May 2004

Compiled and written by
Gary Will

E-mail:
gary@garywill.com

Issue 87 -- June 7, 2004
In this digest:

1. Descartes fires CEO, cuts another 130 jobs, writes off US$18M
   
2. Sirific raises another $23M
   
3. RDM forecasts profitability and record revenue over next 6 months
   
4. Com Dev on pace for first annual profit since 1997

5. Symbility acquired by Alberta public company
   
6. Open Text operations generate US$15 million in cash in Q3
   
7. CME Telemetrix results show desperate conditions before funding
   
8. ARISE needs cash; gets funding & distribution deal with EMJ

9. MKS sales flat year-over-year
   
10. STOCK REPORT: RIM stock has second-highest month-end ever
    
11. Miscellaneous tidbits from UW, SlipStream, IMS, RSS Solutions, AccessTNG, LogiSense, Dspfactory, Web Pearls, Turbosonic, Meikle Automation, ATS, Onlinetel.

Descartes fires CEO, cuts another 130 jobs, writes off US$18M
May 6, 10, June 2, 2004

Shortly after the markets opened on May 6, I wrote myself a note that Descartes shares had fallen to an all-time low that morning. Since the next issue of the Tech Digest wasn't going to be written for another month, I wanted to make sure I remembered to mention it. As it turned out, no reminder was necessary, because about nine hours after Descartes shares had fallen below their previous all-time low, the company announced that it had fired its CEO after badly missing its first quarter forecasts.

It was exactly a year ago that Descartes announced it was eliminating 130 jobs and making changes to its executive team after a terrible first quarter. I even described the cuts at the time as "an annual tradition" at Descartes. That tradition was honoured again this year, as the company has again cut 130 jobs, or about 35% of its remaining workforce.

One of the first to be terminated was CEO Manuel Pietra, who Descartes said it was firing with cause, although it wouldn't specify what that cause was. Pietra had become Descartes' sole CEO a year ago after sharing the title with Peter Schwartz since February 2002. It was Schwartz who introduced Pietra to the company in 2001.

The company has not named a new chief executive, but Brandon Nussey, its new CFO, and Art Mesher, long-serving EVP of strategic development, are forming what is being called the "office of the CEO" until a replacement is hired.

When Descartes and its auditors reviewed the books for FY2004, they found that when the company announced its Q4 results in March, its net income was overstated by a whopping US$6.3 million -- not that you'll find that figure in any of the three news releases the company issued. On May 6, Descartes announced that it was reviewing its FY2004 financial statements and that "it may be necessary" to make adjustments. Four days later, it said that based on that review, it was reducing its stated revenue for the year by US$1.1 million. And then 10 days later, after reviewing the review, it knocked another US$0.8 million off the top line. The change to the bottom line was only expressed as an increased loss per share.

Factors cited by Descartes in its May 10 news release included US$5.0 million in accounts receivable that it no longer expected to be paid. This was said to be primarily related to receivables in the Asia/Pacific region and one large receivable in Europe. The company also said it was no longer recognizing revenue from a customer in China where it needs the approval of "various Chinese authorities" to collect payments. In the end, Descartes chopped US$1.9 million off the Q4 revenue figure it reported in March and added US$4.6 million in expenses. Revenue that was originally reported as US$16.3 million was reduced to US$14.4 million, while the net loss in Q4 ballooned to US$10.6 million (US$0.26/share) from the US$4.2 million originally announced.

Five U.S. law firms issued news releases seeking Descartes shareholders to join a class action lawsuit against the company. A complaint was filed in the U.S. District Court for the Southern District of New York (where Nasdaq is located), naming Descartes, Pietra, and former CFO Colley Clarke as defendants.

Over the last four years, Descartes has been a chronic underperformer, although this is the first time that the board has fired the CEO. Since June 2002 -- well after the market bubble burst -- Descartes shares have lost 95% of their value.

