NIHK News Encouraging

Nighthawk was out with some reassuring news pre open today, and I am starting to become more optimistic on the situation.

CEO Doug Saathoff was very quiet over the course of the summer, but of late has started communicating with shareholders again.

Today, he was out with commentary stating their legacy business would hit a new all time high this year and order flow was reasonably robust.

In a letter to shareholders, he stated he would update everyone on the status relative to the set top boxes in the near future.

It’s quite refreshing to see the company open up a little after all these months of silence.

I’m now pretty comfortable in assuming their business has not eroded much in the teeth of this recession, and a little positive news on the set top boxes might just get the stock rolling again.

I’m looking forward to his commentary on the set top box business.

Meanwhile, as you can see from the chart, the stock remains embroiled in a dismal malaise. I don’t expect this microcap stock to start trading as well as their larger cap bretheren in the short term. It’s going to take a bit of time to see retain investors back in the market buyind small stocks.

Eventually, volume and liquidity will come back, and some of these kinds of stocks will start performing quite a bit better.

NIHK might be a good candidate for a rebound later in 2008 and into 2009.

I’m looking forward to further updates from the company.

9 thoughts on “NIHK News Encouraging

  1. SOOOO,do you still think the strategy of buying when no one else wants them is still smart, and whart are you doing right now are you selling, or are you buying…… man I tell ya this is a mess.

    Editor: I have sold a few shares, but the majority of my position is intact. I sold them because I needed the money. With NIHK- my main concern is cash levels. The last 10Q showed great sales growth once again, but continuing ongoing losses and very low cash levels. We are told revenues are going to be record again. However, there has been no update on the set top box order delivery, so we really don’t know where they are. I would not be averaging down in companies that could need to raise capital as I believe it will be nearly impossible to raise money in the current environment. It could end up being a great buy, but I’d like more information on what they are doing about their cash situation first.

  2. With the slowing economy and the credit crisis, do you think A)People are still going to be interested in buying the set-tops/CEO’s and B) NIHK can stay afloat without taking more money out? Also, what are your thoughts on how long til we can come out of this market? Thanks

    Editor: Those are very good questions, and really get down to the crux of the matter on NIHK. First, I have no indication of how they are doing with the set top boxes. The most recent update indicated the legacy power disconnect business was seeing new highs, but the set top box side represents the bigger side at this point. The CEO indicated an update on the set top box business would be forthcoming, but it hasn’t happened yet, and that’s clearly disappointing. On the cash side we need an understanding of where they are as well. This is the most major concern to me, as if the company has to raise cash in this environment, it either won’t get done, or it will be done under extremely onerous terms. I am concerned without question on this one because of the cash issue. On the market- I believe the waterfall collapse will end this month, but we won’t return to any sort of reasonable market until 2009. 

  3. This might help you have you heard from Doug?
    Doug responded to an e-mail. 13-Oct-08 11:01 am Doug kindly responded to an e-mail I sent him and he did so quite promptly. He stated that he can not say anything that isn’t public but noted that we should see an update on the set-top before the release of the Q3 results, which is around mid-November. Also, he said that just because there is no news we shouldn’t assume that is a sign of bad news. He said that anything he stated from the previous filing should be on track as he has not said anything from the contrary. His overall letter was very friendly and positive. I still believe in this company and with the market seemingly emerging from its negative state, I feel a good turn out from Q3 and the anticipated update on the set-top should reassure investors faith in this company.

    Editor: Thank you for sharing that information. I have reached out to Doug a number of times, and he has politely declined to get into anything specific on the company until he is ready. Hopefully he is on track with the set top boxes and is bringing in additional business. One thing I can tell you for certain- he is working hard on getting the margins up in the set top boxes- which means lowering the cost of manufacturing. Eventually we will know what’s going on.

