Waterloo Tech Digest - June 5, 2007
Compiled and written by
Gary Will
gary@garywill.com
In this issue:
A D V E R T I S E M E N T S
TECHNOLOGY FOCUSED LEAD GENERATION
Virtual Causeway provides a global reach with a local touch! Industry leaders such as RIM, Sybase and IDC rely on us to:
* Gather leads that fill their sales pipeline with qualified opportunities
* Increase seminar and webinar registration
* Conduct market research and customer satisfaction surveys
Contact us today to learn how we can help connect you with your best prospects. Call 519-886-1600 ext. 405 or email marketing@v-causeway.com for details.
BERESKIN & PARR - INTELLECTUAL PROPERTY LAW
Bereskin & Parr is a leading Canadian intellectual property law firm on your doorstep. Our Waterloo region office brings a wealth of experience to serve the growing high technology and manufacturing communities in Canada's Technology Triangle and surrounding areas. Bereskin & Parr's practice encompasses all areas of intellectual property from patents to trade marks and related litigation. Please contact us at 519-783-3210, Tim Sinnott (tsinnott@bereskinparr.com), Neil Henderson (nhenderson@bereskinparr.com), for more information.
PROCOM - IT SEARCH AND PLACEMENT SERVICES
Procom is currently ranked as the 7th largest IT professional services firm in Canada. (Branham 300, Financial Post, April 2005). Procom is a proud, Canadian-owned, privately-held company. Our local KW office provides IT, development and technology personnel on either a contract or permanent basis. We are the largest provider of IT staffing and recruiting services in Canada.
PACKETWORKS
Specializing in managed wide area network services for 10 years
Companies choose to work with PacketWorks because we:
* Provide connectivity where others don't
* Do 24/7 monitoring with a personal response team
* Save companies money in networking costs
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Geosign chops "under 100" jobs
May 30, 2007
Geosign, which raised US$160 million in March, has let go of "under 100" employees, according to the company. The company told the Guelph Mercury that software and user-generated content would replace work formerly done by staff and that it was "no longer aiming to build a costly content and publishing
empire."
The story turned into a PR fiasco for the company. President Ted Hastings was initially quoted in the Mercury (in a story picked up by its sister paper, The Record) saying that there would be "38 or 39" job cuts from an employee base of 245. Within hours of the paper hitting the stands, former Geosign workers got word out that the actual number of cuts was much larger than that. "Word is now spreading that the total provided was incorrect. Company officials have just admitted the number of '38 or 39' given by president Ted Hastings is incorrect," wrote the Mercury on its website.
Instead of providing the correct number, Geosign chose to say only that the actual number of jobs lost was "over 50 and under 100." The Mercury and The Record both published corrections the following day. After all the goodwill Geosign built up in March, this was not the way to get on the good side of the media. Other websites also published accounts of the layoffs with speculation on the magnitude and the causes. At least three Facebook groups were created by former Geosign employees.
A week or two before the layoffs, the buzz in Waterloo was that Geosign had been cut off by Google. Geosign used Google AdWords as one of the methods of driving traffic to its many sites -- paying less per click for the traffic it brings to its sites than it receives from the ads on those sites. Google has been trying to clamp down on "AdWord arbitrage" and Geosign may have been among the casualties, even though it had professionally written and designed content on its sites.
I looked at the Alexa rankings of about 85 Geosign sites and 70% of them were showing a recent drop, but the numbers were still pretty impressive: 40 of those sites were ranked in the top 500,000 and eight were in the top 100,000. That may sound less impressive than it is: RIM's website doesn't quite make the top 100,000. (The non-university ones from this area that do are ProductWiki, GoStats, and The Record, and there may be others.)
[2]---------------------------------------------------------------
RIM buys 37 acres in Waterloo from Dalsa
May 28, 2007
RIM has agreed to buy 37 acres of land near University Ave. and Northfield Dr. from Dalsa. Financial details were not disclosed.
