The Los Angeles Times from Los Angeles, California • 24

SAN DIEGO COUNTY BUSINESS CC Part IV A Oak Industries to Sell TV Station in Florida Media Conglomerate, Troubled by Losses, SEC Probe, Agrees to Deal By CYNDI MITCHELL, Times Staff Writer if BRUCE K. HUFF center while steel skeleton of Meridian condominium tower is in background at left. Below, a closer look at the 27-story luxury condominium, which will have some 1-million units. Work in progress Two of the projects in constantly changing downtown scene are shown in above view. In foreground is the under-construction Horton Plaza shopping in late 1980, and had 40,000 subscribers by 1982.

But the steep monthly charges of about $23 for the service dropped Fort Lauderdale subscriptions to 24,000. Similarly, ON-TV pared its service from five cities to the remaining three after subscriptions dropped from a 1982 high of 600,000 to about 335,000. The company's auditor, Arthur Andersen qualified its opinion of Oak's 1983 annual report because of the decline, saying it doubted that Oak could fully recover its $134-million investment in the subscription-TV industry. "There's really no future in subscription TV," said Irving Katz, an analyst with San Diego Securities. "Eventually, they're going to have to bite the bullet and take the write-off" on their subscription television service.

However, he added that the sale, which is expected to be completed by the end of the year if the FCC grants approval, "should help them continue in business. It will help them pay off some of their debts, help their working capital. That's basically what they need." Oak has suffered similar blows in its other markets. The company has posted a string of losses since 1982, when it was hit simultaneously by the declining subscriptions, high interest rates and production problems with its cable-television converter boxes. First-Quarter Loss Oak posted a first-quarter loss this year of $12.49 million on sales of $105.2 million.

During the corresponding period of 1983, its loss was $24.34 million on sales of $106.6 million. Its 1983 losses of $166.1 million followed a $4. 1-million profit on sales of $545.7 million in 1982. Blair, a diversified marketing and communications company involved in marketing services and broadcast station ownership, said it expects to continue its expansion into television and radio as the opportunities arise. The firm posted sales of $414.3 million and net income of $18.3 million for 1983, up 7 from 1982, when it earned $17.1 million on sales of $322 million.

Oak Industries, the Rancho Bernardo-based media conglomerate troubled by continuing losses and an investigation by the Securities and Exchange Commission, said Monday that it has agreed to sell its Fort Lauderdale, television station for $17.75 million in cash. Oak signed a deal late Friday to sell WKID-TV to John Blair Co. of New York, pending approval by the Federal Communications Commission, according to Frank A. Astrologes, Oak executive vice president and executive financial officer. The agreement does not include sale of the ON-TV over-the-air subscription service, which delivers a scrambled TV signal from conventional stations that is only accessible to subscribers with a converter that Oak provides through the station.

"We've been incurring losses in Florida, and not only in profit but in cash flow. We just figured we've got to do something to help the situation down there," Astrologes said. "The encroachment of cable TV in Florida in addition to the recession has really hurt us. It behooves us to pare the operation down as much as we can to hold down the losses." The company in 1983 lost $166.1 million on revenue of $426.4 million. James A.

Jurist, Blair's vice president and chief financial officer, said the company, which owns four television and eight radio stations, wants to make Channel 51 a Spanish -language station. Oak said it would not decide whether to attempt to operate its subscription service in Florida through another channel until after the sale is approved. Subscription Service Unaffected Astrologes said the subscription service would not be affected. And he said the move is designed chiefly to turn around the company's loss in Florida and does not signal a pending move to discontinue ON-TV service in Los Angeles, on KBSC-TV 52, or in Chicago, where it also owns 49 of WSNS-TV. The move comes just two weeks after Oak attempted to cut its Florida losses by laying off half of its 80 employees there.

It entered the Fort Lauderdale-Miami market Many Cost-Cutting Measures PSA Chief Is Waiting for Airline to Really Take Off By ANTHONY RAMIREZ, San Diego County Business Editor the second quarter from the year-ago period, its profit from its airline business nearly tripled to $15 million. But, because of less revenue from the sale of jets and because special tax benefits known as "safe harbor" leasing credits were rescinded by Congress, PSA wound up reporting a more than 30 drop in net profit from the 1983 second quarter to $3.3 million, or 26 cents per share. Second-quarter revenue rose by a third, to $182.5 million, from the year-earlier quarter. PSA is also making progress in cutting labor costs, with the recent agreement by the pilots' union to a 15 pay cut and a 15 increase in productivity in return for part Please see PSA, Page Builder Survives Rigors of CubicBlamesReserve Fund for Big Earnings Decline By ANTHONY RAMIREZ, San Diego County Business Editor For PSA Inc. and Paul C.

Barkley; the airline's president and chief executive officer, the last five years have been a waiting game. Waiting for sky-high fuel prices to level off after the oil shock of 1979. Waiting to scrimp and save enough money to pay for new, fuel-efficient jets. Waiting through or more accurately, enduring an industry shakeout that sank many larger airlines into bankruptcy and plunged PSA into more than $49 million of red ink. Waiting or more accurately, hoping for labor unions to agree to take pay cuts to reduce overhead.

And, most importantly, waiting for a healthy economy to return and convince people to fly again, without industry-endangering fare wars. At last, there is light at the end of the runway. But the waiting game for PSA is not quite over. The hoped-for travel boom from the Democratic National Convention in San Francisco never came. The route from the San Francisco Bay Area to the Los Angeles Basin is the most heavily traveled in the country and constitutes almost 40 of PSA's business.

