Decom Systems Would Transfer SMR Mobile
Hoping to stop a stream of red ink that led to a $3-million net loss during the fiscal year ended Sept. 28, Decom Systems on Wednesday said it plans to transfer assets of a profit-draining partnership to a newly formed Atlanta-based company.
The proposed deal, announced at Decom’s annual shareholders meeting, calls for Decom Systems to transfer the assets of SMR Mobile Communications, a limited partnership managed by Decom since 1983, to Atlanta-based Digital Telecom Mobile Service Inc.
SMR Mobile Communications owns Federal Communications Commission licenses in 12 cities to develop systems that provide mobile radio-telephone and business radio services.
Digital Telecom would acquire SMR Mobile’s FCC licenses and equipment and assume the partnership’s bank debt and other liabilities.
San Diego-based Decom and its 42 limited partners would receive common stock in Digital Telecom under the proposed plan. In addition, Decom would receive preferred stock that would give the company initial equity of nearly $500,000. Decom has a 1% partnership interest in SMR Mobile.
Decom absorbed $2.7 million in non-recurring losses during a restructuring of SMR Mobile in the year ended Sept. 28, 1985.
Problems with vendor-supplied equipment and slow sales growth forced the restructuring, Robinson told about 50 Decom shareholders during Decom’s annual meeting Wednesday.
Robinson also suggested that Decom will enjoy increased revenues if the Digital Telecom transaction occurs. “We’ll concentrate on the technical aspects and Digital Telecom will focus on its areas of expertise--marketing and sales,” he said.
The sale of SMR Mobile Communications and continued growth in Decom’s aerospace business should return the company to profitability after a $3.9-million loss in 1985, Robinson said.
The company, which markets telecommunications instruments and systems used in the aerospace and land mobile-radio industries, reported a $170,000 profit for the first quarter compared to a $240,000 net loss a year earlier. Revenues grew 76% to $3 million.
