Waterloo Tech Digest - August 10, 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
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 Annual Reports, Brand Identities, Brochures and Collateral, Email Marketing, Websites and more. Let's 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.
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.
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]---------------------------------------------------------------
Desire2Learn wins appeal, Blackboard patent claims invalid
July 27, 2009
Desire2Learn has won its appeal of the February 2008 U.S. court judgment that had found the company infringed the patent of Washington, DC-based competitor Blackboard. The United States Court of Appeals for the Federal Circuit has overturned that judgment and invalidated the three patent claims used against Desire2Learn at the original trial.
The lower court had ruled that 35 of Blackboard's patent claims were invalid, but the three claims that remained were all Blackboard needed to win its case. The appeals court agreed that the first 35 claims were invalid, and found the remaining three to be invalid as well.
As a result of the original trial, Desire2Learn paid Blackboard US$3.3 million in June 2008 as compensation for lost profits and royalties. Following the decision of the appeals court, Blackboard recorded a US$3.5 million expense in the quarter ended June 30, but also made it clear that it was in no hurry to pay the money back (plus 6% interest per year) and would be waiting for a "final and non-appealable" decision. It plans to seek a review of the latest decision. Blackboard has also recorded a non-cash charge of US$7.5 million for impairment of capitalized patent costs.
Blackboard was issued a Canadian patent (#2378200) in March and filed suit the following month against Desire2Learn in Canada's Federal Court, accusing the company of infringing -- and inducing others to infringe -- Blackboard's Canadian patent.
[2]---------------------------------------------------------------
Maplesoft to be acquired by its Japanese reseller for $35M
July 30, 2009
Maplesoft will be acquired by Tokyo-based software distributor Cybernet Systems Co. Ltd. in a $35 million deal expected to close next month. Maplesoft will continue to operate as a standalone business. It has 122 employees.
Company co-founder Keith Geddes and CEO Jim Cooper own nearly 42% of the company between them, with Geddes holding a 22% stake and Cooper 19.8%. According to Cybernet, Maplesoft had sales of $14.6 million in the year ended March 31, 2009, down slightly from the previous year, but up about 12% from 2007. The company has been profitable in each of the last three years, with earnings around $360,000 in fiscal 2009. Operating income for 2009 was about $233,000.
Maplesoft -- the corporate name is still Waterloo Maple Inc. -- was incorporated in 1988, although the research that went into the product had started years earlier. The company was founded by Gaston Gonnet (president) and Keith Geddes (VP), both UW professors at the time and members of the computer science department's Symbolic Computation Group. Geddes remains at UW -- now emeritus -- while Gonnet has been based in Switzerland for several years.
Tim Bray, who would later join Open Text and go on to become well-known in computer circles, particularly for his work on XML, was company CEO in the late 1980s. Ron Neumann -- later of SlipStream and now Dejero Labs -- was CEO through a period of high growth in the early 1990s when Maple went from just a handful of staff to over 40 by 1993.
It was in this period that the company got caught up in a messy internal legal battle that went on for years. It filed suit against Gonnet, accusing him of breaching an agreement among all the creators of the Maple software to transfer IP ownership to the company. Maple claimed that instead of transferring ownership, Gonnet signed a restricted-use, royalty-bearing license for the technology -- an agreement the company said it didn't know about for almost two years. Maple asked for $8 million and ownership of the IP. In response, Gonnet said there never was any enforceable agreement of the kind Maple claimed. It wasn't until around 1999 that the two sides came to a settlement.
In the meantime, Neumann was let go and Dieter Hensler became president and CEO in 1994 after running the company's office in Germany. He resigned in 1998 and, following a period with a team of executives as acting CEO, Ian Suttie took the reins in March 1999. This was during the tech boom, and the company prepared to go public -- going so far as to release its quarterly financial results while still a private company. By now, Maple had grown to nearly 100 employees. But the boom went away, the IPO never happened, and Suttie left just a little more than a year after he started. He was succeeded in October 2000 by Jim Cooper, hired the previous year as R&D VP.
