Custom injection molderCimco Inc. of Costa Mesa, Calif., has discontinued its search for a new president and chief executive officer, announcing that Russell T. Gilbert will remain in that position. Separately, the company announced that two members of its board of directors resigned. James L. Doti and Kenneth E. Hendrickson, resigned from the board for undisclosed reasons.
The turmoil comes a week after the company announced it had hired an investment banker to evaluate ``unsolicited inquiries'' for the company.
Doti, president of Chapman University in Orange, Calif., is a former professor of economics and had been a member of Cimco's board of directors since 1987.
In an interview in February1994, Doti praised Gilbert's ability to ``see current trends and develop strategies that keep the company moving in the direction of growth,'' resulting in Cimco's profitability.
Yet, for the past two fiscal years, Cimco has lost money. In the year ended April 30, the company lost $1.5 million, or 52 cents a share, compared to net losses of $1.2 million, or 41 cents a share in the previous year. The firm reported revenues of $83.2 million at the end of fiscal 1995.
Johnny Svoren, an analyst with Red Chip Review, a stock research publishing company in Portland, Ore., said a review of Cimco's latest quarterly report shows its losses expanding despite its increasing revenues.
He said this trend could be related to the financial problems of one of its major customers. Cimco considered revising its previously released fiscal year-end financial results based on a review of a major customer's financial situation.
Company officials refused to identify the customer or say exactly what prompted the review. Svoren said, however, that revenues from one of the firm's major customers have declined steadily for quite some time.
Svoren said Cimco's mixed year-end report is what could have prompted several unsolicited offers from unidentified parties seeking to purchase either some or all of the molding operations or controlling interest in the company.
Cimco hired PaineWebber Inc. to help it evaluate the inquiries. Company officials would not identify the source of the potential investors.
Cimco's stock recently dropped to a four-year low of
33/8 per share on Nasdaq. On Aug. 16, the stock closed at $6.
Cimco is restructuring the company by combining its custom medical molding work at Medical Molding Corp. of America in the same building as its industrial molding operations. The firm plans to combine marketing, sales and engineering functions of the two groups into one unit.
The company's Respiratory Medical Products Division will remain in a separate building, also in Costa Mesa, where it has clean-room facilities.
Currently, Cimco operates from four separate facilities. After restructuring and redistributing equipment, the firm will do molding at its main plant in Costa Mesa and at the 114,000-square-foot plant in Dayton, Nev., it opened in January 1994.
The Costa Mesa plant will operate with 55 injection presses and the Dayton facility will have 25. Cimco, which employs about 600, says it plans no layoffs.
