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Daegis Inc. Message Board

friendofthetrend 142 posts  |  Last Activity: Jul 23, 2014 7:38 AM Member since: Jan 5, 2001
  • friendofthetrend friendofthetrend Jul 23, 2014 7:38 AM Flag

    Built by Sierra Nevada Corporation (SNC), with Boeing manufacturing the payloads, OG2 satellites are much more capable than their predecessors. Several satellites in OG1 drifted out of their original orbits, and without enough fuel, maneuvering attempts were not able to reestablish order. According to Orbcomm CEO Marc Eisenberg, the new spacecraft carry significantly more fuel to avoid repeating this situation. Now in orbit, the six new satellites both restore lost revenue opportunities and create new ones.

    “Although not explicitly reflected in our model, we estimate that ‘filling the hole’ could result in $4 to 6 million of incremental (annualized) revenues once Orbcomm restores the ability to capture data 24 hours/day,” wrote Chris Quilty, senior vice president of equity research at Raymond James & Associates, in a research note.

    Additionally, the constellation upgrade includes several network enhancements that improve service. Higher gain, for example, means customers can use smaller, more energy-efficient communicators, and the higher altitude of the satellites enables larger messages. Also, OG2 satellites have six times the data access and double the transmission rates of the company’s earlier satellites. In sum, one OG2 satellite is equivalent to six OG1.

    Orbcomm is performing in-orbit evaluation with SNC, and expects to begin full commercial service within 60 days of the launch. Jim McIlree, CFA at Chardan Capital Markets expects the new satellites will help Orbcomm to profit from recent deals and the March 2014 acquisition of Euroscan.

    “Beginning Q2 Orbcomm will also benefit from significant new customer deployments,” McIlree wrote in a research note. “The acquisition of Euroscan adds about $11 million revenue this year, the Doosan deployment about $3 million in hardware revenue beginning in Q2 and the Hub Group deployment adding $4.5 million in hardware revenue beginning in Q3.”

    Analysts identified Orbcomm’s Automatic Identification System (AIS) upgrades as another top opportunity. The company currently has two dedicated microsatellites in orbit, but each OG2 satellite includes an AIS receiver for near real-time ship location and identification reporting. Orbcomm reported $3.1 million in AIS revenue for 2013, which Quilty said could rise to $10 to $12 million. Walkley believes it could go even higher.

    “We believe the AIS business could achieve a $6 million to $7 million annual run-rate in the next few months following the first launch today with these six OG2 satellites … once all 17 OG2 satellites are launched and functional, providing 24 hours a day of real-time ship tracking functionality, Orbcomm’s AIS business could achieve $10 million to $15 million in annual revenue longer-term versus the current $3.5 to $4 million current rate while retaining a cost structure of $2 million, or comparable to current levels,” wrote Walkley.

    When the remaining 11 satellites will launch remains a subject of debate. McIlree reported that the delays from the first launch will likely result in an estimate reduction of roughly $1 million in revenue. Walkley expects the launch to occur this year, while Quilty expects it to slip to 2015. Though SpaceX has struggled recently with launch delays, what is agreed is that with the first six OG2 satellites in orbit, Orbcomm is a much stronger company than it was before.

  • Google it. ...a generational leap in technological capabilities...$4 to 6 million of additional revenue not originally factored into analysts model.

  • Could be a nearly once in a lifetime bottom.

    Sidoti seems to be giving us a warning about possible lower prices. Others here may disagree and dislike the fact that I'm mentioning it but just by reviewing their web site, they seem to be under no pressure to do anything but provide research.

    They could, however be following too many companies. They may have gotten hit with the recent crises with ITI's accounting and they may be making a quick call that is not based on deep knowledge of the intrinsic value of Iteris. I was able to see that they had over two full web pages of companies they follow that start with "I".

    In any case, we have another view. It says that the company is worth $2.50 a share. I'm not a CFA by any means but I'm with most here who look a the financials and probably agree with that assessment.

