Orcadian Energy Share Discussion Threads

[colinhy] 29/8/2007 20:44

Spurned by Lucent, Middleware Provider Orca May Itself Get Swallowed
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By Paula Bernier
Posted on: 08/29/2007
Last year was a tough one for IPTV middleware company Orca Interactive.

Just months after scoring a partnership toward the end of 2005 with Lucent, one of the marquee vendors in telecom, Orca heard the news that Lucent was to merge with Alcatel.

Hearts sank at Orca, along with the company's 2006 revenue.

Now Orca itself may be consumed by another company.

Orca on Jan. 12 announced that it had received preliminary approaches expressing an interest in making an offer for the company. And as Orca today released its financial results for the first half of 2007, the company revealed that "discussions in this regard are continuing to progress and we expect to give further updates in due course."

The company was not available for comment on acquisition talks this morning. However, in January when Orca first began discussing the prospects of its acquisition, Comverse, which has been on a buying binge in the past couple years, surfaced as a likely suitor.

However, as for Orca's former agreement with Lucent, it "was a very strategic one, an OEM agreement where they bundled our software into their end-to-end IPTV solution," Orca's CEO Haggai Barel recently told xchange. "And we started bidding all over the place. We had even [been able to get] short listed on some accounts. Most of our pipeline was built on Lucent for 2006. And then, as you know, in March of 2006 they announced this deal with Alcatel. The merger stopped all relationships between the companies because Alcatel had their own solution."

Revenue at Orca had reached $5.5 million in 2005, only to plummet to $3.3 million in 2006 due to the loss of the Lucent relationship as well as by what Barel calls the "freeze in the IP market" as customers waited for Microsoft product.

It took about six months for Orca to recuperate from the fallout with Lucent, but in the fourth quarter of 2006 and the first quarter of this year, Orca started getting "back to business," said Barel, adding that has been aided by the fact that the IPTV market is now maturing.

"Following a difficult year in 2006, where we saw our revenue impacted by sector consolidation, we have seen a positive return to momentum in the first half of 2007," said Barel Wednesday in announcing the company's results for the six months ended June 30. "We have seen a clear increase in new orders, especially in the EMEA region, which, as the most advanced market, has been the focus for our sales and marketing investment over the past 18 months."

Revenue in the first half of the year was $3.2 million, compared to $900,000 in the first half of 2006. Orca's gross profit margin was 72 percent, with a net loss of $2.1 million, and a strong net cash position with $14.6 million at the end of the period.

The company said its revenue during this half were boosted by new deals with Latvia's Lattelecom, Greece's On Telecoms, Russia's Sibir Telecom and WT Services of Texas, Orca's first U.S. customer.

The addition of a U.S. customer for Orca is a sign of things to come, said Barel in an interview with xchange. He said the company in the third quarter of this year plans to open an office on the West Coast. Barel added that Orca already has IPTV-related partnerships in place with a variety of vendors including Amino, BitBand, MetaSwitch, Trilithic, Quintrex, Tribune Media Services, Verimatrix and Widevine.

As for customers, Orca has a dozen deals in place with service providers in 11 countries. Those providers include the ones mentioned above as well as Chunghwa Telecom, ComX, Jazztel, Media Company, NewNet, Sonaecom as well as two additional service providers. "We do have 12 commercial deployments worldwide. And I am talking about 12 telcos, tier 2s or tier 3s," not very small independent telcos, which many IPTV suppliers boast about in discussing their commercial customers, said Barel.

Additionally, Orca today announced a new, combined WebTV and IPTV solution and revealed that it had won a $3 million deal for the new system with Blockbuster Israel. Using Orca's new combined solution, Blockbuster Israel will launch a new Internet service for progressive download of up-to-date digital content over PCs by the end of the year. In early 2008, Blockbuster Israel plans to provide an IPTV-ready set-top box to enable TV connectivity from the PC and advanced services such as push VoD and HDTV, followed by a complete digital TV offering.

"This announcement marks a new era for Blockbuster Israel, driving us to the forefront of next-generation video services and demonstrating our market leadership. Breaking new ground with a cutting-edge Web service, we can now deliver the latest movies and television series directly to subscribers' homes through an advanced digital platform", commented Ofer Lowy, chairman of Blockbuster Israel. "Orca's unique solution powers high quality interactive TV and digital content services, so that our subscribers can benefit from a triple bundle of local branches and vending machines, Web content and a full IPTV package in the future."

