Waterloo Tech Digest - December 2, 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
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.
GO BEYOND STAFFING
For almost 40 years, Procom has been matching people with companies, for jobs that are a perfect fit - contract, full-time, or part-time. We partner with large and small companies across North America, including some of the world's best-known enterprises, to provide a range of services, training tools, and the ideal candidates to help them flourish. We've been named one of Canada's 50 Best Managed Companies and go beyond staffing to look strategically at the processes and people that will truly help a company succeed. Phone: 519.885.4331.
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.
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Arise revenue jumps, but losses continue
November 11, 2008
Arise reported its first significant revenue from the sale of PV cells in the quarter ended September 30 (Q3 08), boosting total revenue to $15.9 million. Of that, more than 98% was generated by PV cells, with the balance generated by Arise's traditional systems business.
While the top line was impressive, it didn't translate into better earnings. Between equipment downtime, off-spec production, breakage, and other production inefficiencies -- all of which the company expects will improve in future quarters -- the costs of goods sold exceeded the revenue they generated, leaving a negative gross profit of $2.6 million. Once other expenses were added in, Arise lost $8.2 million in the quarter. The loss takes the company's accumulated deficit to $43.2 million.
Arise also lowered its PV cell sales forecast for the current quarter by about $6-9 million, but still expects sales to be in the $21-24 million range.
The company is also looking at a delay of a month or two in the start of its second production line in Germany. It says that a supplier will not be able to deliver a key piece of equipment at the originally scheduled time.
Arise estimates that its PV cells would have sold at a gross margin of about 3% if not for expenses related to being at the beginning of the learning curve at its new facility in Germany -- which it said added about $3.1 million in expenses.
Arise expects that it will soon select a site for its silicon manufacturing plant. A pilot plant is being built in Kitchener, and the company has narrowed its list of potential sites for a full manufacturing plant to two locations.
The company ended the quarter with $21.8 million in cash.
[2]---------------------------------------------------------------
MKS sales climb 19%
November 25, 2008
A good quarter for MKS, which reported US$1.4 million in earnings on sales of US$16.3 million in the quarter ended October 31 (Q2 09). Sales were up 19% from last year and 6% from the previous quarter.
The company spent US$2.5 million to repurchase its own shares in the quarter, while operations generated US$4.5 million in cash. MKS finished the quarter with US$10.6 million in cash.
[3]---------------------------------------------------------------
Coreworx looks to cut costs after lowering sales forecasts
November 13, 2008
Coreworx is "revising its operating plans for 2009" to cut costs after it lowered its projected sales for the year. Even with the cuts, the company expects that it will need to raise money in 2009. The new funds could come from its parent company, Acorn Energy, or from new investors, or through a bank line of credit or a combination of the three.
Coreworx was acquired by Acorn in August. Acorn has warned its investors that it may be writing down the value of Coreworx in a future quarter.
[4]---------------------------------------------------------------
Descartes quarterly profits top US$2M
November 26, 2008
Descartes earned US$2.3 million on sales of US$17.0 million in the quarter ended October 31 (Q3 09). Sales were flat from the previous quarter and up 10% from Q3 last year. Descartes has completed four acquisitions over the past year.
Operations provided US$5.9 million in cash and Descartes finished the quarter with a hefty US$53.5 in cash on the books.
[5]---------------------------------------------------------------
RDM ends poor year with stronger quarterly sales
November 27, 2008
RDM wrapped up a poor fiscal year with what was probably its best quarter of 2008 -- certainly the best from a top line perspective. The company lost $476,000 on sales of $7.5 million in the quarter ended September 30 (Q4 08). Sales were flat from a year ago and up 43% from a weak Q3.
For the year, RDM lost $1.0 million on sales of $26.6 million -- down 22% from 2007.
The royalty payment made to Data Treasury Corporation -- part of a settlement of a DTC patent infringement suit brought against RDM in 2003 -- climbed to $1.1 million in 2008, an amount equivalent to 4.2% of all revenue. The payment was 34% higher than what DTC received from RDM in 2007.
