems, which were introduced earlier this year and have been well-received by customers. Extensions to these product lines and other new products are scheduled for introduction during 1994 and are expected to build the foundation for Data Switch's sustained growth in the future. To support this aggressive new product-development program, R&D expenses were higher in the third quarter."
 "Second," Mr. Moody added, "we are reducing operating expenses. SG&A and marketing expenses for the third quarter were below last year's despite higher revenues. In addition, we initiated a workforce reduction earlier this month. Third, we are taking steps to significantly reduce manufacturing costs by improving purchasing and production efficiencies."
 Mr. Moody continued: "The above steps are expected to improve margins in the second half of 1994. For the fourth quarter of 1993, we expect to see revenues well above those in the comparable period of 1992 with approximately break-even results."
 -0- 10/29/93
 /CONTACT: Linda L. Bachmann, director-corporate communications of Data Switch, 203-925-7542; or Neil G. Berkman of Neil Berkman Associates, 310-277-5162/
 (DASW)


CO: Data Switch Corporation ST: Connecticut IN: CPR SU: ERN

LG-SH -- NY009 -- 8349 10/29/93 08:43 EDT
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Publication:PR Newswire
Date:Oct 29, 1993
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