Waterloo Tech Digest - November 4, 2008
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.
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 Tim Sinnott (tsinnott@bereskinparr.com) or Jason Hynes (jhynes@bereskinparr.com), at (519) 783-3210 for more information.
DELOITTE - SHAPING CANADIAN BUSINESS FOR 150 YEARS
Deloitte's technology, media and telecommunications practice delivers a suite of services including audit, tax, financial advisory, enterprise risk and consulting. We work with all types of technology companies, including early stage and high-growth companies, to help them succeed. We'll help you grow through contacts, M&A, raising capital and most of all through great business advice. We want to be your trusted advisor and look forward to working with you. Contact Jamie Barron 289-259-3385, jabarron@deloitte.ca or Jane Jantzi at 519-650-7788, jjantzi@deloitte.ca.
ENHANCE YOUR COMPETITIVE ADVANTAGE
INO can deliver competitive advantage to fuel company growth. As described in this video, INO's optical recognition technology helped Optosecurity raise $20 million in financing and create a world-class team. Further information on INO's optical recognition technology can be found here. Please contact Glenn Smith in Waterloo at 519-502-1305 to explore how INO might deliver competitive advantage to your organization.
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
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Gerber acquires Virtek
October 24, 2008
Gerber Scientific's $1.05-a-share offer for Virtek (see August digest) was successful, with about 88% of Virtek shares being tendered. The offer was extended to the end of trading yesterday for remaining Virtek shareholders to agree to sell their shares.
Once Gerber has all of Virtek's shares, it will delist the company from the TSX. Virtek and FOBA are already included on the website for Gerber Technology.
The $1.12 a share offer from Jaguar Financial (see last month's digest) never did materialize and it announced on October 9 that it would sell the Virtek shares it owned to Gerber.
[2]---------------------------------------------------------------
STOCK REPORT: Markets plunge, Com Dev jumps
October 2008
The big story internationally was the collapse of the stock markets, but apparently no one told Com Dev investors. Shares in the company had their biggest one-month gain in over two years, climbing 16% in a month where the TSX composite fell 24%. Com Dev didn't even release any significant news during the time its stock was rising.
Thanks to the Gerber Scientific acquisition offer, Virtek shares also stayed steady during the month, gaining two cents to match the Gerber offer of $1.05 a share.
And that was it for good news. Shares of Sandvine, Biorem, and ATS all fell to all-time lows, with ATS stock dropping 42% in October, making it the month's worst performer. Dalsa shares fell to a seven-year low while MKS and Arise both lost a third of their value -- the second straight month where that happened at Arise. Arise shares have now fallen 74% over the last six months.
For the month of October:
Com Dev [TSX: CDV] +16%
Virtek [TSX: VRK] +2%
===============================
Open Text [TSX: OTC] -13%
Biorem [TSXV: BRM] -14%
RIM [TSX: RIM] -15%
TurboSonic [OTCBB: TSTA] -15%
RDM [TSX: RC] -15%
Descartes [TSX: DSG] -16%
Dalsa [TSX: DSA] -23%
Sandvine [TSX: SVC] -24%
--S&P TSX COMPOSITE INDEX -24%
Arise [TSX: APV] -33%
MKS [TSX: MKX] -36%
ATS [TSX: ATA] -42%
--S&P TSX VENTURE INDEX -48%
Last month where the shares closed at a lower price:
Com Dev - [Highest since May 2008]
Virtek - [Highest since December 2006]
Open Text - October 2007
RIM - May 2007
Arise - December 2006
RDM - December 2005
Descartes - November 2005
Turbosonic - May 2005
MKS - October 2004
Dalsa - October 2001
Sandvine - all-time low
Biorem - all-time low
ATS - all-time low
Companies with core operations outside the area:
===================================
McAfee [NYSE: MFE] -4%
Blue Coat [Nasdaq: BCSI] -5%
Google [Nasdaq: GOOG] -10%
Sybase [NYSE: SY] -13%
NCR [NYSE: NCR] -17%
Ansys [Nasdaq: ANSS] -24%
ON Semiconductor [Nasdaq: ONNN] -24%
Oracle [Nasdaq: ORCL] -25%
Agfa-Gevaert [Brussels: AGFA] -27%
Adobe [Nasdaq: ADBE] -33%
Acorn Energy [Nasdaq: ACFN] -43%
[3]---------------------------------------------------------------
Dalsa calls it a wrap on digital cinema
October 30, 2008
Dalsa is throwing in the towel on its digital cinema business more than 10 years after it started development of its digital movie camera. It has signed a letter of intent to sell assets of the business to Germany's ARRI, which describes itself as "the world's largest manufacturer and distributor of motion picture cameras, digital intermediate and lighting technologies." Financial details have not yet been disclosed.
