SpecTran sees Q2 loss $0.18 to $0.21/shr
STURBRIDGE, Mass., July 17 (Reuters) - SpecTran Corp. said Friday it expects to record a loss for its second
quarter in the range of $0.18 to $0.21 per share on revenues of $16.5 million to $17.5 million, significantly below
analysts' expectations.
First Call estimates put the company at a profit of $0.12 per share.
The company said in a statement it also estimates lower earnings for the 1998 year.
These results would put the company in violation of certain covenants with its debt holders, the company said.
SpecTran said it initiated conversations with its debt holders to obtain waivers and/or modifications of certain
covenants in its loan agreements to accommodate the decline in earnings.
SpecTran said it continues to anticipate an earnings decline in 1998 compared with 1997, as it previously announced,
but now expects the decline to be significantly greater than the 30 percent figure reported earlier.
The company attributed lowered earnings expectations primarily to operational and inventory issues at the company's
Specialty Optics subsidiary, which the company said it is addressing.
Charles Harrison, SpecTran's president and chief executive, assumed operational control of this subsidiary until a new
general manager can be recruited and is restructuring its management and systems.
In addition, manufacturing and engineering personnel from the company's Communication Fiber Technology subsidiary
have been assigned to address specific operational issues.
The company also said it is experiencing lower than expected sales at General Photonics, its cabling joint venture with
General Cable Corp. (GCN - news), due to soft market demand and pricing.
The company said it has implemented stringent cost control measures to lead to improved results at General Photonics
for the second half.
Once the operational issues have been resolved, the company said it expects that significant growth in sales volume
and profitability should resume.
The company said it still anticipates double digit revenue growth in 1998 over the previous year, and expects to be
profitable for the second half and full 1998 year.
SpecTran's stock was trading as low as 4-3/8 after being released from a halt in trading on the Nasdaq market, down
from the open at 7-1/8.
Other factors the company cited for its current troubles were a highly competitive market environment that resulted in
price weakness and oversupply in its standard communication fiber business.
SpecTran develops, manufactures and markets glass optical fibers and value-added optic products.
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