Waterloo Tech Digest - February 5, 2008
Compiled and written by
Gary Will
gary@garywill.com
In this issue:
--Gary Will
////////////////////////////////////////////////////////////
A D V E R T I S E M E N T S
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) for more information.
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.
IT SEARCH AND PLACEMENT SERVICES
Procom is currently ranked as the 4th largest IT professional services firm in Canada. (Branham 300, Financial Post, April 2007). Recently awarded one of Canada's 50 Best Managed Companies, 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. Phone: 519.885.4331
ACCELERATE YOUR TIME-TO-MARKET
Advanced Research Technology (ART) saw a market opportunity in the pharmaceutical market but needed to accelerate product development. By partnering with INO, ART realized a new imaging system product less than six months later (see the complete story). Contact Glenn Smith in Waterloo at 519-502-1305 to explore how you can accelerate your time-to-market by partnering with INO.
ARE YOU CONSISTENTLY MAKING YOUR NUMBERS?
The painful truth: Research proves that 50% of salespeople will always be underachievers. The costs inflicted by sub-par sales performers are huge and vastly underestimated by most companies. For information you can use to build winning sales teams, download our free whitepaper at http://www.peaksalesrecruiting.com/whitepaperoffer.php Peak Sales Recruiting focuses on finding top performing salespeople for technology companies.
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
AideRSS closes VC/angel funding round
December 21, 2007
AideRSS announced that it has raised an undisclosed amount of money from Tech Capital Partners and a group of local angel investors. The deal actually closed before Christmas, but wasn't announced until January.
The angels weren't identified, but include names well-known to the local tech community -- another example of how local angels have really stepped up over the last couple of years to fund a new generation of startups. This round was led by Tech Capital and is its first announced investment in a Waterloo-based company since LiveHive Systems two years ago.
AideRSS was founded a year ago and launched its RSS ranking/filtering service in July. It is looking to move into new office space soon, as it outgrows the space in co-founder Kevin Thomason's house (better known to at least two Tech Digest subscribers as "the house next door to where Edna Staebler lived"). I didn't mention last month that that former SlipStream CEO (and Communitech EIR) Ron Neumann has joined AideRSS on a part-time basis.
[2]---------------------------------------------------------------
IMS raises $29.5 million, OSC says
January 11, 2008
No announcement has been made, and I have no details whatsoever, but the Ontario Securities Commission reports that Intelligent Mechatronic Systems (IMS) closed a $29.5 million common share financing on January 11.
IMS is led by UW professor Otman Basir. It had announced a $9.5 million round of funding nearly two years ago, led by an investment firm based in Bahrain.
[3]---------------------------------------------------------------
Agile closes $800K round
January 16, 2008
Agile systems has closed an $800,000 round of funding. The financing was led by Expansion Capital Partners, which had previously led Agile's $7 million round in 2005.
Other existing Agile investors that participated in this round were Covington Capital, RoyNat Capital, and BEST Total Return Fund. RBC Capital is the only firm announced as part of the 2005 financing that did not participate this time.
Agile is now led by president Tom Geiger, who at some point in the last year was promoted from sales & marketing VP.
[4]---------------------------------------------------------------
Dalsa rebounds with best quarter of the year
January 31, 2008
Dalsa ended a rocky 2007 on a strong note, reporting earnings of $2.3 million on sales of $47.3 million in the quarter ended December 31 (Q4 07). It was Dalsa's most profitable quarter since Q3 of 2006 and was enough to make the company profitable for the year, earning $1.8 million on sales of $180.0 million. Annual sales were down 3% from 2006.
