
September 2001
Compiled and written by
Gary Will
Issue 55 -- October 1, 2001
In this digest:
- MKS product manager killed in World Trade Center attack
- Mitra to be acquired by Belgium's Agfa
- Freedom Intelligence plans to merge with UK partner
- Rodin intends to seek protection from creditors
- ADexact attracts $5.5 million investment
- STOCK REPORT: Is this the bottom?
- MKS quarter holds steady
- Navtech lays off 20% to cut costs
- Miscellaneous tidbits from Sandvine, iAnywhere, RDM, PrinterOn, Descartes, RIM, EMJ, Com Dev, JPH, Dalsa
MKS product manager killed in World Trade Center attack
September 11, 2001
Peter Goodrich, product manager for MKS' Engineer Integrity and Code Integrity product lines, was one of the victims of the attacks on the World Trade Center. He had been flying from Boston to Los Angeles on United Airlines flight 175, the second plane to collide with the towers.
Goodrich, who lived in Boston, joined MKS earlier this year through the company's acquisition of Upspring Software, based near Boston. Since joining MKS, he had made frequent trips to Waterloo and worked closely with the team here.
"He was kind of guy that we want to build this company around -- bright, energetic, enthusiastic, tenacious. We are heartsick across the company at his loss," said Ellyn Winters-Robinson, director of marketing at MKS. A story in the Boston Globe emphasized Goodrich's athletic accomplishments. In the late 1980s, he had been a multi-time NCAA Division III All-American in track & field at Bates College in Maine.
Goodrich was 33 years old and leaves behind his wife, Rachel.
His family has established the Peter Goodrich Memorial Trust --
described as "a fund that will provide a scholarship to a child who
has the curiosity for learning which Peter embraced all his life."
Donations to the fund can be made by contacting Megan Hall
Among companies with development sites in Waterloo, Raytheon and
Sybase both lost people in the attacks. Financial Fusion, a Sybase
subsidiary, was sponsoring a conference on the 106th floor of the
north tower when it was hit. Two Sybase employees were killed, and
the losses might even have been higher had the company not moved
out of its World Trade Center office a couple months ago.
Sybase employees company-wide are contributing to a fund for the
families of the two employees that were lost, and at the end of
October the company will match the employees' contributions to that
fund, as well as their contributions to the American Red Cross and
The New York Stock Exchange Fallen Heroes Fund.
Belgium-based Agfa-Gevaert has signed a letter of intent to acquire
Mitra. The two companies have worked together since Mitra was
formed 10 years ago -- Agfa hired Mitra to develop its IMPAX
radiology imaging technology and that contract initially
represented the bulk of Mitra's revenues. Agfa and Mitra co-founded
IMPAX Technology Inc. in 1999.
Financial details of the acquisition were not disclosed.
Mitra will be managed as a separate business unit. CEO and co-
founder Eric Peterson will likely leave, but the other managers are
expected to remain. The company has over 300 employees world-wide,
with most of them in Waterloo. Mitra expects to continue working
with manufacturers other than Agfa.
"We have spent the last six to nine months contemplating all
available options, including private and public financing, and
mergers," said Mitra exec VP Yvan Couture. "Our mandate and focus
has always been to select the option that would ensure continued
presence and operations in Waterloo."
Agfa, which was wholly-owned by Bayer AG of Germany until 1999, had
sales of $3.6 billion (all figures converted to Canadian dollars)
over the first half of 2001 and net income of $45 million. Working
capital at the end of June was $2.6 billion. Technical imaging,
which includes healthcare, has been the only one of the company's
three core segments to show revenue growth this year, with sales
climbing 10% to $1.3 billion.
Since 1999, Agfa has been a public company, listed on the Brussels
Exchange (now part of Euronext), as well as the Frankfurt Exchange.
Its share price has fallen by about 50% over the last year.
The company just unveiled a restructuring plan that will see it cut
4,000 jobs by the end of next year, but it is expanding its medical
imaging operations. Along with the Mitra acquisition, Agfa also
just announced that it is taking a minority stake in MediVision
Medical Imaging Ltd. of Israel.
Freedom Intelligence expects to merge with Aruna plc of London,
England, with operations continuing under the Aruna name.
