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Having been in business since the inception
of the RFID industry, the ability to apply the base technology to real
production environments is giving Sirit a huge advantage in the marketplace
Technology
RFID
(SI-TSX)
Sirit Inc.
372 Bay Street, Suite 1100
Toronto, Ontario M5H 2W9 Canada
Phone: 416-367-1897
Norbert Dawalibi
President and CEO
Anastasia Chodarcewicz, CA, CPA
Chief Financial Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published – June 22, 2007
BIO:
Norbert Dawalibi - President and CEO
In addition to overall corporate leadership, Norbert Dawalibi is primarily
responsible for strategic planning, strategic initiatives (including joint
ventures, partnerships and licensing), acquisitions, and financing.
Most recently, Mr. Dawalibi was President and CEO of Psion Teklogix, a $300
million company and global provider of solutions for mobile computing,
wireless data collection and RFID. In addition to his deep understanding of
the RFID technology and markets, Mr. Dawalibi is a proven and skilled
manager with a solid background in sales and marketing resulting from his 24
years at IBM where he progressed through increasingly executive roles in
Canada and the U.S., including managing marketing for IBM Systems in the
Americas and leading sales operations generating in excess of $1 billion in
revenue.
Anastasia Chodarcewicz, CA, CPA - Chief
Financial Officer
As Chief Financial Officer, Anastasia Chodarcewicz is responsible for all
aspects of Finance and Budgeting, Mergers and Acquisitions, Investor
Relations, Human Resources, IT as well as all regulatory reporting for Sirit.
Prior to joining Sirit in February 2003, Miss. Chodarcewicz spent 8 years at
PricewaterhouseCoopers LLP in progressively senior roles specializing in
Financial Due Diligence, Project Management and Audit Service Engagements
for small private entities through multi-million dollar global enterprises
in North America and Europe.
Company Profile:
Sirit Inc. (TSX: SI) is a leading
provider of Radio Frequency Identification (RFID) solutions worldwide.
Harnessing the power of Sirit's enabling-RFID technology, customers are able
to more rapidly bring high quality RFID solutions to the market with reduced
initial engineering costs. Sirit's products are built on more than 13 years
of RF domain expertise addressing multiple frequencies (LF/HF/UHF), multiple
protocols and are compliant with global standards. Sirit's broad portfolio
of products and capabilities are easily customized to address new and
traditional contactless market applications including Near Field
Communication, Supply Chain & Logistics, Cashless Payment (including
Electronic Tolling), Access Control, Automatic Vehicle Identification,
Inventory Control & Management, Asset Tracking and Product Authentication.
CEOCFO: Mr. Dawalibi, what was your vision
when you became CEO of Sirit and where are you today?
Mr. Dawalibi: “Sirit has been in
business for a long time and has been involved fairly successfully in the
RFID business in a number of application areas. The vision was to take this
company and grow it at a much faster pace and make it profitable and strong
and successful. That is where my focus has been in terms of building the
company and making it a leader in the RFID technology market place.”
CEOCFO: How
has Sirit become a leader?
Mr. Dawalibi: “Last year (2006) was a
very successful year for us. We increased our revenue by 40%. We also raised
capital to make us a stronger company; we raised about $12 million. We did a
couple of acquisitions where we acquired new technology, new customers and
gained access to new markets. We built a stronger company and a company that
demonstrated leadership in the market place. We delivered to the market,
products that are being recognized by major customers as being best-of-breed
in terms of capabilities, performance and quality. We continue to be very
successful in the markets where we compete. For instance in the tolling
market place in the western states in the U.S., we continue to win almost
all the business there against our competitors.”
CEOCFO:
What is a typical contract?
Mr. Dawalibi: “There are different types
for different customers. We recently announced with an agency in California,
a $10 million contract over three years to provide tolling transponders or
tags for their highways, bridges and so on. That is an extreme example of
the type of contracts we get. Another recent contract that we announced was
with a company called BenQ, where we are helping them integrate RFID and
something called Near Field Communication or NFC technology, in their mobile
phones that they will be building in the future. There is quite a range of
the types of contracts that we have.”
CEOCFO:
Please tell us a bit about the RFID industry, and what are some of the
trends of which you are able to take advantage?
Mr. Dawalibi: “RFID is a very exciting
technology right now, which really has lots of application areas. It is an
industry that has been around for awhile that has seen in the last few
years, lots of interest and investment in terms of development and research.
The concept behind RFID is simple; you put in tags or chips that uniquely
identify items, vehicles or people, which can be read over the air using RF
(Radio Frequency) technology. Using RFID (Radio Frequency Identification)
technology you can read lots of items at the same time. Eventually in the
future everything will have ID tags on them. You can think of automatic
vehicle identification applications, parking, tolling, and payments. You see
a lot of credit cards being issued today, which use RFID tags inside of them
so you do not have to give your card to someone or swipe it; it can be read
by placing it close to the reader. Asset management is another big
application area, being able to know about the assets of an enterprise, even
a hospital. There are numerous application areas and many investments going
into that technology, because there are so many ways it can be used and so
many potential benefits to that technology.”
CEOCFO: How
do you decide where to focus?