[6]---------------------------------------------------------------
STOCK REPORT: Com Dev not immune to market woes
November 2008
It was an improvement over October ... although not at Com Dev, where the stock market collapse finally caught up with the company. Its shares had made it through October unscathed (see previous digest), but fell in November to their lowest month-end price since February 2006.
ATS shares were the biggest gainer of the month after the company reported good quarterly results, but it wasn't enough to make up for their drop in October and they finished at their second-lowest month-end price ever.
For the month of November:
ATS [TSX: ATA] +37%
Open Text [TSX: OTC] +17%
MKS [TSX: MKX] +8%
Dalsa [TSX: DSA] +7%
Descartes [TSX: DSG] 0%
Sandvine [TSX: SVC] 0%
===============================
--S&P TSX COMPOSITE INDEX -5%
Arise [TSX: APV] -10%
RIM [TSX: RIM] -11%
RDM [TSX: RC] -14%
--S&P TSX VENTURE INDEX -19%
Biorem [TSXV: BRM] -23%
Com Dev [TSX: CDV] -27%
TurboSonic [OTCBB: TSTA] -61%
Virtek is off the list, having been acquired by Gerber Scientific and delisted (see previous digest).
With one month to go in 2008, the only company with shares showing a gain over the year is Open Text, up 14% (all of which came in November). At the other end of the list, Arise and Sandvine shares are in a dead heat for worst performer, both with 79.1% declines so far in 2008. Arise shares have now fallen for seven consecutive months, and the company has dropped below Sandvine in market capitalization, just slightly ahead of MKS.
Companies with core operations outside the area:
Oracle [Nasdaq: ORCL] +5%
Ansys [Nasdaq: ANSS] +1%
===================================
McAfee [NYSE: MFE] -7%
Sybase [NYSE: SY] -7%
Acorn Energy [Nasdaq: ACFN] -11%
Adobe [Nasdaq: ADBE] -13%
NCR [NYSE: NCR] -17%
Google [Nasdaq: GOOG] -18%
Agfa-Gevaert [Brussels: AGFA] -28%
Blue Coat [Nasdaq: BCSI] -34%
ON Semiconductor [Nasdaq: ONNN] -43%
[7]---------------------------------------------------------------
Miscellaneous Tidbits
Gary Will
gary@garywill.com
In this issue:
- Arise revenue jumps, but losses continue
- MKS sales climb 19%
- Coreworx looks to cut costs after lowering sales forecasts
- Descartes quarterly profits top US$2M
- RDM ends poor year with stronger quarterly sales
- STOCK REPORT: Com Dev not immune to market woes
- Miscellaneous tidbits from Crez, Well.ca, Tangam, IMS, LoyaltyMatch, Com Dev, RIM, ATS, Biorem, TurboSonic, Desire2Learn
A D V E R T I S E M E N T S
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.
GO BEYOND STAFFING
For almost 40 years, Procom has been matching people with companies, for jobs that are a perfect fit - contract, full-time, or part-time. We partner with large and small companies across North America, including some of the world's best-known enterprises, to provide a range of services, training tools, and the ideal candidates to help them flourish. We've been named one of Canada's 50 Best Managed Companies and go beyond staffing to look strategically at the processes and people that will truly help a company succeed. Phone: 519.885.4331.
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.
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Arise revenue jumps, but losses continue
November 11, 2008
Arise reported its first significant revenue from the sale of PV cells in the quarter ended September 30 (Q3 08), boosting total revenue to $15.9 million. Of that, more than 98% was generated by PV cells, with the balance generated by Arise's traditional systems business.
While the top line was impressive, it didn't translate into better earnings. Between equipment downtime, off-spec production, breakage, and other production inefficiencies -- all of which the company expects will improve in future quarters -- the costs of goods sold exceeded the revenue they generated, leaving a negative gross profit of $2.6 million. Once other expenses were added in, Arise lost $8.2 million in the quarter. The loss takes the company's accumulated deficit to $43.2 million.
