March Networks Share Discussion Threads

[sranmal] 20/9/2006 08:55

lordcoco - click "edit" to edit your post. The link will appear twice in your message. Delete the 2nd example (the one not in brackets) and replace with something like "Click Here".

[sandbank] 20/9/2006 08:41

Bombardier is the Canadian train and plane-maker

[lordcoco] 14/9/2006 21:15

This just in:




"Bombardier Transportation announced today that it has signed a joint design and development agreement with March Networks of Canada for the launch of an advanced, on-board mobile security solution for the passenger rail market."

"Bombardier Transportation has its global headquarters in Berlin, Germany, with a presence in over 60 countries. It has an installed base of approximately 97,000 vehicles. The company offers the broadest product portfolio and is recognized as the leader in the global rail sector."

I thought someone like Alstom was the leader..., however they have a market cap of over C$5bn and a revenues last year of C$17bn. Last recent announcement was for a £223m order from Transport for London!

They appear to have quite a bit of business in the UK. Great to see another example of March (hopefuly) being designed into new products instead of a techno refresh.

I can't find any info on the SEKURFLO product family as mentioned in the article but there is an upcoming seminar by Bombardier at Eurotans titled "Integrated Security Event Management System - A Growing Need for Public Transportation" next week, wonder if the March collaboration will get a mention there?

No reaction on the TSX but it doesn't look like there's been any formal announcement...I think this has huge potential.

"March Networks looks forward to working with Bombardier on the many business opportunities throughout the world."

I'll drink to that!

Sorry about long link - anyone know how to edit it down?

Wondering if Bombardier is the rail company they were talking about at results?

[milesy] 14/9/2006 12:50

Thanks L - Sir Tel's disposal may well offer an FM with a 2-3 year view a rare opportunity to pick up a sizeable parcel of shares at what may prove to be an excellent price once the "investment year" is over.

[lordcoco] 14/9/2006 08:18

Looks like Terry M's stock went through last night in Toronto with a trade of 994,500 @ 19.5. Which, from memory, is somewhat lower than the last big line of stock he placed, though I suppose this is dictated by timing rather than anything else. Inerestingly both times the big chunks have gone through at market price ie. someone is taking them without a discount it would seem.

[lordcoco] 11/9/2006 10:52

Interview with Strom, worth a read, no date but I assume it must be fairly recent:



"We're going to going to continue to position this company beyond just being a simple DVR company. The bulk of the budgets and funding these days is geared toward security applications for video, but looking longer term down the road, the winner of all this is going to be the company that can offer a whole multitude of video- based applications beyond just security and we're very determined to be a leader in that sector.

It's really going to be the value of the software that is going to drive the success of a company and part of that is really understanding some of the business problems your customers are having."

This is the crux of what they are trying to do imo, broaden their scope through the new analytics/business solutions software to provided a package that goes way beyond simple surveillance and loss prevention even. Trouble is I'd imagine this space could become even more cut-throat than the pure hardware side, getting in early (as they look to be doing) and partnering with the bigger players may be key:

"SP&T: When you say adding to operations do you mean with respect to managing customers?

Strom: Yes, if you look at what budgets are being spent on today, it is primarily looking to upgrade security and today's loss prevention department is primarily looking to update their video from analog to digital video and we're certainly benefiting from the demand coming out of that segment of the market. However, if you look down the road, a lot of retailers, as their deployment gets larger, a lot of them are asking how they can leverage the infrastructure or investment they made in order to gain in other areas, and operations is one of those areas. So using video for things such as marketing research – detecting customer traffic flow inside retail stores and customer counts to help retailers plan their high-traffic hours and do in-store planning - it's all being done through some pretty sophisticated software analytics.

SP&T: Are customers asking for more analytics tools? Some non-traditional competitors such as IBM are getting into the analytics game. How are you positioning March Networks in that space?

Strom: Some of these larger players, whether it's IBM or some of the others out there, are looking at the space and saying this is the perfect fit for us, and what that does is provide opportunities for March Networks to go in and partner with those kind of companies to become technology enablers. It gives us the ability to take a company like IBM and make them a strong partner.

SP&T: Are you working with IBM?

Strom: I can't specifically comment on IBM but there are a number of companies like IBM we are engaged with.

SP&T: You announced a partnership with Bell Canada in December to develop video surveillance systems. Is that the kind of partnership you are talking about?

Strom: It's certainly part and parcel of it. It's interesting because traditional security integrators have traditionally dominated this industry. We're starting to find that's changing a little bit. There are companies that have historically been in other industries starting to get involved because they also recognize the market opportunity. You have the larger full-service consulting firms like IBM out there who are now recognizing the opportunity. The one we are most excited about is certainly the service provider space and if you look at Bell Canada or in the U.S. we are partnered with Sprint - they have a pretty impressive list of large retail customers they provide IP networking services to and so they view digital video as that next killer application they can potentially sell or offer into their customer base. And with our background in IT networks and telephony, being a Terry Matthews company, we have strong relationships with the leading carriers out there."

[lordcoco] 07/9/2006 09:33

Terry M selling shares:

[dgriffin100] 29/8/2006 17:53

The conference call made reference to ongoing legal action. Did anyone catch the name of the other party?

[sranmal] 29/8/2006 16:41

Hi. Quick listen to the conference call - Europe won't kick in till 4Q2007/1Q2008. Ongoing legal costs. As you say, could drift for a while.

[lordcoco] 29/8/2006 16:16

Hi sran. Not suprised by the fall personally, instead of coasting it now seems they have it all to prove. Without news on contracts soon, against a nervous market backdrop, maybe there'll be a lower low on it's way? I think the retail sector, when Trax kicks in, should be very lucrative but that is some way off, also their new product (targeting industrial, govt sectors?) will take some time to ramp. There is stuff to be optimistic about, but optimism about possibilities some way off isn't really going to cut it right now imo. Also the insider dealing window from thursday through Oct 6th might see some more stock dumped. C'est la vie.

