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DataLogic Releases CEO Letter to Shareholders Outlining Company's Performance
and Forward Guidance
IRVINE, Calif., Feb. 19 /PRNewswire-FirstCall/ -- DataLogic International, Inc.
(OTC Bulletin Board: DLGI; Berlin Stock Exchange: 779612), today releases a
letter to shareholders outlining its performance and forward guidance.
To Our Valued Shareholders,
As we enter into another exciting year, I'd like to express my deepest gratitude
to all our shareholders for your continuing vote of confidence, patience, and
support throughout the last two and a half years of DataLogic as a
publicly-traded company.
Although the roads to growth and profits were often paved with obstacles,
temporary defeats and false promises, DataLogic has weathered and survived one
of toughest economic downturns that the Company has encountered since its
inception. Today, DataLogic is a completely different company with improved
operations, sales and growth opportunities. As part of our on-going open
communications and commitments to our shareholders, I'd like to share some of
our recent accomplishments along with future plans that will set the stage for
the most exciting events in the history of DataLogic:
IT Services
Since inception, DataLogic Consulting Inc. (DCI) has been the provider of
Information Technology (IT) Consulting Services. Although this company had
performed well as an independent privately-held company from its inception to
the late nineties, it became a victim of the technology and economic meltdown in
the early 2000's. In response, DataLogic's management diligently searched for
new market segments in which to target. At that point, we decided to pursue
governmental service contracts. This had proved to be a positive move since the
Company was later awarded several major multi-year service contracts with
governmental entities in the state of New York and Rhode Island for an
approximate combine value of $40 million. As a result of this phenomenal turn
around, we were pleased to booked record sales in excess of $10 million at the
end of fiscal 2003 as compared to $2 million from the prior year.
Although Consulting Services is still our core business and a major source of
our revenues, we are not overly satisfied with its rate of return due to the
continued weakness in the economy in general and IT in particular. As a counter
measure, we again seek for other market segments for growth. As a result, we
expanded our business model to include being a provider of VoIP and
Machine-to-Machine (M2M) products and services. Each of these segments has huge
growth potential. We also believe our entrance timing to these markets is great
due to the technology maturation, proliferation of broadband and wireless
standards.
VoIP
Last June, DataLogic acquired a majority stake in I-Phonehome, which we later
renamed to IPN Communications, to enter into the VoIP space. IPN is a provider
of VoIP products and services for the consumer and business markets. Our unique
suite of services provides free to low-cost, high quality phone calls using our
innovative Voice over IP calling devices. Our system allows subscribers to
receive and place calls to any telephone, mobile phone or other IP-Phones in the
world.
Since the acquisition, IPN had received several purchase orders ranging from
domestic resellers to international telecommunication carriers. Some of IPN's
notable achievements include the agreements to evaluate VoIP phones and servers
by Teracom Technology in China and Vietnam Post and Telecom (VNPT) for
deployment in their respective regions with a combined population of almost 2
billion. Our equipment are also being evaluated by several other large firms
who have asked to remain anonymous due to competitive reasons. We expect these
efforts to result in sizable purchase orders in Q1 and Q2 of this year.
According to a recent research study from Insight Research, VoIP based services
is expected to grow from $13 billion in 2002 to nearly $197 billion by 2007,
making it the fastest-growing segments in the telecommunications industry. Our
plans to capture some of this market include both domestic and international
marketing but with a heavier emphasis on the latter. In addition to North
America, we will continue to place heavy marketing emphasis to Asia, South
America and Europe where we see significant value for VoIP products and
services.
Also, as part of our near-term strategic plan, we intend to spin-off IPN into a
public entity to create a VoIP pure play. We believe this willenhance the
equity and market capitalization for DataLogic as well as our shareholders.
Machine-to-Machine (M2M)
Earlier this quarter, DataLogic launched Panther, a GPS based vehicle tracking
device as its first M2M application. Our devices, available in both GSM and
CDMA, have attracted a high level of interest from both domestic and
international distributors and resellers. Currently, we have agreements in place
with distributors in the US, UK, and Brazil. By the second quarter, we expect
to sign with additional distributors in Germany, Holland, France, Colombia,
Chile, Paraguay, Bolivia, Australia, New Zealand, and Southeast Asia. We are
also actively working with domestic and international back end application
developers to interface with and market our products to their respective
clients.
The existing market for wireless telemetry is estimated to be $1.15 billion and
by the year 2006, it is estimated that the combine revenue within the M2M market
(US, Japan, and Western Europe) will be$3.6 billion as researched by the Yankee
Group and growing to $100 Billion by the end of year 2010 according to McKinsey
and Company. These are very promising products that we think will contribute to
DataLogic's bottom line in terms of high sales and profit margins. As part of
our near term marketing initiatives, we plan to exhibit the devices with our
partners at the expos in Brazil, Atlanta and Las Vegas next month.
Sales Projections
Our company now consists of three core businesses - ConsultingServices, VoIP
and M2M. For fiscal 2004, we expect our Consulting Services to remain a
dominant source of revenues with projected sales that comprise of approximately
60% of total revenues. We expect each of our VoIP and M2M segment to
conservativelymake up 20% of total revenues. Our conservative organic growth
projection for fiscal 2004 is $20 million. We expect to exceed this amount via
our external growth through merger and acquisitions.
External Growth
We are actively seeking funding and expect to undergo a major capital
restructuring this quarter. We also expect to complete several merger and
acquisitions of other technology, VoIP and/or M2M companies in efforts to
increase our market shares and company valuation.
Although we will continue to grow our current businesses, we will not be limited
to our current technologies. Our focus going forward is in the global economy.
We will continue to seek out emerging markets and growth trends in which to
enter. Our new business model includes roll-up initiatives in which we
identify, acquire and consolidate profitable businesses. These businesses can
be located anywhere in the world.
Once sufficient funding has been secured and our business has reached the
projected benchmarks, the next logical step would be to apply for a listing on
the NASDAQ Smallcap Exchange. To do so, we'll need to have the right substance
and meet certain share price/assets criteria along with the right investor
groups and market makers that could tell our story to the investment
communities. We think the timeframe to meet those criteria is between six to
twelve months. However, we will achieve this goal quicker if the right events
and resources are in place before that.
In conclusion, we're quite pleased with the progress we have made in all facets
of our business as evidenced by our current stock price. Our stock has been
trading near its 52-week high compared to 3 cents less than a year ago. Now that
the company is on a steady growth track, we willupdate you frequently with our
progresses.
Again, we thank you for your support. Without your heartfelt support and
encouragement, DataLogic wouldn't be where we are today.
Sincerely,
Derek Nguyen
Chief Executive Officer
About DataLogic International Inc.
DataLogic International, Inc. is a technology and professional service company
dedicated to providing a wide range of Information Technology and Communications
related products and services. For more information about DataLogic, goto
http://www.dlgi.com/ or contact Investor Relations at or (888) 530-8228.
This release contains forward-looking statements within the meaning of Section
27a of the Securities Act of 1933, as amended and section 21e of the Securities
and Exchange Act of 1934, as amended. Those statements include the intent,
belief or current expectations of the company and its management team.
Prospective investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve risks and uncertainties, and
that actual results may differ materially from those projected in the
forward-looking statements as a result of various factors. Accomplishing the
strategy described herein is significantly dependent upon numerous factors, many
are not in management's control. Some of these factors include the ability of
the company to raise sufficient capital, attract qualified management, attract
new customers and effectively compete against similar companies.
DATASOURCE: DataLogic International, Inc.
CONTACT: Investor Relations of DataLogic, +1-888-530-8228,
Web site: http://www.dlgi.com/