Revenues have slumped at Eurologic - the Dublin-based provider of network storage systems. Sales for the year to the end of June 2002 were less than half the $257 million (€258 million) reported in the same period last year, pushing the company into losses.
The severe downturn in technology spending by corporates and a storage deal signed between Dell and EMC also led to Eurologic reporting a loss for the year, Mr John Maybury, chief executive of the group, confirmed yesterday.
Mr Maybury, who rarely speaks to the media about the company's fortunes, said revenues had fallen off a cliff over the past 12 months and that the firm was cutting costs after making a loss. "There are signs that things have bottomed out but I think recovery will be more gradual than many people think," he said.
Mr Maybury was speaking to The Irish Times after the firm released its financial accounts for the year to June 2001. These show Eurologic made a pre-tax profit of $9 million during this 12 months, down from $19 million the previous year.
The firm, one of the State's biggest technology firms, increased turnover to $257 million during 2001, up from $198.6 million in the previous 12 months. But the results also show that at the latter half of the financial year, economic conditions were declining and the firm was suffering customer cancellations. These cancellations led to liabilities within the supply chain amounting to $3.5 million for the year. The firm recorded a $396,098 restructuring charge as it cut 60 jobs at its Dublin facility in Clonshaugh, according to the results.
A further $837,050 was incurred in development costs on a product that did not reach the final phase of development and cancelled orders contributed to a $1.3 million write-off for excess and obsolete inventory.
The company shed further jobs earlier this year at its Dublin facility and is still cutting costs.
The results show the majority of business, some $234 million in revenue, was generated in North America. A further $11 million was made in the Irish market, $6.8 million in the rest of Europe and some $5.1 million in Asia.
Dell accounted for a huge percentage of this business during the year to June 2001. But Mr Maybury said this business had been lost following Dell's storage agreement with EMC last year.
Eurologic was founded in 1988 and is 50 per cent owned by the husband and wife team, Mr John and Ms Heather Maybury. Last year it hit the headlines when technology giant EMC filed an injunction to prevent a former director of EMC from working for Eurologic.
However, The Irish Times has learned that Eurologic set up a new joint-venture company in the US called StorScape in July. The start-up, which is based in Boxborough, Massachusetts, will make storage management software designed to cut labour costs for IT managers. Slovenian firm Hermes SoftLab is to finance the joint venture with Eurologic.
Eurologic's financial results show the cost of sales in the year to June 30th, 2001 increased to $209.7 million, up from $157.2 million in the previous year. Profit carried forward at the end of the year increased to $32.4 million, up from $27.2 million in 2000.
Eurologic's staff of 322 in June 2001 consisted of 256 staff working on manufacturing and development of storage systems, 28 in sales and marketing and 38 in administration. This was an increase of just six people on the 316 employed in June 2000.