  4. Some words from Doug:
    Good morning all,

    The following release went out this morning and announces the launch of a new product that incorporates two-way wireless technology. To put it simply, this technology is what we need to take us to the next level as a company. We’ve spent the past several years growing and establishing a reputation within our markets selling the same, reliable one-way products. Now it’s time to introduce new capabilities to our existing customers and to prospective customers in our markets, and this gives us the communications platform to do just that. In addition, this gives us a common platform that can be used in all of our devices. For example, instead of using different circuit boards within the NH100, PT1000 and the CEO700 as we’ve done in the past, we will be able to use the same circuit boards within most, if not all, of our new products, resulting in production efficiencies.

    The initial benefits are simple – our customers will be able to receive a confirmation that the command to turn on, off or reboot was successfully received and carried out. Using two-way paging or cellular technology, combined with our proprietary Utility WebConnect software, devices can ‘report in’ so that customers can know the status of their devices. But beyond that, this platform will serve as the foundation for exchanging information between the remote site and a centralized facility. Once data is sent back and forth, it opens up a wealth of opportunity to bring information back from remote sites, adding to our historical ability to control power at those remote sites. The ability to transfer data from remote sites opens doors to providing service-based activities, such as collecting data from the field. I look forward to discussing these opportunities in the future with you, and how they can have a positive impact on the Company.

    Have a great week!


    Editor: This sounds like an exciting direction to go product wise. I’d love to see this coupled with orders. One issue on this one- there’s been no indication there were any sales of set top boxes in Q3, so I hope the numbers weren’t terrible. We’ll see. It doesn’t mean they didn’t have orders- they just haven’t disclosed it if they have.  Even if it’s bad, it could be already priced into the market.

  5. This should help you answer your question about sales. From the pr this morning.”We expect to report record results for the third quarter later this month, and the introduction of new, enhanced products gives us the opportunity to continue the positive trends we’ve seen for the last several quarters.”

    Nighthawk Systems Introduces New Two-Way Wireless Product LineLast update: 11/3/2008 7:00:08 AMSAN ANTONIO, Nov 03, 2008 (BUSINESS WIRE) — Nighthawk Systems, Inc. (NIHK) (“Nighthawk”), a leading provider of wireless and IP-based control devices and solutions, announced today that it is launching a new, two-way wireless suite of products. These products will incorporate enhanced capabilities and will provide an acknowledgment that commands have been received and carried out successfully. Like its traditional one-way wireless products, Nighthawk’s new suite of products will utilize available public networks so that customers can avoid costs associated with building, operating and maintaining a private network. Developed primarily to meet the needs of the utility industry, the technology has initially been incorporated into Nighthawk’s new CEO800 series of whole house disconnect products, which also enable current limiting and back-feed detection. Used in combination with Nighthawk’s Utility WebConnect(TM) software, this technology will enable the reliable control capabilities that the Company has become known for, and show the status of devices in the field in an easy-to-read format. The same two-way communications platform and logic board utilized in the CEO800 series will be offered in Nighthawk’s other power control products, which are commonly used to turn on and off or reboot mission-critical network components. H. Douglas Saathoff, Nighthawk’s CEO, commented, “We expect this new, proprietary technology to be the platform for further, more rapid growth for the Company. The ability to transfer data back and forth between our customer and remotely located devices opens doors not only to additional product sales, but to the generation of recurring, service-related revenues in the future. We expect to report record results for the third quarter later this month, and the introduction of new, enhanced products gives us the opportunity to continue the positive trends we’ve seen for the last several quarters.”

    Editor: Seems promising. 

  6. I agree more encouraging news but no sales. I always thought NIHK was out of advanced metering because they couldn’t compete with the owners of this space like Itron. Would love to see them start to make large sales and maybe this is the way. Still nervous about 3rd quarter results, very nervous but still optimistic long term.

    Editor: I’d like a little more visibilty from the company. However, a worse case scenario is probably priced into the stock.

  7. What You think about Obama victory will mean for small companies producing in America. in this case for nihk.

    Editor: I don’t think the Obama victory has much of an effect one way or another. In my view, it’s all about the recession. The recession is clearly going to bring lower hotel revenues, which means they might not invest in infrastructure improvements- the set top boxes. The utilities should be still willing to buy the remote disconnect units. Also, the bear market still goes on. That really has nothing to do with Obama.