Q4 sales were up 19% from the previous quarter, and a huge sequential jump in margins led to a 92% increase in gross profit. Margins were back to the levels of a year ago, after slumping through the first nine months of the year. Digital imaging revenue was up 18% from Q3, while sales from Dalsa's semiconductor business were up 21%. Both segments were profitable. The digital cinema business continued to be more potential than actual, reporting a $1.8 million loss on sales of just $408,000. CEO Brian Doody said he looks forward 2008 as Dalsa's year for "digital cinema market success." In the conference call, he said hitting a break-even point is "kind of a gotta-have" for digital cinema this year and that the managers of the business are aware of these timelines.
Q4 operating income was $3.8 million -- a $13.4 million improvement from a $9.6 million operating loss in Q3. Operations provided $4.5 million in cash, and the company spent $3.0 million to buy back 359,000 of its shares. Dalsa ended the quarter with $9.7 million in cash, down $1.6 million from the end of Q3.
[5]---------------------------------------------------------------
Sandvine ends year with break-even quarter
January 16, 2008
Sandvine's results for the quarter ended November 30 (Q4 07) were in line with the pre-announcement made last month. The company just broke even on sales of $17.1 million -- an 85% jump from last year, but 19% below a strong Q3.
There was an operating loss of $1.5 million in the quarter, down from income of $3.4 million in the previous quarter. R&D expenses were up 19% sequentially and were equal to one-third of total revenue. Included in that was $428,000 in royalties as repayment of Sandvine's Technology Partnerships Canada (TPC) funding from a few years ago. Sales & marketing expenses were flat from Q3, but by the end of the quarter, Sandvine had added eight new people to its sales team, taking the total number to 42.
Sandvine's traditional largest customer -- which has never been identified, but is often assumed to be Comcast -- accounted for $5.6 million in revenue, well below the numbers in the last three quarters. A new customer provided $5.2 million in revenue, while the customer that had accounted for $4.9 million in Q3 didn't follow up with any significant business this quarter. Four customers provided about three quarters of all revenue in fiscal 2007. Sales to North American customers were down 28% from Q3, but still accounted for 79% of revenue.
For the year, Sandvine earned $19.0 million on sales of $73.7 million, up 133% from 2006. Just over half of the year's profits were generated in Q2.
Sandvine ended the year with $113.0 million in cash, down $1.7 million from the end of Q3. Operations consumed $2.1 million in cash in Q4.
As reported last month, the company is forecasting sales of $100-110 million in fiscal 2008.
The National Post quoted an analyst report in January that Sandvine was a prime acquisition candidate following the announcement that competitor Ellacoya Networks would be acquired by Arbor Networks. The selling price wasn't announced, but it will likely be far less than what a company would have to pay for Sandvine.
[6]---------------------------------------------------------------
Descartes makes two U.S. acquisitions
January 9 & 10, 2008
Two more small acquisitions for Descartes in January. It has paid US$650,000 for the assets of the former Mobitrac business from Colorado's Fluensee. Fluensee had acquired Mobitrac in September 2006.
Descartes also acquired the assets of San Francisco's Pacific Coast Tariff Bureau for US$2.1 million. PCTB was founded about 70 years ago, according to the company's website.
[7]---------------------------------------------------------------
STOCK REPORT: Dalsa, ATS bounce back in rough month
January 2008
A volatile month on the stock market, and not in a good way. But there was some positive news: Dalsa shares were up 11% in the month and are now up another 37% over the first two days of trading in February following the release of its latest quarterly results.
ATS shares had another strong month and are now up 43% over the last two months.
For the month of January:
ATS [TSX: ATA] +19%
Dalsa [TSX: DSA] +11%
Virtek [TSX: VRK] +2%
===============================
Open Text [TSX: OTC] -1%
Sandvine [TSX: SVC] -2%
--S&P TSX COMPOSITE INDEX -5%
Descartes [TSX: DSG] -9%
--S&P TSX VENTURE INDEX -10%
MKS [TSX: MKX] -11%
Com Dev [TSX: CDV] -12%
RIM [TSX: RIM] -16%
RDM [TSX: RC] -18%
TurboSonic [OTCBB: TSTA] -20%
Biorem [TSXV: BRM] -26%
Arise [TSX: APV] -31%
The drop in RIM shares shaved more than $10 billion off the company's market value. That's about three times the value of all other companies on this list combined.
