Waterloo Tech Digest - June 9, 2009
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
BERESKIN & PARR LLP - 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.
AERO CORPORATE BENEFITS - Your Employee Benefits Solutions Provider
Located in Waterloo, we've served the KW technology community for over 20 years, providing employee benefits solutions to companies large and small. Our mission is simple. Help our clients succeed by doing what we do best: -- Design and monitor programs that attract & retain the most qualified employees -- Contain costs of employee benefits, retirement plans, and HR support -- Provide employee-level support & advice to help you manage risk & compliance. Please contact Herb Goedecke at 519.489.2376 x11 or herbg@aero-corp.com for details.
EVERYBODY WANTS TO BE HEARD - and we want to listen.
Hagon Design is #1 at creating marketing communications that get heard. Our technology industry experience includes everything from start-ups to global brands. Let¹s get together for a coffee and chat. You tell us where you want to go, we listen, and we¹ll help pave the way to successful marketing. Give creative director, Ben Hagon a call at 519.500.7985 or email ben@hagondesign.com
GO BEYOND STAFFING
For over 30 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.
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Covarity closes $3M round
May 6, 2009
Covarity has raised another round of financing, receiving $3 million from Tech Capital Partners, BDC, GrowthWorks and VentureLink -- all of which were existing investors in the company.
Covarity raised $2.5 million in 2007 and $3.2 million in 2006, on top of other rounds since it was founded in 2001.
[2]---------------------------------------------------------------
Open Text reports solid profits and cash flow
May 6, 2009
Open Text had earnings of US$22.0 million on sales of US$192.0 million in the quarter ended March 31 (Q3 09). Sales were down 8% from the previous quarter but up 7% from a year ago. This was the first quarterly report to include a full three months of results from Captaris, which was acquired at the end of October. Operating income of US$21.0 million was within the range of the previous two quarters.
Operations provided US$72.9 million in cash and the company ended the quarter with US$237.0 million in cash, up US$64.2 million from the end of Q2.
Open Text also announced that it received a 10-year contract with the Government of Ontario to be the exclusive vendor of record of enterprise information management solutions. Along with managing information across all ministries, Open Text says its products will help the government to deploy wikis, blogs, forums and other social media applications.
[3]---------------------------------------------------------------
Open Text to acquire Vignette
May 6, 2009
Open Text will acquire Austin, Texas-based Vignette in a cash and stock deal valued at about US$310 million. Vignette will operate as a wholly-owned subsidiary of Open Text. The deal must still be approved by Vignette shareholders, and is expected to close later this year.
Vignette shareholders will receive US$8 in cash and 0.1447 Open Text common shares for each Vignette share. As of Friday's close, that would be a total of just under US$13 a share. At the time the announcement was made, Vignette shares were trading for US$9 and had been below US$6 as recently as March. Vignette shares last traded at a price above the Open Text offer last summer.
Vignette develops web content management software and has 700 employees worldwide. It reported a loss of US$1.8 million on sales of US$33.9 million in the quarter ended March 31 and has been reporting declining sales in recent quarters. Vignette was a high-flyer in the dot-com boom, with its shares peaking at a price around US$800, adjusting for a split and a reverse split along the way.
[4]---------------------------------------------------------------
MKS ends profitable year
June 2, 2009
MKS closed its 2009 fiscal year with earnings of US$2.0 million on sales of US$13.6 million in the quarter ended April 30 (Q4 09). Sales were up 3% from the previous quarter but down 36% from a very strong Q4 last year. MKS said its ALM licensing revenue fell below expectations, but that it had won several promising customers it hopes will lead to strong follow-on sales down the road.
Most of the Q4 earnings came from an income tax recovery of US$1.4 million. Operating income of US$627,000 was an improvement on Q3, but three-quarters of the company's operating income for the year came in the first two quarters.
For the year, MKS reported earnings of US$4.3 million on sales of US$58.4 million. Sales were down 4.5% from 2008 but operating income was up 19% year-over-year. ALM sales accounted for 87% of total revenue, just slightly less than a year ago, as the mature IO business -- projected to show a sales decline -- managed to maintain its 2008 sales levels.
