Dynalectron Corp. of McLean said yesterday that it plans to sell or shut down two small unprofitable subsidiaries as part of a restructuring that cost the company almost three-quarters of its 1985 profits.
The diversified company provides technical services, primarily in industrial construction and electrical engineering, and recently has moved to expand its government and aviation work.
The company took a fourth-quarter pretax loss of $3.2 million in connection with its plans to discontinue the two money-losing subsidiaries, HRI Inc. and Dyn Construction Corp.
HRI is a synthetic-fuels company that once was considered one of Dynalectron's promising new ventures; Dyn Construction specialized in building waste water treatment plants.
In a statement, Dynalectron said that, in addition to dropping the two divisions, it put aside additional reserves "to close out or consolidate several unprofitable or marginally profitable" branch offices. As a result, Dynalectron reported a fourth-quarter net loss of $1.7 million (17 cents a share) on revenue of $185.5 million. That compared with a profit of $7.1 million (74 cents) on revenue of $168.1 million in the last three months of 1984.
For the year, Dynalectron reported a profit of $3.3 million (34 cents), down 73 percent from net earnings of $12 million ($1.23) in 1984. Revenue increased to $640.3 million in 1985 from $602.9 million the year before.
Financial analysts praised the restructuring, noting that HRI and Dyn Construction accounted for a small portion of Dynalectron's business and had hurt earnings. The two subsidiaries together accounted for less than 2 percent of total revenue, a company spokesman said.
"It's a super move," said Gerald Supple, a senior analyst with Wheat, First Securities Inc. "They are getting out of businesses that are losing money and moving more aggressively into the technical services area, which will continue to grow."