Gradco Reports Earnings Spurt for Fiscal 1986

In what company officials are calling a major turnaround, Gradco Systems Inc. of Irvine reported fiscal 1986 earnings of $1.8 million, compared with losses of just over $2 million for fiscal 1985. And just three months into its fiscal 1987, the company may be headed toward another banner year, one analyst predicted.

Revenue for the fiscal year ended March 31 was $43.7 million, more than double the $21.3 million posted in 1985 by the maker of paper-sorting and collating equipment for copying machines.

Gradco did not release figures for the fourth quarter ended March 31. But the company recorded net income of $1.7 million for the nine-month period ended Dec. 31, contrasted with a year-before loss of $456,000. Revenues for the period totaled $33.3 million, more than twice the $15.8 million reported a year ago.

“Fiscal 1986 was a pivotal year. We have completed the turnaround and have entered fiscal 1987 in our strongest position ever,” President and Chief Operating Officer P. Kenneth Ohlson said in a statement Monday. Ohlson was in Korea on Monday and unavailable for comment. Other company officials declined comment beyond what was reported in the company’s release.

One securities analyst, William Ganelin of McKewon & Timmins in San Diego, agreed that the company has turned the corner.

“They’ve certainly come a long way in turning things around. They’ve taken care of a lot of the problems of a year ago,” he said.

But Ganelin said he thought that Gradco’s fourth-quarter showing was a disappointing end for an otherwise banner year. He attributed lower volume and margins to Gradco’s manufacturing facility in Korea.

Ganelin also expressed concern that the figures were released three months after the fiscal year ended. But he said he believes that the company is looking forward to another strong year because of a new licensing agreement in the South Pacific.

Last month, Gradco strengthened the license under which C. Itoh Co. Ltd. has been making and selling Gradco equipment to copier machine producers in Japan.