Arise also lowered its PV cell sales forecast for the current quarter by about $6-9 million, but still expects sales to be in the $21-24 million range.
The company is also looking at a delay of a month or two in the start of its second production line in Germany. It says that a supplier will not be able to deliver a key piece of equipment at the originally scheduled time.
Arise estimates that its PV cells would have sold at a gross margin of about 3% if not for expenses related to being at the beginning of the learning curve at its new facility in Germany -- which it said added about $3.1 million in expenses.
Arise expects that it will soon select a site for its silicon manufacturing plant. A pilot plant is being built in Kitchener, and the company has narrowed its list of potential sites for a full manufacturing plant to two locations.
The company ended the quarter with $21.8 million in cash.
[2]---------------------------------------------------------------
MKS sales climb 19%
November 25, 2008
A good quarter for MKS, which reported US$1.4 million in earnings on sales of US$16.3 million in the quarter ended October 31 (Q2 09). Sales were up 19% from last year and 6% from the previous quarter.
The company spent US$2.5 million to repurchase its own shares in the quarter, while operations generated US$4.5 million in cash. MKS finished the quarter with US$10.6 million in cash.
[3]---------------------------------------------------------------
Coreworx looks to cut costs after lowering sales forecasts
November 13, 2008
Coreworx is "revising its operating plans for 2009" to cut costs after it lowered its projected sales for the year. Even with the cuts, the company expects that it will need to raise money in 2009. The new funds could come from its parent company, Acorn Energy, or from new investors, or through a bank line of credit or a combination of the three.
Coreworx was acquired by Acorn in August. Acorn has warned its investors that it may be writing down the value of Coreworx in a future quarter.
[4]---------------------------------------------------------------
Descartes quarterly profits top US$2M
November 26, 2008
Descartes earned US$2.3 million on sales of US$17.0 million in the quarter ended October 31 (Q3 09). Sales were flat from the previous quarter and up 10% from Q3 last year. Descartes has completed four acquisitions over the past year.
Operations provided US$5.9 million in cash and Descartes finished the quarter with a hefty US$53.5 in cash on the books.
[5]---------------------------------------------------------------
RDM ends poor year with stronger quarterly sales
November 27, 2008
RDM wrapped up a poor fiscal year with what was probably its best quarter of 2008 -- certainly the best from a top line perspective. The company lost $476,000 on sales of $7.5 million in the quarter ended September 30 (Q4 08). Sales were flat from a year ago and up 43% from a weak Q3.
For the year, RDM lost $1.0 million on sales of $26.6 million -- down 22% from 2007.
The royalty payment made to Data Treasury Corporation -- part of a settlement of a DTC patent infringement suit brought against RDM in 2003 -- climbed to $1.1 million in 2008, an amount equivalent to 4.2% of all revenue. The payment was 34% higher than what DTC received from RDM in 2007.
[6]---------------------------------------------------------------
STOCK REPORT: Com Dev not immune to market woes
November 2008
It was an improvement over October ... although not at Com Dev, where the stock market collapse finally caught up with the company. Its shares had made it through October unscathed (see previous digest), but fell in November to their lowest month-end price since February 2006.
ATS shares were the biggest gainer of the month after the company reported good quarterly results, but it wasn't enough to make up for their drop in October and they finished at their second-lowest month-end price ever.
For the month of November:
ATS [TSX: ATA] +37%
Open Text [TSX: OTC] +17%
MKS [TSX: MKX] +8%
Dalsa [TSX: DSA] +7%
Descartes [TSX: DSG] 0%
Sandvine [TSX: SVC] 0%
===============================
--S&P TSX COMPOSITE INDEX -5%
Arise [TSX: APV] -10%
RIM [TSX: RIM] -11%
RDM [TSX: RC] -14%
--S&P TSX VENTURE INDEX -19%
Biorem [TSXV: BRM] -23%
Com Dev [TSX: CDV] -27%
TurboSonic [OTCBB: TSTA] -61%
Virtek is off the list, having been acquired by Gerber Scientific and delisted (see previous digest).
