Category Archives: Investing

Simtek’s Q1 sales slip

Colorado Springs-based Simtek Corp. (Nasdaq: SMTK) expects to report sequentially lower sales during the year’s first fiscal quarter, for which full earnings results will be announced April 27.

The non-volatile memory chip company announced this week that it expects Q1 2006 product revenue to be about $8 million, 12% less than the record $9.1 million mark reached during last year’s fourth quarter.

Despite the decline, the company’s projected Q1 sales would be 70% more than last year’s first quarter. Simtek — which reported its first quarterly profit in nearly six years during last year’s fourth quarter — nearly tripled its annual revenue during 2006 to $30.6 million, compared with $10.4 million in 2005.

The past year has been eventful for Simtek, which was founded in 1987 and struggled for years to develop a niche market for its unique nvSRAM technology, which allows memory chips to retain stored data when their power is shut off, while also operating at extremely fast speeds.

Last October the company completed a 1-for-10 reverse stock split, paving the way for a Nasdaq stock listing this January 10.

In December Simtek acquired the nvSRAM business of Germany’s Zentrum Mikroelektronik Dresden (ZMD) (which originally licensed the technology from Simtek) for $10 million in cash and stock, and began shifting ZMD’s chip customers to its own nvSRAM chips. In January it raised $11 million in a private share placement, with most of the proceeds used to pay for the ZMD deal.

The company also filed for 10 patents in January, and announced plans to open a design and business-development center in San Diego.

Simtek employs about 45 people in Colorado Springs. Its chips are used in computer servers, GPS navigation systems, robotics, copiers, avionics, radar, “smart” weapons and other products.

Among its competitors is Colorado Springs-based Ramtron Corp. (Nasdaq: RMTR), which uses a different technology, ferroelectric random access memory (FRAM), to produce non-volatile chips.

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Wind-energy stock tips

Colorado features prominently in an article this week on wind-power transmission stocks in the AltEnergyStocks.com blog.

Written by investment advisor Tom Konrad, who also serves as treasurer for both the Colorado Renewable Energy Society and Ratepayers United Colorado, the article identifies several companies (though none in this state) that could benefit from increased demand for transmission facilities. That’s assuming, of course, that the current boom in wind power and other alternative energy sources continues.

The article mentions Colorado’s recently passed Senate Bill 100, which requires regulated electric utilities to identify — and develop plans to remedy — areas of high wind-energy potential where a lack of transmission capacity could hinder development. Gov. Bill Ritter signed the bill into law two weeks ago, along with House Bill 1281, which requires state utilities to obtain at least 20% of their electricity from renewable energy sources by 2020.

The AltEnergyStocks blog also ran an article last week on stocks that could benefit from wind turbine supply constraints. Investor’s Business Daily mentions some of the same stocks in a similar article today.

Turbine makers such as GE Energy are reportedly booked solid with orders well into next year, despite the industry’s aggressive plans to expand production. Denmark’s Vestas Wind Systems, for instance, announced plans last month to build its first U.S. wind turbine blade factory in Windsor, Colo., near Fort Collins.

Surging demand for wind energy may pose a challenge for utilities and potential wind farm investors, but for transmission equipment suppliers, as well as Vestas, GE and other turbine suppliers, the good times appear to be just beginning to roll.

Ascent Solar soars on Norsk buy

Shares of Littleton’s Ascent Solar Technologies, Inc. (Nasdaq: ASTI) were one of the hottest items on the Nasdaq stock exchange on Wednesday, soaring 89% on news that Norway’s Norsk Hydro ASA (NYSE: NHY) bought 23% of the Colorado company for $9.2 million.

Ascent — which is developing thin-film copper-indium-gallium-diselenide (CIGS) photovoltaic cells that can be manufactured on flexible, low-cost plastic substrates — also gave Norsk Hydro an option to purchase another 12% of its shares later this year, subject to stockholder approval.

Ascent plans to build a 1.5 megawatt (MW) per year pilot manufacturing plant in the Denver area in 2008. By 2010 it aims to begin large-scale production from a 25 MW plant.

