September 20, 2000
PRI Automation Working To Stem Production
Problems - CEO
By FRANK BYRT
DOW JONES NEWSWIRES
BOSTON -- PRI Automation Inc. (PRIA), which issued a fourth-quarter profit
warning last week, is working to rectify its production shortfall problems, and
Chief Executive Mitch Tyson said Wednesday he expects the improvement will
pay off over the next two fiscal quarters.
The company said last week that revenue for its fourth fiscal quarter ending Sept.
30 will be about $84 million, rather than the anticipated $100 million, and that
earnings will be slightly above break-even before special charges.
PRI's share prices were hammered on the news and have slipped from about $80
in May to $24.13 Wednesday.
The company earned $9.8 million, or 38 cents a share, on revenue of $88.9
million in its third fiscal quarter.
Tyson told analysts at the SG Cowen Annual Fall Technology Conference that
the revenue shortfall stemmed from problems in the company's Factory Systems
Division and "is tied to our inability to ramp up our Turbostocker shipments."
Turbostocker is the company's new version of its system used by semiconductor
manufacturers to manage the production process. The product was introduced
last year.
The company has been producing the Turbostocker at low- volume levels until
recently. Attempts to shift to high-volume production during the current quarter
presented unexpected problems, including design issues, parts supplies shortfalls,
and a lack of skilled manufacturing personnel, Tyson said.
"While the problems are not simple, including (managing the ) manufacturer
supply chain and employee training, none of the problems are impossible to solve
or difficult to solve, it's just a question of our doing them," Tyson said.
"We have initiated programs to get new suppliers, but unfortunately that wasn't in
time to get us through Q4," Tyson said. "But in the (next) two (fiscal) quarters
going forward we will have more diversified sources for parts."
Tyson said the company is also farming out more subassembly work. It aims to
outsource 80% of Turbostocker's production work, up from 40% now.
The company also recently made some management changes, hired new
managers and is increasing personnel training, Tyson added.
PRI is also adding production shifts to increase capacity, working more closely
with existing suppliers and adding new suppliers.
Tyson said the company expects revenue to grow 45% next year.
PRI said its orders over past two years have been better than the industry
average and bookings this year should reach $410 million, leaving a backlog of
about $200 million at year end. |
