Waterloo Tech Digest - July 12, 2010
In this issue:
Read the latest Waterloo tech news stories every day as they happen.
////////////////////////////////////////////////////////////
S P O N S O R S
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.
WE MAKE FURNISHING YOUR OFFICE SIMPLE. SENSIBLE. & AFFORDABLE.
Prestige Business Interiors is a leading regional commercial office furnishings company with an extensive range of products and services to create and support great places to work. A professionally planned office environment by Prestige can offer many benefits which include: maximizing space utilization; promoting creative thinking and collaborative work; improving employee recruiting and retention; and much more. Please visit our website or call 519-886-9948 for more information.
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.
BRING SCIENCE TO THE ART OF SELECTING KEY PEOPLE
Who are the top performers that you need for your sales, management and IT support roles? How do you know in advance if new hires have the characteristics needed to be successful in your company? Get these answers through the use of powerful psychometric personality profiles. View sample profile reports at http://www.mktaccess.com/recruiting.shtml. If your objective is to grow your business through the advantages that top performing people bring - then contact Kevin Hood 519-885-8766 kevinhood@mktaccess.com for a 15 minute conversation today!
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Dalsa to receive $24.3M over three years from Ontario government
June 29, 2010
Dalsa announced that it will be getting up to $24.3 million from the Ontario government over the next five years. That's about all it announced -- there were no specifics around where the money was from, with no program or ministry attached to the announcement (the Ministry of Economic Development & Trade would seem to be a likely candidate). Dalsa said the funding was for "product innovations and related job creation."
The announcement was made as Dalsa was celebrating its 30th anniversary.
////////////////////////////////////////////////////////////
S P O N S O R
GOWLINGS & DDC
Gowlings was pleased to act for the shareholders of Digital Display & Communications Inc., a leading implementer of digital signage networks and associated products and services, in connection with the sale of DDC to Cineplex Entertainment LP. Gowlings' Waterloo Region Technology Law Group provides sophisticated, practical and timely advice in all areas of technology law to a broad range of clients, from start-ups to public companies. 40 professionals serving Waterloo Region and Guelph (over 700 professionals nationwide). The Right People. Right Here. Contact John.Hiscock@gowlings.com or Sean.Gomes@gowlings.com at 519-576-6910.
////////////////////////////////////////////////////////////
[2]---------------------------------------------------------------
Sandvine reports strong sales; gov't funding lifts Q2 profits
July 9, 2010
Sandvine earned $2.0 million on sales of $22.4 million in the quarter ended May 31 (Q2 10). Sales were up 2.5% from a strong Q1 and 47% from a year ago.
Providing a significant boost to the bottom line was a $3.8 million contribution from Ontario's Next Generation of Jobs Fund (see April 12 digest). When Sandvine received the funding earlier this year, its eligibility period was backdated one year, so this quarter's numbers included five quarters' worth of funding. Nearly 60% of the money was used to offset R&D expenses. Sandvine expects to record funding of $600,000-700,000 per quarter from this point until the end of the funding period in 2014.
Three customers (two of which are regional resellers) accounted for 54% of revenue, and for the first time in the last two years, China's Huawei Technologies was not among the major customers. Sandvine said this was just a matter of timing and not indicative of any change in the relationship between the companies. Comcast was also not among the top three customers. Even without Huawei in the top three, it was a good quarter for the Asia-Pacific region, which accounted for 19% of revenue. The DSL and wireless markets each contributed about 40% of revenue with customers in the cable industry providing the other 20%. Sandvine won nine new customers in the quarter.
Operations provided $4.6 million in cash and Sandvine ended the quarter with cash and securities of $91.6 million.
[3]---------------------------------------------------------------
Sandvine spins out Search Guide technology
July 9, 2010
Sandvine has spun out its Search Guide technology into a new company called Xerocole, which lists a headquarters in Clifton Park, NY and a second office in Boulder, Colorado. Sandvine holds an unspecified minority interest in Xerocole and will receive ongoing royalties from the company's future revenues. Sandvine also received a perpetual license for certain uses of the technology.
The business came to Sandvine through its acquisition of Colorado-based Simplicita three years ago, and the Xerocole management team is mostly comprised of former Simplicita employees who had been with Sandvine for the last three years.
