News
RF Industries sees increases through general distribution RF Industries, San Diego, has benefited from a 65% increase in net income to $220,000, for its first quarter ending Jan. 31, compared to $134,000 for the same quarter last year. Net sales advanced 32% to $1,760,000 compared to $1,331,000 last year.
“Strong shipments of RF coaxial connectors and cable assemblies enabled RFI to post its fifth consecutive quarter of increasing sales,” said Howard Hill, president. “With the addition of several new distributors for coaxial and connector products, coupled with our efforts to increase OEM sales, we are optimistic that the RF Connector Division will have a record year.”
Les Perlman, vice president of sales and marketing for RF connectors, said that the company’s new distributors are performing well. He added that improving market demand for passive electronic components and interconnect products make for a good year for distribution.
Richard LaFay, president and general manager of the RF Connector Division, said, “We are encouraged by strong sales across our product line and the significant contribution being made by cable assembly products, which now account for 10% of the connector division’s sales.”
RF Industries’ Neulink Division, which makes wireless modem products, has added store-and-forward, broadcast mode and TCP/IP engine enhancements for its SS9600 2.4GHz spread-spectrum modem. The improvements allow the modems to be programmed to store and forward their own data and to relay data from other modems. The effect is to increase transmission range without increasing power, thereby maintaining compliance with FCC license-free requirements.
“Land mobile hit a slump for a couple of years,” Hill said. “It seems to be picking up now. There was a slump in 1999, a year that ended down 4% in sales. It was really bad in our second quarter, February to April.”
The company introduced land mobile radio products to fit Andrew, Cablewave and Eupen cables, but they didn’t sell well.
“Similar products designed for Times Microwave Systems cable did okay,” Hill said. Hill said that the company has added large distributors for its general line of industrial connectors that sell more to OEMs than to two-way radio customers. Its large two-way distributors, including Electro-Comm Distributing, Hutton Communications, Talley Communications and TESSCO Technologies, are expanding their market to include smaller OEMs.
Perlman added that once distribution sales picked up momentum, the company started getting inquiries from other large general line and catalog distributors.
RF Industries wants to interest manufacturers’ representatives in its Internet spread-spectrum 2.4GHz link product for the monitoring market. Hill said that applications range from refrigeration cars to gas wells to seismic monitoring. “What’s nice about the spread spectrum is that it is non-licensed,” Hill said. “It has a storage capability to use as a repeater that gives it extra range without extra wattage.”
Hill said that distributors had not been interested in the product because, in contrast to connectors, the link is not something that can be taken off the shelf and shipped. “There’s some customizing to it.” He said that the company had tried to interest major distributors, but the product never really moved out.
Hill said RF Industries views representatives as conduits of information to engineers.
“The reps are beating the bushes with other products under the same umbrella with wireless products. They run across applications with OEMs and end-users,” Hill said.
RF Industries is now looking at possible mergers and acquisitions after renewed power in its shares, Hill said. The stock price rose from $2 to $16 before settling back to $8 in the past few weeks.
“We’re fairly cash-rich,” he said. “We have $3.5 million in cash with no debt.”
Hill attributes the company’s progress to customer service, good-quality products and good prices.
“We smother our customers with service. One compliment is that they hear more from us in a week than they hear from our competitor in a year. That’s what we live by,” he said. -D.B.
Relm compensates Simmonds; completes asset purchase Relm Wireless has signed a contract to compensate Simmonds Capital Ltd. (SCL) for strategic consulting and advisory services, which includes helping it acquire rights to private radio products made by Uniden America and for ongoing advice about Relm’s business development. The compensation includes 150,000 common shares of Relm stock, valued at $724,000 (or $4.82 per share on March 29, the date of announcement). The share price had dropped as low as $3 on April 4. SCL further receives warrants to purchase 300,000 common shares at $3.25 per share. SCL’s expenses will be reimbursed with another 50,000 shares and an unspecified amount in cash.
Another 300,000 shares go to SCL to pay for inventory, tooling and related Midland International intellectual property rights for radio communications products sold outside of the United States. Inventory and tooling are housed at a Hitachi Denshi facility in Japan.
The total value of the 500,000 shares going to SCL is $2.4 million at the March 29 price; at $3 per share, they are worth $1.5 million.
SCL also has purchased a convertible note for $200,000 as part of a private financing placement by Relm.
Relm has an estimated five million shares outstanding. Although SCL may have purchased shares not included as part of these transactions, the 500,000 shares it is acquiring through Relm’s compensation for advice, assets and expenses may allow SCL to control about 10% of the company. -D.B.