Dalsa will continue to develop CCD image sensors for the ARRI cameras, but will no longer be in the camera business.
Four years ago, when Dalsa acquired a Los Angeles-based rental outlet, the company forecast $12 million in digital cinema revenue in 2005 and $30 million in 2006, with the business operating at a break-even level in the first year. The actual numbers never got remotely close to those forecasts and four years later the business was still losing about $2 million a quarter with very little revenue coming from rentals of Dalsa's camera. Founder and former CEO Savvas Chamberlain had been a big supporter of the digital cinema business, but shortly after the Eric Rosenfeld-led shakeup in Dalsa's board earlier this year (see February digest), the company said it was looking for partners to carry some of the digital cinema load.
Dalsa invested tens of millions of dollars in digital cinema -- including millions of federal tax dollars provided through the former TPC program. As of June 30, the digital cinema business has reported assets of $32.8 million and Dalsa will only be able to recover a small percentage of that. In the quarter ended September 30 (Q3 08), Dalsa reported a $21.7 million writedown to "reduce assets sold to net realizable value."
With that writedown, as well as another $3.2 million in provisions related to the discontinuation of the digital cinema business, Dalsa reported a Q3 loss of $20.6 million on sales of $52.6 million. Sales were flat from a strong Q2 and net income from continuing operations of $6.0 million is about what it would have been in Q2 excluding the digital cinema losses.
Continuing operations contributed $5.0 million in cash in the quarter, although most of that was absorbed by digital cinema. In addition, Dalsa spent $3.2 million to repurchase shares and another $3.7 million on property and equipment. It finished Q3 with $12.2 million in cash and securities, down $6.8 million from the start of the quarter.
[4]---------------------------------------------------------------
Open Text plans job cuts after acquiring Captaris
November 3, 2008
Open Text says it's cutting 10% of its workforce -- about 350 jobs -- following its acquisition of Bellevue, Washington-based Captaris (see August digest).
Captaris shareholders approved the deal last Friday and the acquisition added nearly 500 employees to Open Text's total.
With the cuts, Open Text expects to take a US$20 million restructuring charge.
In the quarter ended September 30, Open Text reported earnings of US$14.7 million on sales of US$182.6 million. Sales were down 9% from the previous quarter but up 11% from last year.
Operations generated US$24.8 million in cash and Open Text used US$10.8 million in its acquisition of Spicer in the quarter, as well as US$3.6 million on its eMotion acquisition. It ended the quarter with US$250.1 million in cash.
While Open Text is cutting jobs overall, AustralianIT reported that the company has gone on a "hiring spree" in Australia and New Zealand.
[5]---------------------------------------------------------------
Sandvine reports loss, improved international sales
October 8, 2008
Sandvine reported a loss of $6.3 million on sales of $13.1 million in the quarter ended August 31 (Q3 08). Sales were up 18% from the previous quarter but down 38% from last year. Loss from operations of $5.6 million was a small improvement from Q2.
Sales to North America were down, but all other regions showed gains, with 38% of revenue coming from Europe/Middle East/Africa. Indirect sales accounted for more than a quarter of all revenue.
Sandvine added 15 new customers in the quarter, 11 of which were DSL providers. Four of the new customers came through resellers.
In the biggest non-news, the not-so-mysterious "Customer A" of previous quarterly reports was finally acknowledged to be Comcast. As was the case in the previous two quarters, there wasn't much revenue from Comcast in Q3, but that will likely change in Q4. Five customers accounted for 59% of sales, which is a better mix than in Q2, when four customers provided 62% of revenue.
Sandvine ended the quarter with $96.1 million in cash and securities, or 71 cents a share -- not much less than its October-ending stock price of 80 cents.
[6]---------------------------------------------------------------
Miscellaneous Tidbits
Gary Will
gary@garywill.com
In this issue:
- Gerber acquires Virtek
- STOCK REPORT: Markets plunge, Com Dev jumps
- Dalsa calls it a wrap on digital cinema
- Open Text plans job cuts after acquiring Captaris
- Sandvine reports loss, improved international sales
- Miscellaneous tidbits from Coreworx, Biorem, Arise, LiveHive, AideRSS, RIM, Aimetis
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.
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 Tim Sinnott (tsinnott@bereskinparr.com) or Jason Hynes (jhynes@bereskinparr.com), at (519) 783-3210 for more information.
DELOITTE - SHAPING CANADIAN BUSINESS FOR 150 YEARS
Deloitte's technology, media and telecommunications practice delivers a suite of services including audit, tax, financial advisory, enterprise risk and consulting. We work with all types of technology companies, including early stage and high-growth companies, to help them succeed. We'll help you grow through contacts, M&A, raising capital and most of all through great business advice. We want to be your trusted advisor and look forward to working with you. Contact Jamie Barron 289-259-3385, jabarron@deloitte.ca or Jane Jantzi at 519-650-7788, jjantzi@deloitte.ca.