In 1998, Dalsa bought an option on a 58-acre parcel of land from the City of Waterloo. At the time, it was considering building a semiconductor facility on the site, but instead it ended up buying a fab in Quebec.
Dalsa will develop the remaining 19 acres, and consolidate all its Waterloo offices there, while RIM will expand into its 37 acres.
[3]---------------------------------------------------------------
RIM COOs asked to repay $2M each
May 17, 2007
Following RIM's internal review of its stock option backdating (see February digest), COO Don Morrison was asked to repay US$2.14 million in cash while RIM's other COO, Larry Conlee was asked to repay US$1.95 million. The amounts come from the benefits each received from exercising options that had been backdated by the company to a price below the market value at the time the options were granted.
In its annual report, RIM provided a breakdown of the amounts that would have to be repaid in cash by the company's five highest-paid executive officers. Most of the backdated options had not been exercised, so RIM just had to change the exercise price on those options. The repricing cost co-CEOs Mike Lazaridis and Jim Balsillie US$3.1 million each, and former CFO Dennis Kavelman US$1.8 million, but most of those costs were just on paper since they hadn't exercised many of their options. That wasn't the case for Conlee and Morrison, who are now being hit with a big bill -- although nowhere near what they would have gained from selling those shares, even at the new exercise price. A table in the annual report shows options have been repriced by as much as US$8.13 a share.
RIM's final restatement of its earnings to account for the option backdating was a cumulative reduction of US$248.2 million, in-line with the company's previous announcement that it would be about US$250 million.
[4]---------------------------------------------------------------
Descartes looks to acquisitions for growth
May 24, 2007
Another round of the usual from Descartes in its latest quarterly results -- maybe for the last time, with the company now in acquisition mode. In the period ended April 30 (Q1 08), Descartes earned US$1.1 million (US$0.02/share) on sales of US$13.3 million. Results were almost identical to those of the previous quarter.
Other than a US$1.5 million jump after some acquisitions a year ago, Descartes has been reporting about the same level of quarterly revenue for three years. That was fine when the company was in its cost-cutting phase -- working its way to profitability -- and with an extra US$23.5 million raised in the quarter (see previous digest), Descartes now seems ready to grow its top line through acquisitions. The company ended the quarter with US$46.3 million in cash and securities.
Descartes also announced that Greg Cronin, its sales & marketing EVP for the last 15 months, has left to take another job.
[5]---------------------------------------------------------------
STOCK REPORT: RIM value jumps another $6B
May 2007
A big month for RIM shares, which hit an all-time high of $180.40 during the month and ended May up 22%. That added another $6 billion to RIM's market value, taking it to $32.6 billion, or about 10 times the combined market capitalization of all the other companies on this list.
For the month of May:
RIM [TSX: RIM] +22%
Com Dev [TSX: CDV] +14%
Biorem [TSXV: BRM] +10%
--S&P TSX COMPOSITE INDEX +5%
ATS [TSX: ATA] +1%
RDM [TSX: RC] +0%
===============================
--S&P TSX VENTURE INDEX -1%
Dalsa [TSX: DSA] -2%
TurboSonic [OTCBB: TSTA] -3%
Open Text [TSX: OTC] -4%
Virtek [TSX: VRK] -4%
Sandvine [TSX: SVC] -5%
MKS [TSX: MKX] -6%
Descartes [TSX: DSG] -6%
Navtech [OTCBB: NAVH] -8%
ARISE [TSXV: APV] -11%
Com Dev shares bounced back after taking a beating in April, but still had their second-lowest month-end price since last June. ARISE shares are down 32% over the last three months, but the company still has a fully diluted market capitalization of nearly $90 million. The stock has doubled in value so far in 2007. Navtech shares had their lowest month-end price since December 2005. Sandvine shares finally took a breather following four months with average gains of 25% each month.