The Simplicita acquisition was an all-stock deal, consisting of 643,395 shares upfront (valued at $3.4 million at the time), plus additional shares contingent on continued employment with Sandvine and on achieving certain performance targets. Over the years, Sandvine has recognized about another $2 million in expenses relating to those shares, bringing the total acquisition cost to about $5.4 million.
In the quarter that just ended, Sandvine wrote down the value of the "non-patented technology asset" at the core of Search Guide by $669,000. That left a carrying value of $1.1 million on the books, which is about what Sandvine says is the value of what it will receive.
Search Guide was Sandvine service that gave ISPs an opportunity to generate additional revenue when users mistyped URLs. Instead of displaying error messages (or pages created by others trying to cash in on mistyped URLs), Search Guide would correct some simple errors and in other cases substitute pages with potential revenue-generating Yahoo! ads in place of error messages.
Spinning out Search Guide will make it easier for Sandvine to work with other advertising-based companies, with Xerocole as one of potentially many advertising partners. Search Guide was not making material contributions to Sandvine's revenue or earnings.
[4]---------------------------------------------------------------
Com Dev expects sales to fall $20M short of earlier projections
June 10, 2010
At the halfway point of its fiscal 2010, Com Dev has slashed its revenue forecasts for the year by about $20 million -- going from a projection of "at least 10%" growth (on 2009 sales of $240 million) that was reiterated three months ago, to a new forecast of "minimal" growth for the year.
In the quarter ended April 30 (Q2 10), Com Dev earned $4.1 million on sales of $60.4 million. Sales were up 7% from a weak Q1 and down 6% from a record Q2 a year ago. Only $33 million in new orders were booked in the quarter, lowering the backlog at quarter-end to $128 million from $157 million at the end of Q1.
Gross margins -- which were traditionally in the mid-20% range, then went up to the high-20s through some strong quarters -- fell to 21.6%. While revenue was up sequentially, gross profits fell 3% from Q1.
There were significant reductions in R&D and G&A spending in the quarter, while sales & marketing spending was up. The company said its R&D costs fell because it completed a major project from last year. In the quarter, Com Dev recorded $854,000 in expenses fundable through the Ontario Next Generation of Jobs Fund.
It said it is looking for an optics project for Ottawa-based Com Dev Canada to replace the James Webb Space Telescope program, which is nearing completion. The budget for the Canadian Space Agency is still up in the air.
Operations generated $2.1 million in cash and the company spent $1.5 million on its acquisition of Ottawa's Routes AstroEngineering (see May 10 digest) and $640,000 to acquire the remaining shares it didn't already own in a Chinese joint venture that it established in the 1990s. It ended the quarter with $10.4 million in cash.
[5]---------------------------------------------------------------
RIM adds nearly 5M BlackBerry subscribers in Q1
June 24, 2010
RIM earned US$768.9 million on sales of US$4.24 billion in the quarter ended May 29 (Q1 11). For the second straight quarter, sales fell below RIM's forecasts, although they were closer to the mark this time, coming in just below the company's forecast of US$4.25-4.45 billion. Sales were up 4% from the previous quarter and 24% from last year.
There were a net 4.9 million new BlackBerry subscribers in Q1 -- the same as in the previous quarter and at the low end of the company's forecast of 4.9-5.2 million. RIM shipped 11.2 million devices in the quarter, including its 100 millionth BlackBerry.
Operations generated US$1.12 billion in cash and RIM ended the quarter with cash of US$3.27 billion. The company spent US$409.9 million in the quarter on share repurchases.
RIM is expecting sales of US$4.4-4.6 billion in Q2 with 4.9-5.2 additional BlackBerry subscribers (which is the same number it had forecast for Q1).
RIM also announced that its board has approved a share repurchase program that could see the company buy as many as 31 million of its outstanding shares over the next year. Those would be valued at about $1.7 billion today. RIM is authorized to buy up to 10 million shares on Nasdaq and will require regulatory approval to purchase more shares on either Nasdaq or the TSX.
[6]---------------------------------------------------------------
MKS sales climb 8% in 2010
June 8, 2010
MKS reported sales of US$17.2 million in the quarter ended April 30 (Q4 10), up 12% from the previous quarter and 27% from a year ago.
Earnings for the quarter -- aided by a US$7.5 million income tax recovery -- were US$8.5 million. Operating income was US$2.4 million, up from US$1.7 million in Q3.