Year-end cash balance was US$17.1 million, up from US$12.9 million at the start of the year. MKS is raising its quarterly dividend by 25%, or about an extra US$1 million over the year, assuming the higher dividend is maintained in future quarters.
MKS ended the year with 309 employees worldwide.
[5]---------------------------------------------------------------
Dalsa sued by ex-digital cinema GM
June 5, 2009
Dalsa is being sued by the founder of the California company it acquired in 2004 as part of its failed digital cinema initiative. Bob DaSilva has filed a statement of claim in Ontario seeking more than $22 million.
In October 2004, Dalsa announced that it was buying the assets of DaSilva's Broadcast Plus business in Woodland Hills, Calif. for US$250,000 in cash plus up to 7.5% of the voting shares of a new subsidiary called Dalsa Digital Cinema Inc. DaSilva then became GM of the Dalsa Digital Cinema Center. At the time, DaSilva looked like an odd choice, since his business and background seemed to be focused on the television industry, while Dalsa was targetting filmmakers for its digital movie camera. Two years later, Dalsa hired someone else to run its California digital cinema office.
According to Dalsa, DaSilva had the option to have his stake in Dalsa Digital Cinema Inc. repurchased upon the termination of his employment. Dalsa says it had applied to the court to appoint a valuator for the business, but there was apparently a disagreement with DaSilva around the process to set a valuation. Dalsa says it will defend the claim and file a counterclaim.
[6]---------------------------------------------------------------
Descartes sales up 7%
May 28, 2009
Descartes reported earnings of US$2.2 million on sales of US$17.4 million in the quarter ended April 30 (Q1 10). Sales were up 7% from a year ago and 11% from the previous quarter, aided by two more acquisitions in Q1.
The bottom line was boosted by an income tax recovery of US$0.7 million. Expenses were also up across the board, with R&D spending jumping 24% from the previous quarter to US$3.4 million, or 19% of revenue. Operating income was US$1.7 million, down from US$2.4 million in the last two quarters, but up from a year ago.
Descartes spent US$14.8 million on acquisitions in the quarter, but still ended Q1 with US$46.9 million in cash. Operations generated US$4.4 million in cash.
[7]---------------------------------------------------------------
STOCK REPORT: Another big month for TurboSonic, Sandvine shares
May 2009
TurboSonic shares had another strong month after the company reported impressive top- and bottom-lines in its latest quarterly results. The shares are up 149% in the last two months and finished the month above US$1 for the first time since October 2007.
And it was the same story with Sandvine shares, which have jumped 117% in the last two months. They closed May at their highest month-end price since March of last year.
For the month of May:
TurboSonic [OTCBB: TSTA] +70%
Sandvine [TSX: SVC] +24%
Biorem [TSXV: BRM] +22%
MKS [TSX: MKX] +16%
RDM [TSX: RC] +15%
--S&P TSX VENTURE INDEX +11%
--S&P TSX COMPOSITE INDEX +11%
Descartes [TSX: DSG] +11%
ATS [TSX: ATA] +8%
RIM [TSX: RIM] +4%
===============================
Open Text [TSX: OTC] -2%
Dalsa [TSX: DSA] -5%
Arise [TSX: APV] -7%
Com Dev [TSX: CDV] -9%
Descartes shares had their highest month-end price since September 2007, while RDM shares finished the month above a dollar for the first time since September.
There hasn't been any bad news from Com Dev, but along with having the biggest decline in May, the company's shares were down another 10% in June as of yesterday's close. The stock had some big gains in March and April and is now back to about where it was at the beginning of the year.
