These are rough-and-tumble days for Spokane-based rugged computer manufacturer Itronix Corp.


After strong growth in fiscal 2002, the companys sales tailed off in fiscal year 2003, which ended March 31. In early April, the company cut 10 percent of its Spokane work force, or about 40 permanent employees, in anticipation of continued slow sales during the current fiscal year.


Meantime, while Itronix has turned a profit in each of its past three years, its parent, Germantown, Md.-based Acterna Corp., filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in early May.


Itronix President and CEO Tom Turner says that with the April layoffs, the Spokane company is prepared to withstand flat sales this fiscal year, though he hopes it wont need to. With the launch of a new product and some signs of improvement in sluggish sectors, Itronix could be in a better position than expected by the end of its current fiscal year, he says.


Weve geared the company to make sure we continue to be profitable and cash-flow positive, but we think there are some upside opportunities on top of that this year, Turner says.


Though he declines to disclose specific sales figures for fiscal 2003, Turner says revenues in the last fiscal year declined less than 10 percent from the healthy fiscal 2002 level of $152 million.


That means 2003 revenues were at least $137 million, which though lower than 2002 were still well above 2001s sales, which Itronix earlier had said were between $110 million and $120 million.


The company is expecting sales this fiscal year to be equal to or somewhat lower than those posted in 2003.


Also, Turner says Acternas reorganization filing isnt expected to have any effect on Itronixs day-to-day operations or its revenues this year. He says he and other Itronix executives have worked hard in recent weeks to assure employees, customers, and suppliers that the filing wont affect the Spokane companys ability to pay its bills or manufacture its products.


Itronix makes handheld and laptop computers built to handle rough treatment that conventional computers cant withstand.


Itronixs revenue decrease last fiscal year was due to substantial drops in sales to customers in the telecommunications industry and utility sector. The telecom industry continues to be in a funk after overexuberant expansion in the late 1990s.


The utility sector has been hurt by wholesale power and natural gas price spikes and the strains of deregulation schemes. Turner declines to disclose how much that sales to those market sectors have declined, but says Itronixs overall performance would have been substantially worse had it not seen healthy gains in other market sectors.


For instance, Itronixs sales to the U.S. government, including the U.S. Armed Forces, increased sixfold last year, to $18 million from $3 million the previous year. Among those sales, the company deployed its GoBook MAX laptop computers for use in the U.S. Federal Bureau of Investigations bomb-scene response reporting kits and sold some customized versions of its hand-held fex21 devices for use by the U.S. Marines in the war in Iraq.


Sales to insurance companies and local and state governments also grew.


While business from telecom customers still likely will be difficult to come by this year, some signs suggest that market could be coming back, Turner says.


A couple of telecommunications companies currently are participating in field trials to test Itronix products. Those telecom companies have indicated that they expect to free up money in their budgets for capital expenditures later this year, and the trials could translate into sales for Itronix then, Turner says.


Still, he says, Itronix isnt making any adjustments to its projections based on such hopes.


Weve had so many false starts over the years, he says. Were planning a conservative year until the orders come in.


A wild card in Itronixs year is how quickly customers embrace a rugged tablet computer the company plans to unveil later this month. Called the GoBook Tablet PC, the wireless product has a pressure-sensitive screen, also called a touchscreen, and is a rugged alternative to tablet computers currently on the market.


The Spokane manufacturer has conducted trials with the device here and in Europe, and the product has been well-received, Turner says.


We think this is going to be really, really exciting, he says. In the next couple of years, this could be a significant vehicle of growth for us.


Itronix currently employs just under 500 people, 400 of whom are in the Spokane area.


The company is headquartered at 801 S. Stevens, on Spokanes South Hill, and operates a 52,000-square-foot manufacturing plant at 1730 N. Madson, in Liberty Lake.