Waterloo Tech Digest - May 8, 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
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.
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.
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]---------------------------------------------------------------
Sandvine reports breakthrough quarterly results
April 11, 2007
Sandvine blew away all expectations -- probably even those of the company itself -- in the quarter ended February 28 (Q1 07). Sandvine earned $5.9 million on sales of $15.4 million -- up 66% from the previous quarter and 121% from last year.
With an sharp improvement in margins, gross profits were nearly double that of Q4. The jump in margins came from a big jump in follow-on software sales to existing customers. Sandvine's largest customer accounted for $9.7 million in sales -- up about $4 million from the previous quarter. That by itself would have been a record quarter for the company. A second customer provided $1.8 million in sales in Q1. Operating expenses were down from the previous quarter, which added even more to the bottom line.
On top of the revenue recognized in the quarter, the company added a net $15.8 million in deferred revenue in Q1 and ended the period with $72.4 million in cash, up $15.4 million from the end of Q4.
Sandvine announced that it won 12 new customers in the quarter -- including one of the top U.S. cable companies, which did not contribute materially to the Q1 results. Sandvine has never identified its top-tier cable customers, although it has been reported that Comcast is a customer.
With $15.4 in revenue and another $16.6 in deferred revenue on the books (including $12.4 million in product revenue), it looks like Sandvine should surpass the $50-60 million in annual sales that it had forecast -- it would beat those numbers with zero quarterly growth through the rest of the year -- but the company didn't want to change its guidance.
[2]---------------------------------------------------------------
MedShare raises $1.8M
April 10, 2007
MedShare has raised $1.8 million from investors that it describes as "a group of local technology veterans." Al Foerster was acting as spokesman for the group.
CEO J. Paul Haynes said in a release that the company will be hiring people for positions across the organization. MedShare is moving from Guelph to Cambridge -- the second time Haynes has moved a company from Guelph to Waterloo Region.
The company, founded by president Barry Billings, previously raised $500,000 in 2005.
[3]---------------------------------------------------------------
Com Dev takes $9M hit, wins $39M contract
April 18, 2007
A problem with a multiplexer order could end up costing Com Dev as much as $9 million. The company is working with its customer to determine how much work will need to be redone, and will recognize most of the costs in the quarter ended April 30 (Q2 07). That will lead to a net loss in the quarter of $4 million. Com Dev has been averaging $5-6 million in net income in recent quarters. The company says it has identified and fixed the underlying problem and that it only affected the one program. Com Dev shares lost a quarter of their value in April after the announcement was made.
At the end of the month, Com Dev announced that it had received a follow-on civil space contract valued at $39 million with the work to be completed over the next two-and-a-half years. The company had announced in March that the deal was expected to close soon.
[4]---------------------------------------------------------------
Virtek ends year in the black
April 20, 2007
A good finish for Virtek's 2007 fiscal year, with the company reporting earnings of $1.3 million ($0.04/share) on sales of $17.9 million in the quarter ended January 31 (Q4 07). Revenue was up 16% from the previous quarter and 21% from last year. Virtek's imaging and templating business accounted for 54% of revenue with a 52% jump in sales from Q3 to $9.8 million.
An improvement in gross margins saw gross profits climb 27% sequentially. Operations generated $2.3 million in cash, which enabled Virtek to lower its bank indebtedness by $1.6 million. It ended the quarter with net cash of $1.6 million, an improvement of $1.8 million from the end of Q3. Just after the end of the quarter, Virtek raised an additional $3.7 million (net) from a share offering.
For the year, the company earned $2.2 million ($0.08/share) on sales of $63.8 million, up 23% from the previous year. It was the second-most profitable year in company history, trailing only 2001.
Virtek continues to see its marking and engraving business as the one with the most potential for growth. It expects to see a decline in its traditional imaging and templating business, and is looking into new market opportunities in that segment, including Formula 1 racing and boating. In 2007, imaging and templating accounted for all profits, with net income of $3.2 million -- a small improvement from 2006. Marking and engraving reported a loss of $1.0 million, down from a loss of $2.2 million the previous year.