Arise shares gave back most of their gains from the last two months and the company dropped behind Com Dev and Descartes on the market capitalization list (it fell behind Dalsa yesterday as well; in fact, Dalsa jumped ahead of Arise, Descartes and Com Dev all in one day).
Companies with core operations outside the area:
Sybase [NYSE: SY] +9%
===================================
Oracle [Nasdaq: ORCL] -9%
McAfee [NYSE: MFE] -10%
NCR [NYSE: NCR] -14%
Ansys [Nasdaq: ANSS] -16%
Adobe [Nasdaq: ADBE] -18%
Blue Coat [Nasdaq: BCSI] -18%
Google [Nasdaq: GOOG] -18%
AMIS [Nasdaq: AMIS] -27%
Agfa-Gevaert [Brussels: AGFA] -29%
[8]---------------------------------------------------------------
Miscellaneous Tidbits
Gary Will
gary@garywill.com
In this issue:
- AideRSS closes VC/angel funding round
- IMS raises $29.5 million, OSC says
- Agile closes $800K round
- Dalsa rebounds with best quarter of the year
- Sandvine ends year with break-even quarter
- Descartes makes two U.S. acquisitions
- STOCK REPORT: Dalsa, ATS bounce back in rough month
- Miscellaneous tidbits from LiveHive, Crez, Desire2Learn, Atria, Com Dev, RapidMind, Arise.
--Gary Will
////////////////////////////////////////////////////////////
A D V E R T I S E M E N T S
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) for more information.
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.
IT SEARCH AND PLACEMENT SERVICES
Procom is currently ranked as the 4th largest IT professional services firm in Canada. (Branham 300, Financial Post, April 2007). Recently awarded one of Canada's 50 Best Managed Companies, 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. Phone: 519.885.4331
ACCELERATE YOUR TIME-TO-MARKET
Advanced Research Technology (ART) saw a market opportunity in the pharmaceutical market but needed to accelerate product development. By partnering with INO, ART realized a new imaging system product less than six months later (see the complete story). Contact Glenn Smith in Waterloo at 519-502-1305 to explore how you can accelerate your time-to-market by partnering with INO.
ARE YOU CONSISTENTLY MAKING YOUR NUMBERS?
The painful truth: Research proves that 50% of salespeople will always be underachievers. The costs inflicted by sub-par sales performers are huge and vastly underestimated by most companies. For information you can use to build winning sales teams, download our free whitepaper at http://www.peaksalesrecruiting.com/whitepaperoffer.php Peak Sales Recruiting focuses on finding top performing salespeople for technology companies.
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
AideRSS closes VC/angel funding round
December 21, 2007
AideRSS announced that it has raised an undisclosed amount of money from Tech Capital Partners and a group of local angel investors. The deal actually closed before Christmas, but wasn't announced until January.
The angels weren't identified, but include names well-known to the local tech community -- another example of how local angels have really stepped up over the last couple of years to fund a new generation of startups. This round was led by Tech Capital and is its first announced investment in a Waterloo-based company since LiveHive Systems two years ago.
AideRSS was founded a year ago and launched its RSS ranking/filtering service in July. It is looking to move into new office space soon, as it outgrows the space in co-founder Kevin Thomason's house (better known to at least two Tech Digest subscribers as "the house next door to where Edna Staebler lived"). I didn't mention last month that that former SlipStream CEO (and Communitech EIR) Ron Neumann has joined AideRSS on a part-time basis.
[2]---------------------------------------------------------------
IMS raises $29.5 million, OSC says
January 11, 2008
No announcement has been made, and I have no details whatsoever, but the Ontario Securities Commission reports that Intelligent Mechatronic Systems (IMS) closed a $29.5 million common share financing on January 11.