Companies with core operations outside the area:
ON Semiconductor [Nasdaq: ONNN] +26%
Agfa-Gevaert [Brussels: AGFA] +26%
Ansys [Nasdaq: ANSS] +8%
Blue Coat [Nasdaq: BCSI] +7%
Acorn Energy [Nasdaq: ACFN] +6%
NCR [NYSE: NCR] +6%
Google [Nasdaq: GOOG] +5%
McAfee [NYSE: MFE] +5%
Oracle [Nasdaq: ORCL] +1%
===================================
Sybase [NYSE: SY] -4%
[8]---------------------------------------------------------------
Miscellaneous Tidbits
Gary Will
gary@garywill.com
In this issue:
- Covarity closes $3M round
- Open Text reports solid profits and cash flow
- Open Text to acquire Vignette
- MKS ends profitable year
- Dalsa sued by ex-digital cinema GM
- Descartes sales up 7%
- STOCK REPORT: Another big month for TurboSonic, Sandvine shares
- Miscellaneous tidbits from Aeryon Labs, Bayalink, Bioinformatics Solutions, Unitron, Biorem, RIM, TurboSonic, Desire2Learn, Atria
A D V E R T I S E M E N T S
BERESKIN & PARR LLP - 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.
AERO CORPORATE BENEFITS - Your Employee Benefits Solutions Provider
Located in Waterloo, we've served the KW technology community for over 20 years, providing employee benefits solutions to companies large and small. Our mission is simple. Help our clients succeed by doing what we do best: -- Design and monitor programs that attract & retain the most qualified employees -- Contain costs of employee benefits, retirement plans, and HR support -- Provide employee-level support & advice to help you manage risk & compliance. Please contact Herb Goedecke at 519.489.2376 x11 or herbg@aero-corp.com for details.
EVERYBODY WANTS TO BE HEARD - and we want to listen.
Hagon Design is #1 at creating marketing communications that get heard. Our technology industry experience includes everything from start-ups to global brands. Let¹s get together for a coffee and chat. You tell us where you want to go, we listen, and we¹ll help pave the way to successful marketing. Give creative director, Ben Hagon a call at 519.500.7985 or email ben@hagondesign.com
GO BEYOND STAFFING
For over 30 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.
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Covarity closes $3M round
May 6, 2009
Covarity has raised another round of financing, receiving $3 million from Tech Capital Partners, BDC, GrowthWorks and VentureLink -- all of which were existing investors in the company.
Covarity raised $2.5 million in 2007 and $3.2 million in 2006, on top of other rounds since it was founded in 2001.
[2]---------------------------------------------------------------
Open Text reports solid profits and cash flow
May 6, 2009
Open Text had earnings of US$22.0 million on sales of US$192.0 million in the quarter ended March 31 (Q3 09). Sales were down 8% from the previous quarter but up 7% from a year ago. This was the first quarterly report to include a full three months of results from Captaris, which was acquired at the end of October. Operating income of US$21.0 million was within the range of the previous two quarters.
Operations provided US$72.9 million in cash and the company ended the quarter with US$237.0 million in cash, up US$64.2 million from the end of Q2.
Open Text also announced that it received a 10-year contract with the Government of Ontario to be the exclusive vendor of record of enterprise information management solutions. Along with managing information across all ministries, Open Text says its products will help the government to deploy wikis, blogs, forums and other social media applications.
[3]---------------------------------------------------------------
Open Text to acquire Vignette
May 6, 2009
Open Text will acquire Austin, Texas-based Vignette in a cash and stock deal valued at about US$310 million. Vignette will operate as a wholly-owned subsidiary of Open Text. The deal must still be approved by Vignette shareholders, and is expected to close later this year.
Vignette shareholders will receive US$8 in cash and 0.1447 Open Text common shares for each Vignette share. As of Friday's close, that would be a total of just under US$13 a share. At the time the announcement was made, Vignette shares were trading for US$9 and had been below US$6 as recently as March. Vignette shares last traded at a price above the Open Text offer last summer.
Vignette develops web content management software and has 700 employees worldwide. It reported a loss of US$1.8 million on sales of US$33.9 million in the quarter ended March 31 and has been reporting declining sales in recent quarters. Vignette was a high-flyer in the dot-com boom, with its shares peaking at a price around US$800, adjusting for a split and a reverse split along the way.