The company struggled during Pietra's first year as president and co-CEO in FY2003, and its shares lost over half of their value that year (which was actually an improvement over the 76% decline the previous year), but the company's board of directors still paid him a US$75,000 bonus and gave him a US$50,000 raise for FY2004. Descartes shares fell 12% in FY2004 -- the S&P/TSX composite climbed 30% over the same period -- and were down about 30% in the current year before Pietra's firing was announced.

Pietra had not been impressive in Descartes' quarterly conference calls, which had become a parade of excuses and bafflegab about why the company's revenue was dwindling even as it was announcing over a hundred new customers every quarter.

In its peak years of 1999 and 2000, Descartes brought a lot of money into the Waterloo community. Not from profits, of course, since there haven't been any in the last eight years, but from the well-timed exercise of stock options. The company has created several millionaires -- Mesher, for example, who is the sole remaining executive officer from that era, is listed in insider trading reports as having sold $9.3 million of Descartes shares between December 1999 and May 2001 ($7.4 million net of exercise price), and he wasn't the largest seller from the company's executive ranks. Local home builders, landscapers, and other firms have done well by Descartes, even if it's been years since company shareholders had any reason to be pleased.

With this year's round of layoffs, Descartes has now made major restructuring announcements in four consecutive years: August 2001 (70 jobs cut), June 2002 (120), May 2003 (130), and May 2004 (130). Even with all of the previous cuts, the company was still nowhere close to generating the revenue it needed to cover its costs (which it now says is a priority), and it was clear that if management had any plan to become profitable that more layoffs would be necessary. Descartes says that 65% of its costs were employee-related and that the cutbacks will reduce expenses by over US$7 million per quarter starting in Q3.

The company's salesforce has been drastically scaled back. Six months ago, Descartes said it had 60 quota-carrying sales reps. That was reduced to 51 at the end of Q1 and now is down to just 20. Mesher says the focus will now be on cultivating existing customers rather than creating new business. Descartes now has 250 employees worldwide. Many of the layoffs came in the company's satellite offices -- in Asia/Pacific, Europe, and the Americas -- as the company has abandoned the regional management system ballyhooed by Pietra.

Because Descartes had raised a lot of cash through stock offerings and debenture sales years ago when its shares were soaring, its management has never shown much urgency around becoming profitable. So far, it's been able to live comfortably off the money it raised in 1999 and 2000. But with Descartes' accumulated losses now standing at US$384 million (nearly nine times the company's current market value), and after its share and debenture buy-backs from last year, Descartes' net cash per share has fallen below CDN$1 for the first time in years. It still has US$56.6 million in cash, or US$29.6 million net of convertible debentures, but that's a long way from the hundreds of millions it had just a few years ago.

In the quarter ended April 30 (Q1 05) -- Pietra's last full quarter as CEO -- Descartes had revenue of US$13.3 million, well below the US$15.5-16.5 that it had forecast at the beginning of the period. Sales were down 8% from the company's restated Q4 revenue and 7% below the same period last year. The transportation segment accounted for 64% of sales with retail/CPG providing an additional 15%.

Net loss was US$28.9 million (US$0.73/share), which included a US$18.0 million write-down in the value of goodwill on the balance sheet. Even if you ignore the write-down, the bottom line for the quarter was about US$6 million below what the company had forecast, so this was a huge miss.

Gross margins fell sharply to 58.7% as high-margin license revenue nearly evaporated in the quarter -- down to just US$1.7 million or 13% of sales. With that drop, gross profits were down 17% from a year ago.

The company burned through US$8.4 million in cash in the quarter, of which US$7.6 million was consumed by operations with US$0.9 million spent on capital assets.

Descartes' management information circular for its upcoming AGM shows that Pietra was the company's highest-paid executive officer, taking home US$300,050 in FY2004 (Descartes no longer discloses executive compensation beyond base salary and performance bonuses, so numbers from this year's circular are not comparable to numbers in previous years where other compensation was listed).

