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Basch Report
Jax Daily Record Thursday, Apr. 4, 201904:20 AM EST

The Basch Report: ParkerVision gives up on Milo wireless router

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Jacksonville-based technology company says it plans to preserve resources for its patent litigation efforts.
by: Mark Basch Contributing Writer

After a year and a half of sales disappointments, ParkerVision Inc. said Monday it is giving up on its in-home wireless product called Milo.

Jacksonville-based ParkerVision, which has been developing wireless technology for years but has not successfully marketed a product with it, now is focused solely on its patent infringement lawsuits against several major electronics companies.

Introduced in the fall of 2017, the company said Milo offered superior performance to other in-home wireless routers. 

But sales reached just $100,000 by the end of that year and in its annual report filed Monday, ParkerVision said 2018 sales were only $135,000.

ParkerVision began sharply cutting expenses in mid-2018 and in its third-quarter report, the company said it had to curtail marketing efforts for Milo to save money.

In a news release Monday, the company said it expects to “sell or otherwise exit Milo product operations” to preserve its resources for its patent litigation efforts.

In a brief conference call for investors Monday, CEO Jeff Parker gave updates on the progress of three pending patent infringement lawsuits but didn’t even mention Milo. 

ParkerVision has spent several years in litigation alleging major technology companies are illegally using its patented wireless technology.

“It seems to be that the norm with patent litigation these days is an exercise in hurry up and wait,” Parker said Monday.

ParkerVision last year closed its second office in Lake Mary and severely cut staff. According to its annual report, it had 14 full-time and two part-time employees as of Dec. 31, down from 45 full-time and five part-time workers at the end of 2017.

ParkerVision recorded a net loss of $20.9 million, or 85 cents a share, for 2018. The company, founded in 1989, has lost money every year since its initial public offering in 1993.

Big stock moves for Jacksonville-based firms

ParkerVision’s stock doubled in value in the first quarter. But starting from a year-end 2018 value of 14 cents, that represents an increase to a closing price of just 28 cents at the end of the quarter.

Another Jacksonville-based company that started the year priced below $1, Drone Aviation Holding Corp., had a bigger first-quarter gain of 110% as the stock rose from 50 cents to $1.05.

But the first quarter was good to a lot of stocks, both nationally and in Jacksonville.

The S&P 500 index rose 13.1%, its biggest quarterly gain since 2009, according to CNBC. The Dow Jones industrial average rose 11.2% in the quarter.

Eighteen of 20 companies headquartered in the Jacksonville area registered gains in the first quarter, with 14 of them beating the S&P 500 performance.

The top four were stocks that were trading below $1 when the year started. Besides Drone Aviation and ParkerVision, GEE Group Inc. rose 71% and Duos Technologies Group Inc. rose 48%.

Among more conventionally priced stocks, the winner was Rayonier Advanced Materials Inc., which rose 27% to $13.56.

The two stocks that declined in the quarter were Stein Mart Inc., down 7%, and Patriot Transportation Holdings Inc., down 5%.

Stein Mart’s stock, which has hovered near the $1 level, edged lower over the last two weeks of the quarter after it reported a decline in sales for the fourth quarter.

Patriot, which reported lower earnings for its first quarter ended Dec. 31, bounced up and down during the quarter.

Shoe Carnival jumps on strong earnings

Shoe Carnival Inc. was the top performing stock on Nasdaq a day after reporting better-than-expected earnings.

The footwear chain controlled by former Jacksonville Jaguars owner Wayne Weaver reported adjusted earnings of 9 cents a share in the fourth quarter ended Feb. 2, which was 2 cents lower than the fourth quarter of fiscal 2017.

Total sales of $234.7 million were 3.5% lower than the previous year.

However, Shoe Carnival’s earnings were 3 cents higher than the consensus forecast of analysts and sales were $1.7 million above the consensus forecast, according to Zacks Investment Research.

The company also reported a strong increase of 4.7% for comparable-store sales, which measures sales at stores open for more than one year.

Shoe Carnival is forecasting 2019 earnings of $2.60 to $2.70 a share, up from $2.45 in fiscal 2018, with comparable-store sales rising by a low single-digit percentage.

“Our merchant team continues to do a great job of identifying new trends, categories and key items of the season. They then buy these items with sufficient depth so that we can take advantage of key shopping periods like back-to-school and holidays,” CEO Cliff Sifford said in Shoe Carnival’s conference call with analysts.

Weaver is chairman of Shoe Carnival and his family is the company’s largest shareholder, controlling about 31 percent of the stock.

Shoe Carnival’s stock jumped $6.82 to $37.30 on March 27 after the earnings report. The 22.38% gain was the best for all Nasdaq-listed stocks that day.

Analysts say lower rates benefit FNF

Fidelity National Financial Inc. rose a modest 16% to $36.55 in the first quarter, but one analyst is expecting bigger gains ahead.

“We believe a lower interest rate regime has emerged that will be favorable for home purchase activity,” Piper Jaffray analyst Jason Deleeuw said in a research note Monday as he raised his price target for Fidelity from $44 to $49.

A decline in rates also could increase mortgage refinancing activity, which would benefit the Jacksonville-based title insurance company, he said.

Although Fidelity’s shares are up this year along with the rest of the market, Deleeuw said the stock has declined about 12 percent since an early 2018 rise in mortgage rates. So falling rates would be a big lift for shareholders.

“A significant economic downturn that hurts commercial is the key risk to our upgrade,” he said.

“However, a modest economic downturn may still be positive for FNF as the benefits to home purchase activity from lower interest rates may offset the negatives from modestly weakening employment.”

Deleeuw also weighed in on Fidelity’s pending acquisition of title insurer Stewart Information Services Corp., after the company extended a deadline to complete the deal by three months.

“We continue to believe the deal will be approved, but we acknowledge that the uncertainty level has increased,” he said.

Acquisitions boost ARC Group revenue

The owner of the Dick’s Wings & Grill restaurant chain more than doubled sales in 2018, helped by the acquisition of another chain.

Jacksonville-based ARC Group Inc. reported revenue of $9.5 million, up from $4.3 million in 2017. 

The increase was helped by $3.8 million in revenue from the acquired Fat Patty’s restaurant chain, but the company said it also increased revenue by 30% at its Dick’s Wings business.

ARC Group also has an agreement to acquire the Tilted Kilt Pub and Eatery chain, which will increase annual revenue to $25 million, CEO Seenu Kasturi said in a news release Monday.

“At the same time, we are evaluating a number of other attractive acquisition targets in the marketplace that would provide us with additional brands and offer us product and geographic diversification,” he said.

Despite the increase in sales, the company recorded a net loss of $282,483, or 4 cents a share, in 2018.

Ameris merger meetings set

Ameris Bancorp and Fidelity Southern Corp. scheduled special shareholders meetings for May 6 to vote on their proposed merger.

Ameris, which has its executive offices in Jacksonville, agreed in December to buy Atlanta-based Fidelity Southern for $751 million in stock.

The merged company would have assets of $16.6 billion and 191 bank branches in Florida, Georgia, Alabama and South Carolina.

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