ENHANCE YOUR COMPETITIVE ADVANTAGE
INO can deliver competitive advantage to fuel company growth. As described in this video, INO's optical recognition technology helped Optosecurity raise $20 million in financing and create a world-class team. Further information on INO's optical recognition technology can be found here. Please contact Glenn Smith in Waterloo at 519-502-1305 to explore how INO might deliver competitive advantage to your organization.
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
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Gerber acquires Virtek
October 24, 2008
Gerber Scientific's $1.05-a-share offer for Virtek (see August digest) was successful, with about 88% of Virtek shares being tendered. The offer was extended to the end of trading yesterday for remaining Virtek shareholders to agree to sell their shares.
Once Gerber has all of Virtek's shares, it will delist the company from the TSX. Virtek and FOBA are already included on the website for Gerber Technology.
The $1.12 a share offer from Jaguar Financial (see last month's digest) never did materialize and it announced on October 9 that it would sell the Virtek shares it owned to Gerber.
[2]---------------------------------------------------------------
STOCK REPORT: Markets plunge, Com Dev jumps
October 2008
The big story internationally was the collapse of the stock markets, but apparently no one told Com Dev investors. Shares in the company had their biggest one-month gain in over two years, climbing 16% in a month where the TSX composite fell 24%. Com Dev didn't even release any significant news during the time its stock was rising.
Thanks to the Gerber Scientific acquisition offer, Virtek shares also stayed steady during the month, gaining two cents to match the Gerber offer of $1.05 a share.
And that was it for good news. Shares of Sandvine, Biorem, and ATS all fell to all-time lows, with ATS stock dropping 42% in October, making it the month's worst performer. Dalsa shares fell to a seven-year low while MKS and Arise both lost a third of their value -- the second straight month where that happened at Arise. Arise shares have now fallen 74% over the last six months.
For the month of October:
Com Dev [TSX: CDV] +16%
Virtek [TSX: VRK] +2%
===============================
Open Text [TSX: OTC] -13%
Biorem [TSXV: BRM] -14%
RIM [TSX: RIM] -15%
TurboSonic [OTCBB: TSTA] -15%
RDM [TSX: RC] -15%
Descartes [TSX: DSG] -16%
Dalsa [TSX: DSA] -23%
Sandvine [TSX: SVC] -24%
--S&P TSX COMPOSITE INDEX -24%
Arise [TSX: APV] -33%
MKS [TSX: MKX] -36%
ATS [TSX: ATA] -42%
--S&P TSX VENTURE INDEX -48%
Last month where the shares closed at a lower price:
Com Dev - [Highest since May 2008]
Virtek - [Highest since December 2006]
Open Text - October 2007
RIM - May 2007
Arise - December 2006
RDM - December 2005
Descartes - November 2005
Turbosonic - May 2005
MKS - October 2004
Dalsa - October 2001
Sandvine - all-time low
Biorem - all-time low
ATS - all-time low
Companies with core operations outside the area:
===================================
McAfee [NYSE: MFE] -4%
Blue Coat [Nasdaq: BCSI] -5%
Google [Nasdaq: GOOG] -10%
Sybase [NYSE: SY] -13%
NCR [NYSE: NCR] -17%
Ansys [Nasdaq: ANSS] -24%
ON Semiconductor [Nasdaq: ONNN] -24%
Oracle [Nasdaq: ORCL] -25%
Agfa-Gevaert [Brussels: AGFA] -27%
Adobe [Nasdaq: ADBE] -33%
Acorn Energy [Nasdaq: ACFN] -43%
[3]---------------------------------------------------------------
Dalsa calls it a wrap on digital cinema
October 30, 2008
Dalsa is throwing in the towel on its digital cinema business more than 10 years after it started development of its digital movie camera. It has signed a letter of intent to sell assets of the business to Germany's ARRI, which describes itself as "the world's largest manufacturer and distributor of motion picture cameras, digital intermediate and lighting technologies." Financial details have not yet been disclosed.
Dalsa will continue to develop CCD image sensors for the ARRI cameras, but will no longer be in the camera business.
Four years ago, when Dalsa acquired a Los Angeles-based rental outlet, the company forecast $12 million in digital cinema revenue in 2005 and $30 million in 2006, with the business operating at a break-even level in the first year. The actual numbers never got remotely close to those forecasts and four years later the business was still losing about $2 million a quarter with very little revenue coming from rentals of Dalsa's camera. Founder and former CEO Savvas Chamberlain had been a big supporter of the digital cinema business, but shortly after the Eric Rosenfeld-led shakeup in Dalsa's board earlier this year (see February digest), the company said it was looking for partners to carry some of the digital cinema load.
