Comm is going private; stock takes hit
Orem company
By Bob Mims
The Salt Lake Tribune
Article Last Updated:11/10/2006 11:37:45 PM MST
Q Comm International, struggling to find ways to trim its operations costs, announced Friday it is leaving the American Stock Exchange and pulling its registration with the Securities and Exchange Commission.
The Orem-based provider of such prepaid services as wireless airtime and handsets, phone and debit cards and Internet stressed the decision was voluntary. Q Comm plans to formally file documents implementing the withdrawals Nov. 21. The last day its stock appears under the "QMM" ticker symbol should be on or about Dec. 1.
Q Comm expects to save big by abandoning the steep accounting and legal fees and other costs associated with maintaining a listed stock. For a company that reported a $1.4 million, or 20 cents per share loss on revenues of $12.4 million during the third quarter, the expected savings could be a big step toward eliminating the red ink on its ledgers, said CEO Michael Keough.
"After a detailed financial review, we made the decision to withdraw our shares from listing and registration and take the company private based on our firm commitment to reach breakeven in the near-term," he said. "Public companies large and small have pursued this option based on the increasingly onerous costs associated with being a public company in today's regulatory environment."
The news hit investors like a thunderclap. The stock - trading under the AMEX ticker symbol
QMM, had traded at $3.55 per share a year ago and just a shade under $2 in late August - closed at 26 cents, down 23 cents and 47 percent.
Just how much does it cost Q Comm to operate publicly? Keough said the price tag "easily comprises 20 percent of our annual cash-based expenses," or about $1 million a year. Without that drain, he predicts Q Comm will at least be on the threshold of profitability before 2007 comes to a close.
The delisting and deregistration also means Q Comm will not be required and no longer plans to hold a previously scheduled teleconference Monday to formally discuss its third-quarter performance. As a privately held company, it also will not be required to file earnings reports with the SEC - though the company says it will continue to regularly communicate with its investors.
The process of going private typically involves the repurchase of all outstanding stock by a company's employees or private investors. QMM had 6.9 million outstanding shares it had as of June 30, the date of its last full quarterly report to the SEC.
However, Keough said that because Q Comm has only a small number of individual stockholders - less than 300 - there will be no complex share repurchase plan implemented. Instead, shareholders are welcome to remain invested in the company and are free to sell their stock privately, if they wish.
Shareholders with questions about the decisions are urged to call Q Comm's investor relations department at 203-682-8208.
bmims@sltrib.com
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