Smart Money writer Will Swarts, whose article on Ascent yesterday was headlined “One Day Wonder,” notes that the company’s market cap soared from $25 million on Monday to $34 million in just two days.

At this morning’s peak share price of $9.43, the company’s market cap briefly flirted with the $50 million mark before settling back to $43 million (@7.99 a share) by the end of the trading day.

Still, it’s not too bad for company that spun off last year from Littleton government contractor ITN Energy Systems Inc., went public in July at $5.50 a share (raising $16.5 million) and has languished at $2 to $3 a share until this month.

The solar energy industry — which got a boost last week from the US Energy Department’s plan to provide up to$168 million in development funds for 13 solar energy projects — suddenly has become one of Wall Street’s darlings.

But investors would do well to exercise caution, and avoid being swept up in what New York Times writer Matt Richtel on Wednesday referred to as the next “watt-com” boom.

Denver snags Keiretsu Forum chapter

The rapidly expanding Keiretsu Forum, the nation’s largest group of so-called “angel” and venture capital investors, is about to launch its newest chapter in the Mile High City.

The 6-year-old group, which now includes 12 chapters and more than 500 accredited investor members, has scheduled its first meeting March 27th at the offices of Exclusive Resorts in downtown Denver. Attendance is by invitation only. Interested parties should contact Steve Murchie at (Tel: 720-506-4454, or smurchie@keiretsuforum.com.

Since its 2000 launch in San Francisco, the Keiretsu Forum has expanded into Los Angeles, San Diego, the Pacific Northwest and Boise, Idaho. In November it launched its first international chapter, in Beijing, China. Forum members have invested more than $100 million in 135 companies in technology, healthcare/life sciences, consumer products, real estate and other high growth industries.

Not to be mistaken for the apparently dormant Colorado Internet Kieretsu — a once-thriving organization of Colorado Internet entrepreneurs — the San Francisco-based Keiretsu Forum brings budding entrepreneurs together with potential investors at monthly meetings with the goal of providing early-stage funding for promising startups.

The Keiretsu Forum is far from alone these days. Other West Coast-based angel investing groups have emerged in recent years, including Silicon Valley Angels, Life Science Angels and the Band of Angels.

Last March, John Dilts, formerly the president of the Keiretsu Forum’s Los Angeles chapter, launched another new group, Maverick Angels. That Los Angeles-based group has since expanded into Silicon Valley.

So what does the proliferation of angel investing groups tell us? Is a new cooperative VC business model emerging? Or could it be that the world’s awash in excess capital looking potential investments? Should we be concerned that the VC industry is once again getting a bit frothy and over-enthusiastic?

I’d love to hear from a few early-stage entrepreneurs about whether things are getting easier for Colorado tech startups. Is there ample VC capital out there these days for quality business plans? Will the Kieretsu Forum’s arrival make a positive difference?

Isonics saves its listing

Golden-based Isonics Corp. (ISOND) is back in the good graces of Nasdaq, but it’s not out of the woods yet.

The company received notice from the stock exchange’s hearings department last week that it once again meets the market price requirements to continue its Nasdaq listing, after its shares closed above $1 for 10 consecutive days. This morning ISOND shares were trading at $1.75, well above the required minimum, but far from their $20-plus trading range of two years ago. Last July the company’s shares hit a low of 37 cents.

Isonics — which provides homeland security products, including explosive-detection devices, and a variety of semiconductor products and services — boosted its share price last month with a 1-for-4 reverse stock split. It also announced plans to sell its loss-making life sciences division, which provides isotopes to the health care industry for cancer imaging and treatment.

Two weeks ago, Isonics Chairman, CEO and co-founder James Alexander resigned, while two other company officials with board seats were replaced with independent directors. Former Lockheed Martin executive Christopher Toffales, who owns 10% of Isonics, replaced Alexander as chairman.

The company lost $16.6 million on sales of $23.7 million during its last fiscal year, ending in April 2006.