Top Hal-Rad Executives Resign After Reports of 4th-Quarter Loss
The president and all but one director of Hal-Rad Communications Inc. have resigned amid disclosures that the Orange-based telecommunications company, which is involved in a complex series of acquisitions, will post a significant fourth quarter loss.
A 20% share of Hal-Rad, currently owned by a large Canadian electronics company, is being acquired by American Dominion Group Cos. of London--which has placed five of its officers on Hal-Rad’s new board of directors.
At the same time, Hal-Rad, under its new management, is preparing to acquire a Northern California telecommunications firm as part of a major expansion drive. Hal-Rad expects to lose “several hundred thousand dollars” for the quarter ended Dec. 31, according to George Mainas, the company’s new president. Mainas replaces Clarence Long, who also served as chairman and chief executive officer of the small company.
The company’s new management said that the anticipated loss resulted from “general inactivity of past management” and from discontinued items and write-downs of unspecified items. During the fourth quarter of 1984, Hal-Rad had a net loss of $100,000 on revenues of about $9.5 million.
The changes in the board of directors are due, Mainas said, to United Kingdom-based American Dominion Group Cos.’ acquisition of Hallicrafters Co. of Vancouver, Canada. The U.S. arm of Hallicrafters owns 20% of Hal-Rad.
Five of Hal-Rad’s new directors, including its interim chief executive, Patrick N. Di Carlo, are officials of the American Dominion Group Cos.
Despite American Dominion’s heavy involvement in the company, Mainas--who was involved in the telecommunications industry in San Francisco for the past two decades--said no plans exist for the British company to increase its stake in the firm beyond what it will gain from the acquisition of Hallicrafters.
The new board members and the two new top officers of Hal-Rad are preparing for a major expansion of Hal-Rad’s business, Mainas said. That expansion will be fueled by an immediate $1-million line of credit from American Dominion and will include the acquisition of a Northern California-based long distance carrier with “some $15 million” in annual revenue.
Mainas would not disclose the name of the company that Hal-Rad plans to acquire but did say that a memorandum of understanding had been signed and that final agreements would be signed within 30 days.
“With the changes and the funding American Dominion has made available to Hal-Rad,” Mainas said, “we are going to continue in this business and get into the international distribution of telecommunications service and products.”
Mainas said that Hal-Rad would act as a marketing arm for Hallicrafters, selling its products, services and proprietary telecommunications equipment.
“It’s envisioned that Hal-Rad can be the vehicle to present those (products) to the marketplace,” Mainas said.
The company, which Mainas said employs 100 people, was incorporated in Reno seven years ago and went public in 1984. Mainas said that Hal-Rad has 12.5 million shares of common stock outstanding and that the stock closed Wednesday at $1.10 per share.