IMS is led by UW professor Otman Basir. It had announced a $9.5 million round of funding nearly two years ago, led by an investment firm based in Bahrain.
[3]---------------------------------------------------------------
Agile closes $800K round
January 16, 2008
Agile systems has closed an $800,000 round of funding. The financing was led by Expansion Capital Partners, which had previously led Agile's $7 million round in 2005.
Other existing Agile investors that participated in this round were Covington Capital, RoyNat Capital, and BEST Total Return Fund. RBC Capital is the only firm announced as part of the 2005 financing that did not participate this time.
Agile is now led by president Tom Geiger, who at some point in the last year was promoted from sales & marketing VP.
[4]---------------------------------------------------------------
Dalsa rebounds with best quarter of the year
January 31, 2008
Dalsa ended a rocky 2007 on a strong note, reporting earnings of $2.3 million on sales of $47.3 million in the quarter ended December 31 (Q4 07). It was Dalsa's most profitable quarter since Q3 of 2006 and was enough to make the company profitable for the year, earning $1.8 million on sales of $180.0 million. Annual sales were down 3% from 2006.
Q4 sales were up 19% from the previous quarter, and a huge sequential jump in margins led to a 92% increase in gross profit. Margins were back to the levels of a year ago, after slumping through the first nine months of the year. Digital imaging revenue was up 18% from Q3, while sales from Dalsa's semiconductor business were up 21%. Both segments were profitable. The digital cinema business continued to be more potential than actual, reporting a $1.8 million loss on sales of just $408,000. CEO Brian Doody said he looks forward 2008 as Dalsa's year for "digital cinema market success." In the conference call, he said hitting a break-even point is "kind of a gotta-have" for digital cinema this year and that the managers of the business are aware of these timelines.
Q4 operating income was $3.8 million -- a $13.4 million improvement from a $9.6 million operating loss in Q3. Operations provided $4.5 million in cash, and the company spent $3.0 million to buy back 359,000 of its shares. Dalsa ended the quarter with $9.7 million in cash, down $1.6 million from the end of Q3.
[5]---------------------------------------------------------------
Sandvine ends year with break-even quarter
January 16, 2008
Sandvine's results for the quarter ended November 30 (Q4 07) were in line with the pre-announcement made last month. The company just broke even on sales of $17.1 million -- an 85% jump from last year, but 19% below a strong Q3.
There was an operating loss of $1.5 million in the quarter, down from income of $3.4 million in the previous quarter. R&D expenses were up 19% sequentially and were equal to one-third of total revenue. Included in that was $428,000 in royalties as repayment of Sandvine's Technology Partnerships Canada (TPC) funding from a few years ago. Sales & marketing expenses were flat from Q3, but by the end of the quarter, Sandvine had added eight new people to its sales team, taking the total number to 42.
Sandvine's traditional largest customer -- which has never been identified, but is often assumed to be Comcast -- accounted for $5.6 million in revenue, well below the numbers in the last three quarters. A new customer provided $5.2 million in revenue, while the customer that had accounted for $4.9 million in Q3 didn't follow up with any significant business this quarter. Four customers provided about three quarters of all revenue in fiscal 2007. Sales to North American customers were down 28% from Q3, but still accounted for 79% of revenue.
For the year, Sandvine earned $19.0 million on sales of $73.7 million, up 133% from 2006. Just over half of the year's profits were generated in Q2.
Sandvine ended the year with $113.0 million in cash, down $1.7 million from the end of Q3. Operations consumed $2.1 million in cash in Q4.
As reported last month, the company is forecasting sales of $100-110 million in fiscal 2008.
The National Post quoted an analyst report in January that Sandvine was a prime acquisition candidate following the announcement that competitor Ellacoya Networks would be acquired by Arbor Networks. The selling price wasn't announced, but it will likely be far less than what a company would have to pay for Sandvine.
