Prime Computer's forte is technology, not finance: with sound basic operations, company is still in peril from too much debt
Article Abstract:
Prime Computer Inc is struggling financially in spite of operations profits for its Computervision CAD/CAM systems due to its $1.26 billion debt, tremendous write-offs and major interest payments. Prime's operating earnings of $118.4 million for 1991 became a loss of $16.9 million after interest, taxes and write-offs. Prime faces default, with its negative worth of $725.8 million, if it cannot find new financing sources before Dec 1993. Prime, the sole unit of DR Holdings Inc, has a 4th qtr loss of $53.4 million with sales drops of 14 percent, giving it a stock value of 87 cents a share. Prime reduced its workforce to 6,750 by laying off 2,000 employees in 1991. The Computervision product subsidiary introduced a new design software package, moving its technology from hardware to software. In spite of a revenue drop of 13 percent for 1991, Prime showed a positive cash flow. Analysts believe that the only way for Prime to solve its problems is to boost its CAD/CAM business.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1992
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Firm that bought Prime Computer posts a deficit
Article Abstract:
DR Holdings Inc, which acquired Prime Computer Inc in Aug 1989, reports a $101.3 million loss for the 4th qtr as Prime's revenue falls 9.3 percent, to $391.1 million. The loss includes restructuring charges as well as non-cash costs such as amortization of good will. It also reflects interest and financing costs. DR Holdings says that excluding one-time charges, amortization of good will and other acquisition costs, and interest payments, there would have been a $4.7 million profit. In the 4th qtr of 1989, Prime reported a loss of $14.4 million, including $32.8 million in non-recurring charges. James F. McDonald, Prime vice chairman and chief executive officer, says that progress achieved since DR Holdings' acquisition positions the company for improved results in 1990 and beyond.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1990
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Parent of Prime Computer posts 1st-period loss
Article Abstract:
Prime Computer Inc's parent DR Holdings Inc reports a loss of $84.4 million for the 1st qtr of 1991. DR Holdings, which made a leveraged buyout of Prime Computer in 1989, is in jeopardy of violating the bank covenants surroundings its debt agreements. DR Holdings claims that Prime Computer suffered an 8.1 percent decline in revenue; the computer maker reported revenue of $339.7 million for the period, which is down from $369.8 million for the same period in 1990. Analysts note that DR Holdings is still able to make the interest payments on its $1.24 billion long-term debt portfolio. Prime Computer's ratio of cash flow to cash interest payments is 2.6 to one.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1991
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