ParkerVision still could get $1 billion
Two weeks ago, the Northwestern University School of Law announced it received $2 million from Qualcomm Inc. "to fund research that will investigate the role of patents in incentivizing technological innovation."
According to the Chicago school, the research will focus on claims "that patents may, in some cases, limit technological advancement."
That's ironic, don't you think?
As you undoubtedly know by now, Jacksonville-based ParkerVision Inc. is taking Qualcomm to court, alleging that Qualcomm has been advancing its own wireless technology by violating patents held by ParkerVision.
The case is scheduled to go to trial next month in a federal court in Orlando.
The lawsuit drew some headlines last week when U.S. District Judge Roy B. Dalton Jr. issued rulings on motions by both sides for summary judgment on several issues, siding with ParkerVision on some matters and Qualcomm on others.
Since ParkerVision has staked a large part of its future on the outcome of this lawsuit, investors scrutinized the rulings for hints on how the trial may go.
ParkerVision's stock, which had traded mainly between $4 and $5 for the past four months, fell as low as $3.23 by Friday, its lowest level since April, as some traders got nervous that ParkerVision could lose when the case goes to trial.
However, the one securities analyst who follows ParkerVision thinks last week's rulings do not impact the amount of damages ParkerVision could receive.
"No, it doesn't change that at all," said Jon Hickman of Ladenburg Thalmann.
ParkerVision has never publicly stated how much money it is seeking from Qualcomm. The only hint came in the company's quarterly conference call in May, when CEO Jeff Parker said the amount is "significantly greater than our current market capitalization," which was then about $350 million.
Hickman, however, estimates the potential award at $800 million to $1 billion.
He said that ParkerVision is looking for 2 percent of the price of chips sold by Qualcomm, allegedly using ParkerVision's patented technology, going back to 2006. If Qualcomm sold 2 billion of those chips at $25 each, that would mean $1 billion.
In terms of ParkerVision's stock, Hickman estimates that a victory in court could translate into as much as $18.65 per share in value.
Hickman said the judge's rulings last week will narrow the focus of the arguments made during the trial but do not alter ParkerVision's claims for damages.
A victory would be a significant windfall for a company that has produced no revenue at all for three years but aside from the lawsuit outcome, we may be seeing revenue from ParkerVision very soon. Hickman said ParkerVision has recently begun selling components using its technology online on a limited basis. The company hasn't talked about this and Chief Financial Officer Cindy Poehlman did not respond to voice and email messages last week.
It's not expected to be a big moneymaker immediately. Hickman is estimating revenue of $3 million for the company this year.
ParkerVision is also continuing to partner with VIA Telecomm Inc. to use ParkerVision technology in wireless products. That could finally translate into revenue next year.
Hickman estimates the valuation of ParkerVision's stock, excluding the potential litigation windfall, at $2.50 a share. If you add the litigation value, the total value of the stock could be as high as $21.15, so there is a lot riding on the lawsuit.
The trial begins Oct. 7.
Salt Life apparel business sold for $37 million
Delta Apparel Inc., which has been selling Salt Life-branded apparel under an exclusive licensing arrangement, announced last week it bought all of the assets of Salt Life Holdings LLC for $37 million.
Delta said it paid $15 million in cash and $22 million in promissory notes for the business "founded in 2003 by four avid watermen from Jacksonville Beach."
Greenville, S.C.-based Delta is a publicly traded company which specializes in selling casual and athletic products through several distribution channels.
The company said it became the licensee for Salt Life apparel in 2011 and has grown annual sales of the merchandise from $6 million to $20 million in that time.
After Delta's subsidiary, To The Game LLC, acquired the licensing rights, the company last year opened the Salt Life retail store in Jacksonville Beach.
"We built the store really to have a ground zero for Salt Life in Jacksonville Beach," Delta CEO Robert Humphreys said in a telephone interview.
The company said the Jacksonville Beach store serves as a "laboratory" to test new Salt Life merchandise for distribution to other retailers.
In its two years as the licensee, Delta expanded Salt Life's distribution footprint from basically just Florida to more than 1,500 retail locations from Texas to the Northeast, the company said. It also said it has begun selling Salt Life merchandise in stores in California and Hawaii.
The Jacksonville Beach location is the only Salt Life store but now that it owns the brand, Delta will evaluate opening stores in other cities, Humphreys said.
Delta has licensing agreements with the Salt Life Food Shack restaurants but does not own them, Humphreys said. It receives royalty payments from the restaurants.
The first Salt Life restaurant opened in Jacksonville Beach in 2010 and additional locations have opened in St. Augustine and Coral Springs.
Delta reported total sales of $490.5 million for the fiscal year ended June 29, with net income of $9.2 million, or $1.08 a share.
Electrical construction company agrees to buyout
Salt Life wasn't the only local private company announcing a deal with a public company last week.
Melbourne-based Goldfield Corp. announced a $7 million agreement to buy Jacksonville-based C and C Power Line Inc.
C and C has been constructing electrical transmission lines in Florida since 1989 and had revenue of $15 million last year, Goldfield said.
Goldfield, which provides electrical construction services in the Southeast, mid-Atlantic and Western regions, had total revenue of $43.1 million in the first six months this year, with net income of $1.1 million, or 4 cents per share.
The company hopes to complete the acquisition, which is subject to completion of a due diligence review and execution of a definitive agreement, in the fourth quarter.
Landstar revenue 'choppy' but improving
Landstar System Inc. Chairman and CEO Henry Gerkens said last week that revenue trends remain "somewhat choppy" through the first eight weeks of the third quarter, but the trend has improved from the second quarter.
The Jacksonville-based trucking company's second-quarter revenue was 7.7 percent lower than the second quarter of 2012.
During Landstar's mid-quarter conference call update last week, Gerkens said revenue in July was 5.7 percent lower than July 2012 and August revenue was estimated to be 3 percent lower than last year.
"I am very encouraged by the improving revenue trends and would anticipate continual gradual improvement in revenue trends as we move throughout the balance of the third quarter, into the fourth quarter and into 2014," he said.
Based on the trends through the first two months of the quarter, Gerkens said he is "tightening" his revenue and earnings forecast for the full quarter.
Landstar had previously forecast revenue of $670 million to $715 million and earnings of 67 cents to 72 cents a share for the quarter. The new revenue forecast is $680 million to $700 million, with earnings of 67 cents to 70 cents.
The company had revenue of $717.2 million and earnings of 71 cents a share in the third quarter of 2012.
Landstar's stock, which had closed at $56.65 the previous day and was trading near that level for much of Thursday, dropped in the final two hours of trading after the 2 p.m. Thursday conference call. It closed Thursday at $55.89.
Fidelity taking control of environmental company
Fidelity National Financial Inc. seems well on its way to taking control of an environmental company.
Jacksonville-based Fidelity in July increased its investment in Echosphere Energy Services LLC, a water treatment provider to the energy services sector, to 39 percent.
According to a news release last week by Echosphere Technologies Inc., which owns 31 percent of the business, Echosphere Energy has changed its name to Fidelity National Environmental Solutions LLC.
The release also said that Fidelity National Financial Chairman Bill Foley was named chairman of the environmental services company.
Fidelity, a title insurance company that often makes investments in other businesses, has been gradually increasing its stake in the environmental company. After acquiring an additional 8 percent from Echosphere Technologies in July, Fidelity was granted an option to acquire another 12 percent by the end of this year. That would give it 51 percent.
Fidelity hasn't been discussing this investment – all of the information has come from Echosphere – but the name change of the company seems a good indication that Fidelity will make good on its option to become majority owner.