Waterloo Tech Digest - September 11, 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
RISK FREE LEAD GENERATION
From sales opportunity development to increasing attendance for events, Virtual Causeway accelerates your sales process! With a focus on selling and marketing complex services and technology, we guarantee a consistent and reliable flow of quality leads - assuring that your pipeline is constantly full. Contact us today to learn how we can help connect you with your next customer. Call 519-886-1600 ext. 405 or email marketing@v-causeway.com for details.
2007 TECHNOLOGY SPOTLIGHT PUBLICATION
Where your business needs to be! This is your opportunity to be part of a very special and unique success story. 80,000 copies of the 2007 Technology Spotlight (OUR 10TH ANNIVERSARY)will be delivered on Thursday, October 4th in both The Record and the Guelph Mercury. This is the most cost effective and high impact medium to press home your message with decision makers and legitimize your presence in Canada's Technology Triangle. Contact Waldy Willms at (519) 894-2250 ext.2307 or wwillms@therecord.com to learn more. Check out last year's publication at
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]---------------------------------------------------------------
Open Text sales up sharply to end the fiscal year
August 30, 2007
Open Text put up some strong numbers to finish fiscal 2007, reporting earnings of US$8.2 million (US$0.16/share) on sales of US$175.2 million in the period ended June 30 (Q4 07). Sales were up 12% from the previous quarter while net income more than doubled.
Operations generated US$28.5 million in cash, and the company quickly put it to use, spending US$31.0 million to repay long-term debt (from the Hummingbird acquisition last fall) and another US$10.8 million on acquisition-related expenses. It ended the quarter with US$150.0 million in cash, down US$9.7 million from the end of Q3. It plans to make another US$30 million payment on its long-term debt this quarter.
For the year, which included about nine months of operations with Hummingbird, Open Text had revenue of US$595.7 million and earnings of US$21.7 million with operating cash flow of US$110.9 million.
Open Text now has about 2,700 employees world-wide.
[2]---------------------------------------------------------------
ARISE prepares to start construction in Germany
August 9 & September 4, 2007
ARISE reported a net loss of $3.4 million on sales of $305,000 in the quarter ended June 30 (Q2 07). The company is essentially in a pre-revenue stage as it prepares to commercialize research in new solar technologies. Gross profit in the quarter was just $30,000.
The company had $1.6 million in R&D expenses in the quarter, along with $1.9 million in general and administrative expenses.
During Q2, ARISE raised $24.7 million in cash through a share offering and the exercise of warrants. Operations consumed $2.4 million in cash with an additional $6.8 million spent on capital assets. ARISE ended the quarter with $17.9 million in cash. It received an additional $1.0 million through the exercise of warrants in the first three days of the current quarter. ARISE still has outstanding options and warrants -- now all in the money -- for 16.3 million additional shares. As of August 7, the company's cash balance was $12.2 million following payments to building and equipment suppliers and a prepayment to its silicon wafer supplier. ARISE says it expects to raise additional funds.
The company also announced that its German subsidiary has entered into an agreement to purchase a 13 hectare site in Bischofswerda, Germany, following the letter of intent signed last year. The purchase is expected to close this month. ARISE has hired a German construction company to begin work on the new facility, which is expected to be ready for initial production next spring.
And ARISE has hired Richard Lu as its new business development VP. He had been with Toronto Hydro since 2002 and was named that company's first chief conservation officer three years ago. Lu will be responsible for growing business in Asia, and for sales of solar photovoltaic systems in the Greater Toronto Area. Lu has graduate degrees in medicine and biochemistry from China and came to Canada in 1990 as a post-doctoral fellow at the Hospital for Sick Children in Toronto. He then earned a degree in occupational hygiene and an MBA from the University of Toronto.
