Prime Computer Inc, now privately held, although some debt issues are still traded, recorded a whopping UKP101.3m net loss for the fourth quarter of 1988 on turnover down 9.3% at $391.1m. The loss is after restructuring charges, and balance sheet costs such as write-off of goodwill, and also reflects interest and financing costs. The company’s new legal parent, DR Holdings Inc, which was set up by J H Whitney Co to acquire Prime, says that without the one-time charges, amortisation and other acquisition costs, but, significantly, also before heavy interest payments, Prime would have reported a $4.7m profit. But stripping out the interest charges is not a legitimate way of looking at the figures, because Prime is going to have to live with high interest charges for the foreseeable future following its heavily leveraged buyout. A year ago, Prime reported a loss of $14.4m after $32.8m in non-recurring charges. At the nine-month mark, turnover was down 5.3%, so the decline in the company’s business accelerated in the fourth quarter, suggesting that if, as Prime says, customers held off from buying products because of the uncertainty caused by the protracted and ultimately unsuccessful MAI Basic Four Inc bid, customers are now at least as cautious about buying from a company labouring under such an enormous burden of debt.