While turning in a profitable year, CEO Bob Sandness received total compensation of $512,357 plus 100,000 options in fiscal 2007, up from $363,010 and no options the previous year.
[5]---------------------------------------------------------------
RIM sales hit $3B in 2007
April 11, 2007
Nothing dramatic in RIM's results for the quarter ended March 3 (Q4 07). The company reported net income of US$187.9 million (US$0.99/share) on sales of US$930.4 million. Sales were up 11% from the previous quarter and 66% from a year ago, and within the range of US$900-940 million forecast by the company, but it was the first quarter all year where RIM didn't surpass the high end of its sales forecast.
There were 1.0 million new BlackBerry subscribers -- which was above the forecast -- taking the total to 8 million. Annual sales of US$3.0 billion were up 47% from 2006. Earnings for the year were US$634.5 million, or a little more than what RIM paid to NTP to settle their patent infringement suit. RIM ended the year with US$1.4 billion in cash, with operations providing US$174.4 million in cash in Q4.
It is forecasting sales of US$1.0 to 1.1 billion in the current quarter, with 1.12 to 1.15 million new BlackBerry subscribers.
[6]---------------------------------------------------------------
MKS warns Q4 numbers below expectations
May 3, 2007
MKS has warned that its Q4 numbers will fall short of forecasts. The company had been expecting revenue of US$14.3 to $16.3 million in the quarter, but the actual number will be in the US$12.5 to $12.7 million range. That's still an 8-10% sequential jump from a weak Q3. That means annual sales will be around US$48.3 million -- flat from the previous year and below the company's twice-lowered forecast of US$50-52 million. At the beginning of the year, it was hoping for sales in the US$57-60 million range.
MKS will not be profitable in Q4 or for the full 2007 fiscal year -- its first money-losing year since 2004.
[7]---------------------------------------------------------------
RDM sells Xign shares for $9M, reports 34% sales growth
April 19, 2007
JPMorgan Chase is acquiring Xign, the California-based company that began as a product line within RDM and was spun off seven years ago. RDM will receive $9 million for its shares in Xign, and may receive up to $1.2 million more out of funds that will be held in escrow for one year from the closing date. RDM held 13% of Xign on a full-diluted basis, so the acquisition price should be somewhere in the US$60-70 million range.
It's not the greatest ROI for RDM, which -- in addition to funding Xign's initial development -- invested another $6.4 million into the company in a round of funding in 2001. In the wild, still-bubbly days of 2000, Charles Schwab paid US$3 million for a 16% stake in Xign and RDM at that time held 76%. But a lot of investors would love to break even on money invested in 2000/2001, and with Xign's 2005 revenue reported as being under US$5 million, it was probably a good deal for Xign shareholders. (Xign is a private company that doesn't disclose financial results.)
RDM reported earnings of $587,000 ($0.03/share) on sales of $7.9 million in the quarter ended March 31 (Q2 07). Revenue was up 34% from last year but down 33% from the previous quarter. RDM ended the quarter with $10.1 million in cash, up $1.1 million from the end of Q1. Volume on the company's ITMS electronic payment processing service was up to 1.3 million items a week, up 28% from the previous quarter. RDM has previously said that its breakeven point is at about 2 million transactions. The company shipped 11,990 scanners in the quarter, up from 8,070 last year, but down from a strong Q1.
[8]---------------------------------------------------------------
ARISE raises $25M, hires CFO
April 24, 2007
ARISE has raised $25.3 million through an offering of 25.3 million shares at $1 each. The underwriters were led by Canaccord and included CIBC World Markets, Cormark Securities, D&D Securities, and Loewen, Ondaatje McCutcheon. Net proceeds to the company were $23.5 million.