For the year, MKS earned US$12.6 million on sales of US$62.9 million, with revenue up 8% from 2009. MKS' core ALM business accounted for 87% of sales, with the interoperability business (built around MKS Toolkit) providing the other 13%. Interoperability revenues were uncharacteristically higher during the year, as MKS got rid of most of its Toolkit resellers and focused on direct sales, resulting in larger transaction sizes.
The company ended the year with US$24.8 million in cash, up US$2.6 million from the end of Q3.
[7]---------------------------------------------------------------
Digital Display & Communications acquired by Cineplex
July 5, 2010
Waterloo's Digital Display & Communications has been acquired by Cineplex Entertainment for $3.5 million.
The company was spun out of FRED Systems in 1996, after one of FRED's investors insisted that the company separate its distribution/installation business (DDC) from its technology business. FRED was bought in 2003 by Mercury Online Solutions, based near Seattle, which later became 3M Digital Signage.
[8]---------------------------------------------------------------
Agile Systems acquired by Denver firm
June 4, 2010
Allied Motion Technologies has acquired Waterloo's Agile Systems. Terms were not disclosed. Allied Motion says it expects Agile to contribute about US$3 million in revenue over the next year and add to the company's bottom line.
Allied Motion is a Nasdaq-listed company based in Denver with market capitalization of about US$32 million. It reported earnings of US$734,000 on sales of US$17.4 million in the quarter ended March 31.
Agile Systems closed an $800,000 round of funding in 2008, but had hardly been heard from since. New York/San Francisco-based Expansion Capital Partners (also an investor in Biorem) led that round of financing, as well as Agile's $7 million financing in 2005. The company was founded in 1994 and its investors over the years have included Working Ventures, Helix Investments, Covington Capital (which listed the cost of its investment as $6.6 million in April), and RBC.
Allied said the deal gives it a Canadian location "to better service and support" its customers.
[9]---------------------------------------------------------------
STOCK REPORT: Com Dev shares fall to lowest level in years
June 2010
The weakened outlook from Com Dev triggered the worst month in nearly eight years for the company's shares, which fell to their lowest month-end price since August 2003. The shares had already lost 14% of their value in June before the results were announced, and the day after the quarterlies came out, the stock fell another 23%.
RIM shares also had a rough month, dropping to their lowest month-end in almost a year-and-a-half.
On the flip side, Dalsa stock jumped to its highest month-end in two years.
For the month of June:
Dalsa [TSX: DSA] +10%
MKS [TSX: MKX] +6%
Sandvine [TSX: SVC] +4%
===============================
RDM [TSX: RC] -3%
--S&P TSX COMPOSITE INDEX -4%
Biorem [TSXV: BRM] -4%
Descartes [TSX: DSG] -5%
--S&P TSX VENTURE INDEX -6%
Open Text [TSX: OTC] -12%
TurboSonic [OTCBB: TSTA] -17%
RIM [TSX: RIM] -18%
ATS [TSX: ATA] -20%
Arise [TSX: APV] -28%
Com Dev [TSX: CDV] -29%
Companies with headquarters outside the area:
Acorn Energy [Nasdaq: ACFN] +6%
T-Ray Science [TSXV: THZ] +5%
Sybase [NYSE: SY] +1%
===================================
McAfee [NYSE: MFE] -3%
Blue Coat [Nasdaq: BCSI] -5%
Oracle [Nasdaq: ORCL] -5%
Ansys [Nasdaq: ANSS] -7%
Google [Nasdaq: GOOG] -8%
NCR [NYSE: NCR] -9%
Intel [Nasdaq: INTC] -9%
Agfa-Gevaert [Brussels: AGFA] -10%
ON Semiconductor [Nasdaq: ONNN] -13%
Electronic Arts [Nasdaq: ERTS] -13%
We've reached the half-way point of 2009, and Sandvine and Dalsa have pulled ahead of the pack at the top of the board, while Com Dev and TurboSonic are trailing the field. Here's how the shares of local companies have fared so far this year:
Sandvine [TSX: SVC] +58%
Dalsa [TSX: DSA] +48%
Biorem [TSXV: BRM] +26%
MKS [TSX: MKX] +19%
RDM [TSX: RC] +9%
===============================
--S&P TSX COMPOSITE INDEX -4%
Open Text [TSX: OTC] -6%
--S&P TSX VENTURE INDEX -7%
Descartes [TSX: DSG] -10%
Arise [TSX: APV] -15%
ATS [TSX: ATA] -24%
RIM [TSX: RIM] -26%
Com Dev [TSX: CDV] -45%
TurboSonic [OTCBB: TSTA] -53%
Market capitalization at June 30
in millions, using outstanding shares
(Year-to-date change in parentheses):
1. RIM ----- $28,911 (-$10,646)
2. Open Text ----- 2,271 (-137)
3. ATS ----- 496 (-156)
4. Descartes ----- 351 (-36)
5. Sandvine ----- 278 (+103)
6. Dalsa ----- 206 (+66)
7. Com Dev ----- 145 (-116)
8. MKS ----- 120 (+20)
9. Arise ----- 44 (+10)
10. RDM ----- 18 (+1)
11. Biorem ----- 8 (+2)
12. TurboSonic ----- 6 (-8)
Since the beginning of the year, Sandvine and Dalsa both leaped over Com Dev while Biorem moved ahead of TurboSonic.
