Griffin Technology sees
year-end earnings dive

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Griffin Technology Inc. keeps a profile so low as to be virtually invisible in Rochester’s business community.
“I don’t know what they’re doing,” puzzled Lawrence Burrows of Brighton Securities Corp. “Do they ever put out any news?”
Last Friday, the firm–which designs, manufactures and services computerized debit-card systems used at colleges and universities–released its yearly numbers.
The news is none too nice.
Griffin Technology’s net income plunged 75 percent for fiscal 1995 ended June 30, falling to $162,700, or 7 cents a share, compared with $659,800, or 28 cents a share, last year. That drop marks a seven-year low; not since 1988, when Griffin Technology registered a $1.6 million loss, has the firm taken a harder hit.
Revenues bumped up 12 percent to $17.7 million in fiscal 1995. The impact of a 48 percent gain in net sales–popping from $3.6 million to $5.3 million–was undercut by sliding service fees, which fell from $13.4 million to $12.6 million.
The shifting revenue mix marks a strategic move, as Griffin Technology edges away from leasing to selling its card-reader terminals and systems.
In documents filed with the Securities and Exchange Commission for the third quarter ended March 31, management pointed to “competitive pressures and associated pricing” to account for the drop in service-fee revenues, which historically have accounted for the bulk of total revenues. The firm also cited the new policy of selling rather than leasing its systems as a factor in decreasing service fees.
SEC documents also noted that Griffin Technology is devising an environmental cleanup plan for a solvent formerly used to manufacture its photo-identification cards. The cost of cleanup and other unspecified environmental matters could not be determined, the company stated, though it did not anticipate a negative hit on the firm’s financial position.
While struggling with these changes, Griffin Technology continues what President and CEO Robert Urland, in the firm’s 1994 annual report, called an “ambitious product development program.” Since the early 1990s, Griffin Technology has invested roughly 16 percent of total revenues in efforts to bring a more broad-based system to market.
In a speech to shareholders in November, Urland outlined three projects under way at Griffin Technology. Changes in operating systems and user interface were scheduled for March; the company planned to replace its proprietary data-base manager with an Oracle system by this fall.
The company is tight-lipped about the progress of these projects. Joseph Murrer, vice president of finance and administration, declined to be interviewed for this article. Urland did not return phone calls this week.
On Wednesday, Griffin Technology was trading at $7.25 on the NASDAQ market, up slightly from a 52-week low of $7. The stock’s 52-week high is $8.50.