Marketronics builds Florida network, distributes Securicor products Marketronics, Sunrise, FL, has placed an order worth $2 million with Securicor Wireless for products and services to build a 220MHz network in southeastern Florida. Securicor Wireless, a subsidiary of Securicor, Surrey, United Kingdom, has its headquarters in New York and its operations center in Kansas City, MO.
Securicor Wireless and its partner, the National Rural Telecommunications Cooperative, have national and regional licenses for a large number of 220MHz commercial mobile radio channels. Under a contract with Securicor, Marketronics will have the right to use 30 to 40 of those channels to cover a population of five million people from West Palm Beach to the Florida Keys. Marketronics will own and operate the network and will sell radio communications products and services under the Securicor Wireless name.
The network may include a few existing operational sites and new construction, and it may be activated as soon as the end of July. Marketronics will add as many as eight employees in its U.S. offices for technical support, system engineering, sales and marketing.
Marketronics has been known as an international distributor, carrying products from more than 100 manufacturers. The company also has experience in configuring paging and trunked radio networks. It owns community repeaters in Latin American countries.
Marketronics’ president, John Kelly, said that the company has done business with the U.S. radio equipment sales and distribution unit of Securicor Wireless since the mid-1980s, when the unit was part of Midland International. It began selling what now are Securicor Wireless automatic vehicle location (AVL) and mobile data products about eight years ago, several years before Securicor Wireless’ predecessor company, Intek Global, bought the business known as Data Express from another company, Mobile Data Solutions. Kelly said that Marketronics had been one of Data Express’ largest distributors.
The greater opportunity lies in AVL and data compared to voice communications, Kelly indicated. He said that network sales would concentrate on fleet owners, such as ambulance and regional delivery services, that have vehicle status and AVL requirements.
“We are currently developing our marketing plan and identifying specific users we feel will benefit from the services we will offer. Our emphasis will be on demonstrating the advantages of mobile data vs. traditional voice dispatch,” Kelly said.
Marketronics is motivated by the potential for recurring revenue in airtime sales in southeastern Florida and internationally.
In addition to the Florida network, Marketronics and Securicor Wireless expect to launch similar networks to sell products and services in Latin America and the Caribbean, where Marketronics has offices in Mexico City; Sao Paulo, Brazil; and San-tiago, Chile. The company’s agreement with Securicor Wireless gives it rights to distribute Securicor Wireless’ products throughout the United States, Latin America and the Caribbean.-D.B.
(www.marketronics.com; www.securicorwireless.com; www.securicor.com)
Knight’s Communications resumes business as two-way radio dealer Knight’s Communications, Ft. Worth, TX, is set to re-enter local radio communications sales and service after a five-year absence. Its hiatus was required by its agreement not to compete with Pittencreif after it sold the company its SMR systems in 1994. Pittencreif’s SMR systems later were acquired by Nextel Communications.
Knight’s has a 50-year association with Com-Net Ericsson Critical Radio Systems and its predecessor companies, Ericsson Private Radio Systems and General Electric Mobile Communications. Since the sale of its SMR systems, Knight’s has continued to provide installation and maintenance services for Com-Net enhanced digital access communications systems (EDACS).
The president of Knight’s Communications, Bob Brandt, purchased the company in 1989.
“In 1996, we added products and services for the broadcast and professional audio markets, including Fibox products from Lightwave Systems and matrix switchers from Lighthouse Digital. Knight’s has sales agents that cover China and South Korea,” Brandt said.
In 1998, the company added cable products from Mohawk/CDT, allowing it to quote directly from the manufacturer with standard or custom cable designs. Also added were products from digital video manufacturers AJA Video Systems and Ensemble Designs. The company installed its first data LAN system in 1998.
“Broadcast, audio and video equipment sales are going well, but the market is slow to penetrate. We’re finally turning the corner, and although we can’t subsist on those sales alone, we’re getting better leads and contacts now. Sales in China are picking up,” Brandt said. “We are excited about growing our local presence and getting back into day-to-day service.”
Knight’s wants to begin by selling Com-Net’s conventional two-way radio products to large users with internal systems, such as universities and industrial users.
“We’ve sold to them in the past, and my focus now is to get back with those people and re-establish connections.”
Brandt is positive about Com-Net’s purchase of Ericsson’s private radio systems business.
“No one will invest that amount of money and then let it wither away. Com-Net’s upper management seems committed to bringing new conventional products, which is good. There’s no opportunity for us to sell EDACS trunking, so without a good conventional line, there’s nothing to sell with Ericsson. We’ve been associated with the Ericsson genealogy for 50 years, and we would like to stay with them. So many other dealers have multiple product lines. We have other revenues with Ericsson, so we haven’t had to do that. It has been enough to keep us alive, though barely. If you look at other Ericsson dealers, they’re selling Kenwood, Vertex and other brands. We haven’t had to do that,” Brandt said.