[3]---------------------------------------------------------------
Dalsa makes job cuts, plans to divest Colorado office
August 17 & September 6, 2007
As promised last month, Dalsa announced its plans to cut costs after a disappointing first half to fiscal 2007 and forecasts of flat-to-declining sales in the near-term. The biggest move will see the company sell or shut down its operations in Colorado Springs, Colorado. Dalsa moved into the city in 1999 with its acquisition of Silicon Mountain Design. The facility had specialized in medical imaging and Dalsa says it will now "explore strategic alternatives" for its x-ray imaging business. Production and R&D related to industrial products will be moved to other Dalsa facilities. Dalsa emphasized that it would continue to develop products for the life sciences market.
Staffing levels will also be decreased in Dalsa's semiconductor business and some low margin products will be discontinued. Administrative functions throughout the company will become more centralized. Dalsa expects that staffing levels in its two business units will fall 8-9% compared to the start of the fiscal year.
Ralf Brooks, who has been president of Dalsa Semiconductor since 2002 and has been with Dalsa in other roles since 1994, is one of those who will be leaving the company. He is taking early retirement, finishing at the end of this month. The semiconductor business will now be led by two unit general managers under CEO Brian Doody (who became chief executive on September 1).
As Dalsa also promised, there were no cuts announced to its digital cinema business.
And Dalsa has completed the sale of 37 acres of land in Waterloo to RIM for $11.6 million (see May digest).
[4]---------------------------------------------------------------
Descartes makes it 10 profitable quarters in a row, buys UK firm
September 6, 2007
Descartes reported earnings of US$1.7 million (US$0.03/share) on sales of US$14.3 million in the quarter ended July 31 (Q2 08). Sales were up 7% from both last year and the previous quarter. Operations generated US$3.7 million in cash and the company ended the quarter with US$49.2 million in cash.
That's 10 profitable quarters in a row, following 35 consecutive money-losing quarters. Q2 also set a new company record for quarterly earnings, breaking the previous mark of US$1.2 million set five quarters ago (and essentially matched two quarters back).
Descartes also announced that is has made another acquisition. It bought Global Freight Exchange Limited of London, England -- developers of a air cargo reservation system -- for about US$5.4 million in cash plus 500,000 Descartes common shares (currently worth about $2 million) that were issued to airlines and freight forwarders that agreed to "maintain their investment in Descartes for a minimum period ranging between 11 and 18 months." An additional US$5.2 million in cash may be paid if the business achieves certain milestones over the next four years. Descartes expects GF-X to contribute at least US$4 million in revenue in fiscal 2009.
GF-X is Descartes' sixth announced acquisition in the last 16 months, after it had gone five years without acquiring any other companies.
[5]---------------------------------------------------------------
ATS raises $110 million, faces challenge from two shareholders
August 16 & September 5, 2007
ATS has raised $110 million through a rights offering. The company sold 17.7 million new shares at $6.23 a share. Each existing shareholder received one right per share held, and could buy a new share for each 3.35 rights.
At the time the offering was announced in July, ATS shares were trading above $9. In August, they dipped as low as $5.68 before bouncing back last week.
The main reason for the gains last week was a challenge to ATS' board of directors from two of the company's most prominent shareholders. Toronto's Goodwood Inc. and New York-based Mason Capital Management -- which together own about 21% of ATS' outstanding shares -- have sent a proxy circular to ATS shareholders asking to support their plan to elect a new slate of directors at the company's AGM this Thursday. If successful, Goodwood and Mason say they will replace Ron Jutras with a new CEO.
In their circular, Goodwood and Mason are particularly critical of ATS' decision to invest in Spheral Solar, which has since been abandoned. The circular, and ATS' response, make for entertaining reading, but there isn't any big disagreement between the two sides about what to do with the company. Goodwood and Mason just say they have no confidence in the current board to make good decisions or in the CEO to execute the plan. If you don't want to read through 20 pages of material, the dispute pretty much goes like this: G&M: "Here's the direction we think the company should be going." ATS: "We're already doing that, and making good progress." G&M: "Sure, you are now -- after we suggested it -- but what were you doing the last two years? You really blew it with Spheral Solar." ATS: "Easy to say now. And you sure played a role in the failure of the Photowatt IPO." G&M: "No, you screwed that up. Ghirardi was a poor choice for Photowatt CEO and Jutras needs to go too." ATS: "He's way better than your guy."