After all that turmoil, it's been pretty quiet ever since. Nearly nine years later, Cooper remains CEO and the company's software has expanded from an academic user base in the 1990s to a broader mix of business and academic users today. The automotive industry is apparently one of the largest markets for the company. Sales growth has been modest, expanding from $10 million in annual revenue a decade ago to nearly $15 million today.
Over the years, some of the notable members of the local community who have served on Maple's board include Wes Graham, Randall Howard, Ted Cross, Peter Schwartz and John Whitney (and probably others I never heard about).
Cybernet Systems is a distributor of computer-aided engineering (CAE) software, and distributes Maplesoft products in Japan, China and Taiwan. After being launched in 1985 as a spinoff from Control Data Corporation, the company was later acquired by Kobe Steel and then by Fujisoft in 1999. It has been listed on the Tokyo Stock Exchange since 2003 and Fujisoft remains majority owner.
Maplesoft will be its second acquisition of a North American software company. Just days before the Maplesoft announcement was made, Cybernet acquired Sigmetrix, a developer of mechanical engineering software in Dallas.
[3]---------------------------------------------------------------
Well.ca raises $1.1M from angels
July 30, 2009
Well.ca has closed a $1.1 million angel financing, led by Jordan Banks's Thunder Road Capital. It's the second round of funding for the company, which raised $425,000 in May 2008 from six investors, including Jim Estill. Banks will join Well.ca's board of directors.
Banks was CEO of Toronto's JumpTV for about seven months starting in November 2007, essentially replacing Kaleil Isaza Tuzman, who was a familiar face in the Waterloo area. Banks was CEO when the company merged with New York-based NeuLion. Before that, he had been managing director of eBay Canada.
Other investors in the round include Andrew Sloss, the UW grad who became eBay Canada's "country manager" in 2007 and is GM of Kijiji Canada (an eBay company), David Ceolin, founder of marketing services company Digital Cement, acquired by Pitney Bowes in 2007 for $40 million, and pharmacist Hilton Silberg, founder of Hamilton's DayNight Pharmacy chain, sold last year to the company behind Rexall Pharma Plus.
After some strong years for startups in the region, this deal was the first major round of funding to be announced in 2009 by a local company less than seven years old.
According to Well.ca, its monthly sales in June were four times what they were a year earlier and its web traffic was up 135% over that period. It says it has now shipped nearly 250,000 items since it launched.
[4]---------------------------------------------------------------
Dalsa sees recovery ahead; Chamberlain to leave management team
July 29 & August 5, 2009
Not a good quarter for Dalsa in the period ended June 30 (Q2 09), but the company sees indications of a recovery in its markets, particularly in the Asia/Pacific region.
For the period, Dalsa earned $142,000 on sales of $40.3 million. Sales were down 24% from a year ago, but up 6% from a weak Q1. Dalsa had a $326,000 operating loss in the quarter -- down from operating income of $698,000 last quarter -- partly caused by the appreciation of the Canadian dollar in the quarter, which created a $1.1 million foreign exchange loss. A $491,000 income tax recovery -- also related to foreign exchange -- kept the bottom line in the black. Revenue in both of the company's business segments was up from the previous quarter and down from a year ago.
Operations generated $2.5 million in cash, and the company spent $3.1 million on property and equipment and another $0.9 million was distributed to shareholders as dividends. Dalsa ended the quarter with $9.9 million in cash, down $1.6 million from the end of Q1. Some digital cinema assets were sold in the quarter for $0.7 million.
It ended the quarter with a record order backlog of $99.7 million.
The company also announced that founder and chairman Savvas Chamberlain will be leaving the management team and stepping down as CTO in October. He will remain chairman. Chamberlain became CTO two years ago when he passed the CEO reins to Brian Doody.
