Compass Plastics & Technologies Inc. of Gardena, Calif., anticipates a sales shortfall of about $8 million in fiscal 1998 as a result of an undisclosed customer deciding to take manufacturing of its personal computers back to Asia from the United States.
Compass, however, is losing only one program and, with positive offsets, will have a net sales reduction of about $2 million for 1998, Michael Gibbs, president and chief executive officer, said in a telephone interview. Compass molds plastic enclosures for the original equipment manufacturer's computer monitors.
New customers and additional monitor programs are expected to generate unplanned sales of at least $5 million and probably $6 million in fiscal 1998, according to Gibbs.
``The company has dramatically expanded its customer base,'' adding eight since November, he said. Compass wants to increase its penetration of enclosure markets for television sets and computers and get into telecommunications through thin-wall molding at its new MOS subsidiary.
Those gains should outweigh a further sales loss of $10 million to $12 million from the personal computer maker's program for fiscal 1999.
MOS ``has not achieved its projected 1998 revenue growth,'' Compass said, but projects scheduled for completion this summer should generate sales of about $5 million. Compass acquired MOS Plastics Inc. of San Jose, Calif., for $17.4 million Feb. 27 and named Werner Schulz, MOS president, to the Compass board of directors.
Weather conditions added expense by delaying completion of subsidiary AB Plastics' warehouse in Gardena until May.
Compass is ramping up operations at its maquiladora AB Plastics de Mexico SA de CV in Tijuana, Mexico, pursuing major display manufacturers.
Compass hired Greg Krikorian as director of sales and marketing for MOS and Janet Taylor as senior account manager for AB Plastics.
Before acquiring MOS and its Hewlett-Packard Co. business base, primary Compass customers included the television and computer display divisions of Sony Corp., Matsushita's Panasonic and Quasar television units, Samsung's computer monitor unit, Casio's electronic keyboard unit and Hitachi and Sanyo television units.
Compass had 297 employees in Gardena and 174 in Tijuana as of Jan. 11. MOS employs about 150.
Compass had profit of $216,000 on sales of $10.8 million for the first quarter, which ended Jan. 25. Compass had profit of $2.1 million on sales of $43.98 million for the 1997 fiscal year, which ended Oct. 26.
Gibbs has headed the company since an ownership change in September 1996. Compass began trading on the Nasdaq market in September 1997 after completing an initial public offering of common stock.