The company also announced that it has hired Dave Chornaby as its new. He previously was COO of Focus Automation and finance and operations VP at Focus's successor, SBS Technologies (Canada). From 1993 through 1995, he was GM of H-P's Waterloo-based Panacom division. Chornaby was granted 300,000 ARISE options with an exercise price of $1.
[9]---------------------------------------------------------------
Dalsa sees weak bottom line from soft digital imaging sales
April 26, 2007
Dalsa reported earnings of just $239,000 ($0.01/share) on revenue of $45.3 million in the quarter ended March 31 (Q1 07). Sales were down 3% from last year but up 5% from the previous quarter. It's the second straight year that Q1 sales have surpassed those of Q4, which may put an end to its traditional label as Dalsa's weakest quarter, but a drop in margins led to a sequential decline of 3% in gross profits.
The company had expected that digital imaging revenue would be weak in the quarter, and they were down 14% from Q4 and from last year. Sales to the semiconductor inspection were particularly slow, falling $3 million below the level of a year ago. Dalsa's semiconductor business had a good quarter, rebounding from a soft Q4 with sales up 39% from the previous quarter and 13% from a year ago. Dalsa expects the digital imaging business will rebound through the rest of the year, returning to its traditional earnings levels. The order backlog in digital imaging increased by $9.2 million in the quarter to $30.2 million.
The digital cinema business reported a jump in sales, although Dalsa says that little of that revenue came from rentals of its Origin camera. Digital cinema lost $1.7 million on revenue of $684,000 in the quarter. It was only in October 2004 that Dalsa forecast that its digital cinema business would generate $30-40 million in revenue in 2006, so the market has been much slower to form than the company ever imagined.
Operations provided $744,000 in cash in Q1 and Dalsa spent $2.6 million on property and equipment, leaving the company with $705,000 in cash at the end of the quarter, down $1.7 million from the end of Q4.
[10]---------------------------------------------------------------
Dalsa to get new CEO, CFO
April 26 & May 7, 2007
Dalsa founder Savvas Chamberlain will step down as CEO on September 1, turning the reins over to Brian Doody, who has been with the company for over 20 years and is currently COO. Chamberlain will continue as chairman.
Dalsa has also hired a new CFO: Wajid Ali, previously with Markham's ATI, which became a subsidiary of AMD in the fall. Dalsa's previous CFO, Paul Van Bakel, resigned in January.
In September, Jim Roberts will become president of Dalsa Digital Imaging -- the business unit he has led since 2004 as EVP. Roberts is another company veteran.
[11]---------------------------------------------------------------
Descartes looks at acquisitions after raising $26M
April 4 & 26, 2007
Descartes raised a net $24.8 million through a bought deal public offering. It issued 5.2 million new shares at $5 a share for gross proceeds of $26.0 million. In addition, it received $762,000 from CEO Art Mesher and $316,875 from Global Logistics Manager Ed Ryan, who exercised options and sold the resulting shares as part of the underwriters' over-allotment option. Mesher received $2 million from the sale of 400,000 shares.
The company says there have been "significant discussions" with some potential acquisition candidates, including "some" which could have a material impact on Descartes.
Descartes also reported that new CFO Stephanie Ratza was granted 175,000 options at an exercise price of $5.05.
[12]---------------------------------------------------------------
Open Text rakes in cash, plans to accelerate debt payment
May 2, 2007
Open Text earned US$3.9 million (US$0.08/share) on sales of US$156.1 million in the quarter ended March 31 (Q3 07). Sales were down 4% from last quarter. The company continued to be a cash cow, with operations generating US$41.3 million in cash. Open Text spent US$4.1 million on its acquisition of Virginia's Momentum Systems and US$8.0 million on other acquisition-related costs.
With the extra cash, Open Text plans to make a US$30 million debt repayment. It has US$400 million in long-term debt on its books following the acquisition of Hummingbird. It has also filed to repurchase up to 2.5 million common shares over the next year. Open Text ended the quarter with US$159.7 million in cash.