[5]---------------------------------------------------------------
Jim Estill leaves Nu Horizons
August 3, 2009
Jim Estill has already parted ways with Nu Horizons Electronics, the Nasdaq-listed New York company that attracted him to the U.S. He was CEO for just two months. The announcement of his departure didn't give any explanation, but obviously the fit wasn't what had been expected -- even though the two sides had talked for months before Estill started the job on June 1.
Estill had signed a four-year employment agreement on May 8. Two of the company's three founders, who had run the business for over 25 years, were executive chairman and COO, with Estill in the middle as CEO. The three executives formed a management committee and any major business matter on which the three did not unanimously agree would be brought to the board of directors.
Estill was to receive a base salary of US$350,000 plus bonuses up to additional US$525,000 with a US$262,500 target. If the company ever lost money for three consecutive quarters, his salary would have fallen to US$30,000 until the next profitable quarter was announced.
He will receive a US$175,000 severance payment and the company would also pay his moving expenses to return to Canada, although Estill told Long Island's Newsday that he planned to remain in the area for now.
[6]---------------------------------------------------------------
RDM returns to profitability in Q3
July 30, 2009
After five consecutive money-losing quarters, RDM earned $175,000 on sales of $5.9 million in the quarter ended June 30 (Q3 09). Sales were up 3% from the previous quarter and 13% from a poor Q3 last year.
Digital imaging accounted for half of all revenue, with sales up 21% from Q2. RDM shipped 5,250 scanner units in the quarter. Sales from RDM's payment processing services business were down 4% sequentially, which the company attributed to a rising Canadian dollar. ITMS transaction volumes were up 4% from Q2 and 38% from last year.
As the company had warned, revenue from its electronic payments solutions (EPS) business took a steep tumble following a reduction in RDM's contract work for the U.S. government. EPS revenue was down more than 65% both quarter-over-quarter and year-over-year.
Foreign exchange losses had taken a huge bite out of the company's bottom line in its previous two quarters, but that was completely turned around in Q3 and RDM reported a $692,000 foreign exchange gain.
The company ended the quarter with $16.9 million in cash.
RDM has started beta tests of its Simply Deposit Mobile software for BlackBerrys and iPhones and the product is expected to be launched soon.
[7]---------------------------------------------------------------
RIM criticizes Nortel asset auction; settles Visto suit
July 20 & August 7, 2009
RIM has complained about the way Nortel's CDMA and LTE access businesses were auctioned off. Sweden's Ericsson won the auction, which was held as part of Nortel's bankruptcy proceedings. RIM says it was "effectively prevented" from bidding because it would only be recognized as a qualified bidder if it agreed not to bid on other Nortel assets over the next year. RIM was interested in buying the businesses along with complementary Nortel assets, including the underlying patents for the LTE business, but the auction was set up so that it could only bid on one or the other, at least within the next year. It chose not to make a bid.
RIM has been playing the maple leaf card, saying that it would keep the Nortel technology in Canadian hands, and went so far as to suggest that there are national security reasons for the technology to stay Canadian. Mike Lazaridis appeared before a parliamentary committee last Friday, asking the federal government to use its influence to arrange a meeting between RIM, Nortel, and Ericsson executives and to review the deal to make sure it is in Canada's best interests. Nortel and Ericsson have argued that the deal isn't subject to review because -- even though Ericsson agreed to pay $1.13 billion -- the assets only have a book value of about $150 million, which is well below the threshold for a review under the Investment Canada Act.
Lazaridis said RIM thought it had an agreement with Nortel to buy some of the company's assets before it filed for bankruptcy and that it felt "snookered." He evoked the Avro Arrow and said the government needed to protect "a national treasure." Among those supporting the calls for a government review is former Mulroney finance minister Don Mazankowski.
