See: thomcalandra.com
PALO ALTO, California
—
“?We got hit pret?t?y hard on Q3?,” Nadir Ali
says. ?Sysorex Global‘s CEO got a lot of
questions at his recent appearance in Los Angeles.
?The 46-year-old is
learning the challenges of a start-up in the public markets? At TCR, we like the company and the
concept: blend four or five service-oriented businesses: Big Data, cyber
security, mobile computing, government and commercial systems integration, and
The Cloud. Accelerate some of those services so they are CREATED AT SYSOREX.
“We know this is
taking longer than we anticipated,” Mr Ali tells us. Nadir is the son-in-law
of the original Sysorex creator, an Israeli American named Salam Qureishi.
?Dad-in-law used a similar blending concept with computer resellers
in the 1990s, and made out LARGE. Mr. Qureishi is the current chairman of Sysorex (NASDAQ: SYRX).?On
the Q3 sales miss at the Lilien Systems unit, Mr. Ali says.” ?The Lilien piece
is a one?-?time issue. It just
happened to be a big order. Geoff and Brett ?(Geoffrey Lilien and his sales chief, Bret
Osborn) could not get it. But in their 30?-?year history they have delivered. Rarely do
you get a deal that ?i?s that large and mea?n?ingful.?”
The Lilien unit is
what you would call a traditional computer reseller — the segment is called IT
VARs (value-added resellers). Geoff happens to be an 18-year-long friend of
mine; Lilien Systems has been going in Marin County, Seattle, Portland;
Oregon; Phoenix, Arizona; Honolulu and elsewhere since about 1984. Geoff Lilien
has been in the biz even longer, re-selling computer systems from the back of a
car in the early 1980s.
Long-ish story short: missing that sales
piece in the summer shaved revenue growth off the entire Sysorex pubco-package.
I think it was a life-sciences company that still does business with Lilien and
was looking for an infrastructure build-out. (Yes, even I like to use jargon
once in a bit.) Result: SYRX stock hammered.
More bullet points:
— There will be NO
FINANCING anytime soon. Mr. Ali says Sysorex has $2.7 million in cash and
already has the one problematic piece of the Sysorex miracle-to-be pie,
AirPatrol, budgeted through 2015 — using current cash, future cash flows,
pennies from heaven, that sort of thing.
— AirPatrol, one of the
proprietary parts, was 100 percent government contracts — largely cyber
security, I imagine. Nadir Ali says this year that split is down to 40 percent
government and 60 percent commercial.
— More corporate
(commercial) biz means a SHORTER SALES CYCLE. Government contracts can take 1
year to get paid. Darn that Uncle Sam, and in future, one hopes, Uncle Jose
(Mexico), Uncle Ian (Canada), and so on through the family tree. Corporate
contracts take 6 months and sometimes less.
— That USA Army
contract that was a subject of the November conference call with Sysorex? Well,
turns out this one has a LOT OF MOVING PARTS. The request for proposals on
various items and services came in at $460 million. Part of that is the piece
that the Sysorex unit in Silicon Valley, California, won. Alas, one company
that LOST THE BID filed a protest with Uncle Sam’s Army. Mr. Ali is confident
the Sysorex unit will prevail.
— Insider purchases at
the battered stock price? I asked, and I think Nadir’s answer was better than
most CEOs that dodge the MORAL RESPONSIBILITY of owning as many shares of the
companies they run as they can.
“All of our
?(executive) stock
options (grants) ?are priced higher
than this ?level, ?and of course we are
looki?n?g at insider buying?,?and
when some of us get clearance ?in
a window — different windows and different sizes for those windows according
to where you’re at in the company — I believe we will see a few stock
purchases.”
S?ales forecast for the
entire year that closes December 30 is $?64 million?to
?$?67 ?million. The fourth
quarter looks like $16.5 ?million, he says.
“I know it has been rocky?.”
?The parts for those
new to Sysorex: Lilien, AirPatrol, Sysorex, Shoom, others. Big Data,
cyber security, mobile computing, corporate integration, enterprise, government
servicing?and
gosh-knows I am forgetting something here.? Oh right, The Cloud — otherwise
known as TC in TCR.?”?
On AirPatrol,
it is an emerging market and t?a?king a little longer
than we thought. Longer than our proof of concepts. ?We are getting
traction now, this quarter,” Nadir Ali says. That is a reference to the 60
percent commercial category for revenue for AirPatrol, with government
services declining.”
?I am still all in.
I bought another 1,500 shares today just before the close at $1.21 USD. My
stake in Sysorex is Shoom-ing.
For an update, please see: http://thomcalandra.com/sysorex-slam-who-are-those-darn-sellers-anyway/
?Next Week: Looking to
purchase more — Angkor Gold, more Eurasian Minerals, more BioCryst Pharma??
Please keep thomcalandra.com on your RONAR (that
is Radar & Sonar)?
THE CALANDRA
REPORT: Sample & Subscribe
Now $129 yearly!
At last:
A thomcalandra.com home for our
expanding TCR faithful; including benefits, secrets and
subscriber-only scoops.
Disclaimer: This article was posted with the
permission of a third-party contributor and the opinions contained therein
do not necessarily reflect those of Smallcappower. Smallcappower does not
endorse any investment advice provided by these third-party contributors.
Please consult your investment advisor before making any investment
decisions.
Ubika Corporation and its
divisions Smallcappower, Ubika Communication and Ubika Research are not
registered with any financial or securities regulatory authority in
Ontario or Canada, and do not provide nor claims to provide investment advice
or recommendations to any visitor of this site or readers of any content
on this site. – See more at: http://www.smallcappower.com/posts/small-cap-power-disclosure
