AirIQ Surpasses 25,000 Subscribers, Announces Operating Cost Reductions
AirIQ Inc. has acquired more than 25,000 subscribers from its three primary vertical markets: rental vehicle, commercial transport, and field service. The service revenue backlog relating to this subscriber base at June 26, 2002, was approximately $21.5 million.The company also announced a reduction of 25 employees, or 28 percent of its totalworkforce, as a result of:ï‚· Managementâ€™s decision to focus on acquiring larger accounts.ï‚· The maturity of its service delivery technology.ï‚· The completion of certain internal business automation projects.The staff reductions are effective immediately and will reduce annual operating expenses (in-cluding wages and other associated costs) by approximately $2.8 million. One-time charges related to the staff reductions total approximately $350,000, and will be booked in the third quarter. With previously announced reductions in operating expenses, the company has now reduced annual operating expenses by approximately $4.8 million.The company has further reduced cash requirements by changing to an equipment sales model. Typically, AirIQ secures client contracts for a 36- to 60-month term. Until now, AirIQ offered a bundled service model, which included the vehicle equipment and corresponding wireless airtime for a single monthly fee. To date, the company has used its cash resources to fund approximately $7.2 million in vehicle equipment and will further need to fund approximately $2.5 million in vehicle equipment related to existing contracts. The company has now implemented this equipment sales model and will no longer finance vehicle equipment from its own cash resources.