Tektronix Reports Net Loss, Closes Several Facilities

Test manufacturer Tektronix today reported a net loss of $3.9 million, or $0.08 per share, for the second quarter of fiscal 1999, before non-recurring charges. This compares with earnings of $31.7 million, or $0.61 per share, in the same period a year ago, before non-recurring charges.

Net sales for the quarter were $438.6 million (before reductions related to non-recurring charges) versus $529.0 million in the year-earlier quarter. Despite the 17% decline in comparative quarter sales, the company's second quarter saw a sequential increase in sales over the first quarter in the year. The company reported a 2% decline in orders and built backlog during the quarter.

Tektronix's measurement business unit was hit hard in the second quarter. Sales in this unit declined to $205.1 million over the past quarter. This compares to a $247.7 million total reported at this time last year.

According to Tektronix, softness in the semiconductor industry and Asia-related weaknesses lead to lower sales in this quarter.

"Asia's weak economies continue to impact sales. A quick turnaround in the region is not expected, especially with the slow recovery of Japanese markets," says Jerry Meyer, chairman and CEO of Tektronix. "However, we believe in the long-term potential for the region and have seen some recent improvement."

To adjust to the downturn, Tektronix's measurement division has implemented several internal cost measures as part a reorganization and restructuring program. These cost measures include closing of its Sweden and Bend, OR facilities. Thee measures also include laying off approximately 50% of the workforce at the Bend facility, which currently employs 100 people.

Tektronix also experienced losses in its color printing and imaging division as well as its video and network division. The color printer division recorded $159.3 million in sales during the quarter, down 26.3 million from the previous year. The video and networking division, on the other hand, reported sales of $74.5 million. This compares to the $95.7 million total the division reported during the same quarter last year.