Waterloo Tech Digest - July 3, 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]---------------------------------------------------------------
Handshake VR shutting down
June 2007
Handshake VR is winding down operations, three years after receiving a $3 million investment from Tech Capital Partners, BDC Venture Capital and Trellis Capital. The seven-year-old company had always struggled to find a market for its technology and investors finally ran out of patience.
Handshake was founded by UW professor David Wang, with Tim Ellis and Kevin Tuer, who had previously worked at Control Advancements. Right from the beginning, there was a lot of respect for the technology and the team, and a lot of head scratching over how they were going to make money. In an investor profile in 2002, the company projected revenue of $125 million by 2006, although I don't think anyone took that number very seriously. CITO -- now part of the Ontario Centres of Excellence -- became an investor and by 2004 it was starting to look promising for Handshake. Former Maplesoft president Dieter Hensler had been brought in to take the CEO reins from Wang, and with San Jose's Immersion Corp. beginning to take off (it's worth over $400 million today), Handshake closed a $3 million VC round. When things didn't go as hoped, Com Dev chairman Keith Ainsworth took over as CEO in 2005 (he had been Handshake chairman for a few years by then).
In 2002, Mark Evans wrote a piece in the National Post with the lede "Handshake Interactive Technologies Inc. has cool technology but no customers." Unfortunately, five years later, the story hadn't changed enough to suit investors.
[2]---------------------------------------------------------------
Sandvine raising $50M, makes two acquisitions
June 27, 2007
A share offering from Sandvine will raise gross proceeds of $51.8 million, if the underwriters' over-allotment option is taken in full. The offering will close this month and consists of 10.2 million new shares (including the over-allotment), selling at $5.05 a share. At Friday's close, Sandvine stock was selling at $5.90 a share. Net proceeds to the company would be $49.7 million.
Sandvine also announced two acquisitions, with a combined price of US$4.5 million in cash and 0.9 million Sandvine shares, with an additional 0.6 million shares to be paid if certain milestones are met by the end of 2008. Sandvine has acquired Israel's CableMatrix, which offers similar technology. It was founded in 2004 and received funding that year from Intel Capital. Last November it closed another round of funding with Intel and three other investors participating. Sandvine has signed an agreement to acquire Denver-based Simplicita, which has developed technology to remove Internet zombies, correct URL typos, and block phishing attempts. Sandvine did not specify how much it is paying for each company.
Sandvine also raised its annual revenue guidance from $50-60 million to $62-67 million. After the blow-away results of Q1 (see April digest), anything under $60 million would have ended up being a disappointment and the company now seems confident that it wasn't a fluke.
[3]---------------------------------------------------------------
Com Dev books record business in money-losing quarter
June 14, 2007
Record levels of new orders helped soften the blow of a technical problem that cost Com Dev $5.1 million in the quarter ended April 30 (Q2 08). Com Dev reported a loss of $1.4 million on sales of $38.6 million. Revenue was up slightly from a year ago and down 2% from the previous quarter.
The company had warned in April that it would take a charge of up to $9 million after technical problems had been found in work on a particular project. That charge ended up being $5.1 million after Com Dev discovered that many components could were usable, requiring less rework and repairs. The entire charge was made to the cost of goods sold, reducing gross margins to 18.8% from 28.6% in the previous quarter. The company expects margins to return to their usual levels this quarter and no additional charges are expected.
Even without that extra cost, Com Dev's bottom line would have been impacted by the company's decision to expand its R&D activities. It is increasing spending on R&D through the rest of the year to take advantage of opportunities it sees in the market. R&D costs of $4.1 million were up 63% from Q1 and 43% from a year ago. SG&A expenses were up 22% from the previous quarter, attributed in part to the ramping up of operations in the U.S.
Com Dev booked a record $81 million in new orders in the quarter, boosting its backlog to $130 million. It ended the quarter with $25.6 million in cash.
Over the first half of the fiscal year, revenue is running about even with last year, and Com Dev is maintaining its forecast of at least 10% revenue growth this year.
Com Dev also announced that Linamar chairman Frank Hasenfratz was stepping down from its board. He had been a director of Com Dev for 13 years.
[4]---------------------------------------------------------------
Virtek begins "a challenging year"
June 12, 2007
At Virtek, it was a rough start to what the company says will be a challenging year. It reported breakeven results on revenue of $15.2 million in the quarter ended April 30 (Q1 08). Sales were down 7% from a year ago and 15% from the previous quarter. Year-over-year, Virtek's marking & engraving business reported a 44% increase in sales, while its traditional imaging & templating business showed a 29% decline. Both businesses showed a significant sequential drop in sales.
