Applied Data Suffers $3.9-Million Loss for Year

Applied Data Communications of Tustin, a computer products manufacturer hard hit by a downturn in the personal computer and software markets, said Monday it lost $3.9 million during the year ended March 31.

The deficit compares with earnings of $145,000 for the previous year. ADC recorded $6 million in sales during its 1987 fiscal year, down 37% from $9.4 million a year earlier.

In addition to soft markets for its computer diskette duplicating machines and disk drive testing equipment, the company attributed its financial decline to acquisition-related expenses, research and development investments, product abandonments and inventory costs.

For the fourth quarter, ADC reported a net loss of $1.5 million, compared with a gain of $25,000 during the same period a year earlier. ADC lost money during each quarter of its 1987 fiscal year.

ADC President Pat Kane said the company’s Tustin factory operated at only 33% capacity last year. He said customers were reluctant to buy ADC equipment before the introduction of IBM’s new line of personal computers, which use a new, 3.5-inch data storage diskette. Previous IBM models and most other personal computers use 5.5-inch diskettes.

As a result of IBM’s action, ADC has begun modifying existing products and introducing new products capable of handling the 3.5-inch diskettes.

Kane said the company’s losses also reflect costs incurred in connection with the acquisitions of KJ Instruments Inc. of Campbell, Calif., a manufacturer of disk drive test equipment, and a tape cartridge duplication system from Copytech International of Portland, Ore.