Pinnacle Chief to Retire; Loss Announced

The chairman and founder of computer data storage maker Pinnacle Micro Inc. resigned Friday after announcing a first-quarter loss and a layoff of 15% of the company’s 190 workers.

William F. Blum, who still controls a 56% stake in the ailing Irvine company through a family trust, said he is retiring to make room for new management, which will have to cope with at least one more quarter of substantial losses, according to company executives.

Neither Blum nor anyone on the new management team would comment Friday. Blum, in a brief statement, said he is stepping down because Pinnacle “needs an experienced [management] team.”

The company said it lost $3.9 million for the first quarter, contrasted with earnings of $12,000 a year ago, and disclosed that significant market and internal development problems are keeping it from delivering its products on time. Sales for the first three months dropped 13.6% to $17.4 million.

Pinnacle stock lost 25% of its value Friday, dropping $2.50 a share in heavy Nasdaq trading to close at $7.50.

Blum started Pinnacle with his wife and son using $83,000 from a retirement payment from Hewlett-Packard Co., where he worked for 21 years.

Now the company, which makes optical data storage devices that use laser beams to record and retrieve information, is being pressured by competition from larger device makers.