The company's board -- which held 10 formal meetings during the year -- decided they were being underpaid by the compensation package they implemented two years ago and, starting this month, have arranged for their pay to be bumped up from $9-10,000 a year to $20-30,000. Descartes' directors collectively own about one-quarter of one percent of the company's outstanding shares.

Descartes also disclosed in the circular that its IT services SVP, its fourth-highest-paid executive officer last year, has left the company. Of the six executives listed in the circular, only two are still with Descartes.

Sirific raises another $23M
May 17, 2004

Sirific Wireless has closed a US$17 million round of funding (about CDN$23 million), led by TD Capital Ventures. Intel also made a small investment through its communication fund. Other participants in the round were most of Sirific's existing investors: Agilent Technologies, Celtic House, BDC Venture Capital, and GrowthWorks WV Funds.

Jim Goldinger of TD Capital's Boston office has joined Sirific's board of directors. It is the company's fourth round of funding starting with its seed round four years ago. Sirific raised US$13.5 million in 2002-2003 and has now raised more than CDN$50 million in total.

Sirific expects to have its first products in production by the end of the year.

RDM forecasts profitability and record revenue over next 6 months
May 3, 2004

For the quarter ended March 31 (Q2 04), RDM reported revenue of $4.4 million -- its second-best top line ever. Sales were up 30% from the previous quarter and 64% above a weak Q2 last year. Net loss was $89,000 ($0.00/share), in line with management's forecast of a small loss.

Revenue included a one-time license fee of $200,000 from Ingenico to settle a copyright infringement suit filed by RDM in 2002. Even with that revenue backed out, sales were still up 24% sequentially as RDM's digital imaging business reported record scanner sales, with shipments up over 50% from Q1. Digital imaging sales in the quarter were $3.2 million or 71% of sales, up 45% from the previous quarter and more than double last year's figure. Operating loss for the segment was $297,000.

The electronic payments segment contributed an operational profit of $76,000 on sales of$688,000, while RDM's traditional quality assurance segment contributed a $195,000 operational profit on sales of $581,000.

Operations used $227,000 in cash and an additional $275,000 was spent on capital assets. In total, the company used $475,000 in cash in the quarter and now has $4.1 million. Management expects the company will be cash flow positive in the current quarter and profitable for the rest of the fiscal year.

They're also forecasting sales of $9-12 million over the next two quarters, which would take the company above the 30% annual growth rate forecast at the beginning of the year.

Robert Bruggeman of Northern Securities was the only analyst to participate on the company's quarterly conference call.

Com Dev on pace for first annual profit since 1997
May 26, 2004

For the first time since FY2001, Com Dev's quarterly revenue topped $30 million as the company reported net income of $3.7 million ($0.06/share) on sales of $31.4 million in the quarter ended April 30 (Q2 04).

Sales were up 72% from a terrible Q2 last year and 40% above the previous quarter. On top of that, the company significantly improved its gross margins, so gross profits were up 134% from Q1 (which had abnormally low margins -- see February digest) and 125% from last year. The improvement was partly attributed to a more favourable U.S.-Canadian dollar exchange rate, but even backing out those effects, gross profits were still more than double what they were in the comparable periods.

Expenses climbed 24% sequentially to $6.6 million, leaving an operating income of $3.6 million, up sharply from $197,000 in the previous quarter and $355,000 a year ago.

The company spent a lot of money preparing a proposal for the next phase of the space shuttle battery program, and was very disappointed when the project was awarded to a U.S. company. A second disappointment, according to CEO John Keating, was the company's inability to convince the Canadian Space Agency that it should have a larger role in CSA projects. Keating described Com Dev as Canada's largest employer in the space industry (Com Dev has 712 employees).

Operations generated $7.6 million in cash, of which $3.8 million was used to pay an installment on its $20.3 million promissory note to Technology Horizons Ltd. Com Dev has now paid THL $8.8 million. The first $5 million was paid out of its share offering in October.

