CMD sees 9-mo. $23M-$24M loss with big charges

Electronic News, May 29, 1995

MILPITAS, CALIF.--California Micro Devices Corp. (CMD) said it expects to report a $23 million-$24 million loss--including "very substantial" one-time charges and adjustments, mostly non-cash, for the nine months ended March 31, 1995. At the same time, 3Q95 losses, minus special charges, were slashed significantly from the just-prior quarter.

Charges relate principally to reserves covering class action litigation, specific reserves and write-downs for revised contractual relationships, the re-evaluation of accruals and write-downs of various company assets, CMD said.

Led by a new management team, CMD said losses, excluding special charges, dropped during the March 31 quarter to about $100,000 from a loss of about $3.0 million in the December-ending quarter; the latter included $1.5 million in unusual legal, accounting, consulting and other costs linked to accounting irregularities.

Revenues for the latest quarter are expected to dip to $7.7 million from $8.2 million sequentially. Bookings "were strong, recovering some of the ground lost in the chaotic Dec. 31, 1994 quarter," the company said, alluding to a quarter in which several top posts were unfilled and board members executed the duties.

Included in the $23 million-$24 million nine-month estimated loss is about $16.5 million from a proposed settlement of securities class actions plus other contractual settlements and "about $1.5 million in additional legal and other expenses tied to ongoing investigation and litigation, $4.6 million in losses in prior quarters... and additional balance sheet cleanup."

"By far, the greater part of these losses do not consume additional cash, and instead are made up of the issuance of common stock and the write-down of certain assets," CMD said.

Said new president/CEO Jeffrey Kalb: "There are many milestones...still to be completed before CMD is the kind of company we want it to be...but it is clearly turning around."

Audited results are due about June 1, which will become the company's year-end for the purpose of relisting on Nasdaq.