Reptron outlook far from rosy
By JEFF HARRINGTON
© St. Petersburg Times, published May 16, 2001
TAMPA -- Reptron Electronics president Paul Plante assured a dozen or so employees gathered for the company's annual meeting Tuesday that he didn't "want to bring everybody down." Then he proceeded to deliver an outlook for the Tampa electronics manufacturer and distributor, and the industry as a whole, that was far from upbeat.
Following a $270,000 first-quarter loss, Reptron expects a similar loss in the current second quarter along with a 10 percent to 15 percent drop in sales.
After cutting 100 jobs last month, Plante was optimistic of avoiding a second round of cuts. But he said a hiring freeze and wage freeze will remain in place indefinitely and he gave no indication when or if workers will be called back.
"This is not a 90-day phenomenon," he said.
Reptron chairman and chief executive Michael Musto was equally gloomy, calling the "tumultuous" times the fastest downturn he has seen in his 40 years in the electronics business.
Reptron's annual meeting inside its suburban Tampa headquarters was quick and uneventful, with neither shareholder resolutions nor questions from the floor.
Plante focused most of his 20-minute talk on the myriad of problems plaguing his customers.
Sales are particularly grim in the semiconductor sector, an industry that accounts for 65 percent of Reptron's revenue on the distribution side and 25 percent of its manufacturing business. Not only are chipmakers battling a sudden drop in sales, but prices have fallen as well. "Just to stay even, a company has to sell twice as many components," Plante said.
As a counter move, Reptron is pushing to increase its sales in a pair of less volatile industries: medical equipment and industrial components for companies such as Diebold Inc., a maker of automated teller machines.
The company also is taking solace in its financial strengths. Cash flow remained at $6-million in the first quarter despite the loss and Plante anticipates similar cash flow in the current quarter.
From that positive fiscal perch, Plante said Reptron would continue to invest in growing the business, including keeping open the seven new sales locations opened across the country in late 2000.
"What we're not going to do is rip apart the heart of this company for short-term satisfaction," he said. "The market will turn around."
- Jeff Harrington can be reached at (813) 226-3407.
490 First Avenue South St. Petersburg, FL 33701 727-893-8111
From the Times
From the AP