Firm Makes ‘Financial Recovery,’ President Says : Ultrasystems’ Earnings Show 1.5% Gain
Including an $832,000 one-time profit from the sale of an interest in a fledgling company it created, earnings for Ultrasystems Inc. totaled $1.64 million in the company’s fiscal 1986 second quarter ended July 31, up 1.5% from the $1.62 million reported a year earlier.
Net income for the first half totaled $2.5 million, down 22% from $3.2 million for the first six months of fiscal 1985. Company revenue for the first half of the current fiscal year was $68.9 million, up 18% from $58.3 million for the same period the prior year.
Nonetheless Ultrasystems’ president, Phillip J. Stevens, characterized the company’s most recent six-month performance as a “financial recovery.” He said that during the high-technology engineering company’s 1985 fiscal year, the annual profit dropped to $379,000 from $5.7 million in fiscal 1984. The fiscal 1986 second quarter earnings reflect an increase of 88% from $871,000 in profits for the first quarter.
The severe profit decline last year, Stevens said, came largely from a $3-million loss Ultrasystems took on its high fructose corn syrup refinery business in anticipation of a proposed elimination of federal sugar subsidies that company officials feared would destroy the domestic sugar industry. However, such legislation was never enacted, Stevens said, and now it looks as though the fructose refinery will be profitable.
Also, Stevens said that Ultrasystems has begun to realize profits from its new focus on developing new businesses and later selling equity interests in them. He said that in the second quarter the company sold 17% of its 33% ownership interest in a company called Energy & Environmental Research for $1.25 million, making a $832,000 profit.
Stevens said that since 1981, Ultrasystems has created six other companies around new technologies. It has ownership interests of 50% or less in each of those companies. Stevens said Ultrasystems plans to profit in two ways from the new firms--by selling limited partnership interests in them and by contracting to provide the new companies with engineering, management and other services.