Brandt said that Knight’s went back into the dealer business, at a time when some dealers found it favorable to exit, because the company needed the local sales and service to fill in the gaps of doing systems installations for Com-Net. He estimated that conventional equipment sales might add $200,000 per year to Knight’s revenue, helping to supplement its other revenue sources.
Knight’s is looking for airtime access, whether through existing networks or building its own. Brandt mentioned the possibility of placing users on the 220MHz network operated by Incom in the Dallas-Ft. Worth metroplex, although he said its coverage may limit sales to the middle part of the area.
“Any other players here that would welcome us are so small, they are maxed out anyway. I’m not interested in being a Nextel reseller,” Brandt said. -D.B.
Relocation, spectrum opportunities highlight SBT’s pre-IWCE seminar Relocation issues at 800MHz, auction updates, interconnection agreements and tower site management topics highlighted the second midyear meeting of Small Business in Telecommunications (SBT) in March. About 100 association members and telecommunications small-business people attended the five-hour seminar, held one day prior to IWCE 2000 in Las Vegas.
Lonnie Danchik, SBT chairman, noted that although the seminar was billed as “Jam II,” after 1999’s “Jam Session,” some attendees had mistakenly read the invitation as “Jam It,” in keeping with SBT’s feisty attitude toward regulation and small business.
As a follow-up to a presentation at SBT’s 1999 annual meeting in St. Louis, Sandy Edwards of Nextel Communications discussed his company’s plans for relocating, or retuning, incumbent 800MHz licensees from channels that Nextel had won at auction. A healthy debate emerged from the floor, with attendees quizzing Edwards on specific per-unit retuning costs. Although Nextel’s presentation to SBT six months prior had focused on outright purchase of incumbent systems, Edwards said the current philosophy is to negotiate a retuning solution. Because the upfront costs for retuning are paid by the incumbent and later reimbursed by the auction winners, some attendees expressed the opinion that the new approach was one way to lower prices for outright system buyouts.
Earlier in the program, SBT counsel Robert H. Schwaninger Jr. pointed out that SBT still had an appeal of the 800MHz auction proceedings pending in federal court. He noted that the FCC had not detailed any specific penalties for failure of good faith negotiations in the 800MHz relocation timetable.
A surprise visitor to the seminar was Industrial Telecommunications Association President Mark Crosby. He discussed ITA’s efforts to secure additional spectrum for private wireless, including the pending 700MHz guard band auction. Crosby said other possibilities, such as proposed allocations between 1,390MHz and 1,435MHz, were less promising because of incumbent government systems. He noted that U.S. Senate bill S. 1824, to provide private wireless spectrum, still lacked a companion bill in the U.S. House of Representatives. Crosby discussed various strategies to relocate UHF-TV stations out of the 700MHz band earlier than the statutory 2006 deadline.
Vic Jackson, of Vic Jackson Interconnection Services, in a presentation titled “Phoney Business,” discussed the status of LEC reimbursements to paging carriers and rate structures for negotiating interconnection agreements.
Attorney Michael L. Higgs Jr., of Schwaninger & Associates, discussed reversion contracts for tower sites and ways to leverage tower leases into other investments or capital improvements. Higgs estimated that, despite the acquisitions of the “big five” tower companies, only about 20% of the entire tower market has been consolidated.
Corporate sponsors and presenters at the seminar included Communications Research, ComSpace, DX Radio, Kenwood Communications, First Contact, John Furr & Associates, IDA, Multiplier Industries, PCIA, Primus Electronics, Ritron and Trident Micro Systems. -D.K.
Transcrypt’s losses decline, wireless product sales dominate Transcrypt International’s annual report, released March 23, expresses hope, describes new product development and enumerates declining losses. The Lincoln, NE-based company continues to take steps to overcome the adverse effect on its relationships with customers and vendors stemming from its 1998 restatement of its results for 1996 and 1997. The restatement, which reduced reported revenue by $1.7 million, brought class-action lawsuits, drew an investigation by the Securities and Exchange Commission and adversely affected the company’s business, financial condition, results of operations, liquidity and cash flows.
Revenues declined by 14% to $53.5 million in 1999 from $62 million in 1998. Of total revenues for 1999, the wireless communications segment comprised 85.8%, and the information security segment comprised 14.2%. On a positive note, though, and reflecting its ongoing recovery from the 1998 restatement debacle, the company’s revenues have increased quarter-to-quarter after the first quarter of 1999, ending with $15.8 million in revenues during the fourth quarter of 1999.
