Wireless Facilities Inc. Secures
$35 Million in Equity Investment
HNC Software Inc. cut 75 people from its staff, including 22 in San Diego, “in response to deteriorating economic conditions.”
The San Diego-based software maker reported a net loss of $6.5 million for the third quarter on revenues of $59.1 million, compared to a net loss of $78.5 million on revenues of $77.8 million in the like period of last year.
For the nine months ended Sept. 30, HNC reported it lost $28.4 million on $172 million in revenues, compared to a net loss of $110.8 million on revenues of $200 million.
The latest results excluded the sales from Retek, an HNC subsidiary that was spun off as a public company last September. The net loss was caused mainly from the operational loss at Retek and the cost associated with spinning it off.
HNC has 1,121 employees, of which 463 are based at the firm’s headquarters in San Diego.
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Solid As Oak:
Wireless Facilities Inc. said it obtained $35 million in equity investment from an existing investor, Oak Investment Partners, a venture capital firm based in Palo Alto.
With the additional investment, Oak will own about 12 percent of Wireless Facilities. The VC firm was the largest source of pre-public capital to the company, which provides telecommunications outsourcing services. The capital infusion will come from the sale of preferred stock at $5.50 per share.
Following completion of the preferred stock sale, Bandel Carano, a managing partner for Oak Investment Partners, will take a seat on WFI’s board of directors, a seat he previously held for about two years ending in June.
President Tom Munro said the funds will be used for general corporate purposes.
WFI, which is traded on Nasdaq, like many other companies in the telecom industry, has been in a retrenchment mode. For the first six months of this year, it lost $46.8 million on revenues of $107.4 million, compared to a net profit of $13.7 million on revenues of $102.8 million for the like period of 2000.
After one of Wireless Facilities’ customers, Metricom, filed for bankruptcy in July, the company set aside the entire amount that Metricom owed, $13.6 million, in its reserves, which accounted for part of the firm’s quarterly loss.
Wireless Facilities has about 150 employees at its headquarters office in Sorrento Mesa, and about 1,800 worldwide. It closed at $6.25 on Oct. 18, and its yearlong range is between $3.31 and $66.
TruCost Food Systems Buyout:
A group of six investors, led by founder Bill Lewis, conducted a management buyout of TruCost Food Systems, a San Diego-based firm that acts as a food buying aggregator for restaurants.
The buyout was initiated this month after Mission Ventures, which pumped $7 million into the startup, decided it couldn’t keep the company in its portfolio. Mission will retain its minority ownership in the firm.
“They were scrubbing their portfolio and wanted to limit their exposure,” said CEO Paul Thiel, who took the job in July.
Thiel said the company began about two years ago as a pure information company that collected and provided current prices on food to members. Today it uses the price data it gathers to negotiate better deals for a group of 102 restaurants. The company acts as an aggregator, and never actually buys or distributes the food to members.
To arrange the buyout, six investor partners raised about $100,000. Together with existing revenues, this should be sufficient to carry the company until next January, Thiel said.
In conjunction with the buyout, TruCost cut its staff from 22 employees to seven people.
Besides the local food aggregation business, TruCost also operates a national outsourced purchasing line that has one customer at this time, a New York-based chicken restaurant chain called Ranch1.
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Magis Realigns Itself:
Magis Networks, a San Diego-based high-tech that develops chipsets for wireless networks, said it conducted “a minor realignment,” but declined to divulge the number of jobs it cut or the current staffing levels.
“It was a minor reduction in staff, but we continue to hire in other areas,” said spokeswoman Brigette Engel.
The 2-year-old startup recently took over a three-story building in Del Mar Heights at 12651 High Bluff Drive where it previously leased a single floor.
Magis obtained $11 million first round venture funding in the middle of last year from Vulcan Ventures Inc., Bay Partners, and Crescendo Ventures.
Siemens Spares San Diego:
Siemens AG, Germany’s largest electronics and engineering company, said last week it would cut some 7,000 jobs in unprofitable business divisions, but those cuts won’t affect its San Diego operation, said spokesman Jacob Rice.
Siemens Information and Communication Mobile North American headquarters in Rancho Bernardo, which was established last year, has about 200 employees. The division is engaged in research and development of mobile phones.
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Xifin Closes Venture Round:
Xifin, Inc., a Carlsbad-based service provider of financial management tools for clinical laboratories, said it closed a $6 million second round of venture funding.
San Diego-based Windward Ventures led the round, which also included Enterprise Partners and Boulder Ventures. The company will use proceeds to strengthen its sales, marketing and installation resources.
CEO Lale White said the fact that Xifin was able to attract continued investment during a down-market is further validation of its business.
“With over four years in development and new funding we’re well-positioned to aggressively introduce the first new approach to billing management for clinical laboratories in over 10 years.”
Xifin has attracted a total of $12 million in VC funding since its inception.
Merchandising Avenue Seeks $5M:
Merchandising Avenue, a San Diego based firm that provides merchandising software and services to companies selling via the Internet, said it plans to raise $5 million in a Series C round over the next six months that should take it to profitability. The company also said it hired Court Shannon as its CEO and president.
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