In other news from RIM, the company will pay Visto US$267.5 million to settle the patent infringement suit the California-based company had filed in 2006. Earlier this year, Visto acquired Good Technology (which, over the years, had been sued for patent infringement by both RIM and Visto) from Motorola and is now using the Good Technology name in place of Visto. During the NTP-RIM patent dispute, NTP became shareholders in Visto and the two signed a licensing agreement that NTP trumpeted as proof its patent claims were valid.
[8]---------------------------------------------------------------
STOCK REPORT: Brief slip for Sandvine in uneventful month
July 2009
Not a particularly noteworthy month on the stock market for local tech companies -- only one company saw a double-digit shift in its stock price (compared to an average of eight companies each month this year). Sandvine shares fell 11% in July, but have already recovered most of those losses so far in August.
While I'm on the topic of Sandvine shares, I realized right after I sent out last month's digest (e-mail version only) with the market capitalization ranking that I hadn't updated the Sandvine number. The company currently has a market value of $172 million, up from $110 million at the end of 2008.
For the month of July:
RDM [TSX: RC] +8%
--S&P TSX VENTURE INDEX +8%
Dalsa [TSX: DSA] +8%
Com Dev [TSX: CDV] +8%
ATS [TSX: ATA] +6%
MKS [TSX: MKX] +5%
--S&P TSX COMPOSITE INDEX +4%
Arise [TSX: APV] +3%
===============================
Descartes [TSX: DSG] -0%
RIM [TSX: RIM] -1%
Biorem [TSXV: BRM] -3%
Open Text [TSX: OTC] -4%
TurboSonic [OTCBB: TSTA] -5%
Sandvine [TSX: SVC] -11%
MKS shares had a 1-for-5 reverse split during the month, leaving the company with just over 10 million outstanding shares -- the smallest number of all companies listed here. MKS said the consolidation would result in a trading price "that better reflects its maturity, profitability and dividend yield."
Dalsa shares have gone up in four of the last five months and are up another 6% so far in August. In July, they had their best month-end price since September.
Companies with core operations outside the area:
Acorn Energy [Nasdaq: ACFN] +44%
Sybase [NYSE: SY] +14%
Blue Coat [Nasdaq: BCSI] +13%
NCR [NYSE: NCR] +9%
Agfa-Gevaert [Brussels: AGFA] +7%
ON Semiconductor [Nasdaq: ONNN] +6%
McAfee [NYSE: MFE] +6%
Google [Nasdaq: GOOG] +5%
Oracle [Nasdaq: ORCL] +4%
Ansys [Nasdaq: ANSS] +0%
===================================
Electronic Arts [Nasdaq: ERTS] -1%
[9]---------------------------------------------------------------
Miscellaneous Tidbits
Gary Will
gary@garywill.com
In this issue:
- Desire2Learn wins appeal, Blackboard patent claims invalid
- Maplesoft to be acquired by its Japanese reseller for $35M
- Well.ca raises $1.1M from angels
- Dalsa sees recovery ahead; Chamberlain to leave management team
- Jim Estill leaves Nu Horizons
- RDM returns to profitability in Q3
- RIM criticizes Nortel asset auction; settles Visto suit
- STOCK REPORT: Brief slip for Sandvine in uneventful month
- Miscellaneous tidbits from EA, Tungle, Well.ca, Peer Group, Sandvine, Coreworx, PrinterOn, exactEarth, Open Text, Arise, Biomedical Photometrics
A D V E R T I S E M E N T S
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 Annual Reports, Brand Identities, Brochures and Collateral, Email Marketing, Websites and more. Let's 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.
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.
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]---------------------------------------------------------------
Desire2Learn wins appeal, Blackboard patent claims invalid
July 27, 2009
Desire2Learn has won its appeal of the February 2008 U.S. court judgment that had found the company infringed the patent of Washington, DC-based competitor Blackboard. The United States Court of Appeals for the Federal Circuit has overturned that judgment and invalidated the three patent claims used against Desire2Learn at the original trial.
