Franklin Electronic Publishers Inc, the Burlington, New Jersey-based electronic book publisher, has issued a warning that it expects a substantial first quarter loss, and says it might be forced to sell off its Rocket eBook and Rex businesses – or at the least fine partners to help it support them. Franklin posted a fiscal fourth quarter loss of $21.4m last Tuesday, compared with a loss of $867,000 in the same quarter last year. Revenue was down 26% to $16.2m from $21.8m last year.
The company said that loss related to inventory write-offs due to pricing reductions on the Rex PC companion product line, along with high advertising expenses and a decline in sales. Initial sales of the eRocket electronic book, a handheld device launched in April for reading electronic texts downloaded from the internet, have also been disappointing, the company said. Other losses were attributed to the closure of foreign subsidiaries. Rex, a credit-card sized organizer, was launched in 1997, and used TrueSync synchronization software developed by Philippe Kahn’s Starfish Software Inc, now a part of Motorola Inc.
Franklin said that it does expect to post modest profits for the second, third and fourth quarters, based on sales of its electronic reference book products and recently introduced electronic Rolodex product lines. The company claims to have sold over 17m of its older Bookman electronic books, and publishes 200 educational and reference titles.
