Telular Corp. is seeking a strategic partner to help it take advantage of the burgeoning fixed wireless market worldwide and, eventually, the U.S. personal communications services market.
“The opportunities we have identified outstrip our resources to fully exploit them,” said Dan Wagster, senior vice president and chief financial officer.
The Buffalo Grove, Ill.-based company builds fixed wireless products that convert wireline devices to work on wireless networks, whether they employ analog or digital technology.
Telular holds patents for the technology, the principal patent covering an interface between a standard telephone and a cellular transceiver. The interface provides dial tone and other signals usually provided only through regular wireline service.
In announcing its plans to explore new strategic opportunities, the 9-year-old company said it would consider a merger, sale of the company or sale of an equity investment to a new investor.
About 20 percent of Telular is held by Motorola Inc., which supplies Telular with transceivers. Motorola has access to Telular’s technology and Telular has preferred supplier status with Motorola.
Telular recently announced an agreement with Northern Telecom to develop and supply personal communications services-based fixed wireless subscriber terminals. The PCS 1900 products will incorporate technologies from both companies, Telular said. Products developed under this agreement are slated to be available in this year’s fourth quarter to PCS licensees for technical and market trials.
“We’re not just looking to raise capital, but an investor with human resources, facilities and development expertise. Opportunities are growing,” Wagster said.
Telular held an initial public offering in January 1994, reaping $56.4 million in proceeds. That money has been used to build manufacturing and distribution infrastructure, Wagster said.
Telular’s first public year was up and down, with its stock sliding from $24.50 to $6 on the NASDAQ stock exchange. Wagster said net loss figures have improved recently, with reports from this year’s second quarter ended March 31 showing a net loss of $4.06 million, or 17 cents a share, compared with a net loss of $7.16 million, or 32 cents a share, a year earlier. The company posted a six-month net loss of $8.93 million, or 38 cents per common share, compared with $12.36, or 59 cents per share, a year earlier. The reduction in net loss is due in part to increased sales, 75 percent of which are overseas.
“For the third consecutive quarter, each of our major international markets reported substantial growth in sales volumes, including Latin America, Africa, Europe and the Middle East,” said Richard Gerstner, Telular president and chief executive officer.
Telular reported having $27 million in cash as of March 31. The company said it has devoted a substantial portion of its resources to the successful defense of its patents and expansion of its intellectual property rights. Telular recently won a patent infringement lawsuit against two individuals doing business as Cellabs, a California partnership acquired by Alliance Research Corp., also of California. Some litigation with Alliance remains outstanding in a separate action.
Telular said it has recently received a nod from the U.S. patent office for a self-diagnostic system for use with the company’s fixed cellular products. “This feature has been specified as a requirement by telecom ministries in several wireless local loop programs,” said William De Nicolo, Telular founder and chairman. “Our invention provides Telular with a marketing advantage with which to compete for wireless local loop business, particularly in countries where we would not otherwise have patent protection.”
Telular has two wholly owned subsidiaries, Telular International Inc. and Adcor-Telular Security Products Inc., which provides wireless security backup services. Wagster said Telular is not considering the sale of Adcor.