[10]---------------------------------------------------------------
Startup Notes
Miscellaneous Tidbits
Highlights from Waterloo Tech Daily feed
Blog/RSS
Twitter
- Dalsa to receive $24.3M over three years from Ontario government
- Sandvine reports strong sales; gov't funding lifts Q2 profits
- Sandvine spins out Search Guide technology
- Com Dev expects sales to fall $20M short of earlier projections
- RIM adds nearly 5M BlackBerry subscribers in Q1
- MKS sales climb 8% in 2010
- Digital Display & Communications acquired by Cineplex
- Agile Systems acquired by Denver firm
- STOCK REPORT: Com Dev shares fall to lowest level in years
- Startup notes from Well.ca, Primal, T-Ray, Karos, Snapsort, DossierView
- Miscellaneous tidbits from ON Semiconductor, Cyberplex, Arise, RIM, Accelerated Systems, Descartes, Biorem, Open Text, Com Dev, MedShare, Desire2Learn
- Highlights from Waterloo Tech Daily feed
Read the latest Waterloo tech news stories every day as they happen.
////////////////////////////////////////////////////////////
S P O N S O R S
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.
WE MAKE FURNISHING YOUR OFFICE SIMPLE. SENSIBLE. & AFFORDABLE.
Prestige Business Interiors is a leading regional commercial office furnishings company with an extensive range of products and services to create and support great places to work. A professionally planned office environment by Prestige can offer many benefits which include: maximizing space utilization; promoting creative thinking and collaborative work; improving employee recruiting and retention; and much more. Please visit our website or call 519-886-9948 for more information.
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.
BRING SCIENCE TO THE ART OF SELECTING KEY PEOPLE
Who are the top performers that you need for your sales, management and IT support roles? How do you know in advance if new hires have the characteristics needed to be successful in your company? Get these answers through the use of powerful psychometric personality profiles. View sample profile reports at http://www.mktaccess.com/recruiting.shtml. If your objective is to grow your business through the advantages that top performing people bring - then contact Kevin Hood 519-885-8766 kevinhood@mktaccess.com for a 15 minute conversation today!
////////////////////////////////////////////////////////////
[1]---------------------------------------------------------------
Dalsa to receive $24.3M over three years from Ontario government
June 29, 2010
Dalsa announced that it will be getting up to $24.3 million from the Ontario government over the next five years. That's about all it announced -- there were no specifics around where the money was from, with no program or ministry attached to the announcement (the Ministry of Economic Development & Trade would seem to be a likely candidate). Dalsa said the funding was for "product innovations and related job creation."
The announcement was made as Dalsa was celebrating its 30th anniversary.
////////////////////////////////////////////////////////////
S P O N S O R
GOWLINGS & DDC
Gowlings was pleased to act for the shareholders of Digital Display & Communications Inc., a leading implementer of digital signage networks and associated products and services, in connection with the sale of DDC to Cineplex Entertainment LP. Gowlings' Waterloo Region Technology Law Group provides sophisticated, practical and timely advice in all areas of technology law to a broad range of clients, from start-ups to public companies. 40 professionals serving Waterloo Region and Guelph (over 700 professionals nationwide). The Right People. Right Here. Contact John.Hiscock@gowlings.com or Sean.Gomes@gowlings.com at 519-576-6910.
