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Marty Chilberg
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I'm a retired CPA who spent the majority of his working career in technology companies. My work included management stints at Atari Inc, Daisy Systems Corp, Symantec Corp and Visio Corp. My last position at Visio (VSIO) was as CFO and VP Finance and Operations.
  • Telecommunication Systems, Inc: Buys Indoor Location Technology

    Embedded image permalink

    TCS Acquired Indoor Location Assets from Loctronix

    TeleCommunication Systems (NYSE:TCS) has announced the purchase of location-based technology and intellectual property from Loctronix. a small company (les than 10 employees) specializing in indoor geolocation. The financial details of the acquisition were not made public.

    Called Mobile Explorer Platform (NYSE:MEP) the indoor location system of Loctronix is built on the fusion of two technologies: the "Doppler Aided Inertial Navigation" (DAIN) and the "Spectral Compression Positioning" (SCP).

    SCP basically uses a large variety of signals (GPS/GNSS, Cellular, Digital TV, Beacons) to determine a position and it is entirely software-based.

    DAIN determines location through a sensor fusion approach. Combining inertial, magnetic, and gravity data with the SCP RF observables, DAIN provides continuous position, velocity, and direction information.

    (click to enlarge)

    TLocotronix unveiled their technology solution in 2012 at Mobile World Congress as described by GPS News below

    Loctronix: Autonomous Multi Sensor Fusion for Indoor Geo-Location

    .S. based Loctronix Corporation yesterday announced the successful first public demonstration of its indoor positioning technology Mobile Explorer Platform . MEP builds on the fusion of two technologies developed and patented by Loctronix: the "Doppler Aided Inertial Navigation" (DAIN) and the "Spectral Compression Positioning" (SCP).

    SCP basically uses a large variety of signals (GPS/GNSS, Cellular, Digital TV, Beacons) to determine a position and it is entirely software-based.

    DAIN determines location through a sensor fusion approach. Combining inertial, magnetic, and gravity data with the SCP RF observables, DAIN provides continuous position, velocity, and direction information.

    Jul 07 6:19 PM | Link | Comment!
  • Telecommunication Systems, Inc: Looking At Stategic Alternatives

    Telecommunication Systems, Inc (NASDAQ:TSYS) issued the following press release today:

    TeleCommunication Systems, Inc., a world leader in secure and highly reliable wireless communication technology, today announced that its Board of Directors has established a Special Committee comprised solely of independent directors to explore strategic alternatives to enhance stockholder value. The Special Committee has retained independent legal advisors and has engaged Lazard as its financial advisor.

    No timetable has been set for TCS's evaluation of strategic alternatives. TCS does not expect to comment further or update the market with any additional information on this matter unless and until the Special Committee has approved a specific transaction or otherwise deems disclosure necessary or appropriate. There is no certainty that the review of strategic alternatives will result in TCS pursuing a particular transaction or completing any such transaction.

    This action is something that has been long-awaited and likely prompted by several activist investors who have been publicly critical of management. While there is no guarantee anything will come out of this special committee, I'm hopeful that they will see the potential in splitting this company up. The origin of this company as a defense contractor remains clearly the priority of CEO Maurice Tose, as evidenced by his focus during earnings calls every quarter. The ability to earn profits on government contracts in this era of deficit oversight, sequestration and reduced military deployments is clearly suspect and a drag on company valuation.

    Over the trailing twelve months the company has reported the following revenues and gross profits:

    • Government revenues $171.9m down 7% YY
    • Government gross margin $37.8m (22%) down 20% YY
    • Commercial revenues $ 184.7m up 10% YY
    • Commercial gross margin $ 108.8m (59%) up 19%

    This trend should continue in the future. Government funding awards have not materialized, despite a massive effort by the company to secure prime status on several significant funding vehicles. The reality is that even if these contract vehicles yield significant awards in the next 24 months, the margin is insufficient to justify the effort. Conversely the company activities on the commercial side are in markets that have significant tail winds which should continue for the next few years. These markets and macro trends include:

    1. Precise location platforms (market leadership position). This is a cornerstone requirement for the macro trends of connected cars, connected cities and the Internet of Everything. TSYS also has a location SDK with open API's to improve time-to-market for developers creating location-enabled applications.
    2. Public Safety (market leadership position). The next generation 911 rollout continues to gain momentum with only about 15% or so of the eventual implementation cost yet spent. Adding to this opportunity is FirstNet (emergency responder network) and indoor location (dispatchable location), both of which are partially funded and mandated by national initiatives.
    3. teleHealth platform. New initiative that has gained a little traction without major TSYS sales or marketing backing. This macro trend to mobile and personal health is in it's infancy though it's too early to tell if TSYS will be able to gain any significant market share.
    4. Cyber Security monitoring and training. This is another growth segment that has been supporting the government sector and should be set free by rolling it into commercial and leveraging it more aggressively. The market opportunity for safety and cyber security in public safety, the IoE and teleHealth is another large growth opportunity.

    TSYS has not allocated operating expenses to these revenue streams but I suspect the government side is over half of the sales, marketing and administrative spending. Spinning the commercial growth markets out with dedicated resources to pursue them should be accorded a growth multiple associated with the current market share and macro opportunity.

    Jul 06 7:09 PM | Link | Comment!
  • CBO: Federal Budget In 25 Slides

    www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50300-LTBO_25Slides.pdf

    Jul 06 4:54 PM | Link | Comment!
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