and from the Ottawa Citizen:
Crosskeys sees better days ahead
Bert Hill
The Ottawa Citizen
Crosskeys Systems Corp. of Kanata predicted yesterday that
sales will jump 66 per cent in the next year but warned
investors to expect at least one more quarter, the sixth
straight, of losses.
It had forecast in April a return to profitability in the quarter
that began last month.
But chief executive Ian McLaren said yesterday the company
will put more resources behind Dyband, a new product that
manages broadband traffic, because of strong market interest
from carriers and service providers.
Still, Crosskeys had good news to share with analysts yesterday
as it reported results for the quarter and the year that ended
May 31.
After a year of aggressive investment in acquisitions, research
and sales personnel, it appears on the road to recovery.
Sales in the most recent quarter were $14.5 million, compared
with $5.2 million a year earlier.
Losses for the quarter, before acquisition and other special
charges, were $1.7 million, or nine cents per share, compared
with $6.8 million, or 37 cents per share, a year earlier.
For the fiscal year ending May 31, sales rose slightly to $45.1
million while losses jumped more than four times to $5.9
million.
Mr. McLaren predicted that sales will hit $75 million in the
new fiscal year as an expanded sales force and new products
produce strong results, particularly with new competitive local
telecommunications carriers in the U.S. Crosskeys has 376
employees, an increase of 50 per cent in the last year.
"The last year was one of transition and getting focused. This
year is all about implementation."
The price of Crosskey stock could take longer to recover if
investors wait for real profits. It hit a high of $22 in March as
it got a ride from investor enthusiasm for all things
technological and then plunged in April. The stock closed at
$9.20 yesterday, up 20 cents.
Mr. McLaren predicted that new independent local carriers
will generate 60 per cent of revenues in future years.
Crosskey, an affiliate of Newbridge Networks now Alcatel,
generated 90 per cent of all sales through that channel in the
last quarter. It expects the Alcatel channel to generate about
50 per cent of sales in the future.
Crosskeys is still owned 19.5 per cent by Alcatel. It announced
yesterday that John Selwyn, a founder and previous chief
executive officer, was resigning from the Crosskeys board
along with three other directors.
Patrick Smith, a vice-president at Sprint, the long-distance
carrier, and Peter Gordon Jollymore, a former president to
Stentor Canadian Network Management, will join the board.
Newbridge founder Terence Matthews and former senior
Newbridge executive Peter Charbonneau will continue on the
Crosskeys board. |
