HighwayMaster Communications Inc. stock fell 50 percent to $1 the day after its board of directors and management expressed disappointment at the company’s operating results.
The company’s second-quarter earnings results, released the same day, disclosed a net loss of $14.1 million, or 56 cents per share, on net revenues of $17.7 million, compared with a 1997 second-quarter net loss of $6.6 million, or 27 cents per share, on revenues of $14.4 million.
Although the company saw its installed base of mobile units increase from 25,233 to 37,082 in the last year and a net increase of 1,628 units for the quarter, product shipments for the period were lower than expected. HighwayMaster shipped and recorded revenue on 2,714 mobile units in the quarter, compared with 4,758 during the corresponding period last year. This led to lower product revenue.
The company blamed these results on a slowdown of sales in the trucking industry and the lack of any major contracts. Also, the launch of the Series 3000 mobile units did not meet expectations.
HighwayMaster’s board and management said it plans to take action to reduce the company’s expenses and initiate an operational restructuring by re-evaluating every operational aspect and developmental project.
HighwayMaster operates a mobile communication system offering voice and data communications along with global positioning system location technology to the trucking industry. It has created one of the largest enhanced cellular networks through strategic agreements with several cellular and data carriers.
The company’s stock was priced at more than $4 in June, but fell incrementally to about $2.50 at the beginning of the month and landed at a dollar the day following the earnings report.
