Analysis of Press Release
Plaintree Systems Ready for the "Fiberless" Explosion
Plaintree Systems Inc LAN
Shares issued 70,461,807 Aug 24 close $1.25
Thu 24 Aug 2000 News Release
Mr. David Watson reports
Plaintree Systems Inc. president and chief executive officer, David Watson, says, "the fibreless optical market is ready to explode and Plaintree will be ready when it happens." Mr. Watson has spent the last six months having face-to-face discussions with potential customers and the competition around the world.
PJD Comment:
Plaintree, with the acquisition of the Firlan technology, has identified and is well positioned to take advantage of a new and expanding market. This translates into huge revenue and profit potential. Watson's and the new sales team's efforts will not be reflected in revenues until Q3,Q4,Q1 and Q2 based on the 3 to 12 month sales cycle in the technology sector. This bodes well for future profitable quarters especially with the tight control on expenditures that they have shown.
Plaintree has moved quickly to expand the team to help meet these upcoming opportunities by adding the following key team members:
· Bill White as director of marketing;
· Colin Welch, regional sales rep, previously a leading sales rep at PAV;
· Mike Salustri, regional sales rep, a leading sales rep from Silcon;
· Jason Lee, regional sales rep, top salesperson from the networking industry;
· David Kahn, vice-president of product development, one of the top photonics research engineers in the world;
· Thomas Milc, physical design engineer, leading physical designer from Nortel and a former Plaintree team leader;
· Dermit Kavanaugh, manager of standards, also from Nortel;
· Duncan Wilcox, manager of electronic design, from Alcatel,, Europe;
· Ilia Ekchtout, physical design engineer from JDS Uniphase;
· Design Workshop, a leading industrial design house is now contracted for key design work, combining form and function.
PJD Comment:
Their new Director of Marketing has been busy planning his strategy and we are starting to see it executed in a timely manner. The fact that they have a dedicated marketing person in place coupled with the fact that they have just gone through the process of hiring a new, internationally based PR firm, will result in increased marketing and promotion activity. This should translate into increased sales, revenue and profits. The addition of the sales people means more coverage of existing and new territories/markets which should translate into increased sales, revenues and profits. As well, the companies that they were able to recruit the new sales and engineering staff from shows that Plaintree must have something to offer. With the demand for talent and competitive comp plans being offered for quality people, there is no way that LAN would be able to secure these people unless they truly had something tangible. Also, the quality of the engineering team they have created will translate into new product offerings and announcements in the future.
Top names in both the GSM and ISP markets have shown a strong interest in Plaintree's optical fibreless technology. A number of these customers are flying from as far away as Europe and the Middle East to view Plaintree's operations and design work. According to some market research, it is
reported that the GSM market represents a possible $0.5 billion in potential optical fibreless business. There are currently about 200,000 ISPs around the world and that number is growing. ISP market estimates have yet to be determined.
PJD Comment:
They have targeted an expanding and niche market for which they are well positioned to take advantage of. They are possibly hinting of upcoming contract announcements.
Plaintree's optical fibreless technology will offer a solution to some of the infrastructure problems of crowded airwaves that have arisen with the abundant use of RF and microwave technology. Plaintree System's wireless links use a completely eyesafe LED technology. This differs from the more commonly used laser products that may result in eye damage if viewed
through a telescope or binoculars. These infrared fibreless products offer high-speed data transfer that answer the demand for big bandwidth. Plaintree also develops and manufactures intelligent backbone and workgroup switches, which makes it one of the few companies to provide a complete solution to the last mile problem.
PJD Comment:
They have a differentiated and unique solution that addresses both a potential health issue and a uniquely positioned 'last mile" solution. We all no that product differentiation is a key to success from a competitive perspective. This translates into sales, revenue and profits.
Plaintree anticipates its aggressive investment in engineering will result in potential fibreless product releases in this current year. In responding to the needs of their potential customers, Plaintree is one of the few companies with the experience and existing manufacturing to accommodate the volume of product that will be required to meet the demands of the ISP and GSM markets.
PJD Comment:
This hints about new product announcements to be made in the coming year and a company's ability to meet production demands is critical to sustainable growth.
All in all this is an extremely positive announcement and we will likely see more leading up to the AGM. My guess is that the contract announcements will soon follow this one or may be issued at the AGM on Sept. 7. |
