The difficulties of the paging industry caught up with wholesale paging carrier PNI Technologies Inc., forcing the company into filing for Chapter 11 bankruptcy protection in the U. S. Bankruptcy Court for the Northern District of Georgia.
PNI said it had hoped to restructure its debt either in connection with a strategic transaction or on a stand-alone basis-the company said it was negotiating a potential merger with a “third party”-but was forced into filing for bankruptcy. PNI said it had to fire 50 percent of its employees, which numbered just over 50 in its last reported count.
Mark B. Jones, the company’s new president and chief executive officer, said he could not disclose who the third party was and could not comment on whether merger talks are continuing. Jones said the company had not yet filed a plan of bankruptcy reorganization, a crucial move for bankrupt companies hoping to emerge from bankruptcy.
As part of the bankruptcy move, Mark H. Dunaway, PNI’s former chief executive officer, and Kathryn Loev Putnam, the company’s former chief financial officer, agreed to step down as part of a cost-saving measure. Jones moved from vice president of legal affairs to president and CEO to manage the company during its bankruptcy reorganization. Dunaway will continue as chairman of the board and Putnam will continue as a member of the board.
PNI is the latest in a series of paging carriers to succumb to bankruptcy. PageNet, TSR Wireless L.L.C. and most recently WebLink Wireless Inc. all filed for bankruptcy, citing spiraling revenues sparked by falling subscriber numbers.
PNI’s story is much the same. In its quarterly filing with the Securities and Exchange Commission in May, the company said its revenues for the three months, ended March 31, 2001, dropped more than $1 million during the course of a year, from $3.9 million to $2.7 million. The company said the drop was in large part due to its network services business, which lost more than 100,000 subscribers during the year, from 495,476 in March 2000 to 381,537 this year. In addition, the company’s average revenue per unit dropped from $1.94 last year to $1.83 this year, numbers that are startlingly low even for a paging carrier.
In an interview with RCR Wireless News early this year, PNI executives said the company was placing much of its hope for the future on its newly released networking products, including the iTerminal desktop messaging terminal and the Platform1 high-speed modular switch. However, due to the company’s limited number of employees, sales of the products dropped from $69,000 in 2000 to $35,000 this year, according to SEC filings.
PNI, formerly Preferred Networks Inc., got its start providing unbranded, wholesale one-way messaging network services on the East Coast.