Com Dev spent another $2.5 million on capital assets in the quarter and ended Q2 with $26.8 million in cash, up $0.6 million from the end of Q1. Management is forecasting negative cash flow through the rest of the year.

Deferred revenue jumped $5.9 million to $31.4 million and the order backlog remained at $93 million.

Along with potential exchange rate fluctuations, another risk mentioned by Keating in the conference call is that the company has not yet been able to sublease its old wireless facility in England, and the reserves on the balance sheet won't cover the full costs of the lease if a sublessee isn't found.

The company has bumped up its annual revenue growth forecast to 30% from its previous target of 20%. To achieve that number, Com Dev will have to average $32 million in sales in each of the remaining two quarters of FY2004. Unless the sky falls in before the end of October, this will be Com Dev's first profitable year since 1997. Since then, the company has lost just over a quarter-billion dollars.

Symbility acquired by Alberta public company
May 20, 2004

Kitchener's Symbility Solutions has been acquired by Edmonton-based Automated Benefits Corp. (AutoBen), which trades on the TSX Venture Exchange.

Symbility was founded in Victoria in 2002 by Eric Embacher and Marc-Olivier Huynh and moved to Kitchener last year. It evolved out of a company called Qirra Custom Software, which launched in 1996. Symbility develops Web-based applications for pen-based PDAs that are used in the field by claims estimators to process property insurance claims. It expects to launch its first pilot implementations in September with ING, Allstate, Economical, and Royal & SunAlliance.

Symbility plans to use a transaction-based revenue model and estimates that it will receive about US$13 per claim. The company is pre-revenue, and in its first 18 months, ended December 31, it reported a net loss of $153,000. It had raised $147,500 through the sale of shares.

AutoBen is also a software developer focused on the insurance industry. It provides claims management software for employee health and dental plans. One of AutoBen's investors and directors is G. Scott Paterson, the former CEO of Yorkton Securities.

It was an all-stock transaction and the full purchase price will depend on Symbility's sales over the next five years. Embacher, Symbility's president, has joined AutoBen's board.

Open Text operations generate US$15 million in cash in Q3
May 5, 2004

The markets didn't think much of Open Text's quarter ended March 31 (Q3 04) -- the company's share price fell 10% the day the results were announced and 16% over the next week -- but most of that reaction was a response to a US$10 million restructuring charge in the quarter.

The quarter included one month of results from IXOS, in which Open Text acquired a majority stake in February. With the IXOS sales, revenue was US$80.2 million, up 30% from the previous quarter but at the bottom end of management's forecast. All of those gains came from the IXOS contribution of US$21.2 million, without which Open Text would have reported a 4% sequential decline in sales from a strong Q2. Revenue was up 82% from a year ago, or 34% if you take away the IXOS sales. Open Text has made several acquisitions in the last year, so it's difficult to come up with an "organic" growth rate.

The eye catcher was the US$10 million restructuring charge, but you really had to expect something like that after the company's recent acquisitions. The charge comes on top of the restructuring charges taken by IXOS before the acquisition closed, which became part of the liabilities assumed by Open Text. With the charge, net income fell to US$3.3 million (US$0.07/share), down from US$7.7 million in the previous quarter and US$6.8 million in the same quarter last year.

What probably should have generated as much interest was the record US$15.4 million in cash generated by operations. Open Text also added IXOS' cash to its balance sheet in the quarter, giving it US$153.3 million at quarter-end.

Open Text now owns 88% of IXOS and intends to acquire the remaining shares in the company, which it says have a value of about US$30 million.

With three full months of IXOS revenue to come in Q4, Open Text is forecasting total sales of US$100-110 million in the current quarter with net income of US$9-12 million.