Mr. Dawalibi: “We look at market studies
to figure out where the high growth opportunities are. We look at our
capabilities and our skills, because we have a set of expertise and skills
that we have been building over the last thirteen years. We look at how we
apply that set of capabilities to the market that has potential to us. We
have been in the business of using RFID for the last 13 years to identify
and deal with motor vehicles. We apply it in those new types of
applications.”
CEOCFO: Are
you primarily in North America?
Mr. Dawalibi: “We are primarily in North
America but we do business globally.”
CEOCFO:
What is the financial picture at Sirit today?
Mr. Dawalibi: “We do not have any debt.
We have a substantial amount of cash on our books. With the growth that we
are seeing, we forecast that we will be cash neutral by the end of this
year. We feel very comfortable in terms of our financial situation. We did
raise a fairly substantial amount of capital last year.”
CEOCFO: You
mentioned you were best-of-breed in many areas; what do you know at Sirit
that perhaps others do not? What makes your product superior?
Mr. Dawalibi: “There are a lot of new
companies who have started getting involved in RFID because they looked at
the opportunity and realized there was a very substantial marketplace here.
In reality, we have been doing RFID for the last thirteen years. RFID is
more complicated than traditional information technology applications
because you have to deal with the environment. There are complications in
terms of how you actually make it work because of the nature of radio waves,
such as if you have metal, it gets reflected, if you have water it gets
absorbed. How to make it work is not a simple thing, it takes a lot of
experience, hard lessons learned. We have been in that business almost from
the beginning. We have outstanding talent and skills. We believe we know
better than our competitors how to take the base technology, how to apply
it, and how to put it in a way that it actually performs in a real
production environment. This is a huge differentiator in the marketplace.”
CEOCFO:
What do you see two or three years down the line for Sirit?
Mr. Dawalibi: “I am excited about the
opportunities that we have. We have some strong business in our traditional
AVI or Automatic Vehicle ID application business. There are a number of very
exciting new applications that are coming in the marketplace. We have been
talking about supply chain for a long time, it is taking a long time to
start happening in the marketplace, but there are a lot of good signs that
it is happening and it will be huge in terms of volume and in terms of
opportunity. What we are seeing is a large number of new application areas.
People are very creative, they see the technology capabilities now, and they
are applying it in a number of areas and I talked about some of those;
cashless payments, asset management, product authentication. In
pharmaceuticals, where there is a huge amount of counterfeiting going on,
being able to uniquely identify every bottle of drugs from the time it is
manufactured through the supply chain all the way to the pharmacy becomes
critical. Applying that technology in that environment can be extremely
beneficial. When I look two or three years down the road, I see a Sirit as a
very successful company and the technology being used successfully in a
large number of applications.”
CEOCFO:
What challenges do you see going forward?
Mr. Dawalibi: “A challenge is always
people - making sure that our people are motivated and that we have the
right people that can actually go and execute in the marketplace. That is
always a concern in running a business. The second concern is how fast some
of those application areas and some of those opportunities will develop. The
supply chain is a good example, taking longer than most people were
predicting. What is great news for Sirit is that because we are in so many
application areas and because we do have a strong base in terms of our
business, we do not depend on any one of those opportunities happening in a
certain amount of time. We know they will happen and what we want to make
sure of and what we are well positioned for is that we will be successful
and we will be there when it does happen.”
CEOCFO: Is
the investment community paying attention to Sirit these days?
Mr. Dawalibi: “We are starting to see
more interest. If you remember three years ago when Wal-Mart issued an
edict to their suppliers that they had to start implementing RFID for their
goods shipped, there was a huge interest in the marketplace for RFID
companies including ours. That huge interest and huge expectation were a
little bit disappointing, because the market had taken longer to develop in
that environment. Therefore, we did lose some investor interest, but now
based on our recent results, investors are realizing that the technology is
real, Sirit is real, our opportunities are real, and our business is real.
The opportunities have not gone away, if anything they could be even bigger
than what most people were forecasting a few years ago. The timing is still
uncertain, but there is no doubt that it will happen. From that perspective
we are seeing quite a bit of investor interest especially in the last few
months.”
CEOCFO:
What should readers remember most about Sirit?
Mr. Dawalibi: “Sirit is a supplier of
RFID technology. It is not a simple technology; it is a fairly complex
technology. The differentiator for Sirit is that we know how to make it work
in a real world environment. If customers are looking for practical
applications of technology, and they are looking for someone that can make
it work in their operations and environment, then Sirit is an excellent
choice for them.”
Ms. Chodarcewicz:
“With that in my mind what would set Sirit apart is the fact that we have a
strong recurring revenue stream such that we are not wholly dependent on one
particular vertical or one particular strategy. As compared to many of our
competitors, we have a big portion of our business that focuses on vehicle
tracking, vehicle tolling and vehicle management. That part of our business
is roughly about 80% of revenues today. That provides us with a recurring
revenue stream. Regardless of how fast or slow the market in different areas
takes off, we are a long-term player. We have probably been around longer
than most of the RFID companies in business today. We are a pure play RFID
business and I think that really sets us apart. People tend not to realize
that we are going to be here for the long-term and we are going to use our
strengths to keep us in this market.”
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