Institutional Shareholder Services Canada (formerly Fairvest) has come out in support of Goodwood and Mason.
The most interesting part of this is that Goodwood and Mason have the support of John Bell, the former CEO of Polymer Technologies in Cambridge (and the one-time chair of CTTAN, the CTT Accelerator Network, which became part of Communitech). Bell is on Goodwood and Mason's slate of proposed directors and they say he has also offered to run the company on either a transitional or permanent basis.
Bell is now listed as the chair of The Onbelay Group of Companies, a private equity firm in Cambridge. He had led Polymer for about 10 years, through its merger last year with Illinois-based Plainfield Companies. Bell initially served as chairman of the combined companies, although that arrangement didn't last long. Bell told me in 1999 that he was a shareholder in ATS and that ATS founder Klaus Woerner was a one-time shareholder in Polymer. He said the two companies competed against each other but "on a very friendly basis and they're a good friend." Woerner died in 2005 and Jutras succeeded him as CEO. Jutras had been appointed COO in 2004 when Woerner was ill with cancer. He had previously been CFO for nearly 20 years.
[6]---------------------------------------------------------------
MKS reports loss on record revenue
September 6, 2007
Like Descartes, MKS is also working on a quarterly profitability streak, unfortunately it's a red streak as MKS reported its fifth-consecutive money-losing quarter. MKS lost US$320,000 (US$0.01/share) on sales of US$13.6 million in the quarter ended July 31 (Q1 08).
The bright spot was that the company generated record sales in the quarter, up 8% from both last quarter and last year. Sales from MKS' core ALM business were up 14% from Q4 and 12% from last year, but lost US$0.8 million. Its fading interoperability business recorded earnings of US$0.5 million on sales of US$1.9 million.
Dragging down earnings was US$500,000 in severance expenses -- a bit higher than the number MKS had told shareholders to expect at the beginning of the quarter. The company said it terminated "several long-term employees."
MKS expects to be profitable for the 2008 fiscal year.
Operations used US$1.9 million in cash and MKS had its usual US$1.0 million in quarterly dividend payments, leaving the company with US$11.9 million at the end of the quarter, down US$3.4 million from the end of Q4.
[7]---------------------------------------------------------------
Virtek sells business unit for $6.2 million
August 16, 2007
Virtek has sold its Intelligent Laser Systems group to Belgium's Metris for $6.2 million in cash. The ILS laser projection technology was unveiled in 2005 and won orders from Lockheed Martin, Airbus ($2 million), and Boeing ($4.2 million). Metris and Virtek announced an alliance last year.
Virtek has decided to focus on its marking and engraving business after seeing few near-term prospects for growth in its traditional imaging and templating business. ILS had been one of the company's hopes for growth in imaging and templating.
[8]---------------------------------------------------------------
Sandvine customer draws fire from BitTorrent users
August 2007
Several bloggers were up in arms in August over how Sandvine technology is being used to heavily restrict BitTorrent seeding, particularly by Comcast. Comcast is probably Sandvine's most prominent customer.
A blog on Wired referred to Sandvine's "somewhat creepy" goals, a blogger on CNET asked whether the Sandvine technology was even legal, while a post with an alleged solution for Linux users is up to nearly 1,000 diggs on Digg (with many of the responses saying that the so-called solution would do no good). There were dozens of posts and comments on various sites focused on BitTorrent or ISP issues as well as general tech sites like Slashdot.
Light Reading quoted Sandvine marketing & sales EVP Tom Donnelly saying that he "wasn't aware of any service provider blocking BitTorrent traffic or seeding."
[9]---------------------------------------------------------------
STOCK REPORT: New highs for RIM, Open Text impresses investors
August 2007
A rough month on the stock markets, but not for Waterloo's two most valuable tech companies. Following a three-for-one split, RIM shares continued to soar to new levels, taking the company to a market value of $50 billion by the end of August. It was running neck-and-neck with TD and Scotiabank as the third most valuable company on the TSX, according to globeinvestor.com tables.
