The Lead Balloon Story…
Earlier this year, I posted an entry about Matrikon’s challenge regarding the financials
as 4 out of the top 5 of the management team left within 4 months… leaving us with the question if lead balloons can float...
Now, a short update on that posting.
First, it looks like they’re still struggling to keep execs on board…
In the latest quarterly report, they announced that the VP of Advanced Applications has also left. And, with 5 out of 6 execs have left in recent quarters, the challenge faced by the remaining management team is stronger than we’ve ever seen by any company in this peer group.
Second, they’ve had to back away from prior earnings expectations…
Although they previously cited the second half as traditionally stronger than the first, they are now saying that this will likely not be true in 2006.
Oh, oh….
The company points to two key reasons for the upcoming decline:
1) Currency rate fluctuations
2) A shift to higher-value solutions
I can understand the first with the stronger loonie, but I would have expected that a shift to higher-value solutions would bring increases in profit from the accompanying higher-value software sales, not the opposite.
Presumably, their VP of Advanced Applications was intimately involved in the company’s higher-value product strategy… and now he’s gone.
Third, and what I would consider most interesting for PAS is that Matrikon insists that they have no real competition, saying that there is “only one enemy – that is ourselves” (check out minute 24:30 of the earnings webcast).
< What did I tell you about the prior lack of marketing at PAS?? >
Well, at least that statement about being their own biggest enemy ties up with their curtailed analyst expectations!
Hmmm…
I’m now intrigued enough to read the entire earnings report this weekend – watch for an update next week.
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