Virtek raised a net $3.7 million through the sale of shares in the quarter and ended the period with net cash of $3.0 million. Operations consumed $2.1 million in cash.
The company announced in June that it had spent $1.3 million to buy the remaining 25% of its German FOBA subsidiary. It had acquired 75% of the business four years ago. FOBA became Virtek's marking & engraving business, which is what the company is looking to for future growth.
[5]---------------------------------------------------------------
RIM records first billion-dollar quarter
June 28, 2007
RIM reported earnings of US$223.2 million (US$1.17/share) on sales of US$1.1 billion in the quarter ended June 2 (Q1 08). It was the first time the company topped $1 billion in quarterly sales. Revenue was up 16% from the previous quarter and 77% from the same period last year, and in line with the high end of the company's forecast.
Sales of handheld devices were particularly strong, at about US$822 million, up about 20% from the previous quarter. RIM shipped 2.4 million devices in the quarter. There were 1.2 million new BlackBerry subscribers in the quarter, pushing the total number to 9 million.
RIM ended the quarter with US$1.6 billion in cash, up US$149.9 million from the end of Q4. Operations provided US$225.3 million in cash.
RIM also announced that co-founder Doug Fregin -- a director of the company for the last 22 years, and a friend of Mike Lazaridis from their childhood years in Windsor -- is stepping down from the board. He joins UW president emeritus Doug Wright and Kendall Cork, who announced in February that they would not be standing for reelection to the board. New to the board this year are Roger Martin, dean of the Rotman School of Management at U of T, and David Kerr, former Noranda CEO.
[6]---------------------------------------------------------------
Navtech reports loss on lower margins
June 8, 2007
In the quarter ended April 30 (Q2 07), Navtech reported a loss of US$397,000 (US$0.10/share) on sales of US$10.4 million. Sales were up 1.5% from the previous quarter and 12% from a year ago, but a drop in margins led to a 13% sequential decline in gross profits. Operations lost US$232,000, compared to income of US$609,000 in Q1.
Over the first half of this fiscal year, 72% of Navtech's revenue has come from Europe, with North and South America providing 21%.
Navtech ended the quarter with US$3.1 million in cash, down US$1.2 million from the start of the period.
[7]---------------------------------------------------------------
MKS predicts profitable year after poor 2007
June 6, 2007
MKS' Q4 results were in line with the company's previous warning (see April digest). In the quarter ended April 30, the company lost US$458,000 on sales of US$12.6 million. Revenue was up 9% from a weak Q3, but well below the US$14.3 to $16.3 million that MKS had forecast at the beginning of the quarter. Interoperability sales were up 34% sequentially, so the shortfall came from MKS' core ALM business, which reported 5% growth from Q3.
For the year, MKS lost US$2.8 million on sales of US$48.3 million. Sales were flat from the previous year, when MKS earned US$9.1 million -- a US$12 million reduction to the bottom line on the same revenue. It was MKS' first annual loss since 2004. The company lost money in every quarter through the year.
MKS says it will have US$400,000 in severance costs in the current quarter, but it is forecasting a return to profitability this year, with increased sales. The company ended fiscal 2007 with US$15.3 million in cash, which it expects will be enough to fund operations and its quarterly dividend payments.
[8]---------------------------------------------------------------
STOCK REPORT: RIM approaches $40B value; Sandvine soars
June 2007
Sandvine shares bounced back from a slight decline in May to post their best month ever -- a 33% gain. It was the fourth month in 2007 where Sandvine shares have jumped more than 25%. Meanwhile, RIM shares are up 47% in the last two months, setting another record high in June. The stock will be split 3-for-1 in August, which will give RIM about 558 million shares outstanding.
For the month of June:
Sandvine [TSX: SVC] +33%
RIM [TSX: RIM] +21%
ATS [TSX: ATA] +11%
Com Dev [TSX: CDV] +9%
TurboSonic [OTCBB: TSTA] +3%
===============================
Dalsa [TSX: DSA] -0%
--S&P TSX COMPOSITE INDEX -1%
--S&P TSX VENTURE INDEX -2%
Navtech [OTCBB: NAVH] -4%
Open Text [TSX: OTC] -4%
ARISE [TSXV: APV] -5%
RDM [TSX: RC] -6%
MKS [TSX: MKX] -7%
Descartes [TSX: DSG] -7%
Biorem [TSXV: BRM] -8%
Virtek [TSX: VRK] -12%
Com Dev shares are up 24% in the last two months after a 26% drop in April. Virtek shares fell to their lowest month-end price since December 2005.