Another significant part of Orca's comeback plan centers around new solutions for navigating the sea of available video content. The company expects to announce details of that solution Sept. 7 at the IBC show in Amsterdam.

[hugepants] 29/8/2007 18:17

The holding in Blockbuster Israel is in the books at approx £1.1M. So Orca's £6.1M market cap is (perfectly!) covered by net cash of £5M and this £1.1M stake.

So you can argue the business and IP is in for nothing at this price. Except the business is still losing £2M per year (annualising H1 loss). But IPTV hasnt even started yet if you check out the graphs posted by Colinny a few months back. And despite their tiny revenues ORCA are actually one of the main players. So Orca is a punt on IPTV growing strongly in the next few years. I guess you have to make up your own mind on the risk/reward at this price.

Also I dont think the association with Emblaze helps much either. Nearly all the spin-offs have been total dogs so far.

[hotfinance14] 29/8/2007 10:32

Looks more promising now.A few more big deals required in next 6 months.Can they not do a deal with Blockbusters world wide ?

[ericthecat] 29/8/2007 08:52

This is the best bit of the results

Offer talks

On 12 January 2007 the Company announced that it had received preliminary
approaches expressing an interest in making an offer for the Company.
Discussions in this regard are continuing to progress and we expect to give
further updates in due course.


Current trading and outlook

We currently have 12 commercial deals across 11 countries. This is testament to
the progress we are making signing new customers and strengthening our
relationships with our key channel partners. As in previous years, the timing
of revenues will continue to be difficult to predict, however, the second half
has started well and our pipeline is strong. As a result, we remain confident in
the prospects for our business this year.



Haggai Barel
Chief Executive Officer
29 August 2007

[chrisdgb] 29/8/2007 08:44

I suppose the reassuring thing is after so long they have not been terminated. Reading between the lines they sound confident a takeover deal can be reached. The question is the price, I know in the past we have discussed a minimum 30p...

Also how valuable is the shareholding in Blockbuster Israel????

[fagine] 29/8/2007 08:42

Thanks eric. Its a little surprising the talks are taking so long.

[ericthecat] 29/8/2007 08:29

Take over talks on going. Results as expected for those doing their research. WebTV offering very nice.

[fagine] 29/8/2007 08:25

hotfinance14
Whats your take on, no mention of the take over?

[hugepants] 29/8/2007 08:21

Results look pretty good to me. Revenues up a few hundred percent!

M/Cap £6.2M
Net Cash £5M
H1 Loss £1M

They need to double revenues to break-even but it looks possible given H1 revenues almost same as last years full year. Also takeoever talks on-going.

[hotfinance14] 29/8/2007 07:13

Orca Interactive Ltd
29 August 2007



Orca Interactive Ltd

Results for the six months ended 30 June 2007



Ra'anana, Israel, 29 August 2007 - Orca Interactive Ltd ('Orca'), a global
leader in the IPTV middleware market, announces its results for the six months
ended 30 June 2007.


Financial Highlights:

• Revenues of $3.2m (H1 2006: $0.9m)
• Gross profit margin of 72% (H1 2006: 81%)
• Net loss of $2.1m (H1 2006: $3.4m)
• $0.06 loss per share (H1 2006: $0.1 loss per share)
• Strong net cash position with $14.6m at period end
• Order book at $4.9m


Operational Highlights:

• New deployments with On Telecoms in Greece, Sibir Telecom in Russia,
Lattelecom in Latvia and WT Services in the US
• US office opening announced after the period end
• Agreement signed with Blockbuster Israel to deploy first to market
integrated IPTV and Web TV offering


Haggai Barel, Chief Executive Officer of Orca, said: 'Following a difficult
year in 2006, where we saw our revenue impacted by sector consolidation, we have
seen a positive return to momentum in the first half of 2007. We have seen a
clear increase in new orders, especially in the EMEA region which, as the most
advanced market, has been the focus for our sales and marketing investment over
the past 18 months.

As in previous years, the timing of revenues will continue to be difficult to
predict. However, the second half has started well and our pipeline is strong.
As a result, we remain confident in the prospects for our business this year.'

[hotfinance14] 29/8/2007 07:11

Orca Interactive Ltd
29 August 2007



Blockbuster Israel Signs $3m Deal With Orca Interactive to Take Orca's Unique
Combined IPTV and WebTV Solution

Orca newly-launched first to market technology will enable Blockbuster Israel to
deliver digital content services to subscribers

Ra'anana, Israel - August 29, 2007 - Orca Interactive Ltd. (LSE: ORCA), a market
pioneer in providing IPTV middleware and applications, today announced that it
has signed a $3m deal with Blockbuster Israel, the Israeli franchise of
Blockbuster Inc, the leading global provider of in-home rental, retail movie
and game entertainment.