The lower court had ruled that 35 of Blackboard's patent claims were invalid, but the three claims that remained were all Blackboard needed to win its case. The appeals court agreed that the first 35 claims were invalid, and found the remaining three to be invalid as well.
As a result of the original trial, Desire2Learn paid Blackboard US$3.3 million in June 2008 as compensation for lost profits and royalties. Following the decision of the appeals court, Blackboard recorded a US$3.5 million expense in the quarter ended June 30, but also made it clear that it was in no hurry to pay the money back (plus 6% interest per year) and would be waiting for a "final and non-appealable" decision. It plans to seek a review of the latest decision. Blackboard has also recorded a non-cash charge of US$7.5 million for impairment of capitalized patent costs.
Blackboard was issued a Canadian patent (#2378200) in March and filed suit the following month against Desire2Learn in Canada's Federal Court, accusing the company of infringing -- and inducing others to infringe -- Blackboard's Canadian patent.
[2]---------------------------------------------------------------
Maplesoft to be acquired by its Japanese reseller for $35M
July 30, 2009
Maplesoft will be acquired by Tokyo-based software distributor Cybernet Systems Co. Ltd. in a $35 million deal expected to close next month. Maplesoft will continue to operate as a standalone business. It has 122 employees.
Company co-founder Keith Geddes and CEO Jim Cooper own nearly 42% of the company between them, with Geddes holding a 22% stake and Cooper 19.8%. According to Cybernet, Maplesoft had sales of $14.6 million in the year ended March 31, 2009, down slightly from the previous year, but up about 12% from 2007. The company has been profitable in each of the last three years, with earnings around $360,000 in fiscal 2009. Operating income for 2009 was about $233,000.
Maplesoft -- the corporate name is still Waterloo Maple Inc. -- was incorporated in 1988, although the research that went into the product had started years earlier. The company was founded by Gaston Gonnet (president) and Keith Geddes (VP), both UW professors at the time and members of the computer science department's Symbolic Computation Group. Geddes remains at UW -- now emeritus -- while Gonnet has been based in Switzerland for several years.
Tim Bray, who would later join Open Text and go on to become well-known in computer circles, particularly for his work on XML, was company CEO in the late 1980s. Ron Neumann -- later of SlipStream and now Dejero Labs -- was CEO through a period of high growth in the early 1990s when Maple went from just a handful of staff to over 40 by 1993.
It was in this period that the company got caught up in a messy internal legal battle that went on for years. It filed suit against Gonnet, accusing him of breaching an agreement among all the creators of the Maple software to transfer IP ownership to the company. Maple claimed that instead of transferring ownership, Gonnet signed a restricted-use, royalty-bearing license for the technology -- an agreement the company said it didn't know about for almost two years. Maple asked for $8 million and ownership of the IP. In response, Gonnet said there never was any enforceable agreement of the kind Maple claimed. It wasn't until around 1999 that the two sides came to a settlement.
In the meantime, Neumann was let go and Dieter Hensler became president and CEO in 1994 after running the company's office in Germany. He resigned in 1998 and, following a period with a team of executives as acting CEO, Ian Suttie took the reins in March 1999. This was during the tech boom, and the company prepared to go public -- going so far as to release its quarterly financial results while still a private company. By now, Maple had grown to nearly 100 employees. But the boom went away, the IPO never happened, and Suttie left just a little more than a year after he started. He was succeeded in October 2000 by Jim Cooper, hired the previous year as R&D VP.
After all that turmoil, it's been pretty quiet ever since. Nearly nine years later, Cooper remains CEO and the company's software has expanded from an academic user base in the 1990s to a broader mix of business and academic users today. The automotive industry is apparently one of the largest markets for the company. Sales growth has been modest, expanding from $10 million in annual revenue a decade ago to nearly $15 million today.