Next month marks the 10th anniversary of RIM's IPO. Every $1,000 invested in the company at that time would be worth about $70,000 today, averaging better than a 50% annual return over the decade. One $7.25 share from the IPO would today be six shares with a combined value of about $515.
Open Text zoomed back over the $1 billion mark in market capitalization following the announcement of its quarterly results. The company's shares had their best month since January 2004. While they had traded at higher levels as recently as May, Open Text shares finished August with their highest month-end price in three years.
For the month of August:
Open Text [TSX: OTC] +31%
RIM [TSX: RIM] +18%
===============================
Dalsa [TSX: DSA] -0%
--S&P TSX COMPOSITE INDEX -2%
MKS [TSX: MKX] -2%
Com Dev [TSX: CDV] -5%
Sandvine [TSX: SVC] -5%
ARISE [TSXV: APV] -5%
RDM [TSX: RC] -6%
TurboSonic [OTCBB: TSTA] -7%
Descartes [TSX: DSG] -12%
ATS [TSX: ATA] -13%
Biorem [TSXV: BRM] -13%
Virtek [TSX: VRK] -14%
--S&P TSX VENTURE INDEX -17%
Navtech [OTCBB: NAVH] -25%
It looks like investors weren't optimistic about Descartes' quarter, as the company's shares fell to their lowest month-end since December 2005. But the stock has now regained most of its August losses, with an 8% jump the day the quarterly results came out.
Navtech shares have been taking a pounding, with a 25% drop in September followed by another 18% decline (as of Friday's close) so far in September. The stock had its worst month-end price in nearly three years.
ATS shares fell to another 12-year low, and are down 44% over the first eight months of 2007. Virtek shares dropped to their lowest point since the end of 2005.
Companies with core operations outside the area:
Blue Coat [Nasdaq: BCSI] +71%
Ansys [Nasdaq: ANSS] +27%
Adobe [Nasdaq: ADBE] +6%
Oracle [Nasdaq: ORCL] +6%
Google [Nasdaq: GOOG] +1%
AMIS [Nasdaq: AMIS] +1%
===================================
McAfee [NYSE: MFE] -0%
Agfa-Gevaert [Brussels: AGFA] -1%
Sybase [NYSE: SY] -3%
LSI Logic [NYSE: LSI] -4%
NCR [NYSE: NCR] -5%
Automated Benefits [TSXV: AUT] -17%
Blue Coat shares -- which have had some huge ups and downs over the years -- are now up 220% this year, which is even better than Sandvine's 207% gain.
[10]--------------------------------------------------------------
Miscellaneous Tidbits
Gary Will
gary@garywill.com
In this issue:
- Open Text sales up sharply to end the fiscal year
- ARISE prepares to start construction in Germany
- Dalsa makes job cuts, plans to divest Colorado office
- Descartes makes it 10 profitable quarters in a row, buys UK firm
- ATS raises $110 million, faces challenge from two shareholders
- MKS reports loss on record revenue
- Virtek sells business unit for $6.2 million
- Sandvine customer draws fire from BitTorrent users
- STOCK REPORT: New highs for RIM, Open Text impresses investors
- Miscellaneous tidbits from Symbility, PackagingOne, Com Dev, Desire2Learn, Biorem, RDM, Senesco, CanJobs.com.
A D V E R T I S E M E N T S
RISK FREE LEAD GENERATION
From sales opportunity development to increasing attendance for events, Virtual Causeway accelerates your sales process! With a focus on selling and marketing complex services and technology, we guarantee a consistent and reliable flow of quality leads - assuring that your pipeline is constantly full. Contact us today to learn how we can help connect you with your next customer. Call 519-886-1600 ext. 405 or email marketing@v-causeway.com for details.
