Metro One in financial straits
The firm is scheduled to take over Hawtel's 411 service this month
Metro One Communications Inc., scheduled to take over Hawaiian Telcom's directory assistance services later this month, says it had only $12 million in cash at the end of 2006 and may not be able to survive unless it is successful in raising additional financing, according to a 10-K filing Monday with the Securities and Exchange Commission.
The Beaverton, Ore., company, which already has a call center in Hawaii, has lost money each quarter since the first quarter of 2003. Overall, it lost $19.2 million in 2006 and $39.8 million in 2005.
In the filing, Metro One said its $12 million cash balance "will not likely be sufficient to fund operating and other expenses for the next 12 months or until we reach profitability."
The company said if it can't obtain adequate financing, it may be forced to sell assets or further reduce expenditures, and may not be able to pursue all of its business objectives.
Hawaiian Telcom said yesterday it has plans to ensure uninterrupted directory assistance service if Metro One has problems fulfilling its contract.
"We will be closely monitoring Metro One's financial status and act as needed," said Ann Nishida, senior manager of corporate communications for Hawaiian Telcom.
She said that cutover to Metro One is to be done incrementally in phases through the end of this month.
Hawaiian Telcom said last month it wanted to outsource its directory assistance and redirect resources toward the further expansion of its Internet and video services. In doing so, the company notified 36 employees that their jobs were being eliminated.
The company said at the time that it will continue to provide call completion services internally, including collect calls and operator-assisted calls, and would not change the way it treated directory assistance in its billing packages.
Hawaiian Telcom said the move would eliminate the need for costly equipment and software upgrades, save the company 20 percent and better position it for expansion of more lucrative services.