[4]---------------------------------------------------------------
MKS ends profitable year
June 2, 2009
MKS closed its 2009 fiscal year with earnings of US$2.0 million on sales of US$13.6 million in the quarter ended April 30 (Q4 09). Sales were up 3% from the previous quarter but down 36% from a very strong Q4 last year. MKS said its ALM licensing revenue fell below expectations, but that it had won several promising customers it hopes will lead to strong follow-on sales down the road.
Most of the Q4 earnings came from an income tax recovery of US$1.4 million. Operating income of US$627,000 was an improvement on Q3, but three-quarters of the company's operating income for the year came in the first two quarters.
For the year, MKS reported earnings of US$4.3 million on sales of US$58.4 million. Sales were down 4.5% from 2008 but operating income was up 19% year-over-year. ALM sales accounted for 87% of total revenue, just slightly less than a year ago, as the mature IO business -- projected to show a sales decline -- managed to maintain its 2008 sales levels.
Year-end cash balance was US$17.1 million, up from US$12.9 million at the start of the year. MKS is raising its quarterly dividend by 25%, or about an extra US$1 million over the year, assuming the higher dividend is maintained in future quarters.
MKS ended the year with 309 employees worldwide.
[5]---------------------------------------------------------------
Dalsa sued by ex-digital cinema GM
June 5, 2009
Dalsa is being sued by the founder of the California company it acquired in 2004 as part of its failed digital cinema initiative. Bob DaSilva has filed a statement of claim in Ontario seeking more than $22 million.
In October 2004, Dalsa announced that it was buying the assets of DaSilva's Broadcast Plus business in Woodland Hills, Calif. for US$250,000 in cash plus up to 7.5% of the voting shares of a new subsidiary called Dalsa Digital Cinema Inc. DaSilva then became GM of the Dalsa Digital Cinema Center. At the time, DaSilva looked like an odd choice, since his business and background seemed to be focused on the television industry, while Dalsa was targetting filmmakers for its digital movie camera. Two years later, Dalsa hired someone else to run its California digital cinema office.
According to Dalsa, DaSilva had the option to have his stake in Dalsa Digital Cinema Inc. repurchased upon the termination of his employment. Dalsa says it had applied to the court to appoint a valuator for the business, but there was apparently a disagreement with DaSilva around the process to set a valuation. Dalsa says it will defend the claim and file a counterclaim.
[6]---------------------------------------------------------------
Descartes sales up 7%
May 28, 2009
Descartes reported earnings of US$2.2 million on sales of US$17.4 million in the quarter ended April 30 (Q1 10). Sales were up 7% from a year ago and 11% from the previous quarter, aided by two more acquisitions in Q1.
The bottom line was boosted by an income tax recovery of US$0.7 million. Expenses were also up across the board, with R&D spending jumping 24% from the previous quarter to US$3.4 million, or 19% of revenue. Operating income was US$1.7 million, down from US$2.4 million in the last two quarters, but up from a year ago.
Descartes spent US$14.8 million on acquisitions in the quarter, but still ended Q1 with US$46.9 million in cash. Operations generated US$4.4 million in cash.
[7]---------------------------------------------------------------
STOCK REPORT: Another big month for TurboSonic, Sandvine shares
May 2009
TurboSonic shares had another strong month after the company reported impressive top- and bottom-lines in its latest quarterly results. The shares are up 149% in the last two months and finished the month above US$1 for the first time since October 2007.
And it was the same story with Sandvine shares, which have jumped 117% in the last two months. They closed May at their highest month-end price since March of last year.
For the month of May:
TurboSonic [OTCBB: TSTA] +70%
Sandvine [TSX: SVC] +24%
Biorem [TSXV: BRM] +22%
MKS [TSX: MKX] +16%
RDM [TSX: RC] +15%
--S&P TSX VENTURE INDEX +11%
--S&P TSX COMPOSITE INDEX +11%
Descartes [TSX: DSG] +11%
ATS [TSX: ATA] +8%
RIM [TSX: RIM] +4%
===============================
Open Text [TSX: OTC] -2%
Dalsa [TSX: DSA] -5%
Arise [TSX: APV] -7%
Com Dev [TSX: CDV] -9%
Descartes shares had their highest month-end price since September 2007, while RDM shares finished the month above a dollar for the first time since September.