2007 TECHNOLOGY SPOTLIGHT PUBLICATION
Where your business needs to be! This is your opportunity to be part of a very special and unique success story. 80,000 copies of the 2007 Technology Spotlight (OUR 10TH ANNIVERSARY)will be delivered on Thursday, October 4th in both The Record and the Guelph Mercury. This is the most cost effective and high impact medium to press home your message with decision makers and legitimize your presence in Canada's Technology Triangle. Contact Waldy Willms at (519) 894-2250 ext.2307 or wwillms@therecord.com to learn more. Check out last year's publication at
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]---------------------------------------------------------------
Open Text sales up sharply to end the fiscal year
August 30, 2007
Open Text put up some strong numbers to finish fiscal 2007, reporting earnings of US$8.2 million (US$0.16/share) on sales of US$175.2 million in the period ended June 30 (Q4 07). Sales were up 12% from the previous quarter while net income more than doubled.
Operations generated US$28.5 million in cash, and the company quickly put it to use, spending US$31.0 million to repay long-term debt (from the Hummingbird acquisition last fall) and another US$10.8 million on acquisition-related expenses. It ended the quarter with US$150.0 million in cash, down US$9.7 million from the end of Q3. It plans to make another US$30 million payment on its long-term debt this quarter.
For the year, which included about nine months of operations with Hummingbird, Open Text had revenue of US$595.7 million and earnings of US$21.7 million with operating cash flow of US$110.9 million.
Open Text now has about 2,700 employees world-wide.
[2]---------------------------------------------------------------
ARISE prepares to start construction in Germany
August 9 & September 4, 2007
ARISE reported a net loss of $3.4 million on sales of $305,000 in the quarter ended June 30 (Q2 07). The company is essentially in a pre-revenue stage as it prepares to commercialize research in new solar technologies. Gross profit in the quarter was just $30,000.
The company had $1.6 million in R&D expenses in the quarter, along with $1.9 million in general and administrative expenses.
During Q2, ARISE raised $24.7 million in cash through a share offering and the exercise of warrants. Operations consumed $2.4 million in cash with an additional $6.8 million spent on capital assets. ARISE ended the quarter with $17.9 million in cash. It received an additional $1.0 million through the exercise of warrants in the first three days of the current quarter. ARISE still has outstanding options and warrants -- now all in the money -- for 16.3 million additional shares. As of August 7, the company's cash balance was $12.2 million following payments to building and equipment suppliers and a prepayment to its silicon wafer supplier. ARISE says it expects to raise additional funds.
The company also announced that its German subsidiary has entered into an agreement to purchase a 13 hectare site in Bischofswerda, Germany, following the letter of intent signed last year. The purchase is expected to close this month. ARISE has hired a German construction company to begin work on the new facility, which is expected to be ready for initial production next spring.
And ARISE has hired Richard Lu as its new business development VP. He had been with Toronto Hydro since 2002 and was named that company's first chief conservation officer three years ago. Lu will be responsible for growing business in Asia, and for sales of solar photovoltaic systems in the Greater Toronto Area. Lu has graduate degrees in medicine and biochemistry from China and came to Canada in 1990 as a post-doctoral fellow at the Hospital for Sick Children in Toronto. He then earned a degree in occupational hygiene and an MBA from the University of Toronto.
[3]---------------------------------------------------------------
Dalsa makes job cuts, plans to divest Colorado office
August 17 & September 6, 2007
As promised last month, Dalsa announced its plans to cut costs after a disappointing first half to fiscal 2007 and forecasts of flat-to-declining sales in the near-term. The biggest move will see the company sell or shut down its operations in Colorado Springs, Colorado. Dalsa moved into the city in 1999 with its acquisition of Silicon Mountain Design. The facility had specialized in medical imaging and Dalsa says it will now "explore strategic alternatives" for its x-ray imaging business. Production and R&D related to industrial products will be moved to other Dalsa facilities. Dalsa emphasized that it would continue to develop products for the life sciences market.
Staffing levels will also be decreased in Dalsa's semiconductor business and some low margin products will be discontinued. Administrative functions throughout the company will become more centralized. Dalsa expects that staffing levels in its two business units will fall 8-9% compared to the start of the fiscal year.
Ralf Brooks, who has been president of Dalsa Semiconductor since 2002 and has been with Dalsa in other roles since 1994, is one of those who will be leaving the company. He is taking early retirement, finishing at the end of this month. The semiconductor business will now be led by two unit general managers under CEO Brian Doody (who became chief executive on September 1).
