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Symbiat, Inc. (SYBA) |
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CEOCFO Current
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This is a printer friendly page! A new name, strong management team and
transformation into a service company enable Symbiat to grow their business BIO: CEOCFOinterviews: Mr.
Smith, please give us some background on Symbiat. Mr. Smith: “Symbiat, formally Computone Corporation, was primarily a manufacturer of computer products relative to serial I/O, and network attached serial I/O. Computone Corporation acquired a company in 2000, Multi-User Solutions that was in the services business - providing call center, help desk, logistics, and depot repair service through business partners to end-users. What we have done in the last year is divest ourselves of the product business. Going forward, we are going to be 100% in the service business, and the Symbiat name connotes multiple organizations for mutual benefit.” CEOCFOinterviews: Why did you make the decision to do that? Mr. Smith: “The use of serial I/O in the end was in a market called remote console management. That business was focused primarily at the needs of co-location centers and there were about five or six players in that particular market place. With the economic turn and problems with telcos in co-locations, that market turned out to be about a tenth of what it was predicted in the beginning. None of the players that I know of in that particular market place were totally successful. The manufacturing business was capital intensive and the service business was not. We felt that there wasn’t a viable market for serial I/O and remote console management, but we did have a unique offering in the services business.” CEOCFOinterviews: How do you differentiate yourselves from other service providers in this industry? Mr. Smith: “We call
ourselves a boutique service organization. By that we mean we are very focused and
specialized. We have a number of services that we offer such as call center, help desk,
dispatching, on-site service technicians, depot repair and logistic services as well as
some sophisticated integration services. Most of the concepts relating to delivery of
custom services to end-users on behalf of partners, are embodied in our custom software
package. Everyone in the company uses our proprietary software package to record all of
their actions. We differentiate ourselves in that we have created a unique web portal that
allows our partners to view the progress of service calls and track those in real-time.
This allows us to provide the fast and reliable service levels that are required. We
allow the users to ‘look over our shoulder’ in real-time and find out exactly
where calls are. CEOCFOinterviews: Is it the partners that realize the importance of your unique offering or do the end-users know that ultimately they are going to Symbiat? Mr. Smith: “Some do and some don’t depending on the partner; with some partners the service would be offered as their service under their logo and under their offering. We would disappear in the relationship and it would look like partner X’s service offering. In some cases, we have partners that sell Symbiat services under the Symbiat logo and want to take full advantage of our reputation in the business.” CEOCFOinterviews: How do you grow the business? Mr. Smith: “Service business is a trust business and that is why we elected to go with specific business partners. Most of the business partners we are dealing with have a trust relationship with an end-user community. They may be an ISV who provides a software solution to the end- users and has been doing that for some time. They have developed the trust and advisor relationship from that point of view and it is easy to transfer it to a service organization. They may also be a hardware type firm that has been providing mid-range service solutions or storage solutions to end-users in a particular geography or in a specific marketplace for some time. They have developed the trust relationship and so what we do is include our services with their services, and transfer that trust relationship to us which, dramatically reduces the time it takes to introduce the offering.” CEOCFOinterviews: Are there any services that you aren’t offering now that you would like to offer? Mr. Smith: “Our
core competencies are the on-site hardware service, depot repair and call center area. In
the logistics area, in the past, we primarily focused on providing consignment for our
service partners. A new area has emerged because of the economy; it is the type of partner
that we call broker. Some of the brokers are large and have warehouses; they buy equipment
and sell it as pre-owned, very much like the car marketplace for upscale cars. CEOCFOinterviews: You have a relationship with DataAssure recovery, and you say that support for storage systems is a growing part of your business; will you tell us about that? Mr. Smith: “DataAssure is a data vaulting company that provides access to web-based facilities to people so that they can store their information in a secure vault. One of the big problems with small to medium sized businesses or departments is that often they don’t do a good job of backing up critical information. They may do a great job with their servers, but there is a lot of information on desktops and laptops and a lot of that data doesn’t get backed up. It is only when someone has a disaster that they realize how important it is. With a product like DataAssure we can provide back-up facilities that are relatively painless. As we use ISV products and sell our services into small to medium sized businesses or departments of larger companies, we have DataAssure as an additional service offering. For DataAssure, the fact that we are already calling on this business benefits them and for us it provides additional services that we can offer.” CEOCFOinterviews: Will you tell us about the cash and credit position of the company? Mr. Smith: “In the process of shutting down a major side of the company, we inherited a good portion of debt that was related to the operation of that particular business, in addition to the acquisition of the service company. We are cash flow positive in operations today. We do have, on our audit, a statement of whether we are a growing concern or not. We have put together a coalition of the shareholders and debt holders in such a way that we currently have a rights offering from the shareholders as they provide sufficient working capital into the company. Then the debt holders are willing to push out their debts so that we can get the audit comment removed. That is the big deterrent to us raising additional capital in the public marketplace. We think all that will be taken care of before or during the first quarter of the fiscal year. Our fiscal year is March 30th. As we start a new one April 1st, we will start the new year with a clean slate and working capital into the company and a debt structure so that we can successfully do our debt service over an extended period of time.“ CEOCFOinterviews: Why should shareholders and potential investors be interested? Mr. Smith: “Symbiat, being a boutique player in a specific marketplace, maintains gross margins that are unique to our particular segment of the service business. We have a great management team in place. We have three seasoned veterans in Mark Trimue, Leo Bebeau and I. We have worked together over the last fifteen to twenty years in related businesses and have always been successful as a team. We recruited a young man by the name of John Reichel, who is skilled at operations and outsourcing; we have added him to the team and we think we have an outstanding management team that is solid and will support our growth plans for the next couple of years.” CEOCFOinterviews: In closing, how has the service sector been affected by the economic downturn? Mr. Smith: “For the foreseeable future, we have found that through brokers our business is enhanced as people aren’t spending capital for new equipment that has warranties bundled with it; they have to go out and find services for their existing equipment. The attitude of people buying pre-owned equipment that needs to be bundled with service and it is not coming from an original equipment manufacturer has enhanced our business. We see this condition continuing for the next two or three years and after that we will be established in the mid-range and storage area as a substantial player even from a boutique nature. When the economy turns around and over time people start spending more for capital, they will fully realize that they don’t have to pay the premiere prices.”
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