  8. Well NIHK has pulled off a biggy here whats your thoughts.Back this up with record earnings this week and I think the fire has been lite to move the stock much higher.
    Nighthawk Systems Signs Agreement with ItronLast update: 11/12/2008 7:00:01 AMSAN ANTONIO, Nov 12, 2008 (BUSINESS WIRE) — Nighthawk Systems, Inc. (NIHK) (“Nighthawk”), a leading provider of wireless and IP-based control devices and solutions, announced today that it has signed an agreement with Itron, Inc. (ITRI) under which Nighthawk has granted Itron a nonexclusive right to promote, market and sell Nighthawk wireless power control products to its utility customers. Nighthawk’s wireless, whole house disconnect technology will complement Itron’s proven automated meter reading (AMR) data collection suite, ChoiceConnect(TM), providing electric utilities with two-way communications capability to their customer’s meter. The utility will be able to connect, disconnect, or limit power to customers based on meter readings without rolling a truck and sending field personnel to the customer’s location. Nighthawk’s one-way CEO700 and two-way CEO800 series of disconnect units will enable the Itron team to tailor the best solution for their customers. Nighthawk’s collar-based solutions fit directly behind the Itron-equipped meter allowing for virtually seamless integration of a remote disconnect solution for either existing or new customers. Itron provides a uniquely comprehensive portfolio of products and services to utilities in over 130 countries. Itron is the market share leader in the North American AMR market, deploying both drive-by and fixed network meter reading technology that allows meter reading to be performed without actually viewing or touching the meter with any other equipment. H. Douglas Saathoff, Nighthawk’s CEO, commented, “I’m very happy to announce that we’ve entered into this agreement with Itron, which formally associates Nighthawk with perhaps the most well-known and well-respected provider of metering equipment in the world today. This agreement will allow Itron to incorporate Nighthawk’s technology into their own product offerings, and opens up the Itron sales and distribution network to Nighthawk. This is a significant step in the evolution of Nighthawk.” “Itron certainly recognizes the potential value of combining Nighthawk’s growing wireless control capabilities with our ChoiceConnect suite,” said Philip Mezey, senior vice president and COO of Itron North America. “By building strategic partnerships with providers such as Nighthawk, we continue to enhance our innovative solutions, further helping utilities to better manage demand for an energized future.” About Nighthawk Systems: Nighthawk is a leading provider of intelligent devices and systems that allow for the centralized, on-demand management of assets and processes. Nighthawk products are used throughout the United States in a variety of mission critical applications, including remotely turning on/off and rebooting devices, activating alarms, and emergency notification, including the display of custom messages. Nighthawk’s IPTV set top boxes are utilized by the hospitality industry to provide in-room standard and high definition television and video on demand. Individuals interested in Nighthawk Systems can sign up to receive email alerts by visiting the Company’s website at . About Itron: Itron is a leading technology provider and critical source of knowledge to the global energy and water industries. Itron operates in two divisions: as Itron in North America and as Actaris outside of North America. Our company is the world’s leading provider of metering, data collection and software solutions, with nearly 8,000 utilities worldwide relying on our technology to optimize the delivery and use of energy and water. Itron delivers industry leading solutions for electricity, gas and water utilities by offering meters; data collection and communication systems, including automated meter reading (AMR) and advanced metering infrastructure (AMI); meter data management and utility software applications; as well as comprehensive project management, installation and consulting services. To know more, start here: .

    Editor: This is a major breakthrough. No question.

  9. Wow more news today. How signicant is this signing with Itron? Will this dramatically increase sales? Odviously the margin on sales through Itron will reduce margins, but increase volumes will make up for that?

    Editor: This is probably company changing news. Fantastic. I wasn’t prepared to cover it as I didn’t have any sort of heads up in advance, but will later today. I love this news.