////////////////////////////////////////////////////////////
[2]---------------------------------------------------------------
Sandvine reports strong sales; gov't funding lifts Q2 profits
July 9, 2010
Sandvine earned $2.0 million on sales of $22.4 million in the quarter ended May 31 (Q2 10). Sales were up 2.5% from a strong Q1 and 47% from a year ago.
Providing a significant boost to the bottom line was a $3.8 million contribution from Ontario's Next Generation of Jobs Fund (see April 12 digest). When Sandvine received the funding earlier this year, its eligibility period was backdated one year, so this quarter's numbers included five quarters' worth of funding. Nearly 60% of the money was used to offset R&D expenses. Sandvine expects to record funding of $600,000-700,000 per quarter from this point until the end of the funding period in 2014.
Three customers (two of which are regional resellers) accounted for 54% of revenue, and for the first time in the last two years, China's Huawei Technologies was not among the major customers. Sandvine said this was just a matter of timing and not indicative of any change in the relationship between the companies. Comcast was also not among the top three customers. Even without Huawei in the top three, it was a good quarter for the Asia-Pacific region, which accounted for 19% of revenue. The DSL and wireless markets each contributed about 40% of revenue with customers in the cable industry providing the other 20%. Sandvine won nine new customers in the quarter.
Operations provided $4.6 million in cash and Sandvine ended the quarter with cash and securities of $91.6 million.
[3]---------------------------------------------------------------
Sandvine spins out Search Guide technology
July 9, 2010
Sandvine has spun out its Search Guide technology into a new company called Xerocole, which lists a headquarters in Clifton Park, NY and a second office in Boulder, Colorado. Sandvine holds an unspecified minority interest in Xerocole and will receive ongoing royalties from the company's future revenues. Sandvine also received a perpetual license for certain uses of the technology.
The business came to Sandvine through its acquisition of Colorado-based Simplicita three years ago, and the Xerocole management team is mostly comprised of former Simplicita employees who had been with Sandvine for the last three years.
The Simplicita acquisition was an all-stock deal, consisting of 643,395 shares upfront (valued at $3.4 million at the time), plus additional shares contingent on continued employment with Sandvine and on achieving certain performance targets. Over the years, Sandvine has recognized about another $2 million in expenses relating to those shares, bringing the total acquisition cost to about $5.4 million.
In the quarter that just ended, Sandvine wrote down the value of the "non-patented technology asset" at the core of Search Guide by $669,000. That left a carrying value of $1.1 million on the books, which is about what Sandvine says is the value of what it will receive.
Search Guide was Sandvine service that gave ISPs an opportunity to generate additional revenue when users mistyped URLs. Instead of displaying error messages (or pages created by others trying to cash in on mistyped URLs), Search Guide would correct some simple errors and in other cases substitute pages with potential revenue-generating Yahoo! ads in place of error messages.
Spinning out Search Guide will make it easier for Sandvine to work with other advertising-based companies, with Xerocole as one of potentially many advertising partners. Search Guide was not making material contributions to Sandvine's revenue or earnings.
[4]---------------------------------------------------------------
Com Dev expects sales to fall $20M short of earlier projections
June 10, 2010
At the halfway point of its fiscal 2010, Com Dev has slashed its revenue forecasts for the year by about $20 million -- going from a projection of "at least 10%" growth (on 2009 sales of $240 million) that was reiterated three months ago, to a new forecast of "minimal" growth for the year.
In the quarter ended April 30 (Q2 10), Com Dev earned $4.1 million on sales of $60.4 million. Sales were up 7% from a weak Q1 and down 6% from a record Q2 a year ago. Only $33 million in new orders were booked in the quarter, lowering the backlog at quarter-end to $128 million from $157 million at the end of Q1.
Gross margins -- which were traditionally in the mid-20% range, then went up to the high-20s through some strong quarters -- fell to 21.6%. While revenue was up sequentially, gross profits fell 3% from Q1.
There were significant reductions in R&D and G&A spending in the quarter, while sales & marketing spending was up. The company said its R&D costs fell because it completed a major project from last year. In the quarter, Com Dev recorded $854,000 in expenses fundable through the Ontario Next Generation of Jobs Fund.
