Following a dismal second quarter financial performance that heralded an upper-management juggling act, Paging Network Inc. reported improved third-quarter results, with a net loss of $29.4 million, or 29 cents per share.
While this net loss is greater than the $21.9 million, or 21 cents per share, net loss reported during the same period last year, it is an upgrade from this year’s second-quarter report of a $50 million net loss, or 49 cents per share.
Much has happened in the world’s largest paging carrier business since then. Glenn Marschel, former president and chief executive officer, and George Perrin, former chairman, both were replaced by John Frazee on Aug. 5.
Shortly afterward, Leigh Alexander, former senior vice president of marketing and strategic planning, and Kenneth Sanders, former vice president and chief financial officer, also left the company.
Once at the helm, Frazee promised to turn the company around by focusing on its financial status and not so much on subscriber addition. “PageNet’s foremost objective is profitable growth,” he said after the third quarter figures were announced. “While we are still early in the process, our achievements in attaining free cash illustrate significant progress toward that objective as well as opportunities for continued improvement.”
In particular, the company recorded consolidated net revenues of $216 million; and consolidated earnings before interest, income taxes, depreciation, amortization and equity of $81.7 million. It also reported an addition of 469,721 pagers.
The net loss continues to reflect the VoiceNow disappointment, expenses from its international operations, and depreciation and amortization expenses of $12 million, or 12 cents per share.
But Frazee said his goal is far from complete, at one point defining the company as an 8-cylinder car running on only four, and with a flat tire.
“To refine this focus, we have begun an internal review of our operations and procedures, which are aimed at long-term creation of value for our shareowners, improved customer service and a better place to work.”
These changes include boosting training, developing an enhanced compensation program for all employees, including stock options, and developing new services and alliances with marketing and advertising firms that want to reach the company’s customer base with ad and promotional messages.
He also plans to double the sales force, combine PageNet’s five regional offices into one-focusing on promoting value of services rather than price-and establish a new management approach and philosophy that relies on “front-line” employees making on-the-spot decisions instead of the traditional hierarchical top-down approach.
“We will start implementing the results of this review soon, but expect that continuous improvement will be one of PageNet’s hallmarks,” Frazee said.
PageNet’s stock enjoyed a significant rally with other paging stocks in September. Its stock was up to $13.70 on Oct. 16, which dropped to $12.80 the day before the third-quarter financial announcement and rose to $13 the day of the announcement. At press time, PageNet stock hovered near $13.20.
