Micropolis Corp’s desperate effort to keep its head above water by characterising its disk drives, and the subsystems into which it integrated them, as being designed especially for storage of multimedia video has failed, cash is running out, and the Chatsworth, California company is being forced to sell the disk manufacturing business and become a pure integrator – but it declines to identify the buyer. Micropolis also warned that it expects to report a fourth quarter loss greater than its third quarter loss of $1.12 per share, on turnover of $43m, down from $58.8m in the third quarter. It made net profit of $4.8m or $0.031 a share, on sales of $107.6m in the year-ago fourth quarter. The cash balances fell by almost $10m in the quarter, ending the year at about $28m, compared with $37.3m in September. The company has cut its Chatsworth corporate headquarters workforce as part of the plan to sell the disk drive business, at a cost of about $400,000 against fourth quarter figures. To conserve cash, it has reduced its production plan to a level that is expected to reduce inventories during the first quarter. The sale agreement covers substantially all of the assets related to its disk drive business, and if the buyer is strong enough to establish a position in the market, the buy should prove a steal, because disk drive guru Jim Porter had very kind things to say about the company’s new Omega Class disk drives before they were launched (CI No 2,739). The new Capricorn 9 drive provides 8.7Gb formatted capacity in a 3.5 half-height form factor. The new low-profile Taurus 4 drive offers 4.3Gb formatted in a 3.5 one-inch high form factor. Both drives maximise performance with 8.5mS average seek times and rotational speeds of 7,200rpm. The deal includes a payment for the value of intangibles, including the Micropolis name. Terms are not yet finalised, the deal is not expected to generate a material gain or loss. It will seek shareholder approval for the sale and a corporate name change shortly, after definitive agreement has been reached on the sale and board approval has been given. Micropolis will be keeping hold of the value-added storage systems business it has been building, including video servers, digital disk recorders, and external storage devices such as Microdisk.