Companies with core operations outside the area:
Senesco [Amex: SNT] +33%
Blue Coat [Nasdaq: BCSI] +25%
McAfee [NYSE: MFE] +13%
AMIS [Nasdaq: AMIS] +10%
Ansys [Nasdaq: ANSS] +10%
Agfa-Gevaert [Brussels: AGFA] +9%
NCR [NYSE: NCR] +6%
Adobe [Nasdaq: ADBE] +6%
Google [Nasdaq: GOOG] +6%
Oracle [Nasdaq: ORCL] +3%
LSI Logic [NYSE: LSI] +2%
===================================
Sybase [NYSE: SY] -1%
Automated Benefits [TSXV: AUT] -5%
[6]--------------------------------------------------------------
Miscellaneous Tidbits
Gary Will
gary@garywill.com
In this issue:
- Geosign chops "under 100" jobs
- RIM buys 37 acres in Waterloo from Dalsa
- RIM COOs asked to repay $2M each
- Descartes looks to acquisitions for growth
- STOCK REPORT: RIM value jumps another $6B
- Miscellaneous tidbits from Athena, MedShare, Com Dev, Sandvine, Symbility, ARISE, Biorem, RDM.
A D V E R T I S E M E N T S
TECHNOLOGY FOCUSED LEAD GENERATION
Virtual Causeway provides a global reach with a local touch! Industry leaders such as RIM, Sybase and IDC rely on us to:
* Gather leads that fill their sales pipeline with qualified opportunities
* Increase seminar and webinar registration
* Conduct market research and customer satisfaction surveys
Contact us today to learn how we can help connect you with your best prospects. Call 519-886-1600 ext. 405 or email marketing@v-causeway.com for details.
BERESKIN & PARR - INTELLECTUAL PROPERTY LAW
Bereskin & Parr is a leading Canadian intellectual property law firm on your doorstep. Our Waterloo region office brings a wealth of experience to serve the growing high technology and manufacturing communities in Canada's Technology Triangle and surrounding areas. Bereskin & Parr's practice encompasses all areas of intellectual property from patents to trade marks and related litigation. Please contact us at 519-783-3210, Tim Sinnott (tsinnott@bereskinparr.com), Neil Henderson (nhenderson@bereskinparr.com), for more information.
PROCOM - IT SEARCH AND PLACEMENT SERVICES
Procom is currently ranked as the 7th largest IT professional services firm in Canada. (Branham 300, Financial Post, April 2005). Procom is a proud, Canadian-owned, privately-held company. Our local KW office provides IT, development and technology personnel on either a contract or permanent basis. We are the largest provider of IT staffing and recruiting services in Canada.
PACKETWORKS
Specializing in managed wide area network services for 10 years
Companies choose to work with PacketWorks because we:
* Provide connectivity where others don't
* Do 24/7 monitoring with a personal response team
* Save companies money in networking costs
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Geosign chops "under 100" jobs
May 30, 2007
Geosign, which raised US$160 million in March, has let go of "under 100" employees, according to the company. The company told the Guelph Mercury that software and user-generated content would replace work formerly done by staff and that it was "no longer aiming to build a costly content and publishing
empire."
The story turned into a PR fiasco for the company. President Ted Hastings was initially quoted in the Mercury (in a story picked up by its sister paper, The Record) saying that there would be "38 or 39" job cuts from an employee base of 245. Within hours of the paper hitting the stands, former Geosign workers got word out that the actual number of cuts was much larger than that. "Word is now spreading that the total provided was incorrect. Company officials have just admitted the number of '38 or 39' given by president Ted Hastings is incorrect," wrote the Mercury on its website.
Instead of providing the correct number, Geosign chose to say only that the actual number of jobs lost was "over 50 and under 100." The Mercury and The Record both published corrections the following day. After all the goodwill Geosign built up in March, this was not the way to get on the good side of the media. Other websites also published accounts of the layoffs with speculation on the magnitude and the causes. At least three Facebook groups were created by former Geosign employees.