Aruna lists Freedom Intelligence founders Gaston Gonnet and Tim
Snider as its chief scientist and co-founder and chief
technologist, respectively. Freedom Intelligence technology has
been incorporated into the Aruna Companion product.
Aruna evolved from Coalescent, which was the largest partner of
Freedom Intelligence. The founder of Aruna/Coalescent, Mark
McLellan, had been an investor in the Waterloo company.
Based in London and leading the combined company will be Jack
Hewitt, former CEO of software developer Versata Inc. of Oakland.
The Aruna release mentions that in March 2000 Versata had the 7th-
best first day of trading following its IPO in the history of
Nasdaq. It doesn't mention that it fell from a high of US$101 on
that day to US$0.28 by the time Hewitt left in March of this year.
Aruna's Web site lists Versata as one of the company's resellers.
Aruna also announced in September that UK insurance company
Pinnacle Insurance plc has signed "a major contract" for the Aruna
Companion software.
Also from Freedom Intelligence: Alastair Rough, who had been sales
VP, recently joined Mitra.
What a difference a year has made for Rodin Communications. A year
ago, it hired ex-Communitech boss Vince Schiralli to oversee day-to-
day operations, was expecting an imminent listing on the TSE, and
was forecasting sales of $15 million for this year.
Twelve months later and Schiralli is gone, the TSE listing never
came, and the company may end the year not far off the $2.5 million
in sales it recorded in each of the last two years. It has now
filed a notice of intention to make a proposal to its creditors to
restructure its debt and prevent them from forcing it into
bankruptcy.
CEO Loreto Saccucci said he was "confident that Rodin will emerge
as a much stronger company" from the restructuring.
In July, the North Renfrew Times reported that Rodin had stopped
work on the broadband network it had been contracted to build in
the Ottawa Valley area. "The company was supposed to sink $23
million into the project ... [but] has apparently run into trouble
financing the deal," said the Times. Rodin reported that work on
the contract was deferred "until the terms and conditions of the
contract could be renegotiated." In August, it sent $1.3 million in
equipment that was to be used in Renfrew back to its supplier
(Cisco).
Then in September, the Owen Sound Sun Times ran a story about
Rodin's work on another broadband network -- in Grey-Bruce --
headlined "Slow death of high speed hopes." One of the local
officials who had selected Rodin to build the network characterized
his experience with the company as "two years worth of broken
promises," although two others quoted in the story described Rodin
as "responsive" when problems arose. An Owen Sound councillor later
said he was surprised to hear about a history of unfilled promises
since nothing negative had ever been mentioned to city council.
The Sun Times reported that Rodin owed money to companies in the
Owen Sound area, and quoted one of them saying he doesn't expect
he'll ever see the money.
Saccucci told the paper that he had "just recently taken over the
reins to run [Rodin] day-to-day."
The company quickly -- maybe too quickly -- issued a response to
the Sun Times story saying that "rather than being criticized in
the press" it would expect to be praised "for moving decisively to
limit the impact of those [telecom industry] problems on its
customers, suppliers and other stakeholders."
Rodin said the restructuring was expected to be completed within 30
days, which would be by the end of this week.
Over the first half of 2001, Rodin reported a net loss of $1.8
million on sales of $1.4 million. At June 30, it had a working
capital deficiency of $1.4 million and just $32,000 in cash, down
from $2.5 million at the beginning of the year.
ADexact has closed a $5.5 million round of financing, led by RBC
Capital Partners' information technology fund.
In the release, ADexact CEO David Roussain said the money would be
used "to complete our [product] trial and to fuel deployment in the
U.S."
The managing director of the fund is Richard Black, director of
Open Text and member of the advisory board of Waterloo's Tech
Capital Partners. From the release it looks like fund director Greg
Connor is the one working most closely with ADexact.
ADexact also announced that PixStream co-founder and Sandvine CTO
Marc Morin had joined its advisory board. ADexact was founded by
another PixStream co-founder, Stephen Bacso.
Well, it was RIM's 3rd-best month so far this year. Other than
that...