With one month to go in 2008, the only company with shares showing a gain over the year is Open Text, up 14% (all of which came in November). At the other end of the list, Arise and Sandvine shares are in a dead heat for worst performer, both with 79.1% declines so far in 2008. Arise shares have now fallen for seven consecutive months, and the company has dropped below Sandvine in market capitalization, just slightly ahead of MKS.
Companies with core operations outside the area:
Oracle [Nasdaq: ORCL] +5%
Ansys [Nasdaq: ANSS] +1%
===================================
McAfee [NYSE: MFE] -7%
Sybase [NYSE: SY] -7%
Acorn Energy [Nasdaq: ACFN] -11%
Adobe [Nasdaq: ADBE] -13%
NCR [NYSE: NCR] -17%
Google [Nasdaq: GOOG] -18%
Agfa-Gevaert [Brussels: AGFA] -28%
Blue Coat [Nasdaq: BCSI] -34%
ON Semiconductor [Nasdaq: ONNN] -43%
[7]---------------------------------------------------------------
Miscellaneous Tidbits
- Software from CREZ Basketball Systems will be used to manage all league statistics for the Premier Basketball League's 2009 season. The league consists of teams in 16 cities, including Montreal, Quebec City, and Halifax, as well as Buffalo, Rochester, and 11 other U.S. cities. (There was supposed to be a Toronto team this season, but it never happened.)
- Well.ca was named one of Canada's top 10 angel-backed companies at the National Angel Capital Organization's Canadian Co-investment Summit in Toronto. Well.ca was the first company listed on the news release, but the NACO didn't say if the order on the release matched the ranking of the companies. At the event, 25 angel-backed companies made pitches for another round of funding.
- Tangam Systems announced a partnership with Las Vegas-based Shuffle Master, a Nasdaq-listed company. Shuffle Master will help Tangam to promote its products to casinos and the two companies are looking at working together to develop new products.
- IMS says that Bell Mobility has agreed to help distribute iLane in Canada. iLane, which IMS unveiled in 2006, is a Bluetooth device that uses voice commands and text-to-voice technology to give drivers hands-free access to their e-mail.
- LoyaltyMatch has partnered with Palo Alto-based UpTake, a VC-backed search site for travel deals and information. UpTake will provide links to the LoyaltyMatch site to help its users convert frequent flier and other points into cash.
- Com Dev finished the review of its past stock option grants and found that 635,779 options awarded in 2006 and 433,400 options awarded in 1999 had been improperly priced. None of the 2006 options had been exercised, so the company has just adjusted the exercise price from $4.44 a share to $5.14. Of the 1999 options, only 70,130 were exercised and the rest expired. The company decided not to take any action on those. It also provided an explanation for the pricing of 350,000 additional options granted in 1999. Com Dev says the OSC sent letters to the company and to chairman Keith Ainsworth admonishing them for their practices, but it intends no further action. Com Dev also said that Ainsworth will take the director's education program offered by the Institute of Corporate Directors.
- RIM announced that there were over 400,000 downloads of its MySpace for BlackBerry application in the first week after its launch on November 13.
- ATS saw its sales in the quarter ended September 30 jump 49% from a weak quarter last year and 4% from the previous quarter to $219,536. Earnings were $9.3 million.
- Biorem earned $144,000 on sales of $4.1 million in the quarter ended September 30 (Q3 08). Over the first nine months of the year, its sales are up 49% over last year.
- TurboSonic earned US$30,000 on sales of US$5.0 million in the quarter ended September 30. Sales were up 55% from a year ago.
- Blackboard -- the U.S. company that successfully sued Desire2Learn for patent infringement -- has now filed suit against the U.S. Patent & Trademark Office, complaining that the USPTO should have stopped its reexamination of Blackboard's patent.
posted by Gary Will at 12:42 AM