It said it is looking for an optics project for Ottawa-based Com Dev Canada to replace the James Webb Space Telescope program, which is nearing completion. The budget for the Canadian Space Agency is still up in the air.
Operations generated $2.1 million in cash and the company spent $1.5 million on its acquisition of Ottawa's Routes AstroEngineering (see May 10 digest) and $640,000 to acquire the remaining shares it didn't already own in a Chinese joint venture that it established in the 1990s. It ended the quarter with $10.4 million in cash.
[5]---------------------------------------------------------------
RIM adds nearly 5M BlackBerry subscribers in Q1
June 24, 2010
RIM earned US$768.9 million on sales of US$4.24 billion in the quarter ended May 29 (Q1 11). For the second straight quarter, sales fell below RIM's forecasts, although they were closer to the mark this time, coming in just below the company's forecast of US$4.25-4.45 billion. Sales were up 4% from the previous quarter and 24% from last year.
There were a net 4.9 million new BlackBerry subscribers in Q1 -- the same as in the previous quarter and at the low end of the company's forecast of 4.9-5.2 million. RIM shipped 11.2 million devices in the quarter, including its 100 millionth BlackBerry.
Operations generated US$1.12 billion in cash and RIM ended the quarter with cash of US$3.27 billion. The company spent US$409.9 million in the quarter on share repurchases.
RIM is expecting sales of US$4.4-4.6 billion in Q2 with 4.9-5.2 additional BlackBerry subscribers (which is the same number it had forecast for Q1).
RIM also announced that its board has approved a share repurchase program that could see the company buy as many as 31 million of its outstanding shares over the next year. Those would be valued at about $1.7 billion today. RIM is authorized to buy up to 10 million shares on Nasdaq and will require regulatory approval to purchase more shares on either Nasdaq or the TSX.
[6]---------------------------------------------------------------
MKS sales climb 8% in 2010
June 8, 2010
MKS reported sales of US$17.2 million in the quarter ended April 30 (Q4 10), up 12% from the previous quarter and 27% from a year ago.
Earnings for the quarter -- aided by a US$7.5 million income tax recovery -- were US$8.5 million. Operating income was US$2.4 million, up from US$1.7 million in Q3.
For the year, MKS earned US$12.6 million on sales of US$62.9 million, with revenue up 8% from 2009. MKS' core ALM business accounted for 87% of sales, with the interoperability business (built around MKS Toolkit) providing the other 13%. Interoperability revenues were uncharacteristically higher during the year, as MKS got rid of most of its Toolkit resellers and focused on direct sales, resulting in larger transaction sizes.
The company ended the year with US$24.8 million in cash, up US$2.6 million from the end of Q3.
[7]---------------------------------------------------------------
Digital Display & Communications acquired by Cineplex
July 5, 2010
Waterloo's Digital Display & Communications has been acquired by Cineplex Entertainment for $3.5 million.
The company was spun out of FRED Systems in 1996, after one of FRED's investors insisted that the company separate its distribution/installation business (DDC) from its technology business. FRED was bought in 2003 by Mercury Online Solutions, based near Seattle, which later became 3M Digital Signage.
[8]---------------------------------------------------------------
Agile Systems acquired by Denver firm
June 4, 2010
Allied Motion Technologies has acquired Waterloo's Agile Systems. Terms were not disclosed. Allied Motion says it expects Agile to contribute about US$3 million in revenue over the next year and add to the company's bottom line.
Allied Motion is a Nasdaq-listed company based in Denver with market capitalization of about US$32 million. It reported earnings of US$734,000 on sales of US$17.4 million in the quarter ended March 31.
Agile Systems closed an $800,000 round of funding in 2008, but had hardly been heard from since. New York/San Francisco-based Expansion Capital Partners (also an investor in Biorem) led that round of financing, as well as Agile's $7 million financing in 2005. The company was founded in 1994 and its investors over the years have included Working Ventures, Helix Investments, Covington Capital (which listed the cost of its investment as $6.6 million in April), and RBC.
Allied said the deal gives it a Canadian location "to better service and support" its customers.
[9]---------------------------------------------------------------
STOCK REPORT: Com Dev shares fall to lowest level in years
June 2010
The weakened outlook from Com Dev triggered the worst month in nearly eight years for the company's shares, which fell to their lowest month-end price since August 2003. The shares had already lost 14% of their value in June before the results were announced, and the day after the quarterlies came out, the stock fell another 23%.