A week or two before the layoffs, the buzz in Waterloo was that Geosign had been cut off by Google. Geosign used Google AdWords as one of the methods of driving traffic to its many sites -- paying less per click for the traffic it brings to its sites than it receives from the ads on those sites. Google has been trying to clamp down on "AdWord arbitrage" and Geosign may have been among the casualties, even though it had professionally written and designed content on its sites.
I looked at the Alexa rankings of about 85 Geosign sites and 70% of them were showing a recent drop, but the numbers were still pretty impressive: 40 of those sites were ranked in the top 500,000 and eight were in the top 100,000. That may sound less impressive than it is: RIM's website doesn't quite make the top 100,000. (The non-university ones from this area that do are ProductWiki, GoStats, and The Record, and there may be others.)
[2]---------------------------------------------------------------
RIM buys 37 acres in Waterloo from Dalsa
May 28, 2007
RIM has agreed to buy 37 acres of land near University Ave. and Northfield Dr. from Dalsa. Financial details were not disclosed.
In 1998, Dalsa bought an option on a 58-acre parcel of land from the City of Waterloo. At the time, it was considering building a semiconductor facility on the site, but instead it ended up buying a fab in Quebec.
Dalsa will develop the remaining 19 acres, and consolidate all its Waterloo offices there, while RIM will expand into its 37 acres.
[3]---------------------------------------------------------------
RIM COOs asked to repay $2M each
May 17, 2007
Following RIM's internal review of its stock option backdating (see February digest), COO Don Morrison was asked to repay US$2.14 million in cash while RIM's other COO, Larry Conlee was asked to repay US$1.95 million. The amounts come from the benefits each received from exercising options that had been backdated by the company to a price below the market value at the time the options were granted.
In its annual report, RIM provided a breakdown of the amounts that would have to be repaid in cash by the company's five highest-paid executive officers. Most of the backdated options had not been exercised, so RIM just had to change the exercise price on those options. The repricing cost co-CEOs Mike Lazaridis and Jim Balsillie US$3.1 million each, and former CFO Dennis Kavelman US$1.8 million, but most of those costs were just on paper since they hadn't exercised many of their options. That wasn't the case for Conlee and Morrison, who are now being hit with a big bill -- although nowhere near what they would have gained from selling those shares, even at the new exercise price. A table in the annual report shows options have been repriced by as much as US$8.13 a share.
RIM's final restatement of its earnings to account for the option backdating was a cumulative reduction of US$248.2 million, in-line with the company's previous announcement that it would be about US$250 million.
[4]---------------------------------------------------------------
Descartes looks to acquisitions for growth
May 24, 2007
Another round of the usual from Descartes in its latest quarterly results -- maybe for the last time, with the company now in acquisition mode. In the period ended April 30 (Q1 08), Descartes earned US$1.1 million (US$0.02/share) on sales of US$13.3 million. Results were almost identical to those of the previous quarter.
Other than a US$1.5 million jump after some acquisitions a year ago, Descartes has been reporting about the same level of quarterly revenue for three years. That was fine when the company was in its cost-cutting phase -- working its way to profitability -- and with an extra US$23.5 million raised in the quarter (see previous digest), Descartes now seems ready to grow its top line through acquisitions. The company ended the quarter with US$46.3 million in cash and securities.
Descartes also announced that Greg Cronin, its sales & marketing EVP for the last 15 months, has left to take another job.
[5]---------------------------------------------------------------
STOCK REPORT: RIM value jumps another $6B
May 2007
A big month for RIM shares, which hit an all-time high of $180.40 during the month and ended May up 22%. That added another $6 billion to RIM's market value, taking it to $32.6 billion, or about 10 times the combined market capitalization of all the other companies on this list.