CME Telemetrix results show desperate conditions before funding
May 19 & 31, 2004

CME Telemetrix filed its year-end and Q1 results, which show how dire the company's position was before it closed a $2.16 million round of funding last month (see April digest). At March 31, the company's cash was down to just $97,000. Working capital was $4,000. CME's total book value was down to $17,000 while its accumulated deficit had grown to $20.9 million.

But none of those numbers really mean much now that the company has replenished its balance sheet. Last month, CME said it expected that its offering would be fully subscribed with total gross proceeds of $2.5 million. That didn't quite happen, as there was only an additional $80,505 added to the $2.16 million announced in April, bringing the total proceeds to $2.24 million ($1.93 million net). That's enough to stay in operation for a year, according to the company.

In Q1, CME reported income of $500,000 through the sale of assets, which included the right to receive royalties from the sale of CME's food quantifier device. G&A expenses in the quarter were $392,000 while R&D expenses were $402,000. CME no longer qualifies to have its federal investment tax credits refunded in cash, after it moved from Tier 3 to Tier 2 on the TSX Venture Exchange on January 2. Its provincial ITCs will still be refundable in cash.

ARISE needs cash; gets funding & distribution deal with EMJ
May 28 & 31, 2004

ARISE finally got around to filing its annual financial statements, just as the TSX Venture Exchange issued a cease trade order against the company, citing ARISE's failure to file as the reason for the order. The order was in effect all of last week.

A few days later, ARISE reported its results for the quarter ended March 31 (Q1 04), and, as expected, they reveal a company in need of some funding. ARISE ended the quarter with just $3,908 in cash -- after borrowing $134,000 at 12% annual interest, $100,000 of which came from CEO Ian MacLellan. At quarter-end, ARISE had a working capital deficiency of $1.2 million.

After the end of the Q1, one of ARISE's suppliers agreed to take 107,843 common shares as payment of a $55,000 debt (which works out to $0.51/share). ARISE then raised gross proceeds of $61,240 through what was essentially a small public offering using MacLellan as an intermediary. MacLellan sold 120,000 of his own shares on the public market, receiving $61,240. He then gave the proceeds to the company in return for 120,000 new shares. ARISE will pay any expenses incurred by MacLellan.

Then in May, ARISE announced a distribution and funding agreement with Guelph's EMJ Data Systems. EMJ will handle all of ARISE's order fulfillment and will also buy the company's existing inventory and purchase all future inventory requirements. In return, EMJ has received 250,000 ARISE shares and will receive an undisclosed percentage of ARISE sales. It will also be granted 100,000 warrants each year to buy ARISE shares at the 40-day weighted average market price. The deal immediately gives ARISE another $100,000 in cash, as well as give it the ability to order inventory, which it was having difficulty doing with so little cash. ARISE says it is trying to arrange additional loans, debt conversions, and private placements.

In Q1, ARISE lost $514,121 ($0.05/share) on sales of $564,106. With gross margins of 23%, the company had gross profits of $130,000 and expenses of $618,000 ($189,000 R&D, $429,000 SG&A). G&A costs included $114,640 related to ARISE's attempted acquisition of Dankoff Solar Products (see March digest).

Sales were up 91% from last year and 26% from the previous quarter. Operations consumed $115,000 in cash in the quarter. Sales included two more solar homes in the Eastbridge subdivision in Waterloo, which makes four in total. But ARISE isn't expecting any more sales from the same source. "There are no additional suitable buildings in the subdivision," according to company management.

Q1 is traditionally the company's weakest quarter, as the market for solar home construction dies down through the winter months.

MKS sales flat year-over-year
May 27, 2004

For the quarter ended April 30 (Q4 04), MKS reported net income of US$423,000 (US$0.01/share) on sales of US$9.2 million. Revenue was down 2% from a strong Q4 last year but up 27% from the previous quarter. It was the company's second-highest top line under CEO Phil Deck and the sixth-highest in MKS' history.

