Summary of my AGM notes. Not well organized, nor 100% accurate, but the meat is here. Overall, I say things look positive.
Presentation Notes:
CMS Data Corp: has 232 clients, 131 for CMS Open. Key thing is sales and marketing - breaking into non legal markets
COMP Info: 136 customers for Lawpack, in 13 of the 30 Dow Jones CO's, & in 32 of the fortune 100 are customers
PC Docs: 700,000 users, 4000 customer sites - has strongest distribution network of all competitors. CyberDocs2.0 / Docs Fusion: "will overtake competitors in the marketplace" "Our stock has been beaten up due to delays"
Revenues: affected by sales management issues, market indecision of whether they should spend $ on client server or internet based technology. Rubin said that Co's have to first establish their Y2K budget allocation, then remaining can be allocated for other things.
Earnings: expenses grew significantly. They had faulty revenue projections - based on these faulty projections they had to hire 6 months ahead in anticipation of sales. (if don't' prepare, your
reputation will go down) Earnings dropped from 70 to 18 c/share
97 Accomplishments: 4 year compound annual growth rate of 49% pa. Strong focus on support and services - 38% of revenue. Customers have to by support with products. 18% of sales are outside of NA - envisioning growth - UK, Europe, Asia. CMS Data in seven countries "with real live customers". Partnerships with EDS, Unisys and Arthur Anderson
Future:
EDMS market: 96-277mill, 97-482 mill, 98-700 mill, 99-904 mill, 00-1171 mill, 01-1476 mill
CAGR (annual growth rate) of 50%
See strong growth in the service industries, due to replacement of legacy systems.
Goals: expand globally, increase market share, etc.,,
Manage growth by investing in sales, R&D, Support, infrastructure.
In 97 were ranked 37th in growth (didn't hear by who)
Focus on sales, new product development and speed of development (getting products to market faster).
Strengths: market leader in high growth markets, technology, etc..
WITHDREW CONSIDERATION OF RESOLUTION FOR INCREASING # OF SHARES FOR
OPTIONS ISSUANCE, AND THE REPRICING OF OUTSTANDING OPTIONS. (Items 3 & 4 on
proxy)
[Rubin said "repricing only applies to non-directors" - I didn't understand this]
Q&A:
Q] How will cash be used, and ensure shareholder value?:
Options:
1. buy back stock - were going to but didn't, as at time had a deal in the works.
2. invest in existing business (doing that now)
3. acquire a business - have looked at over 100. Working on 6 opportunities now that they are looking at very seriously. Any acquisition must be synergistic - have technology to build on top of our products, be a significant player with customer base, have distribution channels, must have strong management (we don't want to restructure), have to be able to cross-sell.
Mentioned that Mircrosoft & Lotus will have basic DM built into their products, but is focused on mass volume. PCDocs will build functionality that "goes over top" of this. "Businesses need solutions, not just technology" Rubin sees these document management programs as platforms from which you build applications. If you give people the basic functions, they will want solutions to build on top of it.
Q] Margins in services low? Most revenue due to support, so not so low.
Q] Y2K - Opportunity for revenue growth - instead of fixing, may purchase new software - driving force today.
Major Competitors are FileNet and Documentum as both have Client Server and Internet compatibility. Not OpenText as just internet based.
They had a 50% turnover in the sales force. Promoted someone from inside to run who is more focused. Change to 6 months to take effect. A big problem was that sales mangers had personal sales quotas which conflicted with their managerial responsibilities. Now have regional quotas.
Rubin was asked to comment on how this Q is shaping up - said that FIRST TWO MONTHS LOOK PRETTY GOOD - BETTER THAN LAST 2 MONTHS - LOOKS VERY ENCOURAGING. (but you never know many customers will wait till month end in hoes of a better deal.)
Rubins personal goal: EVERY EMPLOYEE WILL BE A MILLIONAIRE BY THE TIME THEY RETIRE BASED ON THEIR STOCK OPTIONS.
Q] A major stockholder (5%) applauded withdrawal of options resolutions. Went on to say that his compensation went from 635,000 to 200,000, while Rubins goes from 395,000 to 620,000 - how was this justified. They turned to the "compensation committee" [probably a relative] who went on to say they are independent of management, PCDocs is an international Co in worldwide markets, and this level of compensation is with the range of international executives. Rubins task more onerous in the future. Rubin wouldn't comment on his own compensation. Went on to say he has done a good job on return for shareholders. A Financial Post (or other pub.) rating of CEO's rated our very own Rubin the 4TH BEST BARGAIN ON RETURN TO SHAREHOLDER
VALUE!
Finally he said "forget about 1997" |