[13]---------------------------------------------------------------
STOCK REPORT: Sandvine value tops half-billion dollars
April 2007
Sandvine shares are now up 147% over the first four months of 2007, giving the company a market value of $584 million -- about equal to that of Dalsa, Descartes, and MKS combined (and Sandvine's quarterly gross profits already exceed those of each of those companies). As a multiple of gross profits, Sandvine's value is nearly equal to that of RIM, which has historically been well in front of the pack in that metric (excluding ARISE, which is essentially in a pre-revenue stage).
With the shares taking off, some Sandvine founders have cashed in some stock. Selling 10% of their shares in the company were Dave Caputo, Don Bowman, Brad Siim (proceeds of $1.9 million each), and Tom Donnelly ($1.7 million). Marc Morin has not sold any of his shares.
For the month of April:
Sandvine [TSX: SVC] +29%
RDM [TSX: RC] +13%
MKS [TSX: MKX] +10%
Dalsa [TSX: DSA] +4%
--S&P TSX VENTURE INDEX +2%
--S&P TSX COMPOSITE INDEX +2%
===============================
Descartes [TSX: DSG] -1%
Navtech [OTCBB: NAVH] -1%
Open Text [TSX: OTC] -1%
Virtek [TSX: VRK] -1%
TurboSonic [OTCBB: TSTA] -3%
Biorem [TSXV: BRM] -4%
ATS [TSX: ATA] -5%
RIM [TSX: RIM] -7%
ARISE [TSXV: APV] -8%
Com Dev [TSX: CDV] -26%
Com Dev shares fell to their lowest month-end price in nearly a year but are up about 10% so far in May. RIM stock hit an all-time high early in the month but fell sharply when the quarterly results came out, finishing April at its lowest month-end price since October. It has also rebounded in the early days of May following the launch of the BlackBerry Curve. A BlackBerry system outage during the month has no impact on the stock price.
The market didn't take much interest in Virtek's annual results. Shares in the company briefly traded above a dollar during April and then dropped back to where they started. ATS shares have fallen to their lowest point in over a decade
Companies with core operations outside the area:
McAfee [NYSE: MFE] +12%
Agfa-Gevaert [Brussels: AGFA] +8%
AMIS [Nasdaq: AMIS] +6%
Oracle [Nasdaq: ORCL] +4%
Google [Nasdaq: GOOG] +3%
Ansys [Nasdaq: ANSS] +1%
Automated Benefits [TSXV: AUT] 0%
===================================
Adobe [Nasdaq: ADBE] -0%
Sybase [NYSE: SY] -4%
Blue Coat [Nasdaq: BCSI] -5%
NCR [NYSE: NCR] -6%
Senesco [Amex: SNT] -7%
LSI Logic [NYSE: LSI] -19%
[14]--------------------------------------------------------------
Miscellaneous Tidbits
Gary Will
gary@garywill.com
In this issue:
- Sandvine reports breakthrough quarterly results
- MedShare raises $1.8M
- Com Dev takes $9M hit, wins $39M contract
- Virtek ends year in the black
- RIM sales hit $3B in 2007
- MKS warns Q4 numbers below expectations
- RDM sells Xign shares for $9M, reports 34% sales growth
- ARISE raises $25M, hires CFO
- Dalsa sees weak bottom line from soft digital imaging sales
- Dalsa to get new CEO, CFO
- Descartes looks at acquisitions after raising $26M
- Open Text rakes in cash, plans to accelerate debt payment
- STOCK REPORT: Sandvine value tops half-billion dollars
- Miscellaneous tidbits from RapidMind, ATS, Biorem, Symbility, iAnywhere
A D V E R T I S E M E N T S
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.
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.
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]---------------------------------------------------------------
Sandvine reports breakthrough quarterly results
April 11, 2007
Sandvine blew away all expectations -- probably even those of the company itself -- in the quarter ended February 28 (Q1 07). Sandvine earned $5.9 million on sales of $15.4 million -- up 66% from the previous quarter and 121% from last year.
