Did you guys see this?
From Raging Bull -
By: ProfitQuest
Reply To: None
Tuesday, 18 May 1999 at 8:31 AM EDT
Post # of 235
Here is the text of the article, for those of you who don't have access to the post:
High-powered alliances boost Infowave
Drew Hasselback
Financial Post
VANCOUVER - Infowave Wireless Messaging Inc. of Burnaby,
B.C., is surfing the iMac wave.
The company makes software that allows Mac users to connect
their computers to non-Apple printers.
Apple Computer Inc.'s iMac is now one of the most popular
personal home computers on the market.
According to Apple, 13% of the 800,000 units sold between
August, 1998, and January, 1999, were bought by converts from
Windows machines.
All these new Apple customers need Infowave's software to
connect their funky new iMacs to their clunky old IBM-compatible
printers.
Infowave stock (iwm/vse) has a 52-week trading range of $5.20 to
82¢. The shares shot to $4.80 from less than $2 on April 29 on
news of strong financial results. After losing a little altitude, the
shares have begun climbing again, closing yesterday up 30¢ at
$4.65.
The company's first-quarter revenue rose 53% to $2.6-million, from
$1.7-million in the same period last year. Its first-quarter loss
narrowed to $620,063 (4¢ a share) from $950,046 (8¢).
So Infowave has doubled its share price on the back of the iMac,
but can it sustain its new market valuation? That depends on how
much value investors are willing to assign to its latest foray. The
printing software makes up what the company calls its imaging
division.
Infowave also has a wireless division which is trying to develop
business in the experimental new world of wireless data
communications.
The idea is this: Business people who spend a lot of their time
working from their laptop computers on the road need to be able to
exchange data with their employers' computers back at the office.
This usually means tracking down a land-based telephone line and
swapping data by way of modem.
Wireless communications would make laptop and palmtop
computers connect with mainframe computers without the hassle of
tracking down a land-based phone lines.
"Simply put, we take the pain away and make it easy to deploy a
wireless computing network," says Todd Carter, Infowave chief
financial officer.
This idea isn't new. Police officers use wireless computing in their
cruisers to run checks on licence plates. Taxi drivers and couriers
use it to swap simple text messages. But the technology hasn't really
taken off for business users.
Infowave would like to see that change and has teamed up with
some high-powered partners to help push wireless computing into
the mainstream. Infowave recently announced a marketing deal with
Wireless Knowledge LLC, a joint venture put together by
Microsoft Corp. and Qualicomm Inc.
Wireless Knowledge offers a wireless data access service called
Revolv. This is the service that would connect mobile computer
users with the main computer back at the office.
Infowave fits neatly into the picture because it has developed
software that allows computer users to tap into the wireless network
using the popular computer programs Microsoft Exchange and
Microsoft Outlook.
The new deal is in its early stages. Infowave still has some work to
do on its software to make it fit with Revolv. The software probably
would not be available to clients for another year, the company
says.
Meanwhile, Infowave hopes to raise $9.1-million through the sale of
special warrants. The money would be used to finance the wireless
business.
It would be some time before the deal with Wireless Knowledge
results in big revenue for the company. Until then, the firm is relying
on the imaging division and its spin-off success from the iMac
phenomenon to pull in revenue.
Until the company realizes something from Revolv, the question
arises whether Infowave's stock price is justified by its current
financial position.
Julian Marlowe, an analyst at Golden Capital Securities Ltd. in
Vancouver, has published a brief report downgrading the
company's stock to "hold" as the shares have exceeded his target
price. His financial projections for the company remain unchanged.
Mr. Marlowe expects the company to either break even or report a
small loss in the second quarter. Mark Pavan, an analyst at Yorkton
Securities Inc., also recently downgraded the stock from
"speculative buy" to "hold," although he says he still likes the
company. He has raised his 12- to 18-month target price to $5
from $2.50.
"They work their tails off," Mr. Pavan told StockHouse.com. "It's
just that the stock has tripled, so we went to a 'hold.' "
Paul Bradley, an analyst at Canaccord Capital Corp. in Toronto,
has only recently begun coverage of Infowave and has not yet
developed financial models. He says the wireless computer market
has great potential, although the technology has already been around
for a few years and has never really caught on.
Whatever the potential, Mr. Bradley says the wireless business is
still a very small part of the company's overall sales picture.
"It may be on a much higher trajectory than the rest of it, but you'll
only see that over the next couple of quarters," he says.
INFOWAVE WIRELESS MESSAGING INC.:
CEO: Jim McIntosh
Ticker: IWM
Listed: Vancouver Stock Exchange
Head office: 188, 4664 Lougheed Highway,
Burnaby, British Columbia
V5C 6B7
Telephone: (604) 473-3600
INCOME STATEMENT:
12.31.98 12.31.97 12.31.96
Operating revenue $000s 14,689 5,391 8,646
Net income $000s (1,846) (2,567) (287)
Earnings per share $ (0.14) (0.29) (0.05)
Cash flow operations $000s (4,918) (1,143) (979)
Cash flow operations per share $ (0.323) (0.098) (0.176)
P/E ratio: n.m. Dividend yield: n.a. (at 5/14/99)
RATIOS:
12.98 12.97 12.96
Net profit margin (12.57) (47.62) (3.32)
Return on equity (43.98) (196.18) n.a.
Return on assets (29.02) (89.98) n.a.
Current ratio 2.49 2.13 1.22 |
