‘Survival’ Forces Cybertel to Sell Off Subsidiaries, Shut Another and Lay Off 30
Federal regulators loosened some rules covering stock repurchasing by public companies in an effort to stem a major sell-off on Wall Street last week.
Two such local firms were Applied Micro Circuits Corp. and U.S. Laboratories Inc.
AMCC, a designer and maker of high-speed optical chips used in network systems, said it was ready to buy up to $200 million of its stock, which is traded on Nasdaq under AMCC.
That could be a good deal of shares, given AMCC fell more than 2 points over the first three days when trading was resumed on Sept. 17. As of Sept. 19, it closed at $9.61, close to its annual low, and well off its 52-week high of $109.75. AMCC has a market cap of more than $3 billion and about 300 million outstanding shares.
“This repurchase program reflects the confidence our board of directors and management have in our country, our industry and AMCC,” said Dave Rickey, chairman and CEO.
U.S. Labs, also on Nasdaq, said it was ready to repurchase up to $1.5 million of its shares.
CEO Dickerson Wright said the current price of U.S. Labs was undervalued.
The company provides consulting services to the construction, energy, public works, defense, aerospace, engineering and architectural design industries.
U.S. Labs fared much better when trading resumed, initally falling to below $9.50 before regaining to close at $9.70 on Sept. 19.
– – –
Cybertel Sells, Lays Off Staff:
Cybertel Communications, a 5-year-old telecommunications service provider, said it sold off two subsidiaries, shut down another and laid off about 30 employees in a major reorganization aimed at survival.
“We and many other companies in this country are trying to deal with one of the worst economies in a long time,” said Richard Mangiarelli, Cybertel’s CEO.
Mangiarelli said the company cut its staff by 30 people over the last six months, and is operating with 17 people, all based in San Diego.
The sales of two subsidiaries, Telenomics and Like Dat Music, were to the original shareholders of those companies in a stock exchange for Cybertel’s shares. Cybertel, traded on the Over-the-Counter Bulletin Board at 13 cents on Sept. 18, near its 52-week low of 9 cents and well below the high of $4.50.
The other company, LDVL, which provided DSL services, was simply shut down, Mangiarelli said.
The staff and company moves reduced monthly expenses by 75 percent, but Mangiarelli declined to provide the dollar amount.
According to the firm’s latest SEC filing in May, Cybertel had monthly revenues of about $150,000, yet that was “insufficient to cover the monthly general and administrative expenses of about $200,000 monthly.”
Cybertel said it is concentrating on its main business of providing telecom services such as long distance, toll-free numbers and calling cards to affinity groups, or large trade associations or labor groups. It said it had contracts with five such groups and is in negotiations with several others with some 50 million members.
NextLeft Laying Off Staff?:
NextLeft, a Los Angeles-based consulting firm, with offices in Mission Valley and Downtown, declined to comment on an email purporting layoffs at the company.
Rich Harrison, vice president of marketing for NextLeft, said he would not comment on the email, and did not reveal the current or prior staffing levels.
NextLeft, which designs and develops Web sites and was founded in 1999, purchased two local high-tech firms last year: C14 Productions in April, and Systems Engineering Associates in June and operates from the two local offices.
According to Alexander X Publishing’s latest San Diego Technology Directory, NextLeft had 120 employees last year.
– – –
Online Goes Offline:
Online Asset Exchange, another local dot-com operating an Internet exchange for used industrial equipment ceased operations this month. The notice on its Web site cited current economic conditions for its demise.
OAE attracted more than $40 million in venture capital financing since its founding in 1999 including the likes of Sigma Partners Nomura Securities, and signed Lee Iacocca to its board of directors.
At its height, it had 122 employees and opened an office in Tijuana to attract business from Latin America. But by July it had reduced staff to 54. Despite efforts to restructure, chairman Frank Berlage and President Norm Bastin were unable to generate sufficient revenues to survive.
RFI Posts Profits:
RF Industries, a maker of coaxial connectors and cable assemblies, said it earned $326,000, or 8 cents per share, on revenues of $2.6 million for its third quarter ended July 31, compared to a net of $381,000 or 10 cents per share on sales of $2.3 million for the same period of 2000.
For the nine months, RFI reported net income of $821,000 or 21 cents per share on $7.4 million in sales, compared with $883,000 or 24 cents per share on sales of $6 million for the like period a year ago.
CEO Howard Hill said while the last quarter won’t match last year’s fourth, he expects it to be profitable, and annual sales will be 5 percent to 7 percent better than last year when it reported record sales of $8.9 million.
Send any high-tech finance news to mallen@sdbj.com or fax to (858) 571-3628.