With an sharp improvement in margins, gross profits were nearly double that of Q4. The jump in margins came from a big jump in follow-on software sales to existing customers. Sandvine's largest customer accounted for $9.7 million in sales -- up about $4 million from the previous quarter. That by itself would have been a record quarter for the company. A second customer provided $1.8 million in sales in Q1. Operating expenses were down from the previous quarter, which added even more to the bottom line.
On top of the revenue recognized in the quarter, the company added a net $15.8 million in deferred revenue in Q1 and ended the period with $72.4 million in cash, up $15.4 million from the end of Q4.
Sandvine announced that it won 12 new customers in the quarter -- including one of the top U.S. cable companies, which did not contribute materially to the Q1 results. Sandvine has never identified its top-tier cable customers, although it has been reported that Comcast is a customer.
With $15.4 in revenue and another $16.6 in deferred revenue on the books (including $12.4 million in product revenue), it looks like Sandvine should surpass the $50-60 million in annual sales that it had forecast -- it would beat those numbers with zero quarterly growth through the rest of the year -- but the company didn't want to change its guidance.
[2]---------------------------------------------------------------
MedShare raises $1.8M
April 10, 2007
MedShare has raised $1.8 million from investors that it describes as "a group of local technology veterans." Al Foerster was acting as spokesman for the group.
CEO J. Paul Haynes said in a release that the company will be hiring people for positions across the organization. MedShare is moving from Guelph to Cambridge -- the second time Haynes has moved a company from Guelph to Waterloo Region.
The company, founded by president Barry Billings, previously raised $500,000 in 2005.
[3]---------------------------------------------------------------
Com Dev takes $9M hit, wins $39M contract
April 18, 2007
A problem with a multiplexer order could end up costing Com Dev as much as $9 million. The company is working with its customer to determine how much work will need to be redone, and will recognize most of the costs in the quarter ended April 30 (Q2 07). That will lead to a net loss in the quarter of $4 million. Com Dev has been averaging $5-6 million in net income in recent quarters. The company says it has identified and fixed the underlying problem and that it only affected the one program. Com Dev shares lost a quarter of their value in April after the announcement was made.
At the end of the month, Com Dev announced that it had received a follow-on civil space contract valued at $39 million with the work to be completed over the next two-and-a-half years. The company had announced in March that the deal was expected to close soon.
[4]---------------------------------------------------------------
Virtek ends year in the black
April 20, 2007
A good finish for Virtek's 2007 fiscal year, with the company reporting earnings of $1.3 million ($0.04/share) on sales of $17.9 million in the quarter ended January 31 (Q4 07). Revenue was up 16% from the previous quarter and 21% from last year. Virtek's imaging and templating business accounted for 54% of revenue with a 52% jump in sales from Q3 to $9.8 million.
An improvement in gross margins saw gross profits climb 27% sequentially. Operations generated $2.3 million in cash, which enabled Virtek to lower its bank indebtedness by $1.6 million. It ended the quarter with net cash of $1.6 million, an improvement of $1.8 million from the end of Q3. Just after the end of the quarter, Virtek raised an additional $3.7 million (net) from a share offering.
For the year, the company earned $2.2 million ($0.08/share) on sales of $63.8 million, up 23% from the previous year. It was the second-most profitable year in company history, trailing only 2001.
Virtek continues to see its marking and engraving business as the one with the most potential for growth. It expects to see a decline in its traditional imaging and templating business, and is looking into new market opportunities in that segment, including Formula 1 racing and boating. In 2007, imaging and templating accounted for all profits, with net income of $3.2 million -- a small improvement from 2006. Marking and engraving reported a loss of $1.0 million, down from a loss of $2.2 million the previous year.
While turning in a profitable year, CEO Bob Sandness received total compensation of $512,357 plus 100,000 options in fiscal 2007, up from $363,010 and no options the previous year.