Over the years, some of the notable members of the local community who have served on Maple's board include Wes Graham, Randall Howard, Ted Cross, Peter Schwartz and John Whitney (and probably others I never heard about).
Cybernet Systems is a distributor of computer-aided engineering (CAE) software, and distributes Maplesoft products in Japan, China and Taiwan. After being launched in 1985 as a spinoff from Control Data Corporation, the company was later acquired by Kobe Steel and then by Fujisoft in 1999. It has been listed on the Tokyo Stock Exchange since 2003 and Fujisoft remains majority owner.
Maplesoft will be its second acquisition of a North American software company. Just days before the Maplesoft announcement was made, Cybernet acquired Sigmetrix, a developer of mechanical engineering software in Dallas.
[3]---------------------------------------------------------------
Well.ca raises $1.1M from angels
July 30, 2009
Well.ca has closed a $1.1 million angel financing, led by Jordan Banks's Thunder Road Capital. It's the second round of funding for the company, which raised $425,000 in May 2008 from six investors, including Jim Estill. Banks will join Well.ca's board of directors.
Banks was CEO of Toronto's JumpTV for about seven months starting in November 2007, essentially replacing Kaleil Isaza Tuzman, who was a familiar face in the Waterloo area. Banks was CEO when the company merged with New York-based NeuLion. Before that, he had been managing director of eBay Canada.
Other investors in the round include Andrew Sloss, the UW grad who became eBay Canada's "country manager" in 2007 and is GM of Kijiji Canada (an eBay company), David Ceolin, founder of marketing services company Digital Cement, acquired by Pitney Bowes in 2007 for $40 million, and pharmacist Hilton Silberg, founder of Hamilton's DayNight Pharmacy chain, sold last year to the company behind Rexall Pharma Plus.
After some strong years for startups in the region, this deal was the first major round of funding to be announced in 2009 by a local company less than seven years old.
According to Well.ca, its monthly sales in June were four times what they were a year earlier and its web traffic was up 135% over that period. It says it has now shipped nearly 250,000 items since it launched.
[4]---------------------------------------------------------------
Dalsa sees recovery ahead; Chamberlain to leave management team
July 29 & August 5, 2009
Not a good quarter for Dalsa in the period ended June 30 (Q2 09), but the company sees indications of a recovery in its markets, particularly in the Asia/Pacific region.
For the period, Dalsa earned $142,000 on sales of $40.3 million. Sales were down 24% from a year ago, but up 6% from a weak Q1. Dalsa had a $326,000 operating loss in the quarter -- down from operating income of $698,000 last quarter -- partly caused by the appreciation of the Canadian dollar in the quarter, which created a $1.1 million foreign exchange loss. A $491,000 income tax recovery -- also related to foreign exchange -- kept the bottom line in the black. Revenue in both of the company's business segments was up from the previous quarter and down from a year ago.
Operations generated $2.5 million in cash, and the company spent $3.1 million on property and equipment and another $0.9 million was distributed to shareholders as dividends. Dalsa ended the quarter with $9.9 million in cash, down $1.6 million from the end of Q1. Some digital cinema assets were sold in the quarter for $0.7 million.
It ended the quarter with a record order backlog of $99.7 million.
The company also announced that founder and chairman Savvas Chamberlain will be leaving the management team and stepping down as CTO in October. He will remain chairman. Chamberlain became CTO two years ago when he passed the CEO reins to Brian Doody.
[5]---------------------------------------------------------------
Jim Estill leaves Nu Horizons
August 3, 2009
Jim Estill has already parted ways with Nu Horizons Electronics, the Nasdaq-listed New York company that attracted him to the U.S. He was CEO for just two months. The announcement of his departure didn't give any explanation, but obviously the fit wasn't what had been expected -- even though the two sides had talked for months before Estill started the job on June 1.
Estill had signed a four-year employment agreement on May 8. Two of the company's three founders, who had run the business for over 25 years, were executive chairman and COO, with Estill in the middle as CEO. The three executives formed a management committee and any major business matter on which the three did not unanimously agree would be brought to the board of directors.