Companies with core operations outside the area:
Blue Coat [Nasdaq: BCSI] +13%
Google [Nasdaq: GOOG] +5%
Oracle [Nasdaq: ORCL] +2%
Automated Benefits [TSXV: AUT] 0%
===================================
Sybase [NYSE: SY] -1%
Agfa-Gevaert [Brussels: AGFA] -1%
AMIS [Nasdaq: AMIS] -2%
NCR [NYSE: NCR] -2%
Senesco [Amex: SNT] -4%
McAfee [NYSE: MFE] -4%
Ansys [Nasdaq: ANSS] -6%
Adobe [Nasdaq: ADBE] -9%
LSI Logic [NYSE: LSI] -13%
We've reached the half-way point of 2007, and here's how the shares of local companies have fared so far this year:
Sandvine [TSX: SVC] +211%
ARISE [TSXV: APV] +86%
RIM [TSX: RIM] +44%
--S&P TSX COMPOSITE INDEX +8%
Biorem [TSXV: BRM] +8%
TurboSonic [OTCBB: TSTA] +6%
RDM [TSX: RC] +6%
--S&P TSX VENTURE INDEX +6%
Descartes [TSX: DSG] +2%
===============================
Open Text [TSX: OTC] -2%
Navtech [OTCBB: NAVH] -4%
Dalsa [TSX: DSA] -5%
Com Dev [TSX: CDV] -17%
ATS [TSX: ATA] -21%
MKS [TSX: MKX] -21%
Virtek [TSX: VRK] -29%
Only three stocks have outperformed the TSX composite index, but they've all been big winners in 2007. Sandvine stock has consistently been on a tear in every month except May. ARISE shares were up 188% over the first two months of the year, but have cooled off since then, losing value in each of the last four months. With RIM, the story was just the opposite -- its shares were actually down over the first four months, but have now had back-to-back months with 20% gains.
Shares of ATS and MKS were both in the bottom three for 2006 and are repeating so far this year. Virtek stock had a good year in 2006, but the company isn't enthusiastic about its prospects in the current year.
Market capitalization at June 30
in millions, using outstanding shares
(Year-to-date change in parentheses):
1. RIM ----- $39,883 (+$12,353)
2. Open Text ----- 1,166 (-7)
3. Sandvine ----- 732 (+499)
4. ATS ----- 521 (-140)
5. Com Dev ----- 435 (+299)
6. Dalsa ----- 232 (-10)
7. Descartes ----- 229 (+30)
8. RDM ----- 93 (+9)
9. MKS ----- 78 (-25)
10. ARISE ----- 63 (+47) **
11. Virtek ----- 25 (-5)
12. Biorem ----- 19 (+2)
13. TurboSonic ----- 18 (0)
14. Navtech ----- 12 (-3) **
** the market values of ARISE and Navtech would be much higher on a fully-diluted basis
How long will it be until we read that Waterloo Region's 14 public high-tech companies have an average market capitalization of $3.1 billion? In the September 2002 digest, I mentioned that RIM's value had nearly matched that of all the others on the list. Today, even with the addition of Sandvine, RIM contributes 92% of the combined value of these 14 companies.
[9]--------------------------------------------------------------
Miscellaneous Tidbits
Gary Will
gary@garywill.com
In this issue:
- Handshake VR shutting down
- Sandvine raising $50M, makes two acquisitions
- Com Dev books record business in money-losing quarter
- Virtek begins "a challenging year"
- RIM records first billion-dollar quarter
- Navtech reports loss on lower margins
- MKS predicts profitable year after poor 2007
- STOCK REPORT: RIM approaches $40B value; Sandvine soars
- Miscellaneous tidbits from Tungle, ATS, First Sentinel, Desire2Learn.
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]---------------------------------------------------------------
Handshake VR shutting down
June 2007
Handshake VR is winding down operations, three years after receiving a $3 million investment from Tech Capital Partners, BDC Venture Capital and Trellis Capital. The seven-year-old company had always struggled to find a market for its technology and investors finally ran out of patience.
