Today, ACT announced that it has received certification for the final component of the ActiveMine wireless mesh network from U.S. Federal Mine Safety and Health Administration (MSHA). The certified telephone fills out the final elements of the Two-Way Communications and Electronic Tracking Requirements of the Mine Improvement and New Emergency Response Act (MINER Act) of 2006 (was it that long ago?). Here is a list of approved "wireless" communications technology as published by MSHA today.
It is difficult not to notice that ACT is the only wireless mesh network approved with both tracking and a telephone device. In addition, it is the only network that offers excess backhaul capacity for additional monitoring, production, and maintenance applications. The Company has announced partnerships already with Motorola (MOT) and an outfit called 3D-P, which provides data collection solutions for mine machinery.
As stated in previous posts, the Company has approximately $6.0 million in contracted backlog that is dependent upon MSHA approval. These deployments can now proceed. In addition, the Company has a $60 million unfactored pipeline with an estimated $20 million factored pipeline. The sales team should be immediately closing the factored pipeline deals. There are no decision barriers left.
A good sign of potential came last week when a fairly significant long-term contract was signed with a Kentucky mine operation that may turn out to be its first 7-figure deal. Although the contract was ahead of MSHA approval, the mine operator was probably well assured by MSHA that certification risk was low.
Rubber Hits Road
Notwithstanding the great news item today, after some quick cork-popping tonight, the Company needs regroup and refocus on closing deals, getting P.Os converted and turning potential into cashflow. This means that management needs to focus hard on not only sales management, but also manufacturing processes, deployment, training, and service quality. From this day forward, these are likely to be the new measurement sticks that shareholders will use to prod management with.
Investors Likely Positive
Clearly the stock should react positively to this long awaited news as investors assume that MSHA certification means at least $6 million worth of actual sales potential before the end of FY2009 (July 31 Y/E). FY2010 sales could range in the mid-teens.
Disclosure: I own shares of ACT, I do not own shares of MOT.