Orca is also announcing that it is first to market with a unique combined IPTV
and WebTV solution. This innovative new WebTV technology will enable Blockbuster
to deliver advanced digital content services to its subscribers.

Expanding on Orca Interactive's cutting edge RiGHTv middleware platform with
all-new capabilities, the combined IPTV and WebTV solution supports both managed
and unmanaged environments, eliminating boundaries to help service providers
expand their customer base and market reach. IPTV service providers will also be
able to broaden offerings to existing subscribers with anytime, anywhere TV
services for on-the-go digital content over mobile PCs. In addition, content
offerings can be extended beyond IPTV to enable WebTV, diverse multimedia, niche
content and user generated content (UGC).

Using Orca's new combined solution, Blockbuster Israel will launch a new
Internet service for progressive download of up-to-date digital content over PCs
by the end of the year. In early 2008, Blockbuster Israel plans to provide an
IPTV-ready STB to enable TV connectivity from the PC and advanced services such
as Push VOD and HDTV, followed by a complete digital TV offering.

'This announcement marks a new era for Blockbuster Israel, driving us to the
forefront of next-generation video services and demonstrating our market
leadership. Breaking new ground with a cutting-edge Web service, we can now
deliver the latest movies and television series directly to subscribers' homes
through an advanced digital platform', commented Ofer Lowy, Chairman of
Blockbuster Israel. 'Orca's unique solution powers high quality interactive TV
and digital content services, so that our subscribers can benefit from a triple
bundle of local branches and vending machines, Web content and a full IPTV
package in the future.'

'We are thrilled to launch our revolutionary WebTV offering, while enabling
Blockbuster Israel to deliver advanced digital content services', said Haggai
Barel, CEO of Orca Interactive. 'WebTV can help IPTV players today protect their
market share and maintain a competitive edge. As the first to market with this
unique combined IPTV and WebTV solution, Orca is yet again pioneering the future
of IPTV - this time leading the market towards total convergence of managed and
unmanaged services for top-notch home entertainment.'

Orca first announced its involvement with Blockbuster Israel in December 2005,
though at the time Orca was unable to disclose the identity of its partner. At
the time of that announcement, Orca also announced an agreement to acquire a
stake in Blockbuster Israel for $2.5m and now owns 33.33% of the company.

[chrisdgb] 28/8/2007 10:06

do they normally time results with Emblaze, because they are out next week. Will we get some news on the 'takeover'?

[eenmakkie] 24/8/2007 15:20

ericthecat - 20 Aug'07 - 12:29 - 1087 of 1090
the money willnot be gone by 2008, your calculations are wrong

You are wright about that, they will give there results for the first half of 2008 only in September, by then you will know it is gonne the money, on a neto basis. Balance minus depts of course.

[blinddarts] 21/8/2007 20:29

decided not to buy these. I'm absolutely convinced on the technolgy but not on the revenue/prospects.
all the best

[ericthecat] 21/8/2007 12:56

A latest interview, but it tells you nothing really?

[chrisdgb] 20/8/2007 12:35

agree with that, would be nice to see some progress though.

[ericthecat] 20/8/2007 12:29

the money willnot be gone by 2008, your calculations are wrong.

[eenmakkie] 19/8/2007 11:38

They have to be fast with the takeover because by my calculations the money will be gonne by the middle of the year 2008.
So no cash bottom anymore for this piggy.....

put your money on the bank and not in an Emblaze related company....

[hotfinance14] 09/8/2007 08:44

We have a tick-up!!

[britishbear] 29/7/2007 13:45

So are you buying Eric? What price do they expect to be taken out at?

[par12] 29/7/2007 12:09

Are you saying BLZ is Jaws ?

[hotfinance14] 29/7/2007 12:00

I notice the name of the boat used to catch jaws in the film is called...ORCA!!!

[fagine] 26/7/2007 21:18

eric

Thank you for the feed back, it is appreciated.

[deep powder] 26/7/2007 17:40

Thanks for the update, longest takeover talks in history!?

[ericthecat] 26/7/2007 14:03

Business is good, both logged and pipeline, the main competition is Siemens, Alcatel, Thompson ( europe) and Minerva (US)

Alliances are doing well introductions from BCC, optibase, commverse and indra.

Takeover talks still on-going.;-)