Apr 11, 2008
IdleAire, losing millions, says its future is in doubt
By Andy Duncan
Truck-stop electrification pioneer IdleAire has reported to the U.S. Securities and Exchange Commission that its 2007 annual report, which will be filed late, will show losses that “raise substantial doubt as to the Registrant’s ability to continue as a going concern.”
While IdleAire is working with investment bank KPMG Corporate Finance and crisis-management experts Getzler Henrich & Associates to finance the company for the next 12 months, “there is no assurance that such plan can be executed on acceptable terms, if at all,” the company reported in its March 31 notice of late filing.
IdleAire, which has yet to turn a profit, expects to report a 2007 net loss of $93 million on revenues of $37 million, compared to a 2006 net loss of $60 million on revenues of $14 million, the company reported.
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“We cannot guarantee if, when or to what extent we will become profitable, or that we can maintain profitability if it is achieved,” IdleAire reported in its third-quarter statement.“Our stock is a highly speculative investment.” Since its founding in 2000, IdleAire rapidly has built by far the nation’s largest electrified-parking network, with 138 sites in 35 states, three-fourths of them in the TravelCenters of America chain (which since May 2007 includes all Petro locations). Besides electrical power, IdleAire hookups provide an Internet connection, satellite television and long-distance phone calls. The company’s network, however,“has not yet achieved widespread market acceptance,” IdleAire reported in November 2007, telling the SEC it would need “substantial additional funds” to continue its expansion and fund 2008 operations. The company subsequently announced Jan. 31 that it would cut 40 jobs. The typical IdleAire site costs $1 million for 65 electrified parking spaces, or $15,000 per space, according to SEC filings. So far, those costs have been subsidized by states, local governments and truck stops. From the company’s inception in 2000 through Sept. 30, 2007, IdleAire previously reported, it was awarded $55.6 million in government grants. |
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