HIALEAH, FL – Simclar Inc. reported sharp revenue drops for its past two quarters, citing the telecommunications infrastructure sector, which accounts for some 60% of the company's business, and production problems in its Mexico facility.

Revenue was down 27% year-over-year to $27 million for the three months ended June 30, and down 39% to $20 million for the September period. Net losses were $2.7 million in June and $700,000 in September, down from net income of $1.4 million and $400,000, respectively, last year.

Pretax losses were $4.1 million and $1.1 million in June and September, respectively, down from pretax income of $2.1 million and $600,000.

Simclar encountered problems in transferring sheet metal fabrication operations from its North Carolina facility to its Mexico plant, some of which involved the site’s ERP system. As a result, Simclar closed its sheet metal business and plastic injection molding businesses and took an asset write-off of $2.8 million in the second quarter.

In a press release, chairman Sam Russell said, “Despite the company’s other locations remaining profitable, such was the seriousness of the problems in our Mexico facility that it drove the company into significant losses in each of the two quarters. We are, however, confident, that we have now made substantive improvements in the management and operations of our Mexican facility and are developing plans to significantly grow the business in this strengthened facility.”

Order backlogs at the end of the third quarter were steady at $28 million. Russell said the company expects to return to profitability during the fourth quarter.