Outdoing Estimates, Archive Corp. Sees Good Profit for Year

COSTA MESA —  Continuing its year-old recovery despite the recession, Archive Corp. said Thursday that it expects to report a healthy profit for its fiscal year that ends today.

Outperforming analysts’ estimates, Archive said it expects to report annual earnings of $11 million to $11.5 million, or 73 cents to 76 cents a share. That would contrast with a loss of $49 million, or $3.78 a share, for the previous 12 months when Archive was struggling with a merger and heavy debt.

Revenue for the year is expected to hit $378 million, up 19% from $346 million.

“It is unexpected growth,” said Ian Gilson, analyst with L.H. Friend, Weinress, Frankson & Co., an investment bank in Irvine. “They are benefiting from a revamped product line.”

The Costa Mesa company makes computer storage equipment that protects against the accidental loss of data.

Analysts had expected earnings per share to be about 59 cents for the fiscal year and 17 cents a share for the quarter that ends today. Archive said Thursday that it expects to report quarterly earnings per share of 28 cents to 32 cents, including a onetime gain of 7 cents a share from the settlement of two lawsuits.

Revenue for the fourth quarter is expected to be $97 million, up 19% from $82 million a year earlier. Much of the improvement can be attributed to healthy sales as well as lowered costs after Archive laid off hundreds of workers during the previous fiscal year, Gilson said. The company now employs about 2,200.

Archive reported a favorable settlement of patent infringement lawsuits with competitors Rexon Inc. in Manhattan Beach and Colorado Memory Systems Inc. in Loveland, Colo., over Archive’s patented storage technology.

Archive filed papers with the Securities and Exchange Commission in August to issue 5 million additional shares of common stock. The proceeds of the offering, which is not yet scheduled, will be used to repay debt and repurchase stock warrants.

Archive’s long-term debt relates to its $141.7-million purchase of competitor Cipher Data Products Inc. in San Diego in 1990. Final fiscal year results are expected by the third week of November.

In Thursday’s trading on the NASDAQ market, Archive’s stock closed at $7.375 a share, up 37.5 cents.