[sranmal] 29/8/2006 15:51

TSX!

Still have these on my watchlist lordcoco, but will wait until Europe gets fully going, maybe not for another 6 months.

[crystball] 29/8/2006 15:44

I don't understand the fall taking place. Any ideas anyone?

[lordcoco] 29/8/2006 14:44

Hi milesy. P Strom gives his usual bullish and upbeat assessment of the business. Interesting talk of new rail customer, though unlikely as big as their current, sounding positive about expansion abroad and continued support/orders from major customers. Trax should start paying back in late 07/early 08. But still they have a huge a mount of revenue coming from a handful of customers - Walmart grown to 52%, their opex is growing a lot - 37% of revenues for 07 and still the tax issues is a bug (for me at any rate), what is it now long term, 39%? Huge legal fees for qrt - 600k.

Short term I still think this is going to be choppy, long term I still believe they have what it takes to deliver as they say they will though with greatly increased opex they are going to have to!

[milesy] 29/8/2006 13:33

Lord - thanks for that. Still have a slice in MNW for LTBH and optimistic that they will do well internationally once "investment year" has laid appropriate foundations. Would be nice to see some UK/EU contract wins on the back of this i.d.c.

Cheers

>M

[lordcoco] 29/8/2006 13:09

Just in case I'm not the only one left here, RBC remain upbeat on March. They cite eps shortfall down to a 45% accounting for tax vs. the 36% expected, which would have equated to the consensus of 18c, still short of their 19c and also fails to mention revenues were lower than forecast/expected. edit - though inline with their forecast.

I've no idea why they are allowing 45% now for GAAP accounting nor why their initial 36% was way higher than their peers in the first place, where does it end, 99% tax??? I thought the last call was rather lacklustre considering they were obviously undergoing big changes at the company and they maybe could have used the opportunity to "sell" their strategy. Hoping for a bit more today, but not holding breath.

----

Impact
Modestly negative. FQ1/07 GAAP EPS came in just shy of consensus.
First Impression
• Revenue and Customer Deployments On Track: MN posted FQ1/07
revenue growth of 53% y/y to $22.8 million, in-line with our forecast. All
verticals reportedly grew – we will look for the Wal-Mart contribution on
the conference call.
• GAAP EPS $0.02 Shy Of Consensus: With Opex modestly ($300K)
higher than expected, MN posted GAAP EPS of $0.16 vs. consensus of
$0.18 and RBC at $0.19. Regarding Opex, we note:
o MN was behind on its hiring plans through F2006, so the catch-up is
acceptable, in our view, to support revenue growth.
o This quarter reflected some expenses from the acquired Trax
business – estimates for Trax were rough or non-existent in most
models, we expect.
o It is only $300K, but on a relatively low share count the EPS impact
is noticeable.
• Non-Cash Taxes A Real Culprit: MN is shielded from paying cash
taxes, though reported a 45% effective tax rate for the quarter. We had
expected 36% - applying that rate yields $0.18, in-line with consensus.
• Annual revenue guidance re-iterated, but EPS trimmed because of
Trax-related amortization: GAAP EPS guidance range is now $0.66-
0.77, down $0.04 because of amortization of acquired intangibles (no
impact on cash).
• Compelling Risk/Reward: While a "miss" is rarely viewed positively, we
continue to see MN as a compelling risk/reward opportunity. Key industry
drivers are very much intact (as evidenced by 53% revenue growth), and
execution is sound. We do not see the higher expenses as a lack of cost
management, but rather as hiring and Opex increasing (in fact, catching
up), to support the growth of the business.
• Based on what we have seen in the release, we remain buyers of MN –
and increasingly so should the shares trade lower on the FQ1 results.
• Conference call scheduled for 8:30am ET (1-800-814-4941): We will
review our estimates following the call, but expect relatively minor
changes (EPS will be trimmed to reflect modestly higher Opex and
amortization), but we maintain our Outperform, Above Average Risk
recommendation.

[mitzis] 29/8/2006 09:25

looking great crystball revenues up 53% on the year ..

[lordcoco] 29/8/2006 07:28

EPS looks to have come in under expectations. Will have to wait for call to find out why but it looks like their 'investment year' is well under way and the new, bigger MNW is in effect, unfortunately so far with the sole result being what you may expect; a more expensive company to run. Unfortunately they have not seen fit/been able to raise their guidance in tandem with raising expenses across the board, until they can do that or we see a steady flow of contract wins coming in, I'd say the pressure on this is more downward.

[crystball] 29/8/2006 07:17

First quarter results look ok. Should be a rise after this. Can't see any nasties?

[mitzis] 28/7/2006 08:37

Feeling more confident that the bottom has been called and that the share price will rise quickly back to 1600p

[avery_c] 27/7/2006 16:20

catch this:

[mitzis] 27/7/2006 16:07

still some way to before we hit Evo's 1600p target.

[sandbank] 26/7/2006 09:27

Yes, I know, famous last words - but surely this must be the bottom!

[lordcoco] 26/7/2006 08:45

unclebooks, no news out (contract wins) and a depressed market for "tech" stocks, low guidance by company suggesting "dead money" for the year because "investment year" hits eps forecasts and therfore indicates no growth. However, they habitually guide low and come in high.

Interesting how stock rose for el Tel to place his 500k and subsequently drooped again.

[unclebooks] 24/7/2006 14:54

Anyone know what is happening here please?- Is this nervousness pending results?