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This article by Barbara Fox was prepared for the September 17, 2003 edition of U.S. 1 Newspaper. All rights reserved.
From the Ashes, Happy Ending
On Monday Greg Lazzaro and Stephen Cooper had good
jobs with six figure salaries. On Tuesday, without warning, the company
This frightening and too-familiar story has an upbeat ending, because
on the very day the two men were laid off from PCR, they launched
their own firm. Six months later their equipment rental business,
Technology Resource Corporation, is profitable. Lazzaro and Cooper
say they are happy, much happier than they were before they were fired.
"It was scary for us, and for our top managers who made good money,
instantly to be without an income and no severance," says Lazzaro,
32. His wife was pregnant with their second child when the company
closed. Cooper, 33, is the father of two children under three. "We
all liked what our families had been accustomed to. All of us had
at least an eight-year tenure. We had been doing this for forever,
so long that we couldn’t let it go. We saw the opportunity, and it
was a no brainer. The second day after we launched Technology Resource
Corporation, we knew we would be successful."
Technology Resource Corporation (TRC) was born when PCR (Personal
Computer Rentals) closed on March 4, 2003. At one point in its history,
PCR had been a profitable division of Interpool, the public company
on College Road East. But in 2003 PCR was a separate company, and
Interpool was PCR’s bank and lender of last resort. When Interpool
pulled PCR’s line of credit, PCR could not continue.
That first week after PCR closed, Cooper stayed in the College Road
offices working with one foot in each camp. On the first day he persuaded
the technicians not to put down the tools but to stay on and fulfill
the old contracts. "I was the one who had to pull the trigger
on a lot of people, but I told the workers, `PCR can’t pay you, we
will pay you. You need to take care of those customers first and foremost,’"
says Cooper. He also hired the new executive team. " We took the
top sales people and top project managers, saving some big jobs.
"We made a pretty seamless transition," claims Cooper, who
says the new firm fulfilled every contract and paid every person.
"We had a lot of balls in the air, a lot of contracts to be fulfilled,
and we scrambled. We were salvaging the customers they were going
to try to collect from."
For PCR, Cooper says he had to empty out the offices, liquidate some
equipment, and marshal the rest into a few warehouses. For TRC, he
encouraged former employees to go into business: "I told the managers,
`If you want to continue in the business, buy yourself some equipment
and open up your shop, and we will be happy to use you as a vendor.’
We told our former competitors, here are the names of the good people
we know, and you can buy up the inventory."
The pair also went looking for money, space, and health insurance.
Within three days they had financing from Roma Savings Bank (though
they have never tapped the loan). Lazzaro can’t say enough good things
about Roma: "Everyone from the bank listened to our story. They
capitalized the company to support us through the growth period, and
we will be a longstanding customer there."
Within a week they had opened their office at Princeton
Commerce Center on Emmons Drive, and before the month was out they
had signed up for a full, company-funded healthcare program.
"PCR’s closing left me and everyone in this company far better
off than they were before," says Cooper. A native of Hamilton,
Cooper’s father had worked for General Motors. At Rider, majoring
in business administration and marketing, he learned formal business
planning, but he says that it was even more valuable to learn how
to juggle multiple tasks.
Before Cooper graduated from Rider in 1992, he had been recruited
to Microtech Leasing by Allen M. Olinger. Olinger was president of
Microtech Leasing, a long-term leasing company, and Gregg Carpene
was general counsel. The related company, PCR, did short leases for
workshops and conventions.
"We were leasing to venture capital backed companies that wanted
to conserve cash, so financing the equipment still made sense,"
The majority owner of Microtech was Interpool, the public company
whose core business is truck chassis and shipping containers. "The
computer leasing business was different then," explains Cooper.
"The technology jumps were more exponential, and the computers
cost 10 times the money, so leasing was a big deal, like cars are
now. A lot of Microtech’s clients were PCR rental franchises who were
leasing the equipment for the long term and renting it short term.
They made the money, paid it off, and kept the gear."
Cooper’s first Microtech job was to repossess equipment from a defaulted
account in Philadelphia. He started a branch in Philadelphia, and
in the 10 years that followed, he had his hands in every facet of
the business, which he now says was equivalent to an MBA. As a regional
manager, Cooper moved to Florida. Ironically, his wife’s parents had
just moved from South Brunswick to be with their grandchildren when
PCR closed, so he is commuting, going home two weekends a month, to
keep the family with the grandparents through the holidays.
Lazzaro had been hired by Cooper to start the Pittsburgh franchise
in 1992. Lazzaro had grown up in Pittsburgh, where his father worked
two blue collar jobs, and he lives with his family in Princeton.
Around 1996, according to Carpene, the franchisees of PCR rolled up
the business, bought the franchiser, and made a single entity of PCR.
Microtech (and its investor, Interpool) wound up with an equity interest
In 1999 Interpool bought a 51 percent interest from the former franchisees
of PCR, provided some financing, and PCR became a subsidiary of Interpool,
says Carpene. A Metuchen native, Carpene graduated from Dickinson
College in 1985 and studied law at Rutgers. In 1997 he left a Philadelphia
law firm, Cozen O’Connor, to be corporate counsel at Microtech. (Carpene
is now corporate counsel for Interpool, and Olinger is a consultant
In its heyday, PCR had 30 offices, 325 people, and 2,000 clients.
Then came a decline in both businesses. The basic price of computers
dropped, more convention exhibitors used laptops instead of hard-to-manage
monitors and hard drives, and the venture capital market softened.
PCR tightened its belt. "The amount of money being thrown at the
companies was less. Around 2000 a decision was made that we would
focus all of our efforts on PCR and wind down the leasing business,"
Carpene says that PCR really began to feel the downturn
in February, 2001, but both businesses were still solvent. In 2000
PCR had netted $700,000, and Microtech showed profit of $500,000,
according to Interpool’s SEC filings.
