IdleAire ‘here to stay,’ turnaround specialist says
John Calabrese of turnaround management firm CRG partners told reporters at GATS that a new ownership group has the resources to lead IdleAire to business success. (The Trucker/Lyndon Finney)
The Trucker Staff
8/22/2008
DALLAS — Don’t sweat it, truckers. IdleAire, with its shore-based in-cab comfort system, is under new management and ready for business better-than-usual. The consultant guiding the company’s emergence from Chapter 11 bankruptcy told reporters Friday at the Great American Trucking Show that a lot of questions are still unanswered, but one thing is certain: Customers accustomed to getting air and heat, entertainment and Internet from the patented window unit can continue to pull in and plug in.
“The message I’m bringing here today is IdleAire is not going away,” said John Calabrese of turnaround management firm CRG partners. “IdleAire is here to stay.”
The new owners manage investment funds worth billions of dollars and have the resources to lead IdleAire to business success, Calabrese explained.
“They are firm in their support, they’re very enthusiastic and very experienced in managing situations like this, in investing in situations like this,” Calabrese said, adding the IdleAire concept is a sound one. “They believe not only that IdleAire has potential for fantastic continued growth, but that it can become a world class company.”
Calabrese, who has been retained to handle the ownership transition, said company headquarters would remain in Knoxville, Tenn., and that current employees — with the exception of some management positions — will be retained.
He said a search is underway for a new CEO with “very specialized experience.” The consulting firm over the next few weeks also will be developing a “comprehensive business strategy.”
On the plus side, IdleAire reported a recent record week, providing 49,000 customers with 483,000 hours of service — meaning a half million gallons of fuel saved — July 27 through Aug. 2. IdleAire also signed up almost 2,000 new members during that time.
According to filings with the Securities and Exchange Commission earlier this year, IdleAire losses came to $93.4 million in 2007, compared to losses of $60.2 million in 2006. And while basic and premium services revenue nearly tripled, growing to $31.8 million from $10.9 million the year before — along with a comparable surge in operating expenses — the bottom line net number reflected the cost of rapid expansion, and growing debt service.
The company also reported that its initial public offering — the attempt to raise capital through the sale of common stock — had been hampered “due to market conditions.”
Citing debts of $303.6 million and assets of $210.9 million, IdleAire Technologies Corp. filed its bankruptcy protection petition May 12. That filing also set conditions for the sale of the business.
IdleAire Acquisition Co. LLC, which includes some previous investors, agreed to act as the “stalking horse” in the bid process, offering a base amount of $10 million. It eventually won an auction with one other bidder. The reported price was about $26 million, including some assumed liabilities.
“The main thing we have to focus on right now is to continue to create a business that’s financially sound,” Calabrese said.