[5]---------------------------------------------------------------
RIM sales hit $3B in 2007
April 11, 2007
Nothing dramatic in RIM's results for the quarter ended March 3 (Q4 07). The company reported net income of US$187.9 million (US$0.99/share) on sales of US$930.4 million. Sales were up 11% from the previous quarter and 66% from a year ago, and within the range of US$900-940 million forecast by the company, but it was the first quarter all year where RIM didn't surpass the high end of its sales forecast.
There were 1.0 million new BlackBerry subscribers -- which was above the forecast -- taking the total to 8 million. Annual sales of US$3.0 billion were up 47% from 2006. Earnings for the year were US$634.5 million, or a little more than what RIM paid to NTP to settle their patent infringement suit. RIM ended the year with US$1.4 billion in cash, with operations providing US$174.4 million in cash in Q4.
It is forecasting sales of US$1.0 to 1.1 billion in the current quarter, with 1.12 to 1.15 million new BlackBerry subscribers.
[6]---------------------------------------------------------------
MKS warns Q4 numbers below expectations
May 3, 2007
MKS has warned that its Q4 numbers will fall short of forecasts. The company had been expecting revenue of US$14.3 to $16.3 million in the quarter, but the actual number will be in the US$12.5 to $12.7 million range. That's still an 8-10% sequential jump from a weak Q3. That means annual sales will be around US$48.3 million -- flat from the previous year and below the company's twice-lowered forecast of US$50-52 million. At the beginning of the year, it was hoping for sales in the US$57-60 million range.
MKS will not be profitable in Q4 or for the full 2007 fiscal year -- its first money-losing year since 2004.
[7]---------------------------------------------------------------
RDM sells Xign shares for $9M, reports 34% sales growth
April 19, 2007
JPMorgan Chase is acquiring Xign, the California-based company that began as a product line within RDM and was spun off seven years ago. RDM will receive $9 million for its shares in Xign, and may receive up to $1.2 million more out of funds that will be held in escrow for one year from the closing date. RDM held 13% of Xign on a full-diluted basis, so the acquisition price should be somewhere in the US$60-70 million range.
It's not the greatest ROI for RDM, which -- in addition to funding Xign's initial development -- invested another $6.4 million into the company in a round of funding in 2001. In the wild, still-bubbly days of 2000, Charles Schwab paid US$3 million for a 16% stake in Xign and RDM at that time held 76%. But a lot of investors would love to break even on money invested in 2000/2001, and with Xign's 2005 revenue reported as being under US$5 million, it was probably a good deal for Xign shareholders. (Xign is a private company that doesn't disclose financial results.)
RDM reported earnings of $587,000 ($0.03/share) on sales of $7.9 million in the quarter ended March 31 (Q2 07). Revenue was up 34% from last year but down 33% from the previous quarter. RDM ended the quarter with $10.1 million in cash, up $1.1 million from the end of Q1. Volume on the company's ITMS electronic payment processing service was up to 1.3 million items a week, up 28% from the previous quarter. RDM has previously said that its breakeven point is at about 2 million transactions. The company shipped 11,990 scanners in the quarter, up from 8,070 last year, but down from a strong Q1.
[8]---------------------------------------------------------------
ARISE raises $25M, hires CFO
April 24, 2007
ARISE has raised $25.3 million through an offering of 25.3 million shares at $1 each. The underwriters were led by Canaccord and included CIBC World Markets, Cormark Securities, D&D Securities, and Loewen, Ondaatje McCutcheon. Net proceeds to the company were $23.5 million.
The company also announced that it has hired Dave Chornaby as its new. He previously was COO of Focus Automation and finance and operations VP at Focus's successor, SBS Technologies (Canada). From 1993 through 1995, he was GM of H-P's Waterloo-based Panacom division. Chornaby was granted 300,000 ARISE options with an exercise price of $1.