Handshake was founded by UW professor David Wang, with Tim Ellis and Kevin Tuer, who had previously worked at Control Advancements. Right from the beginning, there was a lot of respect for the technology and the team, and a lot of head scratching over how they were going to make money. In an investor profile in 2002, the company projected revenue of $125 million by 2006, although I don't think anyone took that number very seriously. CITO -- now part of the Ontario Centres of Excellence -- became an investor and by 2004 it was starting to look promising for Handshake. Former Maplesoft president Dieter Hensler had been brought in to take the CEO reins from Wang, and with San Jose's Immersion Corp. beginning to take off (it's worth over $400 million today), Handshake closed a $3 million VC round. When things didn't go as hoped, Com Dev chairman Keith Ainsworth took over as CEO in 2005 (he had been Handshake chairman for a few years by then).
In 2002, Mark Evans wrote a piece in the National Post with the lede "Handshake Interactive Technologies Inc. has cool technology but no customers." Unfortunately, five years later, the story hadn't changed enough to suit investors.
[2]---------------------------------------------------------------
Sandvine raising $50M, makes two acquisitions
June 27, 2007
A share offering from Sandvine will raise gross proceeds of $51.8 million, if the underwriters' over-allotment option is taken in full. The offering will close this month and consists of 10.2 million new shares (including the over-allotment), selling at $5.05 a share. At Friday's close, Sandvine stock was selling at $5.90 a share. Net proceeds to the company would be $49.7 million.
Sandvine also announced two acquisitions, with a combined price of US$4.5 million in cash and 0.9 million Sandvine shares, with an additional 0.6 million shares to be paid if certain milestones are met by the end of 2008. Sandvine has acquired Israel's CableMatrix, which offers similar technology. It was founded in 2004 and received funding that year from Intel Capital. Last November it closed another round of funding with Intel and three other investors participating. Sandvine has signed an agreement to acquire Denver-based Simplicita, which has developed technology to remove Internet zombies, correct URL typos, and block phishing attempts. Sandvine did not specify how much it is paying for each company.
Sandvine also raised its annual revenue guidance from $50-60 million to $62-67 million. After the blow-away results of Q1 (see April digest), anything under $60 million would have ended up being a disappointment and the company now seems confident that it wasn't a fluke.
[3]---------------------------------------------------------------
Com Dev books record business in money-losing quarter
June 14, 2007
Record levels of new orders helped soften the blow of a technical problem that cost Com Dev $5.1 million in the quarter ended April 30 (Q2 08). Com Dev reported a loss of $1.4 million on sales of $38.6 million. Revenue was up slightly from a year ago and down 2% from the previous quarter.
The company had warned in April that it would take a charge of up to $9 million after technical problems had been found in work on a particular project. That charge ended up being $5.1 million after Com Dev discovered that many components could were usable, requiring less rework and repairs. The entire charge was made to the cost of goods sold, reducing gross margins to 18.8% from 28.6% in the previous quarter. The company expects margins to return to their usual levels this quarter and no additional charges are expected.
Even without that extra cost, Com Dev's bottom line would have been impacted by the company's decision to expand its R&D activities. It is increasing spending on R&D through the rest of the year to take advantage of opportunities it sees in the market. R&D costs of $4.1 million were up 63% from Q1 and 43% from a year ago. SG&A expenses were up 22% from the previous quarter, attributed in part to the ramping up of operations in the U.S.
Com Dev booked a record $81 million in new orders in the quarter, boosting its backlog to $130 million. It ended the quarter with $25.6 million in cash.
Over the first half of the fiscal year, revenue is running about even with last year, and Com Dev is maintaining its forecast of at least 10% revenue growth this year.
Com Dev also announced that Linamar chairman Frank Hasenfratz was stepping down from its board. He had been a director of Com Dev for 13 years.
[4]---------------------------------------------------------------
Virtek begins "a challenging year"
June 12, 2007
At Virtek, it was a rough start to what the company says will be a challenging year. It reported breakeven results on revenue of $15.2 million in the quarter ended April 30 (Q1 08). Sales were down 7% from a year ago and 15% from the previous quarter. Year-over-year, Virtek's marking & engraving business reported a 44% increase in sales, while its traditional imaging & templating business showed a 29% decline. Both businesses showed a significant sequential drop in sales.
Virtek raised a net $3.7 million through the sale of shares in the quarter and ended the period with net cash of $3.0 million. Operations consumed $2.1 million in cash.
The company announced in June that it had spent $1.3 million to buy the remaining 25% of its German FOBA subsidiary. It had acquired 75% of the business four years ago. FOBA became Virtek's marking & engraving business, which is what the company is looking to for future growth.
