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Image Sensing Systems, Inc. Message Board

  • mikeyspeaksok mikeyspeaksok Oct 18, 2011 7:53 PM Flag

    Any insight on the biz model here

    I see lots of big fixed cost increases (gen admin, R&D, sales, but not nearly enough advancement on the top line revenue to generate a decent profit. What is the problem? Are there contracts out there waiting to be filled or are thye just spending away with nothing to show for it. Any insights?

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    • Given the report and the call, I am amazed it is hanging in there. I thought they tried to be a little more transparent about what's happening, but.

      Isn't there some amount of lead time involved in these orders? How is it possible that back in April/May, they didn't have a better grasp of how the next 3-6 months would unfold. I find that very hard to believe. This stuff has to be tested, ordered, etc. To think after the first quarter they thought it was a seasonal, short-term issue from which they would rebound, and now they talk about weakness, etc. It's amazing.

      Apart from job #1 getting about this work "urgently," they better work to give investors a better idea of where this is going, or they will lose the analyst community's following of them, I would think. You just can't keep surprising quarter after quarter, with results that seem pretty far from what seemed to be conveyed -- especially when we keep getting surprised at how weak results are, and how many operational issues still seem unresolved!!

      And on the hybrid Autoscope, we are now hearing about a second beta site, etc. ISS has talked about this for years, and now we see Iteris planning to launch its own hybrid system to coincide with ISS!! Isn't that just a shot in the stomach. For all of ISS's deep technology, and bench, it's deliberate rollout of this may mean they are missing opportunities! Amazing.

    • Well, that is a good question, and the one everyone is probably asking here. ISS gets to strut their stuff this week, and maybe provide a little more insight.

      To no fault of the company, they have are in the tragic predicament of being slammed by the economy about as hard as almost any company out there. Management is full of lots of forward-thinking strategy that if realized, could make this company flourish. They appear to have some core competencies in their technology and in their relationships with distributors and customers that should provide some level of sustainability to their business relative to competitors.

      One thing I think everyone is waiting for is the new hybrid camera, the Autoscope, which supposedly will roll out in 1Q11. It supposedly should be a dominating technology with capabilities unmatched by competitors. I think that oasis of hope is one thing keeping the stock as alive as it is.

      Now be forewarned, we have been hearing every year for the last several years that this product is coming out “next year.” For ostensibly being this category killer, it doesn’t seem they have devoted resources to really roll this out. But, this time does seem to be different, and it seems highly likely we should see it deploy shortly.

      In the company’s attempt to strengthen its business via acquisition, while the new businesses look compelling, it has been more trying than I think every management anticipated in integrating these businesses into ISS.

      This should be a rewarding story, especially here. Good technology with able management, building an integrated company, and it is cheap!

      Having said that, I think one of the major challenges facing management has been how to guide investor expectations. This is not an easy task, as this has been a very volatile business and environment, and when a company takes on acquisitions and “heavy lifting,” the path is rarely straight. But, management seems in some ways as becoming more detached from investors and hasn’t been willing to be forthcoming about its situation and short-term prospects. With the stock at these lows, I hope management will try to be a little more candid and transparent about how things are going. I think people have a lot of respect for management’s and the company’s capabilities, and realize what a challenging environment this is. But management is losing investor confidence by missing the mark so much on what is going on.

      Now, just wait, ISS will have a huge quarter, like they did last winter, and be able to do a “told you so” to us. I am not that hopeful. But it seems more a matter of when they will be successful, than if.

 
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