The Stanwick Corp., an Arlington engineering and management firm, is liquidating its assets because the company has failed to make a substantial operating profit since it lost its defense contract with the Iranian navy seven years ago, analysts and investors said yesterday.
Stanwick's stockholders overwhelmingly approved the company's liquidation and dissolution plan this week at its annual meeting. The liquidation plan already had been approved by the company's board of directors on Nov. 19.
"I'm afraid that this is a very surprising end to a company," said Dominique Gignoux, president of Data Measurement Corp. of Gaithersburg, who is a Stanwick stockholder. "People don't just dissolve a business that is sufficiently working with its divisions operating independently. I would think they would find a way to restructure the management of the company."
But Wells T. Stanwick, a company vice president, said yesterday that the board of directors "decided after careful review that liquidation would be in the best interest of the company's stockholders."
"The proposed plan is designed to transfer the divisions and operating units of the company intact to minimize the effect on the division and operating-unit employes," said Stanwick. He added that he is one employe who is "looking for a job."
Although Stanwick had been profitable in the past two years, those profits were "primarily generated by interest income, elimination of reserves and the settlement of claims arising out of business activities the company conducted with Iranian interests prior to the Iranian revolution in 1979," according to a document filed with the Securities and Exchange Commission on Jan. 15.
Stanwick has supplied technical and logistic support to the Defense Department, other government agencies and private industry since 1962. The $5 million-a-year firm was at one point a $20 million operation with more than 300 American employes in Iran providing maintenance and logistic support to the Iranian navy.
"We had people in Iran who were training their counterparts in the Iranian navy on how to operate and maintain their navy," said Stanwick.
Since last year, Stanwick had been pursuing the high-tech market and had specifically targeted the Reagan administration's Strategic Defense Initiative, or "Star Wars," program as one area where they could develop a niche.
But Stanwick did not receive any high-tech contracts.
"The company is currently not optimistic about any near-term potential for significant new business in this extremely competitive area since it has been unable to generate new business opportunities," Stanwick said in the SEC document.
Stanwick lost more than $1 million in both 1982 and 1983. In 1984, the company had a $1.8 million profit; last year, it earned about $375,876. But in both profitable years, the majority of its income came from about $3.7 million it received in settlements of claims made against Iran in 1980. A third claim of $869,145 is still pending against Iranian banks to recover deposits there.
Under the liquidation plan, Stanwick plans to sell or exchange all of the company's businesses and assets. The firm's main operating units are in Norfolk, Arlington, and Thousand Oaks, Calif.
The proceeds of the sale or exchange of the company's assets will be distributed to its stockholders after all debts and liabilities are paid. "Stockholders should receive greater value from the liquidation of the company at this time than would be available to them in the foreseeable future through their continued ownership of the common stock," Stanwick said.