As Dalsa also promised, there were no cuts announced to its digital cinema business.
And Dalsa has completed the sale of 37 acres of land in Waterloo to RIM for $11.6 million (see May digest).
[4]---------------------------------------------------------------
Descartes makes it 10 profitable quarters in a row, buys UK firm
September 6, 2007
Descartes reported earnings of US$1.7 million (US$0.03/share) on sales of US$14.3 million in the quarter ended July 31 (Q2 08). Sales were up 7% from both last year and the previous quarter. Operations generated US$3.7 million in cash and the company ended the quarter with US$49.2 million in cash.
That's 10 profitable quarters in a row, following 35 consecutive money-losing quarters. Q2 also set a new company record for quarterly earnings, breaking the previous mark of US$1.2 million set five quarters ago (and essentially matched two quarters back).
Descartes also announced that is has made another acquisition. It bought Global Freight Exchange Limited of London, England -- developers of a air cargo reservation system -- for about US$5.4 million in cash plus 500,000 Descartes common shares (currently worth about $2 million) that were issued to airlines and freight forwarders that agreed to "maintain their investment in Descartes for a minimum period ranging between 11 and 18 months." An additional US$5.2 million in cash may be paid if the business achieves certain milestones over the next four years. Descartes expects GF-X to contribute at least US$4 million in revenue in fiscal 2009.
GF-X is Descartes' sixth announced acquisition in the last 16 months, after it had gone five years without acquiring any other companies.
[5]---------------------------------------------------------------
ATS raises $110 million, faces challenge from two shareholders
August 16 & September 5, 2007
ATS has raised $110 million through a rights offering. The company sold 17.7 million new shares at $6.23 a share. Each existing shareholder received one right per share held, and could buy a new share for each 3.35 rights.
At the time the offering was announced in July, ATS shares were trading above $9. In August, they dipped as low as $5.68 before bouncing back last week.
The main reason for the gains last week was a challenge to ATS' board of directors from two of the company's most prominent shareholders. Toronto's Goodwood Inc. and New York-based Mason Capital Management -- which together own about 21% of ATS' outstanding shares -- have sent a proxy circular to ATS shareholders asking to support their plan to elect a new slate of directors at the company's AGM this Thursday. If successful, Goodwood and Mason say they will replace Ron Jutras with a new CEO.
In their circular, Goodwood and Mason are particularly critical of ATS' decision to invest in Spheral Solar, which has since been abandoned. The circular, and ATS' response, make for entertaining reading, but there isn't any big disagreement between the two sides about what to do with the company. Goodwood and Mason just say they have no confidence in the current board to make good decisions or in the CEO to execute the plan. If you don't want to read through 20 pages of material, the dispute pretty much goes like this: G&M: "Here's the direction we think the company should be going." ATS: "We're already doing that, and making good progress." G&M: "Sure, you are now -- after we suggested it -- but what were you doing the last two years? You really blew it with Spheral Solar." ATS: "Easy to say now. And you sure played a role in the failure of the Photowatt IPO." G&M: "No, you screwed that up. Ghirardi was a poor choice for Photowatt CEO and Jutras needs to go too." ATS: "He's way better than your guy."
Institutional Shareholder Services Canada (formerly Fairvest) has come out in support of Goodwood and Mason.
The most interesting part of this is that Goodwood and Mason have the support of John Bell, the former CEO of Polymer Technologies in Cambridge (and the one-time chair of CTTAN, the CTT Accelerator Network, which became part of Communitech). Bell is on Goodwood and Mason's slate of proposed directors and they say he has also offered to run the company on either a transitional or permanent basis.
Bell is now listed as the chair of The Onbelay Group of Companies, a private equity firm in Cambridge. He had led Polymer for about 10 years, through its merger last year with Illinois-based Plainfield Companies. Bell initially served as chairman of the combined companies, although that arrangement didn't last long. Bell told me in 1999 that he was a shareholder in ATS and that ATS founder Klaus Woerner was a one-time shareholder in Polymer. He said the two companies competed against each other but "on a very friendly basis and they're a good friend." Woerner died in 2005 and Jutras succeeded him as CEO. Jutras had been appointed COO in 2004 when Woerner was ill with cancer. He had previously been CFO for nearly 20 years.
