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C-COM Satellite Systems Inc. (CMI-TSXV) |
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July 29, 2011 Issue |
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The Most Powerful Name In Corporate News and Information |
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CURRENT ISSUE | COVER ARCHIVES | INDEX | CONTACT | FINANCIALS | SERVICES | HOME PAGE |
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As One of the First on the Ground After the Tsunami Disaster in Japan, C-COM Satellite Systems Inc. was Able to Show just How Truly Valuable their iNetVu® Antenna System Was in Helping to Provide the Ability to Make Instant Cell Calls where Cell Towers were Destroyed |
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Established in 1997, C-COM
Satellite Systems Inc. is a leader in the development and deployment of
vehicle mounted antennas, auto deploy antennas and other VSAT technology for
the delivery of 2-way high-speed, mobile Internet services into vehicles or
other transportable structures as well as a leading service provider of
reliable 2-way fixed broadband satellite Internet services.
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CEOCFO: Dr. Klein, it has been a couple of years since we have spoken, what has changed at C-COM? Dr. Klein: We have progressed in the number of years since we had spoken. First, the company has generated incremental revenues. We are up to about $10.5 million in sales for 2010, we continue to be profitable, have no debt and we are continuing on this path into 2011 as well. Our last fiscal year was the 27th consecutive profitable quarter for the company. In our 1st Quarter of this fiscal year we have lost about $70 thousand due to currency exchange; because the U.S. dollar is weak against the Canadian Dollar and all our sales are in U.S. dollars while most of our expenses are in Canadian dollars. The last time we spoke the Canadian dollar was significantly weaker than the U.S. dollar, and that has now flipped over. So, for many years we had benefited from the weak Canadian dollar, but now we have to deal with the effects of a strong Canadian dollar. However, we have certainly done well in spite of that. The 1st Quarter of this year was one of our largest quarters ever in the company’s history and other than having a significant currency loss, the company would have made a significant profit because it was a very large quarter for us and very profitable one as well. We are also sitting on a large amount of U.S. cash and that tends to cost us money when the Canadian dollar goes against the U.S. dollar. The company has also opened new markets around the world, mainly in Asia and Russia. We have added significant number of customers in Asia, Russia, China, India, and Pakistan. We now have a significant customer base there and just recently we have closed a $4 million deal with one of our Japanese resellers for systems sold to SoftBank Japan, which is the third largest Japanese cellular operator. Therefore, Japan is now very prominently on the map for C-COM.
Dr. Klein: The tsunami in March of this year (2011) in Japan, completely destroyed entire sections of Japan in the Sendai region and has wiped out their infrastructure completely, including fiber in the ground, cell towers and buildings. What C-COM was able to do for this cell company is restore some of their operation within five minutes of arriving on site. Our satellite antennas were able to deliver cellular backhaul, which is actually emulating a cell tower and able to deliver cell communications through a technology called the Picocell antenna that sits beside our satellite antenna on a vehicle. Essentially, we were one of the first on the ground with SoftBank during the Japanese tsunami disaster to deliver instant cellular communication to people who were stranded and unable to communicate with anybody for a number of days because everything was washed away. The technology delivered to Japan consist of our mobile self pointing satellite antennas called iNetVu®, which at a press of a button will locate the satellite under two minutes and then with the combination of the Picocell antenna, which is a GSM cellular type of antenna, will deliver within a kilometer or two cellular coverage. It makes it possible to make instant cell calls jut like they would with cell towers, which were destroyed during the tsunami.
Dr. Klein: The Canadian/Japanese Bilateral Symposium was organized by the Canadian Embassy in Tokyo and it was the result of the Japanese tsunami. The topic was how to prevent similar types of disasters, and how SoftBank, Dokomo KDDI and other large Japanese cellular operators have coped with this disaster and how they will be reacting to these type of disasters in the future. There were 240 invited guests at the conference, with six speakers. Softbank has shown a very moving video of their involvement in the Tsunami using our antenna systems and how they assisted people in the affected areas to restore communications using the iNetVu antenna system. C-COM also had two people on the ground in Japan shortly after the tsunami to help SoftBank and our reseller Telemann in Japan to get the systems deployed. We have sold a total of 310 systems to this one cellular company and we shipped over 100 units to them in three days. That is how urgently they required it. Fortunately, we keep a very large inventory, so we were able to deliver 100 systems in three days and then deliver another 210 in a couple of weeks shortly after that. The conference itself provided an interesting insight into how different cellular service companies coped with the disaster, what they learned from it and how they would proceed in the future if something of this magnitude were to occur in a much larger populated area such as Tokyo. There was also a presentation by a representative of the Canadian government on a government sponsored technology that C-COM has been involved in the last seven years called REMSAT, which is a federal and provincial government initiative to deal with emergencies such as forest fires and floods. C-COM has been providing mobile connectivity for this technology. This was presented to the Japanese because they may want to set up something similar on a governmental level to provide a similar type of disaster management capability in case of a large scale disasters such as the tsunami was.