    This hedge fund is open about having a stake in ITI. So there is bias there to come out in support of their investment. But this also means they have deep knowledge of the value of the company. Hence they say, if it stays below $1.50 there may be a buy out at a more realistic price.

    So for now,the multi-element contract, accounting factor, plus the claim of buyers waiting for M&A and the claim of an intrinsic value of $2.50 makes the stock remind me of Dos Equis and "the most interesting man" commercial. Where ever the bottom is, it may be an exciting, once in a decade entry point.

  • Reply to

    I looked at Orbcomm's chart before the open

    by chart_watcher99 Jul 15, 2014 12:14 PM
    friendofthetrend friendofthetrend Jul 17, 2014 7:40 AM Flag

    High PE could mean investors realize Orbcomm is entering a period of increasing free cash flow as large capital projects are completed.

  • 2,268 followers of Hawkinvest. Article supports Kopin and will draw interest.

  • It doesn't breakdown the Q results but the whole Yr.

    Seems like they made around 17M which appears to be solid sequential growth over last Q.
    ***************
    “2014 was another profitable year with strong revenue growth and a growing cash balance. In addition, our business and its prospects remain strong. We are continuing to focus on completing our fiscal 2014 audit.”
    *******************
    This announcement should soothe some nerves, it seem to me. I guess the difference in the range reveals the amounts in question. About 1.5 M in revs is the limit to what is questionable there.

    Net income has a range difference of $1M for the entire year. Either way, there IS net income for the year. So EPS could be say, in the neighborhood of $.03 per share if net income comes in at $1M. If it comes in at the lowest range it would be $.017. If it comes in at the highest range we are talking about $.0458 EPS for the year.

  • Reply to

    A hedge fund's view of today's news

    by micromaven7 Jul 16, 2014 10:25 AM
    friendofthetrend friendofthetrend Jul 16, 2014 1:59 PM Flag

    Reviewing this and the excellent comments posted I, for one, will be looking to buy. As I said, the enterprise value and the cash generating capacity will probably be impacted by nill. But now I have the feeling the problem seems specific to a contained area.

    For investors, this is bad news but there are some attributes to the company that longs can definitely take some comfort in. We'll more clearly see what the problems are soon enough, hopefully.

  • Reply to

    material weakness in financial reporting controls

    by sbc1209 Jul 16, 2014 9:46 AM
    friendofthetrend friendofthetrend Jul 16, 2014 10:02 AM Flag

    The contracts are real and specific about how they generate revenues. All the revenues are likely of the same type that have sustained the company for decades. But how and when you account for revenues can be stipulated by rules. Rules can be misunderstood, open to a variety of interpretations, or flagrantly violated.

    Since the CFO was fired, it could have been incompetence or self motivated misrepresentation, which he paid for with his job.

    He obviously did not cover his *** by getting approval from the CEO or BOD.

    That said, the matter needs clarity as soon as possible. So,until they can make an agreed upon, fact filled statement, it's better to halt trading, IMO.

  • Reply to

    RMGN being sued

    by jon83mck Jul 15, 2014 9:38 AM
    friendofthetrend friendofthetrend Jul 16, 2014 9:06 AM Flag

    Today's Pr indicates their ability to secure credit arrangements; they passed the test and came through with flying colors.

  • Reply to

    I looked at Orbcomm's chart before the open

    by chart_watcher99 Jul 15, 2014 12:14 PM
    friendofthetrend friendofthetrend Jul 15, 2014 9:44 PM Flag

    In 2007, Orbcomm had 250,000 subscribers. In 2012, 750,00. About a 15% CAGR.

    OG2 has 12 x Capacity, 3 x Power Vs. OG1. Larger message sizes. Better battery life. Reduced power consumption.Better coverage.

    Orbcomm expects "full commercial service to be available within 60 days of launch".

    The company had about $200M investment in OG2 and no ROI. But that all begins to change 60 days from Launch.