Sales from MKS' software change management unit grew 34% sequentially to US$6.8 million with operating loss of US$384,000, while the company's interoperability unit recorded an operational profit of US$798,000 on US$2.4 million in revenue, a 9% increase from Q3.

For fiscal 2004, sales were flat year-over-year at US$32.0 million -- an increase of one-half of one percent from 2003. Net loss for the year was US$1.4 million (US$0.03/share), just slightly higher than last year's US$1.2 million loss.

MKS ended the year with US$6.4 million in cash, up US$709,000 over the fourth quarter but down US$1.3 million over the year. Operations provided US$632,000 in cash in Q4.

Management expects that the company will lose money in the current quarter, and it is forecasting that Q1 sales will fall below Q4 levels, as is historically the case for MKS.

STOCK REPORT: RIM stock has second-highest month-end ever
May 2004

RIM shares split 2-for-1 and bounced back from two months of small declines to finish May at their second-highest monthly closing price ever. RIM shares closed the month at $83.99, or the equivalent of $167.98 pre-split. The only month where RIM shares ended with a higher price was February 2000. That was when the stock hit its all-time high of $260.00 and ended the month at $200.00. RIM's market value at month-end was $15.3 billion.

At the other end of the scale was Descartes, which lost almost half of its value during May. It fell to an intra-month low of $1.32, easily surpassing its previous low-water mark of $2.83 set last July. Descartes shares closed May at $1.55. As of Friday's close, the company's market value was down to $60 million. At its peak, Descartes has a market capitalization of nearly $5 billion and was for a very brief time (intra-day trading on March 10, 2000) the most valuable software company in Canada.

In the quarters that were just reported, MKS actually had slightly higher gross profits than Descartes.

For the month of May:

ClearFrame [TSXV: CLF] +50%
RIM [TSX: RIM] +40%
Com Dev [TSX: CDV] +23%
CME Telemetrix [TSXV: CEM] +14%
Dalsa [TSX: DSA] +12%
MKS [TSX: MKX] +10%
Open Text [TSX: OTC] +3%
RDM [TSX: RC] +2%
--S&P TSX COMPOSITE INDEX +2%
===============================
Navtech [OTCBB: NAVH] -2%
--S&P TSX VENTURE INDEX -3%
Virtek [TSX: VRK] -3%
ARISE [TSXV: APV] -14%
Newlook Industries [TSXV: NLI] -18%
Turbosonic [OTCBB: TSTA] -40%
Descartes [TSX: DSG] -48%

ClearFrame's 50% gain was a jump from four cents to six. Com Dev shares regained most of their losses over the previous three months. For the fourth month in a row, Dalsa shares set an all-time record.

Newlook shares lost another 18% of their value but remain the most incredibly overvalued shares followed here. The company has a $51 million market value -- about the same as MKS -- and just reported gross profits of a paltry $222,000 in its most recent quarter. For comparison, MKS' quarterly gross profits were $10.6 million.

Companies with core operations outside the area:

SBS Technologies [Nasdaq: SBSE] +24%
Ansys [Nasdaq: ANSS] +16%
LSI Logic [NYSE: LSI] +10%
Agfa-Gevaert [Brussels: AGFA] +8%
Adobe [Nasdaq: ADBE] +8%
Network Assoc [NYSE: NET] +6%
Siebel [Nasdaq: SEBL] +5%
CheckFree [Nasdaq: CKFR] +2%
Sybase [NYSE: SY] +2%
==================================
Senesco [Amex: SNT] -10%
CVF Technologies [Amex: CNV] -14%
Blue Coat [Nasdaq: BCSI] -38%

Miscellaneous Tidbits

• RIM's David Yach is the recipient of the 2004 J.W. Graham Medal in Computing and Innovation from UW. Yach has been RIM's software SVP since the end of 1998, and before that was chief software architect at Sybase/Watcom. Later this month, he will deliver the Graham Medal Seminar, with a talk called "The Evolution of Software Efficiency: From Saving Bytes to Saving You an Hour a Day."

