Doug Rink, President and CEO of Fortran Corp (FRTN) called into SmallCapVoice.com to discuss the recent news for the Company, the business models and markets for their subsidiaries, The New Telephone Company, Inc. B & L Telephone, LLC and Fortran Communications, Inc., the goals for FRTN in 2013, and much more.
Fortran Corp., is a leading communications system integrator through its subsidiaries, The New Telephone Company, Inc. B & L Telephone, LLC and Fortran Communications, Inc. Fortran Corp. is dedicated to designing, sourcing, implementing and maintaining today’s complex communications solutions for business and governments. Fortran services more than 3,000 clients in 2 states with 3 offices in the southeast. To learn more, please visit the Fortran Corp. website at www.fortrancorp.com.
Fortran Corporation Is On a Winning Streak
About Fortran Corporation
After a series of acquisitions that were not talked about much in the financial press, Fortran Corporation has finally arrived and caught investor attention with its recent acquisition of CCI Telecom. Fortran Corporation, a communication system integrator that operates through its subsidiaries, New Telephone Co. Inc., B&L Telephone and Fortran Communications Inc., stands to benefit from the synergetic alliance of different “product disciplines” and expansion of its client database.
An Intelligent Business Model of Multiple Small Scale Acquisitions
Fortran Corporation is a leading communication integration company with 3000 clients, some that feature in the Fortune 500 list, in two states with three offices in the southeast. To quote the company’s President and CEO, Doug Rink, it “represents a lot of hardware in the telecommunications space” for telecom companies like Avaya, NEC and Nortel. Primarily, that involves selling, leasing and maintaining telecommunication equipment in businesses, governments and quasi government agencies and in the healthcare and hospitality industries.
In its present avatar, Fortran Corporation has been in the communication business for the last six years and has adopted a business model of consolidation and growth through acquisitions. Basically, it offers an exit strategy to older, smaller companies by acquiring them.
The telecom business was primarily created by entrepreneurs and telephone executives who quit telephone companies during deregulation in early 1980s. At that point in time, the FCC had barred telecom carriers like AT&T from being exclusively telephone equipment, holding that it involved a conflict of interest. Thus, the telephone industry offered these older, smaller companies virtual monopolies for selling telecom equipment. Whereas their businesses have grown, so has customer demand. These companies and their management are however nearing their retirement ages today.
With the emergence of the internet based communications including Voice over Internet Protocol (VoIP) and the data industry growing the way it has, these mom-and-pop telecom companies are worried as they find it hard to service their clients. While these small companies still control their clients, most of them want to get out of the business and Fortran Corporation offers them a convenient escape route. It is a win-win situation – instead of building itself from scratch, it gets an assured clientele through these acquisition.
Acquisition Of CCI Telecom Inc And What Comes With It
CCI Telecom is an exceptional acquisition for Fortran Corporation. Firstly, it is one of those companies that wanted to remain with the business instead of getting out of it. Secondly, it has a lot more to offer than just its clients.
CCI Telecom was actually a local competitor that had many clients that Fortran did not control. Its list of 1,000 clients includes some Fortune 500 companies like Volvo and Aveda, CCI has fewer but high quality clients. Whereas Fortran was handling smaller clients, CCI Telecom’s clients include many with 100 and more telephone sets – clients that Fortran did not service in its local area. Additionally, Fortran Corp. was so impressed with CCI Telecom’s President, Todd Rankin, that it appointed him as its Chief Operating Officer (COO), in an effort to derive maximum benefits from the acquisition.
In the telecom business the entire talent is in the switching rooms and it is extremely critical for any company to have technical staff with expertise in handling available equipment. The success of the business depends entirely on ensuring that the switches keep working, day in and day out. The fact that CCI Telecom was already using Avaya equipment and had adequate technical staff to manage suited Fortran’s strategy of, as its CEO puts it, not trying to “reinvent the wheel”.
Mr. Rankin has been selling telecom equipment since the 1980s. In 1991 he started a payphone company, General Communications, which he sold in 1997. In 1993, he founded CCI Telecom and built it from scratch, first as a retail mobile telephone business and later as a telecom equipment business as well. In an interview, Mr. Doug Rink described him as a “100% telecom” person.
With Mr. Rankin, Fortran gets an experienced leader along with his team of technical experts that he built as head of CCI Telecom – the team that he has known and worked with for years.
The CEO and The Rest Of The Management Team
President and CEO Doug Rink is an acquisition specialist and has twenty years of experience as an entrepreneur in various fields – in real estate business and now six years in telecom business. As President and CEO, he is responsible for identifying acquisition targets and bringing deals to their logical conclusions. In his own words, his major qualification is that he has made a lot of deals during the course of his career as an entrepreneur.
In Mr. Richard Craft the company has an experienced financial officer, a local professional who has worked with a publicly traded company called Western Steer Mom and Pop’s Restaurant. He went into his own business for a few years, when one of Fortran’s investors referred him to the CEO. He has also worked with the company in its earlier acquisitions and handled the transactions related to it. He not only knows his numbers well, he is also good at it – financial recording and GAAP format and all that a publicly traded company needs to report. With the type of skills he has, the company is indeed lucky to have him.
2013 has been a good year for the company – it has been able to bring itself up through share exchange acquisitions and get its current information on to the pink sheets, followed by the CCI Telecom acquisition. It has made gainful acquisitions and believes that there are still lots of smaller companies in the industry looking for an exit route, and acquiring them can potentially provide Fortran Corporation the synergies it is looking for.
The company’s stated immediate goal is to prove that it has got a business model that is viable and to prove that it has the necessary skills to make deals. It already has an alliance with Windstream, a fairly large communications and technology provider, and intends to work towards building profitable relationships with carriers and customers.
By the end of this fiscal, the company hopes to move its financials up to the OTCBB. Additionally, it has plans to make one or two more acquisitions this year, ensuring at the same time that it does not move too fast in integrating new businesses. It intends to see how it goes there on and then finally move its financials to SEC status.
As Mr. Doug Rink puts it, the company is in a good spot and has lot of growth opportunities in the next two years.
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