View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Technology
September 7, 1988

ORCHID TECHNOLOGY SEEKS TO BOLSTER ITS BOMBED OUT SHARES WITH BETTER SECOND HALF

By CBR Staff Writer

The mixed financial track record of Orchid Technology Inc, the Fremont, California add-on board maker quoted on London’s Unlisted Securities Market, continued yesterday, amidst claims that the past 12 months have fallen into two halves of contrasting fortunes. In the year to June 30, 1988 net profit fell to $820,000 from $3.3m, on sales up just 10% at $27m. Performance, however, did improve in the second half: $1.26m of the $1.64m net operating profit was accumulated in the second six months, and turnover grew 40%. Chairman and president Le Bui, forecasting that profits would remain at 9% to 11% of turnover, accounted for the poorer results by reference to the October market crash, as well as greater investment in sales and marketing – $5.7m this time, up from $4.5m in 1987, and product development – $2.2m against $1.2m. Aborting its planned flotation in the US also cost $400,000. Meltdown Monday also got the blame for the shares plummeting to 155 pence now from their high of 355 pence last year. Falling gross margins could be attributed to a broadening of the product mix: Orchid is increasingly emphasising the memory and graphics markets that have lower margins, rather than the accelerators and networks the company had specialised in until 1988. Two graphic products based on IBM’s Video Graphic Array standard – and two enhanced memory boards for PS/2s were introduced in the last fiscal year. Product development will incorporate memory, accelerators, graphics and AT Systems boards for IBM machines, fax+modem boards and accelerators for Apple Macintosh, and add-on memory for Compaq. Orchid, whose delayed flotation eventually went through in April, 1987, (CI No 656), also hopes to reassure investors with claims of rapid market acceptance of its memory and graphics products, a stronger cash reserve base of $1m – acquisitions are hinted at – as well as and greater penetration of the European market, where sales now account for between 20% and 25% of the company’s total turnover.

Content from our partners
How businesses can safeguard themselves on the cyber frontline
How hackers’ tactics are evolving in an increasingly complex landscape
Green for go: Transforming trade in the UK

Websites in our network
Select and enter your corporate email address Tech Monitor's research, insight and analysis examines the frontiers of digital transformation to help tech leaders navigate the future. Our Changelog newsletter delivers our best work to your inbox every week.
  • CIO
  • CTO
  • CISO
  • CSO
  • CFO
  • CDO
  • CEO
  • Architect Founder
  • MD
  • Director
  • Manager
  • Other
Visit our privacy policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
THANK YOU