Jaco Electronics reports narrowing losses, coming profits

BY JAMES BERNSTEIN | james.bernstein@newsday.com

9:24 AM EDT, May 15, 2008

Jaco Electronics chairman and chief executive Joel Girsky said there were bright spots in the quarter as his company won voting machine contracts. (Newsday Photo / Alejandra Villa / May 15, 2008)

Citing a market that continues to be difficult, components distributor Jaco Electronics Corp. Thursday said sales were lower in its fiscal third quarter, which ended March 31, compared with the same period last year.

But losses narrowed as the Hauppauge-based company said it lost $595,000 in the quarter, compared with $747,000 in the same period a year ago. And the company said it would soon start getting profits from a contract to build optical-scan voting machines.

Sales in the latest quarter were $44.4 million, against $49.8 million in the fiscal third quarter of last year.

The company said it lost 9 cents a share, against a loss of 12 cents a year ago. Jaco has struggled in a market hurt by the slowing U.S. economy.

Jaco chairman and chief executive Joel Girsky said in an announcement before markets opened for trading that there were "some bright spots" in the quarter. He said that sales of flat panel displays rose 10.3 percent, compared with the same period last year.

Girsky said that Jaco's sales do not include any shipments of a contract the company was awarded in early April to manufacture approximately 4,500 optical-scan voting machines for use by handicapped persons in New York State.

In an interview, Girsky said Jaco has already hired 53 people as a result of the new contract. That brings Jaco's Long Island workforce to about 160. The company has a total of 220 people across the country.

Industry sources had said the contract, awarded by Dominion Voting Systems and Sequoia Voting Systems, was worth between $18 million and $20 million. The contract was Jaco's largest-ever single award.

Girsky said the optical scanners are currently being assembled at the company's Hauppauge facility.

Girsky said the company anticipates profits from the voting machine contract in the next two quarters.

"Jaco's new optical scan voting machine contract, as well as some positive recent developments in the digital signage space are reasons for optimism in our fiscal fourth quarter and as we head into fiscal 2009," Girsky said. "We will continue to prudently manage Jaco's cost structure during this period, with the goal of maximizing bottom-line profitability and enhancing shareholder value.

Jaco shares dropped 10 cents, or 6 percent, Thursday, closing at $1.51.