[6]---------------------------------------------------------------
MKS reports loss on record revenue
September 6, 2007
Like Descartes, MKS is also working on a quarterly profitability streak, unfortunately it's a red streak as MKS reported its fifth-consecutive money-losing quarter. MKS lost US$320,000 (US$0.01/share) on sales of US$13.6 million in the quarter ended July 31 (Q1 08).
The bright spot was that the company generated record sales in the quarter, up 8% from both last quarter and last year. Sales from MKS' core ALM business were up 14% from Q4 and 12% from last year, but lost US$0.8 million. Its fading interoperability business recorded earnings of US$0.5 million on sales of US$1.9 million.
Dragging down earnings was US$500,000 in severance expenses -- a bit higher than the number MKS had told shareholders to expect at the beginning of the quarter. The company said it terminated "several long-term employees."
MKS expects to be profitable for the 2008 fiscal year.
Operations used US$1.9 million in cash and MKS had its usual US$1.0 million in quarterly dividend payments, leaving the company with US$11.9 million at the end of the quarter, down US$3.4 million from the end of Q4.
[7]---------------------------------------------------------------
Virtek sells business unit for $6.2 million
August 16, 2007
Virtek has sold its Intelligent Laser Systems group to Belgium's Metris for $6.2 million in cash. The ILS laser projection technology was unveiled in 2005 and won orders from Lockheed Martin, Airbus ($2 million), and Boeing ($4.2 million). Metris and Virtek announced an alliance last year.
Virtek has decided to focus on its marking and engraving business after seeing few near-term prospects for growth in its traditional imaging and templating business. ILS had been one of the company's hopes for growth in imaging and templating.
[8]---------------------------------------------------------------
Sandvine customer draws fire from BitTorrent users
August 2007
Several bloggers were up in arms in August over how Sandvine technology is being used to heavily restrict BitTorrent seeding, particularly by Comcast. Comcast is probably Sandvine's most prominent customer.
A blog on Wired referred to Sandvine's "somewhat creepy" goals, a blogger on CNET asked whether the Sandvine technology was even legal, while a post with an alleged solution for Linux users is up to nearly 1,000 diggs on Digg (with many of the responses saying that the so-called solution would do no good). There were dozens of posts and comments on various sites focused on BitTorrent or ISP issues as well as general tech sites like Slashdot.
Light Reading quoted Sandvine marketing & sales EVP Tom Donnelly saying that he "wasn't aware of any service provider blocking BitTorrent traffic or seeding."
[9]---------------------------------------------------------------
STOCK REPORT: New highs for RIM, Open Text impresses investors
August 2007
A rough month on the stock markets, but not for Waterloo's two most valuable tech companies. Following a three-for-one split, RIM shares continued to soar to new levels, taking the company to a market value of $50 billion by the end of August. It was running neck-and-neck with TD and Scotiabank as the third most valuable company on the TSX, according to globeinvestor.com tables.
Next month marks the 10th anniversary of RIM's IPO. Every $1,000 invested in the company at that time would be worth about $70,000 today, averaging better than a 50% annual return over the decade. One $7.25 share from the IPO would today be six shares with a combined value of about $515.
Open Text zoomed back over the $1 billion mark in market capitalization following the announcement of its quarterly results. The company's shares had their best month since January 2004. While they had traded at higher levels as recently as May, Open Text shares finished August with their highest month-end price in three years.