Anticipating that the rental business would not grow, the officers
at PCR decided to diversify. "We started a services division to
provide technical services in the form of local area networking, wide
area networking, and cabling. We were utilizing the people who were
setting up the rental equipment to bring in a new revenue stream for
pure services," says Carpene.
Lazzaro and Cooper now say that moving into the computer services
business was PCR’s downfall. "It took a tremendous amount of capital
on the front end," says Cooper.
"At the end of the day, this is a blue collar business, and the
company was run with far too much overhead," says Lazzaro. "Better
than 50 percent of the technicians were on staff to ramp up the services
business that never came. The PCR staff lost faith in the management."
But Carpene says the plan could have worked: "Our plan had been
to maintain the rental business to help fund the services business."
Then came September 11, and the fallout from that devastated PCR’s
bread and butter business, conventions. September and October are
the biggest months for conventions and trade shows. "We had significant
contracts with national companies, but when 9/11 happened, it caused
a deceleration in our rental revenue and we needed to accelerate the
growth of our services business," says Carpene.
That year PCR lost $1.7 million, according to the SEC filings, and
Olinger and Carpene mustered their resources to try to save the business.
On December 31, 2001, together with some other investors, they bought
PCR for just over $3 million, including $640,000 in cash, and the
rest in a loan. Interpool held the nine-year note and provided a credit
line. Interpool also paid PCR $792,000 for 100 percent ownership of
Microtech, which had lost $200,000 in 2001. As Interpool continued
closing down Microtech in 2002 it wrote off losses of $12.5 million,
according to the filings. Meanwhile Interpool was involved in some
very complex audits (see story below). That may have influenced its
decision to completely rid itself of the exposure to computer leasing,
a business that it saw as nonstrategic, risky, and unprofitable.
The PCR board met Monday night, March 3, and the company closed on
Tuesday, March 4. Though it did not declare bankruptcy, it liquidated
all its assets.
"Interpool was supportive toward PCR and had assisted the company
greatly," says Carpene, speaking of the painful business decision:
"As a public company, Interpool was growing and wanted to focus
on its core business, leasing containers and chassis. PCR was losing
money. Interpool stopped financing PCR. Without the financing, PCR
was unable to sustain the business."
Cooper believes the closing of PCR could have been prevented: "We
did not adjust fast enough, either scaling back or dumping one of
those businesses. Interpool eventually realized it was throwing good
money after bad. It had a lien on everything and wanted to sell it
Criticizing the sudden closing, Cooper says, "If they had shut
it down a month later and done it with precision, they would have
lost less money. They would have been able to get some debt back."
But now that things are settled down, and as they look back, Lazzaro
and Cooper realize the mistakes they believe PCR made helped to jumpstart
their new business. "I’m certainly not upset that decision was
made," says Lazzaro, "because we have made a success. I’m
happy they did it."
Whereas PCR had 30 offices all over the country, TRC has one office
in Princeton plus a satellite in New York. PCR had 325 employees,
and TRC has 14, including 10 in Princeton, six men and four women.
"We took it on at a sales level so we don’t carry the massive
overhead," explains Cooper. In an average month TRC serves 25
to 30 conventions (50 in the busy month of September) and writes 600
to 700 rental contracts for audiovisual equipment or PCs.
In spite of all their stated objections to PCR’s going into the services
business, TRC is making the very same move, but they say they have
lower overhead. "We are still very much interested in the services
business and are selling large deployment deals to the pharmaceutical
companies," says Cooper. "When pharmaceutical sales reps get
brought on in large numbers, they need laptops and Palms. Dell will
ship 500 computers to a dock, but somebody has to get them set up
and on desks. We’re the feet on the street. We will work with a help
Cooper emphasizes that the TRC success story depended on its business
partners and employees. "Our staff did an incredible job of taking
care of our customers in a short amount of time." All had competitive
offers. "All of them took a great leap of faith. They said, we
think this will work. We can make it happen."
"We have taken the same business and made it into a fun, casual
business," says Cooper, pointing to the reception area’s 40-inch
screen cable TV that employees can watch during lunch. "We have
a group of people who don’t need to be babysat. We don’t have them
filling out forms and counting the days they take off. If you need
to be out, somebody covers for you, but you don’t take advantage of
it. It’s 150 percent different. We’re doing good business. We’re making
money. We’re having fun."
"Something wonderful came out of something horrible," says
Lazzaro of his new status as entrepreneur. He and Cooper each own
50 percent of the firm. "We sit back in disbelief. We are cash
positive and profitable. We haven’t used a penny of financing —
we made more money in six months than PCR made in two years. We feel
we are running the company instead of the other company running us."
Suite E-10, Princeton 08540. 609-720-1885; fax, 609-720-1701. E-mail:
08540. Martin Tuchman, chairman and CEO. 609-452-8900; fax, 609-452-8211.
Home page: www.interpool.com
A supplier to the transportation industry, Interpool
is the largest lessor of intermodal container chassis and one of the
largest lessors of containers used in international trade. Founded
in 1968, it has 240 global locations and 100 employees in Princeton.
Listed by Forbes magazine as one of the 200 best small companies in
America, it celebrated 10 years on the New York Stock Exchange last
Interpool has nevertheless gotten involved with some very complex
audit moves. In the post-Enron turmoil, it replaced Arthur Andersen
and hired KPMG as its independent auditors. So many complications
ensued that Interpool still has not issued a final, audited, annual
report for 2002.The company says it is cash flow positive, has $150
million in cash, and expects to report $320 million in revenues for
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