[9]---------------------------------------------------------------
Dalsa sees weak bottom line from soft digital imaging sales
April 26, 2007
Dalsa reported earnings of just $239,000 ($0.01/share) on revenue of $45.3 million in the quarter ended March 31 (Q1 07). Sales were down 3% from last year but up 5% from the previous quarter. It's the second straight year that Q1 sales have surpassed those of Q4, which may put an end to its traditional label as Dalsa's weakest quarter, but a drop in margins led to a sequential decline of 3% in gross profits.
The company had expected that digital imaging revenue would be weak in the quarter, and they were down 14% from Q4 and from last year. Sales to the semiconductor inspection were particularly slow, falling $3 million below the level of a year ago. Dalsa's semiconductor business had a good quarter, rebounding from a soft Q4 with sales up 39% from the previous quarter and 13% from a year ago. Dalsa expects the digital imaging business will rebound through the rest of the year, returning to its traditional earnings levels. The order backlog in digital imaging increased by $9.2 million in the quarter to $30.2 million.
The digital cinema business reported a jump in sales, although Dalsa says that little of that revenue came from rentals of its Origin camera. Digital cinema lost $1.7 million on revenue of $684,000 in the quarter. It was only in October 2004 that Dalsa forecast that its digital cinema business would generate $30-40 million in revenue in 2006, so the market has been much slower to form than the company ever imagined.
Operations provided $744,000 in cash in Q1 and Dalsa spent $2.6 million on property and equipment, leaving the company with $705,000 in cash at the end of the quarter, down $1.7 million from the end of Q4.
[10]---------------------------------------------------------------
Dalsa to get new CEO, CFO
April 26 & May 7, 2007
Dalsa founder Savvas Chamberlain will step down as CEO on September 1, turning the reins over to Brian Doody, who has been with the company for over 20 years and is currently COO. Chamberlain will continue as chairman.
Dalsa has also hired a new CFO: Wajid Ali, previously with Markham's ATI, which became a subsidiary of AMD in the fall. Dalsa's previous CFO, Paul Van Bakel, resigned in January.
In September, Jim Roberts will become president of Dalsa Digital Imaging -- the business unit he has led since 2004 as EVP. Roberts is another company veteran.
[11]---------------------------------------------------------------
Descartes looks at acquisitions after raising $26M
April 4 & 26, 2007
Descartes raised a net $24.8 million through a bought deal public offering. It issued 5.2 million new shares at $5 a share for gross proceeds of $26.0 million. In addition, it received $762,000 from CEO Art Mesher and $316,875 from Global Logistics Manager Ed Ryan, who exercised options and sold the resulting shares as part of the underwriters' over-allotment option. Mesher received $2 million from the sale of 400,000 shares.
The company says there have been "significant discussions" with some potential acquisition candidates, including "some" which could have a material impact on Descartes.
Descartes also reported that new CFO Stephanie Ratza was granted 175,000 options at an exercise price of $5.05.
[12]---------------------------------------------------------------
Open Text rakes in cash, plans to accelerate debt payment
May 2, 2007
Open Text earned US$3.9 million (US$0.08/share) on sales of US$156.1 million in the quarter ended March 31 (Q3 07). Sales were down 4% from last quarter. The company continued to be a cash cow, with operations generating US$41.3 million in cash. Open Text spent US$4.1 million on its acquisition of Virginia's Momentum Systems and US$8.0 million on other acquisition-related costs.
With the extra cash, Open Text plans to make a US$30 million debt repayment. It has US$400 million in long-term debt on its books following the acquisition of Hummingbird. It has also filed to repurchase up to 2.5 million common shares over the next year. Open Text ended the quarter with US$159.7 million in cash.
[13]---------------------------------------------------------------
STOCK REPORT: Sandvine value tops half-billion dollars
April 2007
Sandvine shares are now up 147% over the first four months of 2007, giving the company a market value of $584 million -- about equal to that of Dalsa, Descartes, and MKS combined (and Sandvine's quarterly gross profits already exceed those of each of those companies). As a multiple of gross profits, Sandvine's value is nearly equal to that of RIM, which has historically been well in front of the pack in that metric (excluding ARISE, which is essentially in a pre-revenue stage).