[5]---------------------------------------------------------------
RIM records first billion-dollar quarter
June 28, 2007
RIM reported earnings of US$223.2 million (US$1.17/share) on sales of US$1.1 billion in the quarter ended June 2 (Q1 08). It was the first time the company topped $1 billion in quarterly sales. Revenue was up 16% from the previous quarter and 77% from the same period last year, and in line with the high end of the company's forecast.
Sales of handheld devices were particularly strong, at about US$822 million, up about 20% from the previous quarter. RIM shipped 2.4 million devices in the quarter. There were 1.2 million new BlackBerry subscribers in the quarter, pushing the total number to 9 million.
RIM ended the quarter with US$1.6 billion in cash, up US$149.9 million from the end of Q4. Operations provided US$225.3 million in cash.
RIM also announced that co-founder Doug Fregin -- a director of the company for the last 22 years, and a friend of Mike Lazaridis from their childhood years in Windsor -- is stepping down from the board. He joins UW president emeritus Doug Wright and Kendall Cork, who announced in February that they would not be standing for reelection to the board. New to the board this year are Roger Martin, dean of the Rotman School of Management at U of T, and David Kerr, former Noranda CEO.
[6]---------------------------------------------------------------
Navtech reports loss on lower margins
June 8, 2007
In the quarter ended April 30 (Q2 07), Navtech reported a loss of US$397,000 (US$0.10/share) on sales of US$10.4 million. Sales were up 1.5% from the previous quarter and 12% from a year ago, but a drop in margins led to a 13% sequential decline in gross profits. Operations lost US$232,000, compared to income of US$609,000 in Q1.
Over the first half of this fiscal year, 72% of Navtech's revenue has come from Europe, with North and South America providing 21%.
Navtech ended the quarter with US$3.1 million in cash, down US$1.2 million from the start of the period.
[7]---------------------------------------------------------------
MKS predicts profitable year after poor 2007
June 6, 2007
MKS' Q4 results were in line with the company's previous warning (see April digest). In the quarter ended April 30, the company lost US$458,000 on sales of US$12.6 million. Revenue was up 9% from a weak Q3, but well below the US$14.3 to $16.3 million that MKS had forecast at the beginning of the quarter. Interoperability sales were up 34% sequentially, so the shortfall came from MKS' core ALM business, which reported 5% growth from Q3.
For the year, MKS lost US$2.8 million on sales of US$48.3 million. Sales were flat from the previous year, when MKS earned US$9.1 million -- a US$12 million reduction to the bottom line on the same revenue. It was MKS' first annual loss since 2004. The company lost money in every quarter through the year.
MKS says it will have US$400,000 in severance costs in the current quarter, but it is forecasting a return to profitability this year, with increased sales. The company ended fiscal 2007 with US$15.3 million in cash, which it expects will be enough to fund operations and its quarterly dividend payments.
[8]---------------------------------------------------------------
STOCK REPORT: RIM approaches $40B value; Sandvine soars
June 2007
Sandvine shares bounced back from a slight decline in May to post their best month ever -- a 33% gain. It was the fourth month in 2007 where Sandvine shares have jumped more than 25%. Meanwhile, RIM shares are up 47% in the last two months, setting another record high in June. The stock will be split 3-for-1 in August, which will give RIM about 558 million shares outstanding.
For the month of June:
Sandvine [TSX: SVC] +33%
RIM [TSX: RIM] +21%
ATS [TSX: ATA] +11%
Com Dev [TSX: CDV] +9%
TurboSonic [OTCBB: TSTA] +3%
===============================
Dalsa [TSX: DSA] -0%
--S&P TSX COMPOSITE INDEX -1%
--S&P TSX VENTURE INDEX -2%
Navtech [OTCBB: NAVH] -4%
Open Text [TSX: OTC] -4%
ARISE [TSXV: APV] -5%
RDM [TSX: RC] -6%
MKS [TSX: MKX] -7%
Descartes [TSX: DSG] -7%
Biorem [TSXV: BRM] -8%
Virtek [TSX: VRK] -12%
Com Dev shares are up 24% in the last two months after a 26% drop in April. Virtek shares fell to their lowest month-end price since December 2005.
