Layoffs Follow Loss at Boyds Wheels Inc.

STANTON —  Custom wheel and auto parts maker Boyds Wheels Inc. said Wednesday it has laid off a “significant” number of its 356 employees in the wake of a first-quarter loss of $1.4 million, or 37 cents a share.

The company declined to say how many workers were let go, but said it considered the situation a temporary one caused by overcapacity in its newly expanded manufacturing plant.

“We are trying to make the company more efficient,” said Chief Financial Officer Rex Ours. “But we expect business to pick up and, as it does, we will be rehiring people.”

Boyds Wheels said last week that it expected to post a major first-quarter loss. The company blamed the drop from a year-earlier profit of $460,000, or 17 cents a share, on costs of its recent expansion and an unanticipated slowdown in sales.

Revenue for the quarter slumped 34% to $3.6 million from $5.5 million in the first three months a year ago.

Ours said Boyds began the year with almost no backlog to boost sales--compared with a $2-million backlog at the beginning of the 1996 first quarter--and that an expansion of its sales effort in the East Coast did not generate revenue as fast as had been expected.

Because the company nearly doubled its manufacturing capacity in the last quarter of 1996, its inability to significantly boost volume forced it to lay off workers, Ours said.

“Having greater capacity was a two-edged sword,” he said.

The layoffs affected all departments in the wheel and accessories units of the company, he said.

The custom auto wheel business is seasonal, with sales slowdowns in the fall and early spring, Ours said. This is the first layoff since the company went public in September 1995, but they happened seasonally before that, he said.

“Current conditions forced us to make this difficult decision, one of the hardest we have ever had to make,” he said.

While overall revenue in the quarter was down, new orders were up about 30% to $4.4 million from $3.3 million, Ours said. “We believe the future is very positive.”

Boyds Wheels stock dropped by 50 cents a share to close at $5.125 in Nasdaq trading Thursday. The stock hit a high of $17.375 on Nov. 18.