For the month of September:
Gensel Biotech [CDNX: GSB] +25% (4 cents)
Over the last 12 months, the only company here whose stock has gone
up is Open Text. The only other company whose stock haven't lost at
least half its value in that time is Dalsa. It's down 43%. And the
only other companies on this list whose shares haven't lost at
least three-quarters of their value are TurboSonic (-58%) and MKS (-
64%).
Year-to-date, Com Dev shares are now the biggest decliner, losing
86% of their value so far in 2001. That edges out Finline's 85%
drop. Descartes shares are off 81%.
I've stopped tracking Treasury International here. Pretensions
aside, it isn't a tech company now and never really was, although
it did make half an effort to get on the Internet gravy-train back
when there was such a thing (or shortly after, actually). Its
software development expenses for the first half of fiscal 2002
were only US$7,700.
Finline did close its reverse takeover of Tekron (see the last two
digests) and now owns 79% of the company which trades on the ever-
flaky U.S. over-the-counter bulletin board. Tekron's share price
has fallen more than 60% in the weeks since the deal closed, but it
still has a market value about three times that of Finline. Finline
insiders also gave themselves 2.8 million new shares in the company
as repayment for a purported $400,000 in loans (and interest) that
they had made to keep Finline afloat.
Companies based elsewhere with development offices in Waterloo were
all below the line for the second straight month:
=================================
MKS' results for the quarter ended July 31 (Q1 02) looked very much
like its Q4 numbers. Sales were US$6.6 million, down only 1.5% from
Q4 and up just 2% from a year ago. Expenses climbed 3.4%
sequentially, resulting in a loss from operations of $1.4 million --
just as in the previous quarter. R&D expenses climbed 34% from Q4
to US$2.0 million, offset by a decline in G&A costs.
The SCM business segment contributed US$3.9 million in sales or 58%
or revenue while the interoperability side brought in the remaining
US$2.8 million -- all exactly as they were in Q4.
One significant change was that the interoperability segment saw
its profits drop from US$1.1 million in Q4 to US$432,000. MKS laid
off 12 people from the IO unit following the end of the quarter.
The company's cash position declined US$1.8 million over the
quarter to US$7.2 million. MKS expects that it will have enough
cash to meet its needs for at least the next year.
The annual general meeting was postponed until this month. It had
been scheduled for September 11.
For the quarter ended July 31 (Q3 01), Navtech reported a net loss
of US$585,000 on sales of US$1.7 million. Working capital
deficiency grew to US$672,000.
In August, the company initiated a cost-cutting program and cut
more than 20% of its workforce. It also close its very expensive
sales office in Denver. Navtech is cutting the number of trade
shows it will attend and has renegotiated its contract with its
largest communications supplier.
Mitra to be acquired by Belgium's Agfa
September 26, 2001
Freedom Intelligence plans to merge with UK partner
September 25, 2001
Rodin intends to seek protection from creditors
September 7, 2001
ADexact attracts $5.5 million investment
September 18, 2001
STOCK REPORT: Is this the bottom?
September 2001
Finline [CDNX: FIN] +25% (3 cents)
=================================
RIM [TSE: RIM] -3%
Dalsa [TSE: DSA] -7%
Open Text [TSE: OTC] -7%
RecycleNet [OTC: GARM] -17%
MKS [TSE: MKX] -20%
Virtek [TSE: VRK] -21%
GUARD [CDNX: GUA] -22%
RDM [CDNX: RC] -24%
Descartes [TSE: DSG] -27%
Com Dev [TSE: CDV] -29%
Turbosonic [OTCBB: TSTA] -31%
Navtech [OTCBB: NAVH] -50%
CME Telemetrix [CDNX: YME] -56%
MDR Switchview [CDNX: MSW] -6%
VoiceIQ [CDNX: VIQ] -17%
Network Assoc [Nasdaq: NETA] -19%
CheckFree [Nasdaq: CKFR] -23%
Sybase [NYSE: SY] -32%
Engineering.com [CDNX: EGN] -36%
Cyberplex [TSE: CX] -37%
Siebel [Nasdaq: SEBL] -40%
CacheFlow [Nasdaq: CFLO] -42%
CVF Technologies [Amex: CNV] -43%
MKS quarter holds steady
September 10, 2001
Navtech lays off 20% to cut costs
September 14, 2001
Miscellaneous Tidbits