Dr. Klein:
Our expansion into Russia and Asia seems to be working very well for us. We
are working through resellers in those regions. In Asia, particularly in
Pakistan, we have cracked the satellite newsgathering market and we have
been very successful in delivering multiple systems to television stations
in Pakistan. For example, when the Bin Laden execution in Pakistan took
place, the streaming video of that for the general public was provided by
one of the local TV stations using our antenna mounted on a vehicle that was
positioned near the compound where Bin Laden lived. The antenna was also
deployed during a recent crash of a Pakistani aircraft outside the city of
Karachi. Our antennas have multiple application capabilities. They can be used by the military for communication, by cell companies for cellular backhaul, by oil and gas companies for exploration as well by television stations to stream video into studios. We have had successes in Asia, and India, as well repeat sales into Malaysia, Indonesia, China and Australia. We are practically on every continent around the world and have resellers on the ground everywhere and selling more and more systems everyday.
Dr. Klein: I think we are making our mark. For example, in the oil and gas industry, C-COM has been recognized as a leading provider of technology. We are becoming quite well known to the point where some of the large oil and gas operators are requesting our iNetVu products from those bidding this kind of technology. They are asking for our iNetVu products, specifically because they know it has been deployed around the world by such notable companies as Halliburton, Schlumberger, Harris/Caprock and Petrobrass in Brazil. Many oil and gas companies such as B.P. and others are using it around the world for oil exploration. Therefore, we are starting to become a defacto standard for some in these areas as well as in disaster management. The cellular companies are now also starting to pay attention to our technology as a result of the Japanese acquisition, as they have tested a number of products and they ended up selecting ours for a reason of price, performance, and reliability. We are now becoming a force to be reckoned with in this marketplace for sure.
Dr. Klein: We have released several new products. One is an airline checkable antenna system that is just like the antennas that are used by companies like SoftBank and Halliburton but are compact enough to be taken on a plane and check it in like luggage. In fact, when I went to Japan I took this antenna system with me and I checked in on a plane. It was also shipped to Singapore to CommunicAsia where it was displayed at the show. I was very happy to see it come down the baggage carousel just like any other luggage and then it was unpacked and reassembled without any tools and made operational within 10 minutes. This is the next generation of products that is going to have a very large implication on broadband communications in areas where you can actually take this product with you as luggage. It has a handle like luggage and it has wheels, so you can actually roll it behind you and check it on the plane because it is under 32 kilos. That is the requirement for maximum weight and it has the required dimension to fit on a plane without any problem much like ordinary luggage would. We have also announced another product a satellite news gathering product that is a very high precision, vehicle mounted unit that will revolutionize in many ways the satellite news gathering industry. It is going to be extremely price competitive and extremely reliable. Therefore, it will open up a market for many new TV stations that are unable to afford a $100,000 antenna. However, they would be able to spend $25 thousand or $30 thousand for an antenna system that is superior in many ways to many of the $100,000 antennas on the market today.
Dr. Klein: Yes.
Dr. Klein: First, they should look at our financials and see that the company is doing very well and continues to make progress from quarter to quarter. We are a relatively small company with a very high revenue per employee ratio, we have no debt and have a significant amount of cash in the bank. We have had increasing sales from year to year, with 27 consecutive quarters until the last quarter. Therefore, we have a very solid record of accomplishment with a very bright future with more and more systems in the field. We have over 4,000 antennas now deployed around the world and we are going to be adding many more to this installed base every year. We will be growing hopefully a little faster than we have in the past because now we have the momentum. We have a market that seems to be opening up all around the world and the demand for this type of technology is growing. There is also Ka band, which is the recent large development in the satellite technology deployment that has been launched this year by a number of large operators. They are putting in a lot of money and effort to get this technology into the field and C-COM has already developed antenna systems to work with this new satellite technology that will be ten times faster, sometimes even one hundred times faster than what is available today. In addition, it will be significantly cheaper in terms of airtime as compared to what is available today. Therefore, the market looks very positive and very bright for us and we hope to capitalize on it.
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We are a relatively small company with a very high revenue per employee ratio, we have no debt and have a significant amount of cash in the bank. We have had increasing sales from year to year, with 27 consecutive quarters until the last quarter. Therefore, we have a very solid record of accomplishment with a very bright future with more and more systems in the field. We have over 4,000 antennas now deployed around the world and we are going to be adding many more to this installed base every year. We will be growing hopefully a little faster than we have in the past because now we have the momentum. We have a market that seems to be opening up all around the world and the demand for this type of technology is growing. - Dr. Leslie Klein, P.Eng. |
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C-COM has developed proprietary mobile self-pointing, auto deploy antennas
that (while stationary) allows the delivery of broadband satellite Internet
services into mobile environments virtually anywhere where you can drive,
whether for residential use (like high-speed internet) or professional use
(like SNG - Satellite News Gathering).