    OG1 limited the financial metrics attainable by the company. Expect a growth spurt in all metrics, including PPS, over the next few years.

    Add to that the ROI from acquisitions. IMO.

  • friendofthetrend by friendofthetrend Jul 15, 2014 7:06 PM Flag

    from news story 3-52014

    Ixia said the financial errors would not affect the total revenue of the company, but would represent a shift of between 0% and 3% of revenue between quarters... errors came via inappropriate assessment of multi-element sales transactions and extensions of payment terms beyond customary terms.

  • Reply to

    What to do now

    by friendofthetrend Jul 15, 2014 6:30 PM
    friendofthetrend friendofthetrend Jul 15, 2014 6:52 PM Flag

    Excellent point.

  • Reply to

    Now we know why the share price weakness

    by chart_watcher99 Jul 15, 2014 5:45 PM
    friendofthetrend friendofthetrend Jul 15, 2014 6:41 PM Flag

    Good point. Some of this news has already been priced in to some extent.. But there will be short term weakness. If it's not too bad, there may actually be a good buying opportunity, once it's out in the open- what happened and so forth.

  • friendofthetrend by friendofthetrend Jul 15, 2014 6:30 PM Flag

    The audit problems have resulted in the resignation of the CFO. Until we know what the improprieties were, it's hard to value the company way beyond cash value, which is $.63 per share.

    But then there are intangible assets that cannot be taken away be misreporting.

    For example, they have been in business for decades and have many relationships with transportation authorities and many patents and marketable solutions and they are experts in their field with many contracts in effect that last for years. They also have a pipeline in the 30M range but we'll have to see what the accounting errors were.

    I sold my position on 6-27 and gave my reasons why.

    If I hadn't, I would not sell this stock if it should ever drop anywhere near $1. But I, for one, would sell right now if I could get over $1.40 or so which might well be had.

    There will be a lawsuit on behalf of shareholders, so that's something to keep in mind.

    The company will survive this. They have a good cash position and a good strategy for increasing value once a bottom is in, imo. Keep in mind that cash on hand and cash flow are numbers that are hard to manipulate and these numbers will continue to support the enterprise valuation.

    With the CFO gone, the CEO should be able to retain credibility and soldier on with strategies for increasing the value of the company. I don't see this effecting relationships with customers. Not at all.

    Their debt and cash position are formidable enough.

    The company may not have the revenues they have stated nor, probably, the non cash assets they have been reporting. We just don't now how badly they misstated. Bad enough for the CFO to resign but probably not so bad that the EV drops too much lower. It was worth $34M before the accounting crises.

    This is why one must own a minimum of 6 to eight stocks, if you are going to invest in micro caps. You can get blindsided by one and you have others to fall back on. There are always opportunities to come back .

    GLTA!

  • Reply to

    I looked at Orbcomm's chart before the open

    by chart_watcher99 Jul 15, 2014 12:14 PM
    friendofthetrend friendofthetrend Jul 15, 2014 5:24 PM Flag

    Completely agree!

  • Reply to

    Congrats to management on pulling this off

    by chart_watcher99 Jul 14, 2014 2:46 PM
    friendofthetrend friendofthetrend Jul 14, 2014 2:59 PM Flag

    Ditto!! You tube has the launch!!

  • Reply to

    Sunny

    by friendofthetrend Jul 14, 2014 10:36 AM
    friendofthetrend friendofthetrend Jul 14, 2014 10:49 AM Flag

    T-minus 30 minutes. Weather looks promising for launch at 11:15 a.m. EDT (1515 GMT). Skies are mostly sunny over Cape Canaveral right now, but clouds and showers are expected to form by afternoon.

  • friendofthetrend by friendofthetrend Jul 14, 2014 10:36 AM Flag

    according to hourly forecast for 11:00

  • friendofthetrend by friendofthetrend Jul 14, 2014 10:13 AM Flag

    SpaceX says its webcast will begin at 11 a.m. EDT

DAEG
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