• SlipStream announced that it has nearly 900,000 paying users for its dial-up accelerator from United Online's NetZero and Juno Internet services. That's about 29% of United's total subscriber base. Over 750 ISPs offer services using SlipStream technology.

• According to one of IMS' investors, the company licensed its occupant classification system technology to an unnamed "Tier 1 U.S. auto supplier" at the end of March. IMS had announced a similar deal in November 2002.

• RSS Solutions' advanced planning and scheduling software is being used by Philadelphia's Toll Brothers, one of the top luxury home builders in the U.S. Toll Brothers is listed on the NYSE with a market capitalization of US$3 billion. The company will use the RSS software to manage its manufacturing operations for components such as walls, doors, windows, and roofs.

• AccessTNG has acquired Utah-based Broadband Communications Inc. (broadbandcoms.com), which provides satellite and other broadband services to business customers. The company will operate as a wholly-owned subsidiary. AccessTNG has also acquired Cinzonte Inc. which it says operates a wireless network in Grey-Bruce.

• LogiSense's EngageIPT Hotspot Suite will be used by the District of Squamish in B.C. to manage subscribers to various Wi-Fi hotspots that will be created by the municipality as it prepares for the 2010 Winter Olympics. Squamish is located north of Vancouver on the road to Whistler.

• Dspfactory was the big winner at the provincial Ontario Global Traders Awards in Toronto, taking home the Innovation Award. The company had won the regional award in March. Dspfactory also announced that it has partnered with RF Micro Devices, a Nasdaq-listed company with a US$1.5 billion market value, to create audio processing solutions for Bluetooth stereo headsets.

• Web Pearls announced the release of AnonymizerPro, an add-on to Microsoft Word that goes through documents and anonymizes personal information contained in Word documents. It's being sold to the legal, medical, and insurance industries as a tool to facilitate compliance with new Canadian privacy laws. Version 2 of the software was released in May. Version 1 was launched in the fall.

• Turbosonic reported a loss of US$242,000 on sales of US$1.2 million in the quarter ended March 31 (Q3 04). Over the first nine months of the fiscal year, sales are down 38% from 2003. The company says it is cutting jobs and implementing stricter cost controls as its operations have consumed US$808,000 in cash so far this year. Turbosonic had US$281,000 in cash remaining at quarter-end. The company says it expects to receive some larger orders later this year. Turbosonic is closing the New Jersey office it acquired in 1997 when Turbotak, as it was then known, bought New Jersey-based Sonic Environmental Systems to form Turbosonic.

• Randall Howard, the co-founder and ex-CEO of MKS, has become the new CEO of Toronto-based Software Innovation after the company was acquired by Verdexus, the consulting firm Howard co-founded after he left MKS. The company calls itself a provider of project collaboration and document management solutions for the architecture, engineering and construction market and was the first North American office of Norway's Software Innovation ASA. Howard's bio on the Software Innovation website bravely mentions that he oversaw the creation of Vertical Sky. Of course, it also says that he grew MKS to US$45 million in annual sales -- a number the company has never achieved. MKS did legitimately get to US$40 million (FY2000) under Howard, but I guess it sounded better with a phantom US$5 million added on. It's funny because the bio was copied from the Verdexus website, which lists the correct numbers.

• Kitchener's Meikle Automation says it had a record month in April, with over $11 million in orders booked.

• Ron Jutras, who has been the CFO of ATS for nearly 20 years, is taking on responsibility for day-to-day operations as COO as founder and CEO Klaus Woerner battles cancer. For the year ended March 31, ATS lost $2.3 million on sales of $665.1 million.

• Onlinetel/Newlook reported an operational loss of $252,000 on sales of $1.4 million in the quarter ended March 31 (Q2 04). Revenue was down 15% from the previous quarter, which the company attributed to a higher volume of calls placed in the December holiday season. Year-over-year growth was 12%.