Day Runner Losses Widen, Prospects Worsen

Day Runner Inc., the daily organizer company that has struggled under a mountain of debt and growing electronic competition, posted widening losses Tuesday in the latest quarter and warned of further, “substantial� losses ahead.

The maker of paper organizers, planners and software also said it closed its Irvine headquarters in mid-March and consolidated operations at its Fullerton plant, which has become its new headquarters. The company is in the midst of closing its Filofax subsidiary’s two British manufacturing plants and shifting production to subcontractors.

“I think their survivability is in doubt. I think that’s a real question at this point,� said Michael Crawford, an analyst with B. Riley & Co. in Los Angeles.

For its fiscal third quarter ended March 31, Day Runner reported a loss of $12.4 million, or $1.04 per share. That compares to a loss of $4.45 million, or 37 cents per share, for the same period a year earlier. Sales fell to nearly $30 million from $36.2 million, about a 17% decline.

In a release, the company blamed its sluggish performance on promotional cutbacks, inventory tightening by such top customers as Wal-Mart and restructuring costs, including severance payments and expenses related to closing down Filofax’s manufacturing plants.

“Our goal is still to complete the bulk of our restructuring this fiscal year and to return to profitability for the first quarter of 2001, which begins on July 1,� said James E. Freeman Jr., Day Runner’s chief executive. “In the meantime, we expect a substantial loss in the June quarter.�

The company’s stock has taken a pounding since hitting a 12-month high of $13.75 last June. Shares closed Tuesday at $1.25, near a yearly low, down 25 cents on Nasdaq trading. Day Runner’s earnings announcement was made after the market closed.

Day Runner’s fortunes took a turn for the worse after purchasing British rival Filofax Group for $84.5 million in late 1998, the analyst Crawford said. The price was 50% more than Filofax’s stock, and Day Runner bit off substantial debt to finance the acquisition.

Meanwhile, the company has been slow to respond to the changing demands of retailers, which are reducing inventories to maximize profits. Day Runner, Crawford added, has failed to respond quickly to the increased consumer demand for electronic organizers.

The company’s latest version of electronic organizers, e-Runner, won’t begin shipping until September.

Day Runner did not say how many people were affected by the shutdown of its Irvine headquarters.

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Day Runner Reports Loss

Fullerton-based daily planner maker Day Runner Inc. reported a net loss for the third quarter of fiscal 2000

Three Months Ended March 31 (in thousands except per share amounts)

Net sales

2000: $29,976

1999: $36,216

Net Income

2000: ($12,375)

1999: ($4,448)

Per Share

2000: ($1.04)

1999: ($0.37)

*

Nine Months Ended March 31 (in thousands except per share amounts)

Net sales

2000: $139,312

1999: $148,512

Net Income

2000: ($14,468)

1999: $1,251

Per Share

2000: ($1.22)

1999: $0.10