Dalsa invested tens of millions of dollars in digital cinema -- including millions of federal tax dollars provided through the former TPC program. As of June 30, the digital cinema business has reported assets of $32.8 million and Dalsa will only be able to recover a small percentage of that. In the quarter ended September 30 (Q3 08), Dalsa reported a $21.7 million writedown to "reduce assets sold to net realizable value."
With that writedown, as well as another $3.2 million in provisions related to the discontinuation of the digital cinema business, Dalsa reported a Q3 loss of $20.6 million on sales of $52.6 million. Sales were flat from a strong Q2 and net income from continuing operations of $6.0 million is about what it would have been in Q2 excluding the digital cinema losses.
Continuing operations contributed $5.0 million in cash in the quarter, although most of that was absorbed by digital cinema. In addition, Dalsa spent $3.2 million to repurchase shares and another $3.7 million on property and equipment. It finished Q3 with $12.2 million in cash and securities, down $6.8 million from the start of the quarter.
[4]---------------------------------------------------------------
Open Text plans job cuts after acquiring Captaris
November 3, 2008
Open Text says it's cutting 10% of its workforce -- about 350 jobs -- following its acquisition of Bellevue, Washington-based Captaris (see August digest).
Captaris shareholders approved the deal last Friday and the acquisition added nearly 500 employees to Open Text's total.
With the cuts, Open Text expects to take a US$20 million restructuring charge.
In the quarter ended September 30, Open Text reported earnings of US$14.7 million on sales of US$182.6 million. Sales were down 9% from the previous quarter but up 11% from last year.
Operations generated US$24.8 million in cash and Open Text used US$10.8 million in its acquisition of Spicer in the quarter, as well as US$3.6 million on its eMotion acquisition. It ended the quarter with US$250.1 million in cash.
While Open Text is cutting jobs overall, AustralianIT reported that the company has gone on a "hiring spree" in Australia and New Zealand.
[5]---------------------------------------------------------------
Sandvine reports loss, improved international sales
October 8, 2008
Sandvine reported a loss of $6.3 million on sales of $13.1 million in the quarter ended August 31 (Q3 08). Sales were up 18% from the previous quarter but down 38% from last year. Loss from operations of $5.6 million was a small improvement from Q2.
Sales to North America were down, but all other regions showed gains, with 38% of revenue coming from Europe/Middle East/Africa. Indirect sales accounted for more than a quarter of all revenue.
Sandvine added 15 new customers in the quarter, 11 of which were DSL providers. Four of the new customers came through resellers.
In the biggest non-news, the not-so-mysterious "Customer A" of previous quarterly reports was finally acknowledged to be Comcast. As was the case in the previous two quarters, there wasn't much revenue from Comcast in Q3, but that will likely change in Q4. Five customers accounted for 59% of sales, which is a better mix than in Q2, when four customers provided 62% of revenue.
Sandvine ended the quarter with $96.1 million in cash and securities, or 71 cents a share -- not much less than its October-ending stock price of 80 cents.
[6]---------------------------------------------------------------
Miscellaneous Tidbits
- J. Paul Haynes is now COO at Coreworx. He is the former CEO of MedShare and Ever America and the founder of JPH International.
- Biorem has closed a $3 million round of venture debt funding from Toronto's Wellington Financial. Biorem has had a rough ride with investors. After going public in 2005, the company's stock fell 56% in 2006 and 29% in 2007, and is down 40% so far this year.
- Arise announced that its sales of PV cells in the quarter ended September 30 exceeded the $15 million it had forecast. The company will announce its full results next week. Arise has not said what level of sales it expects it will need to become profitable. The company also announced that it had signed a 10-year lease on a 68,000 square-foot building in the Huron industrial park in Kitchener where it will place its polysilicon pilot plant.
- LiveHive signed a two-year agreement with Rogers Sportsnet that will see its NanoGaming platform used for Sportsnet's "Game in the Game" prediction and trivia games during regional NHL telecasts.
- AideRSS is now putting its PostRank trademark front and centre, changing its website to focus on the PostRank name. During the month, it launched PostRank 2.0, which offers keyword filtering among other new features.
- RIM plans to open an online store for BlackBerry applications in March. Developers can begin submitting their apps next month. RIM also says it will be introducing a suite of tools to help developers create BlackBerry applications.
- RIM's BlackBerry Pearl Flip -- its first flip phone -- is now available in Canada.
- Aimetis received Frost & Sullivan's 2008 Global Video Analytics Product Innovation of the Year Award for its Aimetis Symphony video surveillance product.
posted by Gary Will at 12:09 AM