There hasn't been any bad news from Com Dev, but along with having the biggest decline in May, the company's shares were down another 10% in June as of yesterday's close. The stock had some big gains in March and April and is now back to about where it was at the beginning of the year.
Companies with core operations outside the area:
ON Semiconductor [Nasdaq: ONNN] +26%
Agfa-Gevaert [Brussels: AGFA] +26%
Ansys [Nasdaq: ANSS] +8%
Blue Coat [Nasdaq: BCSI] +7%
Acorn Energy [Nasdaq: ACFN] +6%
NCR [NYSE: NCR] +6%
Google [Nasdaq: GOOG] +5%
McAfee [NYSE: MFE] +5%
Oracle [Nasdaq: ORCL] +1%
===================================
Sybase [NYSE: SY] -4%
[8]---------------------------------------------------------------
Miscellaneous Tidbits
- Aeryon Labs and Bayalink were two of the companies selected to receive the Canadian Angel Capital Top Five Award at the 2009 Canadian Co-Investment Summit in Toronto. Recipients were selected through an investor vote from the 15 companies that made presentations. Aeryon and Bayalink were the only two Waterloo area companies to present at the conference.
- Lots of Waterloo-area winners at the 2009 Premier's Innovation Awards. Ming Li, co-founder of Bioinformatics Solutions (BSI) and UW professor, won the $250,000 Discovery Award for Innovation Leadership. At the same time, his BSI and UW colleague, Bin Ma, won the $200,000 Catalyst Award for Best Young Innovator. Two-thirds of this year's Premier's Catalyst Awards went to Waterloo Region recipients, with Navid Zargari named Innovator of the Year for a technology he developed for Rockwell Automation, Unitron Hearing named Company with the Best Innovation, and UW professor and Certicom co-founder Scott Vanstone presented the Lifetime Leadership in Innovation award. Each of those prizes also came with a $200,000 award.
- Biorem announced a $700,000 sale of a biotrickling filtration system to a buyer in Florida and two other biofiltration orders in the "midwest and western coast of the United States" for a combined $1.3 million. The company lost $425,000 on sales of $4.0 million in the quarter ended March 31 (Q1 09). Sales were up 27% from a year ago. Order backlog at the end of the quarter stood at $12.8 million.
- Jim Estill's new corporate home is Nu Horizons Electronics, a components distributor based in Melville, New York on Long Island. He became president and CEO of the company on June 1 and has also been appointed to the board of directors. Nu Horizons is listed on Nasdaq with a market value just under US$70 million.
- RIM has acquired Sunnyvale, Calif.-based Dash Networks for an undisclosed amount. In fact, the entire acquisition was more discovered than disclosed. Dash developed a GPS-based device that provided drivers with traffic information. At one point, it was thought to be a promising startup, attracting investments from Kleiner Perkins and Sequoia, among others. But the company had fallen on hard times and laid off most of its staff in the fall. It then shifted from being a device company to a software provider, selling applications that could run on various devices.
- TurboSonic earned US$604,000 on sales of US$7.0 million in the quarter ended March 31 (Q3 09). Sales were up 216% from the same quarter last year, and sales over the first three quarters of the fiscal year are double what they were a year ago.
- According to Bloomberg News, the U.S. International Trade Commission has agreed to review Blackboard's request to block the sale of Desire2Learn software in the U.S. Blackboard acquired another major competitor in May, and Desire2Learn has said that the U.S. Department of Justice is investigating the deal (this was subsequently confirmed by Blackboard). Desire2Learn is also preparing for another patent infringement suit from Backboard -- this time in Canada. In April, the U.S. Patent and Trademark Office issued a preliminary ruling rejecting all 57 claims in the original Blackboard patent. Unfortunately for Desire2Learn, even if that were to be the ultimate ruling, it would probably take years to get to that point.
- Michael Stephens is the new marketing and product development VP at Atria Networks. Stephens -- a UW engineering grad -- will work out of the company's Markham office.
posted by Gary Will at 12:16 AM
