ACT Sells Headquarters in Lease-Back Transaction

In an effort to boost capital, Applied Circuit Technology Inc. said Tuesday that it had sold its Anaheim headquarters building in a lease-back deal for $3.2 million, resulting in a $1.08-million gain for the company.

The two-story building was sold to the investment division of Cadway Inc., a Whittier water utility company. The deal provides ACT with a five-year lease at an undisclosed rental sum. The building was co-owned by ACT and its former chairman J.V. Taylor, who received the rest of the proceeds.

In addition, the company expects to sell one of its two computer repair divisions for cash and notes totaling $3.5 million, said Don M. Sweatman, ACT’s new chairman and chief executive. And the company is in negotiations to sell another computer repair division and a computer product design division, he said.

The company plans to concentrate its efforts on the generic drug manufacturer it acquired last year and on ACT’s original line of business--computer-system testing equipment.

“A new edict that has come down from top management this week,” Sweatman said, calls on the remaining divisions to formulate plans to produce a 10% net profit on revenues this fiscal year.

ACT posted a net loss of $4.8 million on revenues of $13.4 million in its first nine months ended July 31. Its annual financial statement for the year ended Oct. 31 is expected to be released next week, Sweatman said. He would not comment on what the figures would show.

“The purpose of our concentration is to focus attention on the things we know how to do best,” Sweatman said, pointing out that the company just hired an executive from the giant pharmaceutical company, Upjohn Co. in Kalamazoo, to run its drug company, Whiteworth International.

The systems division recently landed a $500,000 contract with Maxtor Corp. in San Jose for disk-drive testing equipment. The contract brings the total value of contracts signed in the last six weeks to $2.7 million, Sweatman said.