Estill was to receive a base salary of US$350,000 plus bonuses up to additional US$525,000 with a US$262,500 target. If the company ever lost money for three consecutive quarters, his salary would have fallen to US$30,000 until the next profitable quarter was announced.
He will receive a US$175,000 severance payment and the company would also pay his moving expenses to return to Canada, although Estill told Long Island's Newsday that he planned to remain in the area for now.
[6]---------------------------------------------------------------
RDM returns to profitability in Q3
July 30, 2009
After five consecutive money-losing quarters, RDM earned $175,000 on sales of $5.9 million in the quarter ended June 30 (Q3 09). Sales were up 3% from the previous quarter and 13% from a poor Q3 last year.
Digital imaging accounted for half of all revenue, with sales up 21% from Q2. RDM shipped 5,250 scanner units in the quarter. Sales from RDM's payment processing services business were down 4% sequentially, which the company attributed to a rising Canadian dollar. ITMS transaction volumes were up 4% from Q2 and 38% from last year.
As the company had warned, revenue from its electronic payments solutions (EPS) business took a steep tumble following a reduction in RDM's contract work for the U.S. government. EPS revenue was down more than 65% both quarter-over-quarter and year-over-year.
Foreign exchange losses had taken a huge bite out of the company's bottom line in its previous two quarters, but that was completely turned around in Q3 and RDM reported a $692,000 foreign exchange gain.
The company ended the quarter with $16.9 million in cash.
RDM has started beta tests of its Simply Deposit Mobile software for BlackBerrys and iPhones and the product is expected to be launched soon.
[7]---------------------------------------------------------------
RIM criticizes Nortel asset auction; settles Visto suit
July 20 & August 7, 2009
RIM has complained about the way Nortel's CDMA and LTE access businesses were auctioned off. Sweden's Ericsson won the auction, which was held as part of Nortel's bankruptcy proceedings. RIM says it was "effectively prevented" from bidding because it would only be recognized as a qualified bidder if it agreed not to bid on other Nortel assets over the next year. RIM was interested in buying the businesses along with complementary Nortel assets, including the underlying patents for the LTE business, but the auction was set up so that it could only bid on one or the other, at least within the next year. It chose not to make a bid.
RIM has been playing the maple leaf card, saying that it would keep the Nortel technology in Canadian hands, and went so far as to suggest that there are national security reasons for the technology to stay Canadian. Mike Lazaridis appeared before a parliamentary committee last Friday, asking the federal government to use its influence to arrange a meeting between RIM, Nortel, and Ericsson executives and to review the deal to make sure it is in Canada's best interests. Nortel and Ericsson have argued that the deal isn't subject to review because -- even though Ericsson agreed to pay $1.13 billion -- the assets only have a book value of about $150 million, which is well below the threshold for a review under the Investment Canada Act.
Lazaridis said RIM thought it had an agreement with Nortel to buy some of the company's assets before it filed for bankruptcy and that it felt "snookered." He evoked the Avro Arrow and said the government needed to protect "a national treasure." Among those supporting the calls for a government review is former Mulroney finance minister Don Mazankowski.
In other news from RIM, the company will pay Visto US$267.5 million to settle the patent infringement suit the California-based company had filed in 2006. Earlier this year, Visto acquired Good Technology (which, over the years, had been sued for patent infringement by both RIM and Visto) from Motorola and is now using the Good Technology name in place of Visto. During the NTP-RIM patent dispute, NTP became shareholders in Visto and the two signed a licensing agreement that NTP trumpeted as proof its patent claims were valid.
[8]---------------------------------------------------------------
STOCK REPORT: Brief slip for Sandvine in uneventful month
July 2009
Not a particularly noteworthy month on the stock market for local tech companies -- only one company saw a double-digit shift in its stock price (compared to an average of eight companies each month this year). Sandvine shares fell 11% in July, but have already recovered most of those losses so far in August.