For the month of May:
RIM [TSX: RIM] +22%
Com Dev [TSX: CDV] +14%
Biorem [TSXV: BRM] +10%
--S&P TSX COMPOSITE INDEX +5%
ATS [TSX: ATA] +1%
RDM [TSX: RC] +0%
===============================
--S&P TSX VENTURE INDEX -1%
Dalsa [TSX: DSA] -2%
TurboSonic [OTCBB: TSTA] -3%
Open Text [TSX: OTC] -4%
Virtek [TSX: VRK] -4%
Sandvine [TSX: SVC] -5%
MKS [TSX: MKX] -6%
Descartes [TSX: DSG] -6%
Navtech [OTCBB: NAVH] -8%
ARISE [TSXV: APV] -11%
Com Dev shares bounced back after taking a beating in April, but still had their second-lowest month-end price since last June. ARISE shares are down 32% over the last three months, but the company still has a fully diluted market capitalization of nearly $90 million. The stock has doubled in value so far in 2007. Navtech shares had their lowest month-end price since December 2005. Sandvine shares finally took a breather following four months with average gains of 25% each month.
Companies with core operations outside the area:
Senesco [Amex: SNT] +33%
Blue Coat [Nasdaq: BCSI] +25%
McAfee [NYSE: MFE] +13%
AMIS [Nasdaq: AMIS] +10%
Ansys [Nasdaq: ANSS] +10%
Agfa-Gevaert [Brussels: AGFA] +9%
NCR [NYSE: NCR] +6%
Adobe [Nasdaq: ADBE] +6%
Google [Nasdaq: GOOG] +6%
Oracle [Nasdaq: ORCL] +3%
LSI Logic [NYSE: LSI] +2%
===================================
Sybase [NYSE: SY] -1%
Automated Benefits [TSXV: AUT] -5%
[6]--------------------------------------------------------------
Miscellaneous Tidbits
- Athena Software has landed its largest contract. It will provide its case management software to Relate, the UK's largest provider of relationship counselling services with 600 offices and 150,000 clients served last year. Athena has moved from Guelph into larger offices in Kitchener.
- MedShare unveiled its new electronic health record software that runs on the BlackBerry and is used by home health care providers as they visit patients. Information is cached on the device so it can be used in areas without wireless coverage. The company says the system is being used by five clients, including an unnamed "large national agency" with 4,000 staff.
- Com Dev has bought a 46,000 square foot facility in El Segundo, Calif., in the Los Angeles area, for US$8.75 million. El Segundo is also home to Com Dev customer Boeing Satellite Systems, as well as several other companies in the satellite industry.
- The founders of Sandvine were named "entrepreneur of the year" by the Canada's Venture Capital & Private Equity Association (CVCA). CEO and co-founder Dave Caputo accepted the award at the CVCA conference in Halifax. Sandvine was partly a creation of the venture capital industry, getting a $20 million seed round, mostly from investors thrilled to have sold PixStream for nearly a half-billon dollars. It took a few years for Sandvine to catch up to its funding, but with a market value of $560 million today, everyone can look back and say they knew it would happen all along.
- Symbility Solutions lost $691,000 on sales of $266,000 in the quarter ended March 31. Sales were up 28% from the previous quarter and 219% from the same period last year.
- Nothing particularly new and notable in ARISE's most recent quarterly results. The company continues to develop its technology and raise money to build a manufacturing facility in Germany. It raised $23.4 million just after the end of the quarter and has already paid $6.0 million to building and equipment suppliers. As of May 18, ARISE had $17.9 million in cash. In the quarter ended March 31 (Q1 07), it lost $1.3 million. It is essentially in a pre-revenue stage with gross profits of just $16,000 in the quarter. Accumulated deficit is now $12.9 million. ARISE created a German subsidiary, ARISE Technologies Deutschland GmbH, during the quarter and announced a 10-year agreement to be supplied with 200 MW of silicon wafers by Deutsche Solar AG.
- Biorem announced that it has received five new orders totaling $1.3 million, including a $700,000 deal with Veolia Water North America for a facility near New York City. The new orders take Biorem's order backlog to over $10 million.
- RDM received $8.6 million in cash from the sale of its shares of Xign (see last month's digest). Because of the rising Canadian dollar, the amount was a little less than the $9 million originally announced. It could receive up to another US$1.05 million out of funds being held is escrow for the next year.
posted by Gary Will at 12:00 AM