[6]---------------------------------------------------------------
Descartes makes two U.S. acquisitions
January 9 & 10, 2008
Two more small acquisitions for Descartes in January. It has paid US$650,000 for the assets of the former Mobitrac business from Colorado's Fluensee. Fluensee had acquired Mobitrac in September 2006.
Descartes also acquired the assets of San Francisco's Pacific Coast Tariff Bureau for US$2.1 million. PCTB was founded about 70 years ago, according to the company's website.
[7]---------------------------------------------------------------
STOCK REPORT: Dalsa, ATS bounce back in rough month
January 2008
A volatile month on the stock market, and not in a good way. But there was some positive news: Dalsa shares were up 11% in the month and are now up another 37% over the first two days of trading in February following the release of its latest quarterly results.
ATS shares had another strong month and are now up 43% over the last two months.
For the month of January:
ATS [TSX: ATA] +19%
Dalsa [TSX: DSA] +11%
Virtek [TSX: VRK] +2%
===============================
Open Text [TSX: OTC] -1%
Sandvine [TSX: SVC] -2%
--S&P TSX COMPOSITE INDEX -5%
Descartes [TSX: DSG] -9%
--S&P TSX VENTURE INDEX -10%
MKS [TSX: MKX] -11%
Com Dev [TSX: CDV] -12%
RIM [TSX: RIM] -16%
RDM [TSX: RC] -18%
TurboSonic [OTCBB: TSTA] -20%
Biorem [TSXV: BRM] -26%
Arise [TSX: APV] -31%
The drop in RIM shares shaved more than $10 billion off the company's market value. That's about three times the value of all other companies on this list combined.
Arise shares gave back most of their gains from the last two months and the company dropped behind Com Dev and Descartes on the market capitalization list (it fell behind Dalsa yesterday as well; in fact, Dalsa jumped ahead of Arise, Descartes and Com Dev all in one day).
Companies with core operations outside the area:
Sybase [NYSE: SY] +9%
===================================
Oracle [Nasdaq: ORCL] -9%
McAfee [NYSE: MFE] -10%
NCR [NYSE: NCR] -14%
Ansys [Nasdaq: ANSS] -16%
Adobe [Nasdaq: ADBE] -18%
Blue Coat [Nasdaq: BCSI] -18%
Google [Nasdaq: GOOG] -18%
AMIS [Nasdaq: AMIS] -27%
Agfa-Gevaert [Brussels: AGFA] -29%
[8]---------------------------------------------------------------
Miscellaneous Tidbits
- LiveHive's Nanogaming technology was being used on the Toronto Maple Leafs' website, mapleleafs.com, in conjunction with the broadcast of five Leafs games. It was also used on NBCSports.com during the broadcast on NBC of the U.S. figure skating championships. LiveHive was the subject of stories in the Toronto Star and the Globe & Mail, while CEO Dave Bullock appeared on CTV's Canada AM.
- Michelin Development announced that it had provided a $50,000 loan to Crez, the basketball coaching system developer founded by UW professor David Clausi. Pat Pavlik, the former CEO of RDM, has also been working with Crez.
- Desire2Learn's patent infringement dispute with Blackboard goes to trial next week in Lufkin, Texas. Each side will be limited to 18 hours to present their case.
- Atria Networks has grown again through acquisition, this time adding FibreWired Hamilton. The companies had announced a merger in 2004, but that never happened, and Atria has been steadily expanding ever since. Terms of the FibreWired Hamilton deal were not disclosed.
- Following a review of its historical stock option grants, Com Dev has determined that it will not have to restate its earnings and that no material adjustments will be required.
- Derek Cardy has been named CFO of RapidMind. He was previously finance director at Toronto's Avokia, which was a venture-backed software company.
- Bert Pendergast is the new VP/GM of Arise's systems division. He was most recently VP of Celestica's aftermarket services and had previously spent nearly 20 years with IBM.
posted by Gary Will at 12:32 AM