RIM shares also had a rough month, dropping to their lowest month-end in almost a year-and-a-half.
On the flip side, Dalsa stock jumped to its highest month-end in two years.
For the month of June:
Dalsa [TSX: DSA] +10%
MKS [TSX: MKX] +6%
Sandvine [TSX: SVC] +4%
===============================
RDM [TSX: RC] -3%
--S&P TSX COMPOSITE INDEX -4%
Biorem [TSXV: BRM] -4%
Descartes [TSX: DSG] -5%
--S&P TSX VENTURE INDEX -6%
Open Text [TSX: OTC] -12%
TurboSonic [OTCBB: TSTA] -17%
RIM [TSX: RIM] -18%
ATS [TSX: ATA] -20%
Arise [TSX: APV] -28%
Com Dev [TSX: CDV] -29%
Companies with headquarters outside the area:
Acorn Energy [Nasdaq: ACFN] +6%
T-Ray Science [TSXV: THZ] +5%
Sybase [NYSE: SY] +1%
===================================
McAfee [NYSE: MFE] -3%
Blue Coat [Nasdaq: BCSI] -5%
Oracle [Nasdaq: ORCL] -5%
Ansys [Nasdaq: ANSS] -7%
Google [Nasdaq: GOOG] -8%
NCR [NYSE: NCR] -9%
Intel [Nasdaq: INTC] -9%
Agfa-Gevaert [Brussels: AGFA] -10%
ON Semiconductor [Nasdaq: ONNN] -13%
Electronic Arts [Nasdaq: ERTS] -13%
We've reached the half-way point of 2009, and Sandvine and Dalsa have pulled ahead of the pack at the top of the board, while Com Dev and TurboSonic are trailing the field. Here's how the shares of local companies have fared so far this year:
Sandvine [TSX: SVC] +58%
Dalsa [TSX: DSA] +48%
Biorem [TSXV: BRM] +26%
MKS [TSX: MKX] +19%
RDM [TSX: RC] +9%
===============================
--S&P TSX COMPOSITE INDEX -4%
Open Text [TSX: OTC] -6%
--S&P TSX VENTURE INDEX -7%
Descartes [TSX: DSG] -10%
Arise [TSX: APV] -15%
ATS [TSX: ATA] -24%
RIM [TSX: RIM] -26%
Com Dev [TSX: CDV] -45%
TurboSonic [OTCBB: TSTA] -53%
Market capitalization at June 30
in millions, using outstanding shares
(Year-to-date change in parentheses):
1. RIM ----- $28,911 (-$10,646)
2. Open Text ----- 2,271 (-137)
3. ATS ----- 496 (-156)
4. Descartes ----- 351 (-36)
5. Sandvine ----- 278 (+103)
6. Dalsa ----- 206 (+66)
7. Com Dev ----- 145 (-116)
8. MKS ----- 120 (+20)
9. Arise ----- 44 (+10)
10. RDM ----- 18 (+1)
11. Biorem ----- 8 (+2)
12. TurboSonic ----- 6 (-8)
Since the beginning of the year, Sandvine and Dalsa both leaped over Com Dev while Biorem moved ahead of TurboSonic.
[10]---------------------------------------------------------------
Startup Notes
- Well.ca founder/CEO Ali Asaria is one of the finalists in the "young entrepreneur" category of the Ernst & Young Entrepreneur Of The Year 2010 Awards for Ontario. Stephen Carpenter of Enermodal Engineering (Cleantech category), Dave Hatherton of NextEnergy (also Cleantech), Howard Singleton of Trimaster Manufacturing (Manufacturing) and Greg Overholt of Students Offering Support (social entrepreneur) are the other nominees from the region. UW grad James Schmalz who founded London's Digital Extremes in Waterloo in 1993 was also nominated, along with his brother Michael Schmalz, in the media and entertainment category.
- At the 2010 Semantic Technology Conference (SemTech) in San Francisco, Primal announced the launch of its "semantic synthesis platform" as well as Primal Pages -- the latest version of its software that lets users create a Web page around an idea of their choice. "In real-time, it builds a structure of related topics around their interests and assembles information from sites like Wikipedia, Yahoo! and Flickr," wrote the company in its announcement.
