Tempest Technologies Inc., once a highflying local computer company that fell victim to changing technology and cuts in Pentagon spending, announced yesterday that it would liquidate by the end of the year.
The Herndon-based firm, which modifies computer equipment to meet the Pentagon's Tempest standards for protection against electronic eavesdropping, said it would begin the liquidation process by paying a one-time 60-cent dividend on March 6 to owners of its stock as of Feb. 19.
Tempest, which has 8 million shares outstanding, 59 percent of them owned by Herndon-based C3 Inc., has 62 employees and annual revenue of $8 million -- down from a peak of $26.2 million just three years ago.
The company, which has been losing money in recent quarters, said earlier this week that it was contemplating selling off its assets and liquidating after trying unsuccessfully for more than a year to find a buyer for the entire company. Analysts said the decision to sell or close the company probably was dictated by C3, which has been trimming unprofitable operations.
"The company has spent a considerable amount of time and effort exploring ways to maximize the value of its shares," Tempest said in a prepared statement yesterday. "To date, the company has been unsuccessful in finding a potential acquirer or other alternative acceptable to Tempest's board. As a result, the board believes that liquidation offers the best potential return to Tempest shareholders among the alternatives examined."
Yesterday, Tempest stock, which is traded over the counter, closed at 62 1/2 cents, up 9 3/8 cents. Earlier this week, Tempest said it expected a liquidation would be of more value to shareholders than its recent stock price, which has averaged 40 cents a share in the past three months.
The liquidation plan is subject to approval at a special shareholders meeting yet to be announced. If approved, Tempest said, "the company's business affairs will be wound up by the end of 1991."