AGM: My Take
What struck me in particular at the AGM (and some of this has been alluded to by others):
Cliff Horwitz seems to be hinting at some surprises in the near future. He also sounds like SMY intends to be fairly aggressive in taking advantages of opportunities: "we will do what we deem appropriate to be proactive ... we will add complimentary technologies, we will add complimentary markets." SMY' mantra is "to be the right company at the right place at the right time"! "Intellectual Property and money will separate the haves and the have nots ... we must be brave or someone else will!" And one must acknowledge that Cliff has been uncanny in accurately predicting where opportunities will lie in this industry. He says SMY has never groomed the company as a takeover, "SMY is a consolidator!"
Specifically he spoke of some hopes for the Asian market - "don't want to strain the budget but must be proactive ...Asian market is a very important part of the near term future." (It should be noted that a huge component of exports - over 50% - out of China go to Wal-Mart).
Also:
* TSX listing could provide "potential for dramatically larger groups of institutions and retail investors to invest" in SMY (Cliff)
* First full-scale rollouts will be in Europe, quite possibly in 2004; "SMY has a significant competitive advantage in Europe" (Cliff)
* SMY is the first company with readers that are certifiable in both Europe and NA
* SMY readers are at the Wal-Mart test lab where they are being adapted to meet the needs of the end-users. SMY readers "currently have the best fit for Wal-Mart" (Bill Davidson), working closely with 40 of the top 100 WM suppliers.
* SMY is a leader in the RFID reader business, particularly in technology
* Next week at RFID tradeshow SMY will unveil new product introduction
* SMY has developed technology to meet needs of companies adopting Slap & Ship initially (this may be the new product)
* SMY is in with the 'in' crowd in RFID - good relationships with all the players and many are Giants
* There are some "fantastic alliances" out there, Accenture & IBM mentionned specifically; SMY reader will be the only reader in the Accenture booth next week.
* Reader hardware is definitely the 'sweet spot' of the RFID market right now, independent research has almost doubled projected reader sales in 2005
* SMY has two contract manufacturers set up that can meet early needs, will have more as required - even in Asia "when it makes sense"
* SMY has 35 VAR agreements, 17 new ones since October '03; SMY is winning pilots, some "key" pilots with its VARS
* SMY has a low risk financial model, a clean balance sheet with enough cash resources to last until the company is cash-flow positive
* Protocol standards are developing as a "multi-class structure" - the DoD will standardize at least 8 levels of functionality. Their readers will have to be MF/MP and SMY is in the prime position to take advantage of the way this industry is evolving
* In terms of opportunity, Wal-Mart has 6,500 suppliers, the DoD has 43,000 supplier (and this number will contain many of the WM suppliers)
* The industry has a long way to travel, the growth is currently in the supply chain but in future years we will see a second burst of demand in item level tracking. [Of course, we are at the very beginning of the first burst.]