But, possibly because they feared convention-related congestion, tourists didn't flock to San Francisco, Bark-ley says. No Olympics Packages Another hoped-for boom isn't materializing, either. The Olympic Games have not sparked a surge in late July traffic, partly because, Barkley believes, tour operators and others were banned from buying tickets in large blocks and thus selling Olympic vacation packages in bulk. Then there was the "extraordinarily" negative publicity from law-enforcement authorities about possible terrorism and street crime that, Barkley said, "convinced the world not to come to L.A." "Put it all together," Barkley said in an interview last week in his office near Lindbergh Field, "and we're not going to have a good summer." The picture isn't all bad, however. PSA reported that, although company-wide profit declined in County Business Editor it was basically, don't think you can do that; I think you're lying to Huffman said with a heavy sigh.

"It was a little like the mother-in-law who thinks that the son-in-law is never going to be successful." Edward H. Sibbett, chairman of the creditors' committee, confirms that relations were strained. The seven-member creditors committee objected to many of Huffman's proposals, including some complex switching of equities in various projects with Mexican investors. "Mostly Just Talk" "It's mostly just talk so far," said Sibbett, 78 -year -old attorney for Investcal Realty which buys and sells shopping centers, industrial parks and other real estate projects. "I haven't seen any money yet.

But we had to have a plan. Anything was better than nothing." Under the plan approved by a federal bankruptcy judge June 22, about 400 unsecured creditors would be paid about $3 million plus interest. (Unsecured creditors are those who lent or invested money contracts pay off. A $3-million pretax reserve fund was created for the third quarter to cover what may not be reimbursed by the federal government. Describing the dispute as complex, Boyle said the fight centers on a $5-million contract to build a tracking system.

The government contends that Cubic did not meet certain specifications. Boyle declined to elaborate. He said, however, that such contract disputes had happened before at Cubic but that because of the relatively large size of the contract, Cubic accountants decided to provide for it conservatively by assuming that the government would refuse to reimburse all the costs. Despite the sales decline and flat nine months' revenue, Cubic is enjoying a good quarter, Boyle said. The backlog of unfilled orders, as of June 30, was up 12 to $225 million.

Bookings for new orders rose 10 from the year-earlier period to $237 million. Bankruptcy without any pledge of collateral from Huffman.) Put into 10 classes, creditors would be paid in three annual installments. The first 40 owned would be paid later this summer with 7 interest; the remaining 60 would be paid at 11 interest in two annual installments. Secured creditors, mainly a five-member bank group led by Imperial Bank, agreed to refinance their loans by stretching repayment or charging higher interest rates. Huffman's 100 cents on the dollar plan is unusual in bankruptcy cases.

Often firms have staggering debts and are forced into reorganization or liquidation by investors, or when management has no other choice. Shareholders in Wickes Cos. and Nucorp Energy Inc. had to settle for substantially less than 100 cents on the dollar in recent years. Investors in J.

David which was forced into Chapter 7 liquidation, may see only a small fraction of their original investment. While those firms were or may prove to be insolvent, Huffman's Please see BANKRUPTCY, Page Current Yield Current Rate In its first quarterly earnings decline in four years, Cubic Corp. on Monday reported a nearly 50 drop in third-quarter profit, mainly due to a reserve created for a disputed contract. In the third quarter ended June 30, Cubic, the high-technology defense contractor that also builds transit systems and elevators, earned nearly $2.6 million, or 32 cents a share, compared to the year-earlier $4.9 million, or 62 cents a share. Third-quarter sales declined slightly, by 4 to $65.4 million from $68.3 million.

In the nine -month period, Cubic profit dropped 14 to $10.6 million, or $1.33 a share, from the year-earlier $12.3 million, or $1.55 a share. Nine months' sales inched upward 1 to $200.5 million from $198 million. William W. Boyle, Cubic's vice president-finance, acknowledged that even without the reserve draining profits, Cubic's earnings would have dropped. He attributed the decline to "timing differences" in the way different government 1 YEAR TERM Current Yield Current Rate By ANTHONY RAMIREZ, San Diego Ray Huffman, San Diego's largest apartment builder, knows exactly how he feels about bankruptcy.

It's like backing your car into quicksand, he says. Or it's like checking into a terminal cancer ward. Or it's like having leprosy and having everyone you know point at you. "The stigma is awful," says the 49-year-old Huffman, who rubs his temples when he talks about bankruptcy. "I'd liquidate and go home rather than go through it again." Huffman, owner of San Diego-based Ray L.

Huffman Construction emerged in June from a two-year-long reorganization under Chapter 11 of the federal bankruptcy code, which allows the management of a bankrupt firm to continue to run the company while it works out a plan to pay back creditors. (Under Chapter 7, everything of value in a company is liquidated and the proceeds are paid to creditors.) The surprising thing about Huffman's tale of woe: He has come up with a plan to repay investors, not pennies on the dollar, but 100 cents on the dollar, with interest. How did investors react? "I think American 6 MONTH TERM ft Qneartt To open your account, call the toll-free Financial Line now: (800) 272-9000. AmroOTn) tote! Great FSLTC Federal Savings Loan Insurance Corp Savings Insured to 100.000 Current yield shown is based on minimum deposit of $5,000, and is an effective annual yield based on the current rate which is an annual rate. The current rate is subject to change upon renewal.

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