While I'm on the topic of Sandvine shares, I realized right after I sent out last month's digest (e-mail version only) with the market capitalization ranking that I hadn't updated the Sandvine number. The company currently has a market value of $172 million, up from $110 million at the end of 2008.
For the month of July:
RDM [TSX: RC] +8%
--S&P TSX VENTURE INDEX +8%
Dalsa [TSX: DSA] +8%
Com Dev [TSX: CDV] +8%
ATS [TSX: ATA] +6%
MKS [TSX: MKX] +5%
--S&P TSX COMPOSITE INDEX +4%
Arise [TSX: APV] +3%
===============================
Descartes [TSX: DSG] -0%
RIM [TSX: RIM] -1%
Biorem [TSXV: BRM] -3%
Open Text [TSX: OTC] -4%
TurboSonic [OTCBB: TSTA] -5%
Sandvine [TSX: SVC] -11%
MKS shares had a 1-for-5 reverse split during the month, leaving the company with just over 10 million outstanding shares -- the smallest number of all companies listed here. MKS said the consolidation would result in a trading price "that better reflects its maturity, profitability and dividend yield."
Dalsa shares have gone up in four of the last five months and are up another 6% so far in August. In July, they had their best month-end price since September.
Companies with core operations outside the area:
Acorn Energy [Nasdaq: ACFN] +44%
Sybase [NYSE: SY] +14%
Blue Coat [Nasdaq: BCSI] +13%
NCR [NYSE: NCR] +9%
Agfa-Gevaert [Brussels: AGFA] +7%
ON Semiconductor [Nasdaq: ONNN] +6%
McAfee [NYSE: MFE] +6%
Google [Nasdaq: GOOG] +5%
Oracle [Nasdaq: ORCL] +4%
Ansys [Nasdaq: ANSS] +0%
===================================
Electronic Arts [Nasdaq: ERTS] -1%
[9]---------------------------------------------------------------
Miscellaneous Tidbits
- EA acknowledged its acquisition of J2Play (see last month's digest) in a things-we-did-this-quarter list in the news release announcing its latest financial results.
- Tungle (#9) and Well.ca (#15) both made Backbone magazine's PICK 20 list of Canada's leading Web 2.0 companies.
- The Peer Group has acquired the connectivity software business of California's Asyst Technologies for US$2 million. The Asyst products are used by many of the world's largest semiconductor equipment manufacturers. The business became available after Asyst filed for bankruptcy protection in April. The Peer Group had been a reseller for the software.
- Local MP Peter Braid, on behalf of the federal government, announced that Sandvine received a $1 million IRAP contribution. The company was also recognized for its R&D achievements with the National Research Council's Canadian Innovation Leader certificate.
- Coreworx had sales of about US$1.1 million in the quarter ended June 30 (Q2 09), according to parent company Acorn Energy.
- PrinterOn announced a partnership with Ricoh under which the Japanese company receives exclusive rights to embed PrinterOn software in its line of Wi-Fi hotspot printers. The announcement was made at a Williams Coffee Pub with federal cabinet minister Gary Goodyear in attendance.
- David Martin, long-time product management VP at MKS, is now in a similar role at exactEarth, the new Com Dev subsidiary.
- Open Text completed its US$321 million acquisition of Vignette (see May digest).
- Arise has negotiated a one-year deferral on payments towards its $19.3 million (€12.55 million) in long-term debt raised to construct its manufacturing plant in Germany. Arise was scheduled to make quarterly payments of $963,000. It also negotiated an extension of a $15 million (€10 million) credit facility with a German bank to the end of this year.
- Biomedical Photometrics has a new gallery of fluorescence pathology images, which includes what it believes may be the largest pathology image ever (61.3 gigapixels or 184GB).
posted by Gary Will at 1:25 AM