For the month of August:
Open Text [TSX: OTC] +31%
RIM [TSX: RIM] +18%
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Dalsa [TSX: DSA] -0%
--S&P TSX COMPOSITE INDEX -2%
MKS [TSX: MKX] -2%
Com Dev [TSX: CDV] -5%
Sandvine [TSX: SVC] -5%
ARISE [TSXV: APV] -5%
RDM [TSX: RC] -6%
TurboSonic [OTCBB: TSTA] -7%
Descartes [TSX: DSG] -12%
ATS [TSX: ATA] -13%
Biorem [TSXV: BRM] -13%
Virtek [TSX: VRK] -14%
--S&P TSX VENTURE INDEX -17%
Navtech [OTCBB: NAVH] -25%
It looks like investors weren't optimistic about Descartes' quarter, as the company's shares fell to their lowest month-end since December 2005. But the stock has now regained most of its August losses, with an 8% jump the day the quarterly results came out.
Navtech shares have been taking a pounding, with a 25% drop in September followed by another 18% decline (as of Friday's close) so far in September. The stock had its worst month-end price in nearly three years.
ATS shares fell to another 12-year low, and are down 44% over the first eight months of 2007. Virtek shares dropped to their lowest point since the end of 2005.
Companies with core operations outside the area:
Blue Coat [Nasdaq: BCSI] +71%
Ansys [Nasdaq: ANSS] +27%
Adobe [Nasdaq: ADBE] +6%
Oracle [Nasdaq: ORCL] +6%
Google [Nasdaq: GOOG] +1%
AMIS [Nasdaq: AMIS] +1%
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McAfee [NYSE: MFE] -0%
Agfa-Gevaert [Brussels: AGFA] -1%
Sybase [NYSE: SY] -3%
LSI Logic [NYSE: LSI] -4%
NCR [NYSE: NCR] -5%
Automated Benefits [TSXV: AUT] -17%
Blue Coat shares -- which have had some huge ups and downs over the years -- are now up 220% this year, which is even better than Sandvine's 207% gain.
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Miscellaneous Tidbits
- Symbility lost $460,000 on sales of $391,000 in the period ended June 30 (Q2 07). Sales were up 47% from the previous quarter and more than doubled from last year. The loss was reduced from $691,000 in Q1 and $882,000 in 2006. Parent company Automated Benefits is consolidating the operations of its two subsidiaries, Kitchener's Symbility and Edmonton's AutoBen, with its corporate HQ in Toronto, moving operations to Toronto. It already announced that the Edmonton office of AutoBen will shut down, and I've been told that Symbility will be closing its Kitchener office before the end of the year. Symbility was founded in 2002 by Eric Embacher in Kitchener and Marc-Olivier Huynh in Montreal. It merged with AutoBen in 2004. Dave Chalmers, a former RIM VP previously with Descartes, joined Symbility at the beginning of this year as its bizdev VP.
- PackagingOne is opening an R&D facility in Kitchener at the Huron Business Park. It will retain its existing presence within the Accelerator Centre.
- John Keating has resumed his duties as Com Dev CEO after spending a few months recuperating from a medical procedure in March.
- Desire2Learn has landed England's Nottingham Trent University as a customer for its e-learning products.
- Biorem reported a loss of $736,000 on sales of $2.2 million in the quarter ended June 30 (Q2 07). Sales were up 25% from the previous quarter and down 20% from a strong top line in Q2 last year. Even with the dip in sales, gross profits were up 12% from last year. Operations consumed $1.4 million in cash, leaving Biorem with $2.5 million in cash. There were big sequential increases in R&D and sales & marketing expenses. The company booked $3.6 million in new orders in Q2, raising its order backlog to $9.0 million.
- RDM's new marketing VP is Mike Murphy, succeeding Tom Kettell who had held the position since 2002. Murphy was most recently with Virginia-based Transaction Network Services.
- Senesco Technologies, a New Jersey-based company commercializing technology invented by UW biology professor and associate VP of university research John Thompson, announced a private placement of up to US$5 million. Thompson is Senesco's R&D EVP.
- CanJobs.com, created by Guelph's VentureLabour.com, is being acquired by Arizona-based Jobing.com. It is Jobing.com's ninth acquisition and its first in Canada. CanJobs.com will operate as a wholly-owned subsidiary and keep its Guelph HQ. CanJobs also runs the kwjobs.com and cttjobs.com sites as well as many others across Canada.
posted by Gary Will at 12:33 AM
