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SiriCOMM’s
technology platform incorporates both software applications and broadband network
infrastructure for the commercial transportation industry
Prepackaged Software
Communications
(SIRC-OTC BB)
SiriCOMM, Inc.
2900 Davis Blvd., Suite 130
Joplin, MO 64804
Phone: 417-626-9961
Henry P. Hoffman
Chairman, President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
July 28, 2005
BIO:
Henry P. (Hank) Hoffman
SiriCOMM, Inc.
Mr. Hoffman co-founded SiriCOMM in January 2000 and has been President, CEO and Chairman
since its inception. Mr. Hoffman has over twenty years experience in the
transportation industry ranging from frontline supervision to executive leadership.
Prior to the formation of SiriCOMM, from 1996 to 2000 Mr. Hoffman was President and Chief
Operating Officer of Hook Up, Inc. of Joplin, Missouri, a specialized motor carrier
serving the heavy-duty truck OEM market. From 1990 to 1995 Mr. Hoffman was President
and COO of Tri-State Motor Transit, the nation’s largest transporter of munitions and
nuclear materials for the U.S. Government.
Prior to
his term at Tri-State, he served in several operations and management positions with both
Schneider National, Inc. and Viking Freight System. As an industry leader he has been a
Vice President of the American Trucking Associations, President and Chairman of the Board
of the Munitions Carriers Conference of the ATA, member of the Board of Directors of the
National Automobile Transporters Association, and Forum Co-Chairman of the National
Defense Transportation Association. Prior to his trucking industry career, Mr. Hoffman
served as an officer in the United States Army for six years where he completed two
command assignments. Mr. Hoffman earned a Bachelor of Science degree from the United
States Military Academy, West Point, New York and a Master of Business Administration from
the University of Wisconsin, Oshkosh, Wisconsin.
Company Profile:
SiriCOMM, Inc. is a provider of nationwide broadband wireless software and network
infrastructure solutions for the commercial transportation industry and government market.
The Company has a vertically integrated technology platform incorporating both software
applications and broadband network infrastructure and access. The vertical-specific,
enterprise-grade software solutions are designed to help significantly increase
profitability, reduce operating costs, improve productivity and operational efficiencies,
enhance safety, and strengthen security for businesses of any size and, to the extent
applicable, government. The Company's unique, commercial-grade private network solution is
built for enterprises and integrates multiple technologies to enable an ultra high-speed,
open-architecture wireless data network for its software applications and Internet access.
The Company believes that its vertical-specific software, network technology, deep
industry relationships, and low cost of operations can represent significant value to the
commercial transportation industry and the government market.
CEOCFO: Mr. Hoffman,
will you tell us about your vision when you came to the company and how that has developed
under your leadership?
Mr. Hoffman: “The vision has remained unchanged. We
began the business in 2000, with four key points in mind related to serving the interests
of the commercial trucking industry. We wanted to help motor carriers drive down their
operating costs, help them improve their productivity, increase safety and enhance their
security. That continues to be our driving force today. However, we have made some changes
along the way that we think are an improvement to how we are delivering upon that mission.
These include some technical improvements as well as several strategic partnerships.”
CEOCFO: How are you
accomplishing the goals, and what are you providing for the trucking industry?
Mr. Hoffman: “The trucking industry was deregulated in
1980. Although the demands for trucking services continue to go up year over year, one of
the interesting things about trucking is that since 1980, the inflation-adjusted revenue
per mile has actually dropped about 40%. The resultant downward pressure on freight rates
from competition in the industry has been tremendous. By and large during that period
motor carriers have done a great job of getting their operating costs in place. To a large
extent they have done that by “squeezing” their vendors very hard. However,
there is not much squeeze left for the vendors. SiriCOMM started its business
understanding the need to drive down cost and improve productivity. We believe that with
our software solutions, we can find new places for people to improve their business
models. We started out purely as a software company. Over time our clients told us very
clearly that they needed to have their software solutions operating over a wireless
network so that they could involve their drivers in improving their business models. We
began testing our first generation software products on existing wireless networks. We
found that when using terrestrial landlines connected to Wi-Fi, existing cellular networks
or other available technology, we did not have the combination of bandwidth, coverage and,
in particular, price that would be acceptable. That is when SiriCOMM made the decision to
go about developing its own network system. We developed a satellite-based broadband data
network that is designed specifically for the trucking industry.”
CEOCFO: What are you
actually selling to your customers?
Mr. Hoffman: “We have four principle products at this
point. The first product named “InTouch”, which we have already launched, is an
Internet service. We are installed at all 260 of the Pilot Travel Centers across the
country; Pilot is the largest truck stop chain in the country. We have begun installation
at the PrePass weigh station sites along the highways all over the country as well.