Although Transcrypt’s domestic commercial sales declined 40% between 1998 and 1999, the company anticipates that its revenues soon will stabilize at 1999 levels and then begin to grow.
The company’s R&D expenses declined in 1999 as it reduced and divided its engineering staff between its E. F. Johnson subsidiary and Secure Technologies division. A continuing new product development process initiated in 1998 requires smaller resources and is intended to speed the delivery of products to market.
Transcrypt’s results can be interpreted in several ways. For example, the company had a net loss of $3.8 million during 1999. However, this amount includes a $0.5 million restructuring expense and $2.2 million of income from a reduction in a litigation reserve set up during the previous year. Without these two items, the net loss would have been about $5.5 million.
During 1998, the company lost $22.2 million, which included $1.2 million of restructuring charges and a $10 million provision for litigation settlement. Without these two items, the company would have had a net loss of about $11.4 million (net of tax benefit).
During 1997, the company had a net loss of $10.9 million, which includes a $9.8 million charge for in-process research and development. Without this item, the company would have had a net loss of about $1.6 million (net of tax benefit).
Transcrypt makes wireless communications products and systems and information security products. Its communications products include land mobile radio base stations, mobile radios and portable radios, and complete communications systems. It sells radio products and systems to commercial users and to public safety and government users.
Its information security products prevent unauthorized access to sensitive voice communications. These products, which use analog scrambling and digital encryption technologies, are sold to the land mobile radio and telephony security markets. -D.B.
FCC Notes Transcrypt’s losses decline, wireless product sales dominate Transcrypt International’s annual report, released March 23, expresses hope, describes new product development and enumerates declining losses. The Lincoln, NE-based company continues to take steps to overcome the adverse effect on its relationships with customers and vendors stemming from its 1998 restatement of its results for 1996 and 1997. The restatement, which reduced reported revenue by $1.7 million, brought class-action lawsuits, drew an investigation by the Securities and Exchange Commission and adversely affected the company’s business, financial condition, results of operations, liquidity and cash flows.
Revenues declined by 14% to $53.5 million in 1999 from $62 million in 1998. Of total revenues for 1999, the wireless communications segment comprised 85.8%, and the information security segment comprised 14.2%. On a positive note, though, and reflecting its ongoing recovery from the 1998 restatement debacle, the company’s revenues have increased quarter-to-quarter after the first quarter of 1999, ending with $15.8 million in revenues during the fourth quarter of 1999. Although Transcrypt’s domestic commercial sales declined 40% between 1998 and 1999, the company anticipates that its revenues soon will stabilize at 1999 levels and then begin to grow. The company’s R&D expenses declined in 1999 as it reduced and divided its engineering staff between its E. F. Johnson subsidiary and Secure Technologies division. A continuing new product development process initiated in 1998 requires smaller resources and is intended to speed the delivery of products to market. Transcrypt’s results can be interpreted in several ways. For example, the company had a net loss of $3.8 million during 1999. However, this amount includes a $0.5 million restructuring expense and $2.2 million of income from a reduction in a litigation reserve set up during the previous year. Without these two items, the net loss would have been about $5.5 million.
During 1998, the company lost $22.2 million, which included $1.2 million of restructuring charges and a $10 million provision for litigation settlement. Without these two items, the company would have had a net loss of about $11.4 million (net of tax benefit).
During 1997, the company had a net loss of $10.9 million, which includes a $9.8 million charge for in-process research and development. Without this item, the company would have had a net loss of about $1.6 million (net of tax benefit). Transcrypt makes wireless communications products and systems and information security products. Its communications products include land mobile radio base stations, mobile radios and portable radios, and complete communications systems. It sells radio products and systems to commercial users and to public safety and government users.
Its information security products prevent unauthorized access to sensitive voice communications. These products, which use analog scrambling and digital encryption technologies, are sold to the land mobile radio and telephony security markets. -D.B.
Getting the 700MHz game on the road Activities in the doubleheader auctions to license 700MHz spectrum include game delays, substitutions in the lineup and change-up pitches. The FCC postponed the 30MHz allocation for commercial service auction (747MHz-762MHz and 777MHz-792MHz) from May to June to allow both bidders and the agency to get their game together. The revised schedule: April 24, auction seminar; April 25, orders for remote-bidding software; May 8, Form 175 filing deadline; May 22, upfront payment deadline. A mock auction on June 2 precedes the real thing on June 7.