- T-Ray Science announced it has completed development of a pre-production prototype for Authenticare, a device that can identify counterfeit drugs. The device came out of research at UW. It will now undergo various field and safety tests over the rest of this year.
- Karos Health has received a $149,600 grant from IRAP.
- Snapsort has added camera recommendations to its free web service.
- OSC reports list a $150,000 common share financing for DossierView on May 26.
Miscellaneous Tidbits
- ON Semiconductor has acquired Burlington's Sound Design Technologies (SDT) for US$22 million, and will integrate the business into its Waterloo-based medical division under VP Robert Tong. SDT shareholders could receive up to an additional US$10 million if certain revenue thresholds are met over the next three years. SDT is the former hearing aid/audio processing business of Gennum, which was spun out into an independent company in 2007. Gennum used to be a competitor of Waterloo's Dspfactory, which -- over the course of two acquisitions -- formed the basis of ON's medical division.
- Cyberplex completed its acquisition of Tsavo Media and its $33.3 million private placement (see previous digest). Insider trading reports confirmed that the 4.16 million Cyberplex shares issued as part of the $75 million purchase price were paid to Tsavo CEO (now Cyberplex president) Ted Hastings, who also received 1.5 million options. Greg Pogue, who was Tsavo CTO, now holds 1.3 million Cyberplex shares with an additional 750,000 options.
- Arise closed its share-and-warrant offering (see previous digest), raising gross proceeds of $11.5 million. The warrants issued as part of the deal are now listed on the TSX.
- I can't remember this happening before to a company covered here: Arise had to reschedule its AGM when shareholders or proxyholders representing less than 10% of its outstanding shares turned up at the planned meeting on June 28. The company went ahead with the management presentations and other informal parts of the meeting.
- Arise also announced a joint venture with Sky Solar (Canada) -- a subsidiary of China's Sky Solar -- that will provide engineering, procurement and contracting services for solar projects under the Ontario FIT program.
- RIM and Motorola settled their patent dispute. The agreement, which includes cross-licensing of various patents, will see RIM pay an upfront fee and ongoing royalties to Motorola.
- Former RIM patent foe, NTP Inc. -- winners of a US$612 million settlement from the company in 2006 -- has now filed patent infringement suits against Apple, Google, Microsoft, Motorola, LG and HTC. The threat of an injunction against infringers -- which was ultimately the biggest weapon in NTP's arsenal in its battles with RIM -- has been significantly reduced in the time since the RIM decision. U.S. courts have also been more open to waiting for patent reexaminations (nothing has happened in NTP's suit against Palm, filed nearly four years ago), which they would not do for RIM.
- Accelerated Systems (ASI) has received an additional $940,000 in support from IRAP toward the development of its drivetrain technology for electric vehicles. ASI is led by co-CEO Rob Lankin, who was CEO of Agile Systems from 1997 to 2004. The company received $464,000 from IRAP two years ago. It also received $154,000 earlier this year from FedDev Ontario's Community Adjustment Fund.
- Descartes has acquired Brussels-based Routing International, paying US$4.1 million (net of cash received). Routing International CEO Daniel Verougstraete is now a VP at Descartes. Routing International had 22 employees when it was acquired.
- Bob Nally has finished his term as chair of Biorem's board of directors and has been succeeded by Hank Vander Laan. Nally will remain a director and has been part of Biorem since it was spun out of UW 20 years ago. Vander Laan has been a high-profile member of London's tech community and became a director of Biorem four years ago. Jeffrey Drebin, Nally's long-time business partner at CVF Technologies and its predecessor -- the original backers of Biorem -- has stepped down from Biorem's board. Biorem hopes to raise up to $3 million through a private placement share and warrant offering, which it expects to close in the next 40 days.
- Open Text announced that its secure social networking software was used by international policymakers in preparation for and during the G-20 Summit in Toronto.
- Data collected by Com Dev subsidiary exactEarth was used by the Canadian Forces in its "Operation Podium" -- supporting the security of the Vancouver Olympics and Paralympic Games.
- MedShare's mobile nurse charting application has been integrated with the Ontario Ministry of Health and Long-Term Care's HOBIC (Health Outcomes for Better Information and Care) processes.
- Desire2Learn has created an Australian subsidiary, Desire2Learn Australia Pty Ltd.
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posted by Gary Will at 2:19 AM
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