NEW YORK-Cotelligent Inc. has no debt, cash reserves of $22 million and a $100 million line of credit to finance its expanded focus on enterprise connectivity to mobile workers, a market Ovum Inc. projects will total $29 billion by 2006. But the San Francisco-based company also is racing a Sept. 1 deadline to raise its share price or face de-listing from the New York Stock Exchange.
As its second quarter drew to a close, the company had 163 such mobility projects in its revenue pipeline, up from eight at the end of the first quarter, said Curt Parker, chief financial officer, at a presentation in late July at the Exchange.
“Hardware has more features and functionality in a smaller footprint for less money, allowing distributed data to more and more mobile workers. Wired and wireless connectivity is becoming faster and cheaper. And companies are still outsourcing non-core competency items,” said Chris Rudolph, senior director of mobile information technologies.
Cotelligent went public on the Big Board in 1996 as a company focused on consolidating through acquisitions in the information technology consulting industry. Three years later, when Y2K concerns flattened demand for systems integration services, the company began brainstorming about how to reposition itself. The sale of its Human Resources consulting business in June 2000 was one of its early significant steps in the transition.
Cotelligent stock has reached a one-year high of $5 and a one-year low of 25 cents, and closed the trading day July 26 at 60 cents. To retain its NYSE listing, the stock must begin trading above $1 per share by Sept. 1.
In May, when Cotelligent stock reached its 52-week low, the company began a share repurchase program. The company said it repurchased 3 percent of its common shares during the second quarter.
Also in May, the company announced “a refined focus, which has evolved over the past year to offer the best of enterprise IT consulting and mobility solutions, services and applications hosting,” said James Lavelle, chief executive officer.
Cotelligent, which earned about 10 percent of its revenues from wireless-related services last fiscal year, believes a conservative estimate of its growth potential in this arena is between 15 percent and 20 percent annually for the next five years. To define its mission in enabling mobile worker connectivity to company databases, Cotelligent has devised the promotional tag line of “structure without boundaries”.
Last year, Cotelligent bought all rights to JASware middleware, which it has been deploying to its customers for a decade, Lavelle said. The 60,000 active licensees of JASware include Kraft, Hershey Foods Corp., Proctor & Gamble and the Chicago Department of Transportation.
“The JAS network makes wired and wireless irrelevant because it treats them both equally. Data is stored locally. The trick is synchronization between storage and device, and the key is how frequently,” Rudolph said.
“There are also intelligent connections. Some data doesn’t need updating all the time, and you probably don’t want to pull down a multimedia app wirelessly.”
In September, Cotelligent will release a new version of JASware that is based on JAVA, XML and SyncML.
“With the new software evolving to an XML environment, we have an opportunity to extend our presence into markets way beyond what we’re doing now,” Lavelle said.
Recently, Cotelligent announced an agreement to become a WebSphere Everyplace Solution partner of IBM Corp.
“JASware is being built into the WebSphere platform, and this allows us to take advantage of pervasive (computing) technology,” Lavelle said.
Cotelligent also has license and maintenance agreements for FastTrack Sales/Field Force Automation software with 6,000 users in 19 countries. The company has a decade of experience with FastTrack, the CEO said.
By early August, Cotelligent expected to make details public of its new licensing and services integration agreement with Symbol Technologies.
“We feel this is a landmark for our company because it will use our strengths in field force automation middleware and systems integration,” Lavelle said.