Lowering the taxes on Tara Meanwhile, the 700MHz guard band auction follows on June 14, offering a total of 6MHz designed to protect public safety bands. One “A block” 2MHz license (paired 1MHz blocks) and one “B block” 4MHz license (paired 2MHz blocks) will be offered in each of the 52 major economic areas (MEAs). Key dates preceding the auction had just been posted by the FCC at press time. The schedule: April 27, auction seminar; May 9, Form 175 filing deadline; May 26, upfront payment deadline; May 30, order deadline for remote bidding software. A mock auction on June 12 precedes the actual auction.
The auction is restricted to the new guard band manager (GBM) licensee category. Rules comments focused on the high upfront payments (UFPs) and minimum opening bid (MOB) requirements. Industry associations and potential bidders unanimously called for a reduction of the amounts. The FCC’s auction prices, set by the WTB, called for A and B block UFPs as high as $623,000 and $1.25 million, respectively. Similarly, MOBs topped out at $1.87 million for the A block and $3.7 million for the B block.
Several comments filed on the auction rules pointed out that the bid levels would deter, if not exclude, small business. Commenters said that factors that would decrease the value of the spectrum include incumbency on the bands by UHF-TV stations until 2006, interference protection from commercial users in the other 30MHz allocation and provisions for interference protection for public safety users. Commenters said the FCC should not expect GBMs to have deep pockets.
ITA noted that population may not be the appropriate economic platform on which to establish MOBs, given the “practical realities” of GBMs providing interference protection to public safety. Mobex Communications said the thresholds were “cost-prohibitive for most small businesses.” Mobex noted that the minimum aggregate value that the FCC had placed on the entire 6MHz was $48 million, with an average bid for each MEA (A and B blocks) of about $469,000, “just to participate” in the auction, let alone to register a winning bid. AMTA said the rates would “preclude auction participation by the very entities the FCC anticipates will elect to pursue guard band manager roles.”
Motorola proposed a valuation formula, similar to that used for the 220MHz auctions, whereby MOBs would be calculated at a dollar value multiplied by megahertz and by license population. UFPs would be about one-third of the MOB for an MEA. The proposal would reduce the original entry levels for the auction by two-thirds.Reply comments by ITA, Mobex and AMTA all endorsed the Motorola proposal.
Yes, Virginia, there is an FCC At press time, the FCC acquiesced to the commenters’ points and, in an April 10 auction notice, reduced the levels for UFPs and MOBs to about one-third of the original postings. This puts the average UFP for an MEA at $104,410 and the average MOB for an MEA at $312,670. -D.K.
Karen A. Robinson, chairman of Enrev, Atlanta, is honored as an “Enterprising Woman of Wireless” by Wireless Week magazine.
Alan Haase, vice president of Terrestrial Microwave Products at Andrew, Orland Park, IL, advances to group president of Communication Products.
Promotions at Anritsu, Richardson, TX: Bill Lovelace, president of Anritsu’s North American Region Operation (NARO), moves up to general manager of the International Sales Management Center (ISMC). Phil Bowen, general manager of NARO, takes Lovelace’s place as president of NARO.
Bill Rose, vice president of Electronic Engineering at Leviton Manufacturing, Little Neck, NY, becomes chairman of the Arlington, VA-based Consumer Electronics Association’s Technology and Standards Council.
Jo-Anne Basil, vice president for external and industry relations at the Cellular Telecommunications Industry Association, Washington, represents CTIA on the Center for the Study of Wireless Electromagnetic Compatibility’s Industry Advisory Board, located at the University of Oklahoma.
Rick Guipe, senior vice president of Wireless Network Systems at TESSCO Technologies, Hunt Valley, MD, joins the board of directors of the Wireless Communications Association, Washington.
Richard C. Notebaert, retired chairman of Ameritech, Chicago, joins Lisle, IL-based Tellabs’ board of directors.
Appointments to Montreal-based Microcell Telecommunications’ board of directors: Bruno Ducharme, president of Telesystem International Wireless, Montreal, joins the board, as well as John W. Stanton, chairman of VoiceStream Wireless, Albuquerque, NM, and Robert R. Stapleton, president of VoiceStream.
David Neylon, former chief operating officer of LookSmart, San Francisco, becomes chairman of the board at Geoworks, Alameda, CA.
Armineh Noravian departs E/O Networks, Mountain View, CA, as engineering vice president to join Larus, San Jose, CA, as vice president of development engineering of its research and development facility, Vista Labs.
Doug Garber departs GTE Public Safety, Dallas, as senior product manager for public safety systems to join Global Dispatch Technology, Oklahoma City, OK, as vice president of sales.