Xerox to Convert $4-Million Note Into Tandon Shares

Tandon said Xerox plans to convert a four-year, $4-million note into about 1.4 million shares of Tandon common stock.

Once the note is converted, Xerox will own more than 2% of Tandon’s 56 million shares outstanding.

Tandon, which is headquartered in Chatsworth, makes personal computers and disk drives. Xerox made the loan last year to help Tandon finance its expansion into the personal computer business.

Last week, Tandon announced it earned $5.6 million, or 10 cents a share, in the third quarter ended June 28 as sales rose 58% to $81.8 million, in contrast with a loss of $20.3 million, or 39 cents a share, a year earlier. The company said European sales were especially strong, accounting for about 65% of the company’s revenue.

During the nine months, Tandon earned $11.7 million, or 22 cents a share, in contrast with a loss of $17.5 million, or 34 cents a share, a year earlier. Sales in the nine months rose 51% to $238.6 million.