With the shares taking off, some Sandvine founders have cashed in some stock. Selling 10% of their shares in the company were Dave Caputo, Don Bowman, Brad Siim (proceeds of $1.9 million each), and Tom Donnelly ($1.7 million). Marc Morin has not sold any of his shares.
For the month of April:
Sandvine [TSX: SVC] +29%
RDM [TSX: RC] +13%
MKS [TSX: MKX] +10%
Dalsa [TSX: DSA] +4%
--S&P TSX VENTURE INDEX +2%
--S&P TSX COMPOSITE INDEX +2%
===============================
Descartes [TSX: DSG] -1%
Navtech [OTCBB: NAVH] -1%
Open Text [TSX: OTC] -1%
Virtek [TSX: VRK] -1%
TurboSonic [OTCBB: TSTA] -3%
Biorem [TSXV: BRM] -4%
ATS [TSX: ATA] -5%
RIM [TSX: RIM] -7%
ARISE [TSXV: APV] -8%
Com Dev [TSX: CDV] -26%
Com Dev shares fell to their lowest month-end price in nearly a year but are up about 10% so far in May. RIM stock hit an all-time high early in the month but fell sharply when the quarterly results came out, finishing April at its lowest month-end price since October. It has also rebounded in the early days of May following the launch of the BlackBerry Curve. A BlackBerry system outage during the month has no impact on the stock price.
The market didn't take much interest in Virtek's annual results. Shares in the company briefly traded above a dollar during April and then dropped back to where they started. ATS shares have fallen to their lowest point in over a decade
Companies with core operations outside the area:
McAfee [NYSE: MFE] +12%
Agfa-Gevaert [Brussels: AGFA] +8%
AMIS [Nasdaq: AMIS] +6%
Oracle [Nasdaq: ORCL] +4%
Google [Nasdaq: GOOG] +3%
Ansys [Nasdaq: ANSS] +1%
Automated Benefits [TSXV: AUT] 0%
===================================
Adobe [Nasdaq: ADBE] -0%
Sybase [NYSE: SY] -4%
Blue Coat [Nasdaq: BCSI] -5%
NCR [NYSE: NCR] -6%
Senesco [Amex: SNT] -7%
LSI Logic [NYSE: LSI] -19%
[14]--------------------------------------------------------------
Miscellaneous Tidbits
- EdgeStone joined in RapidMind's round of funding reported last month, bringing the total size of the round to $10 million. The funding was led by Ventures West with participation from BDC, which provided seed funding to RapidMind last year.
- Waterloo took three of the five Premier's Catalyst Awards for excellence in innovation at the first Premier's Innovation Awards, held in Toronto. RIM was named company with the best innovation, SlipStream co-founder En-Hiu Yang was named innovator of the year, and Dalsa founder Savvas Chamberlain was given the lifetime achievement in innovation award.
- Silvano Ghirardi, CEO of ATS's Photowatt Technologies business, has left the company following the decision not to proceed with an IPO. The business will now be led by Gary Seiter, who has been promoted to COO. The spheralsolar.com domain expired on March 31 and hasn't yet been renewed.
- Biorem lost $375,000 on sales of $1.8 million in the quarter ended March 31 (Q1 07). Sales were down 45% from both the previous quarter and last year. The company ended the quarter with $3.9 million in cash. Biorem announced $1.6 million in new orders after the end of the quarter, taking its order backlog to over $9 million.
- In 2006, Symbility Solutions lost $3.6 million on sales of $662,000. Sales were up from $195,000 in 2005. In Q4, ended December 31, Symbility lost $792,000 on sales of $208,000. Parent company Automated Benefits has raised $3.7 million through a private placement of units at $0.20 each. Each unit consists of a common share and half a warrant to purchase another common share for $0.25 over the next two years.
- Sybase's iAnywhere business reported operating income of US$0.8 million on sales of US$19.9 million in the quarter ended March 31.
posted by Gary Will at 12:00 AM
