Follow-Up File: Tracking firm turns profit for first time

February 26, 2011 

Name: Cliff Henley

Job: Chief executive officer and founder

Business: Fleet Management Solutions Inc.

What he said then:

In January 2010, The Tribune reported that Fleet Management Solutions Inc. in San Luis Obispo was being acquired by British-based Trafficmaster.

The local company makes mobile tracking devices and software that allow military, logistics, mining and energy operations to track follow vehicles using satellite global positioning systems.

“One of my mandates was that the company and people stay in San Luis Obispo,” said Cliff Henley, who founded FMS in 2002 with his wife, Colleen Henley. “Looking ahead, I predict we’ll continue to ramp up quicker than we have in the past, especially with the additional working capital and resources.”

FMS posted a $1.6 million loss in 2008 and a small loss in 2009 with about $5.7 million in revenue. Its largest contract was with the Department of Homeland Security to outfit 4,500 vehicles with its tracking systems for more than $20 million.

Henley expected FMS employment to increase from 26 workers to about 36 during 2010. The new parent company had more than 500 employees.

The acquisition deal included a $6.9 million upfront payment and $350,000 in stock, plus up to $6 million based on FMS performance over two years. Henley agreed to remain as CEO at least that long.

What he says now:

FMS reported a profit in 2010.

“It was the first profitable year since our inception,” said Henley. “We were in the black by a comfortable margin. Due to our growing subscriber base, we are extremely confident that FMS will sustain profitability going forward.”

He can no longer release revenue figures, but did say there was a 55 percent increase in 2010 compared to the year before.

Revenues would have more than doubled, he added, but only 2,123 of the systems ordered by Homeland Security were shipped and installed. Those accounted for 30 percent of FMS’s income last year.

With the 2011 federal budget stalled in Congress, the remaining systems sit in a warehouse waiting to be shipped once one is passed.

Orders remain strong from companies involved in gold and copper mining, oil, natural gas and cross-border supply in war-torn areas such as Afghanistan. FMS products and services are used on six continents.

So far, its employment has gone down slightly as departments such as human resources, accounts payable and accounts receivable have moved from San Luis.

Those functions, along with shipping and quality assurance, have been been relocated to sister offices in Dallas and Garden Grove.

As head of human resources, Colleen Henley was one of those dismissed in the spring. She’s spending more time with their teenage children and assisting with her parents’ commercial holdings.

FMS now has 24 employees. Starting in the second quarter, it plans to add six to eight more this year in marketing, sales, technical support and development.

While Cliff Henley prefers to hire locally, the jobs will be advertised within its parent and sister companies first.

“The competition is pretty fierce,” Henley said. “It’s tough to hire here, as we compete with other technology companies searching for similar candidates. We definitely hunt locally, but we’re going to get résumés from all over the world.”

— Raven J. Railey

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