O.C. BUSINESS PLUS : Day Runner Ready to Answer Acquisition Bids

Day Runner Inc., North America’s top maker of address books and other loose-leaf paper organizers, said it has received a number of unsolicited bids to acquire the company as it pursues strategic options.

The Irvine company also posted a loss for the fourth fiscal quarter on slumping sales and said it restated results for the first three quarters to correct accounting errors.

Day Runner, which makes appointment books, assignment books and a variety of other business accessories, hasn’t pursued any of the offers because it was undergoing an audit, Chief Executive James E. Freeman said in a prepared statement.

Now, the company is ready to explore these options, he added.

Early in July, the company warned that it would post a loss for the quarter and said it hired an investment banking firm to explore a number of ways to boost its share price. Those included seeking more financing, joint ventures, asset sales or selling the company.

Day Runner said Tuesday that it lost $5.2 million, or 44 cents a share, in the three months ended June 30, more than double the losses it estimated in July. A year ago, the company earned nearly $5 million, or 39 cents a share, for the same period a year ago. Sales dropped 6.3% to $47.7 million, as several major U.S. customers tightened their inventories and cut back orders.

The company said it restated results for the first three quarters because of accounting errors that resulted in overstated inventory and understated costs of goods sold. The changes reduced net income in the first and second quarters by $2.27 million in the first half and the company’s third-quarter loss by $117,000.

For the year, the company lost $4 million, or 34 cents a share, including a $1.1-million charge related to the acquisition of Filofax, which closed in October.

In the previous year, Day Runner earned $15.9 million, or $1.27 a share.

Sales rose nearly 17% to $196.2 million, a gain that also reflected the Filofax acquisition, the company said.

Day Runner results for the fiscal year also were below expectations because it increased reserves for returns and excess inventory.

However, Day Runner said it expects to return to profitability in the current quarter and for fiscal 2000.