Drivers connect to the Internet at these sites via conventional Wi-fi. The second product
is a suite of applications that we call “Beacon”. Once we have a substantial
number of PrePass sites in place, we will begin to offer the Beacon service. The
applications include a Digital Freight Bill with signature capture so that clients can
expedite their payables. The software suite also includes a Digital Logbook so that
trucking companies will be able to be in compliance more readily with the Federal
Department of Transportation regulations. In addition, there is a Driver’s Pay
Settlement, a Fuel Management System and several other productivity applications. We have
designed all the applications in such a way that they can be customized by fleet customers
and we enable each fleet to develop their own proprietary applications as needed. The
Beacon suite of software is a turnkey product and for a single price the fleet receives
the client device, network connectivity and the full suite of applications. The third
application, “Pulse”, is a device that SiriCOMM co-developed with a partner
company. When connected to the Engine Control Module on a truck, it passively extracts
vehicle diagnostic data and GPS data from the truck and transmits it wirelessly across
SiriCOMM’s network. What differentiates Pulse from the competition is the low cost of
the network and its high bandwidth. Current systems deliver the data periodically, usually
once or twice a week at best. Our network can provide the maintenance and GPS data
multiple times per day at a lower cost. The fourth application is one that we have
developed in partnership with a company named “Idling Solutions”. They have
built a battery pack that replaces the starting batteries that come standard on all trucks
and couple it with an auxiliary cooling and heating unit. SiriCOMM is the exclusive
provider of wireless data services for Idling Solutions. Our services are for two
purposes; first, to ensure that the battery pack is functioning properly and within
warranty specifications. The second and more important reason is that the data we extract
from each truck enables Idling Solutions to file for mobile source emissions reduction
credits on behalf of the mobile carriers.”
CEOCFO: How has the
trucking industry responded to your offerings so far?
Mr. Hoffman: “They have responded very favorably. As an
example, we are installed in the largest truck stop chain in the country; Pilot Travel
Centers is a wonderful partner. We also are doing beta testing on some projects with
several large fleets that have grabbed onto the idea of connecting their vehicles and
drivers using broadband. Our newest installation partner, PrePass, is a company that
provides weigh station services. Being connected with PrePass not only provides services
for their over 300,000 truck subscribers, but it will also offer subscription services to
the nation’s highway law enforcement officials who work at those weigh stations. The
uptake at this early stage has been good.”
CEOCFO: What is the
market opportunity for SiriCOMM?
Mr. Hoffman: “We think it is a tremendous opportunity in
the trucking industry. About four million trucks operate in North America. The demand for
truck services is growing everyday. The demand for truck services is actually growing
faster than the expansion rate of the economy. Trucking is receiving a disproportionate
share of the freight because it is an efficient mode of transportation. Our vision goes
far beyond the applications that I described to you. It is an expanding industry but it is
also an industry that has some problems. The single biggest problem is that the labor
force available for trucking is shrinking. The driver turnover rate, according to The
American Trucking Associations, is about 120% per year, which is just a shocking number.
People come into the industry and leave or change jobs frequently. It is difficult for
carriers to retain their drivers for multiple reasons. We believe that one of
SiriCOMM’s missions in the long run is to help the industry by connecting drivers to
distance learning programs. We believe that SiriCOMM will lead the industry in converting
truck drivers into knowledge workers. The drivers today are more qualified and educated
than ever. They are drug free. However, truck fleets are not spending much money on
training. We believe that delivering inexpensive distance learning is going to be one of
the biggest opportunities for both trucking and SiriCOMM. Because truck drivers have
direct control of about 85% of operating costs but are constantly moving and seldom at
fleet headquarters, distance learning will be the key to trucking companies’ future
success.”
CEOCFO: Will you tell us
about the financial picture at SiriCOMM?
Mr. Hoffman: “SiriCOMM is a publicly traded company. We
completed the development work on the network infrastructure on our third generation
software. About a year ago, we began the installation of the first phase of our nationwide
network, and completed it at the end of the year. We launched our InTouch ISP service in
January, so we have only been generating revenues for a few months. In the initial months,
we were only able to do credit card subscriptions to individual driver customers. Pilot
Travel Centers completed its cash point of sale system in June and that is having a
positive impact on our sales.”
CEOCFO: In closing, why
should potential investors be interested and what should they know that they might not
realize when they first look at the company?
Mr. Hoffman: “We are like two companies in one; we are
not only an applications services provider but we are also a network provider. First, our
application service provider package and the growing list of partners that will also
launch their applications on our network are services needed desperately by the trucking
industry. Motor carriers recognize the need to find new sources of cost reductions and
productivity improvements in their business models. I think there is a huge demand for
those services. Second, we developed a network that is specifically designed for the
commercial transportation industry to support our software applications. However, we also
recognized that there are opportunities in other vertical markets not necessarily related
to the commercial vehicle industry. SiriCOMM’s unique network design uses server
technologies that allow us to take advantage of the best characteristics of satellite
multi-cast data communications and mitigate all of the worst characteristics. That has
enabled us to have broadband communication at a very reasonable price and that can be
installed rapidly. Moreover, we do not have the maintenance and support problems that are
typical to some terrestrial landlines installations.”
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