Companies with core operations outside the area:
Blue Coat [Nasdaq: BCSI] +13%
Google [Nasdaq: GOOG] +5%
Oracle [Nasdaq: ORCL] +2%
Automated Benefits [TSXV: AUT] 0%
===================================
Sybase [NYSE: SY] -1%
Agfa-Gevaert [Brussels: AGFA] -1%
AMIS [Nasdaq: AMIS] -2%
NCR [NYSE: NCR] -2%
Senesco [Amex: SNT] -4%
McAfee [NYSE: MFE] -4%
Ansys [Nasdaq: ANSS] -6%
Adobe [Nasdaq: ADBE] -9%
LSI Logic [NYSE: LSI] -13%
We've reached the half-way point of 2007, and here's how the shares of local companies have fared so far this year:
Sandvine [TSX: SVC] +211%
ARISE [TSXV: APV] +86%
RIM [TSX: RIM] +44%
--S&P TSX COMPOSITE INDEX +8%
Biorem [TSXV: BRM] +8%
TurboSonic [OTCBB: TSTA] +6%
RDM [TSX: RC] +6%
--S&P TSX VENTURE INDEX +6%
Descartes [TSX: DSG] +2%
===============================
Open Text [TSX: OTC] -2%
Navtech [OTCBB: NAVH] -4%
Dalsa [TSX: DSA] -5%
Com Dev [TSX: CDV] -17%
ATS [TSX: ATA] -21%
MKS [TSX: MKX] -21%
Virtek [TSX: VRK] -29%
Only three stocks have outperformed the TSX composite index, but they've all been big winners in 2007. Sandvine stock has consistently been on a tear in every month except May. ARISE shares were up 188% over the first two months of the year, but have cooled off since then, losing value in each of the last four months. With RIM, the story was just the opposite -- its shares were actually down over the first four months, but have now had back-to-back months with 20% gains.
Shares of ATS and MKS were both in the bottom three for 2006 and are repeating so far this year. Virtek stock had a good year in 2006, but the company isn't enthusiastic about its prospects in the current year.
Market capitalization at June 30
in millions, using outstanding shares
(Year-to-date change in parentheses):
1. RIM ----- $39,883 (+$12,353)
2. Open Text ----- 1,166 (-7)
3. Sandvine ----- 732 (+499)
4. ATS ----- 521 (-140)
5. Com Dev ----- 435 (+299)
6. Dalsa ----- 232 (-10)
7. Descartes ----- 229 (+30)
8. RDM ----- 93 (+9)
9. MKS ----- 78 (-25)
10. ARISE ----- 63 (+47) **
11. Virtek ----- 25 (-5)
12. Biorem ----- 19 (+2)
13. TurboSonic ----- 18 (0)
14. Navtech ----- 12 (-3) **
** the market values of ARISE and Navtech would be much higher on a fully-diluted basis
How long will it be until we read that Waterloo Region's 14 public high-tech companies have an average market capitalization of $3.1 billion? In the September 2002 digest, I mentioned that RIM's value had nearly matched that of all the others on the list. Today, even with the addition of Sandvine, RIM contributes 92% of the combined value of these 14 companies.
[9]--------------------------------------------------------------
Miscellaneous Tidbits
- Montreal's Tungle is opening an office in Waterloo. The company recently received $1.5 million in funding from JLA Ventures and Desjardins Venture Capital, as well funding from a U.S. based angel investor. Tungle was founded by CEO Marc Gingras, who previously ran the Kitchener-based development offices of Entrade and Metiom before heading off to Europe to get an MBA. Gingras's long-time Waterloo-based business partner, Fang Yang, has joined the Tungle team as CTO.
- ATS formally announced that it was stopping further development of its Spheral Solar technology. It says it is looking at selling off or licensing the technology. In the quarter ended March 31, ATS reported costs of $11.1 million related to its withdrawn Photowatt IPO. The company is now hoping to fund its Photowatt business through a $110 million rights offering.
- First Sentinel Technologies was one of five nominees for the 2007 MSDN Code Award for top team developer. The Microsoft-sponsored prize was won by a company in Vancouver.
- Desire2Learn has opened an office in Moncton at the Université de Moncton's Scientific Park. Desire2Learn is part of the SynergiC3 program at the university, funded in part by ACOA and NRC.
- Former Metafore chairman and co-founder Joe Vos pleaded guilty to charges that he defrauded his former partners and misappropriated funds from MicroAge Southwestern Ontario and Metafore. By the time Vos is sentenced in October it will be nearly six years since the accusations against him first came to light (see June 2002, June 2003 digests).
posted by Gary Will at 12:00 AM
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