Tollgrade Communications (TLGD)

[MWM]

When she breaks $8.30 this will fly!

[MWM]

Tollgrade Reports Highest Quarterly Profit in Nearly a Decade
Doubles Second Quarter 2010 Net Income

Press Release Source: Tollgrade Communications, Inc. On Thursday October 28, 2010, 7:30 am EDT

PITTSBURGH, Oct. 28, 2010 (GLOBE NEWSWIRE) -- Tollgrade Communications, Inc. (Nasdaq:TLGD - News), a leading supplier of network service assurance test products and solutions, today reported revenue of $11.1 million and net income of $2.5 million or $0.19 per share on a fully diluted basis for the third quarter ended September 30, 2010. The Company's net income for this quarter was more than double the second quarter 2010 net income of $1.2 million and was the highest quarterly net income since the second quarter of 2001. Although third quarter 2010 revenue was down slightly compared to the third quarter 2009 revenue of $11.3 million, due primarily to timing of customer orders, net income increased by approximately $9.6 million from the loss of approximately $(7.1) million posted in the third quarter of 2009.



"The Company performed very well during the quarter, closing a key customer contract and posting positive net income for the second consecutive quarter. Although certain projects that we hoped would be included in our third quarter revenues have been delayed, we anticipate that they will close in the fourth quarter or early in 2011. Our primary focus still continues to be on our core customers to ensure they receive the highest levels of service. We are working hard to secure revenues from both new and existing customers. For example, in the third quarter, we finalized a new multi-year long term maintenance contract with a major European telecommunications provider. Lastly, during the quarter, we generated approximately $5.4 million in cash from operations," said Edward Kennedy, President and Chief Executive Officer.



As of September 30, 2010, the Company's cash and short-term investments position was $69.6 million compared to $66.0 million at December 31, 2009. The increase of $3.6 million primarily reflects cash generated from operations.



Fourth Quarter 2010 Revenue Outlook



"We expect revenue to be in the range of $10 million to $13 million for the fourth quarter of 2010. Our revenue range for guidance reflects several revenue opportunities that were deferred from the third quarter, but which we believe may be recognized in the fourth quarter of 2010 or early in 2011," said Mr. Kennedy

[MWM]

Tollgrade Communications Inc. : Approximately 897,300 shares changed hands, a 3,116.4 percent increase over its 65-day average volume. The shares rose $.05 or .7 percent to $7.65.

[MWM]

14:17:03 292000 7.55 NASD ADF tq
14:16:54 100000 7.52 NASD ADF bb ex
14:16:45 392824 7.49 NASD ADF bb ex

[MWM]

TLGD starting the move!

[MWM]

Excellent volume late day here, I want some follow thru this time Damn It!

Go Baby Go!

[MWM]

TLGD I think u are ready for the next leg up!

Excellent consolidation here but it's time buddy!

[MWM]

Somebody smacking here again here...

[MWM]

Someone just grabbed a nice chunk eod here...

[MWM]

Chart is starting the grind back up here imo...

[MWM]

Look at the time and sales, something is up...

16:26:15 8905 7.355 + NASD ADF W tq (F)
16:25:27 4700 7.3525 - NASD ADF W tq (F)
16:24:36 220 7.355 + NASD ADF W tq (F)
16:23:33 441 7.355 + NASD ADF W tq (F)
16:22:54 9100 7.34 - NASD ADF W tq (F)
16:22:36 6484 7.3525 + NASD ADF W tq (F)
16:21:51 1100 7.3525 + NASD ADF W tq (F)
16:21:48 3500 7.34 - NASD ADF P tq (SF)
16:20:27 6484 7.3525 + NASD ADF W tq (F)
16:20:06 1430 7.3384 - NASD ADF W tq (F)
16:18:39 1850 7.3525 + NASD ADF W tq (F)
16:17:51 1200 7.34 - NASD ADF P tq (SF)
16:09:03 600 7.37 + NASD T ex (F)
16:00:00 100 7.26 - NASD T ex (F)
16:00:00 812 7.34 - NASD ADF dv ex (SF)
16:00:00 444 7.34 - NASD ADF dv ex (SF)
16:00:00 0 7.35 + PAC M
16:00:00 133 7.35 + PAC bb ex
16:00:00 0 7.34 + NASD M
16:00:00 91042 7.34 + NASD xt ex
15:59:57 100 7.22 - BATS bb ex
15:59:57 100 7.22 - BATS bb ex
15:59:57 100 7.23 - NASD bb ex
15:59:57 100 7.24 + NASD bb ex
15:59:57 100 7.24 + NASD bb ex
15:59:57 100 7.23 - NASD bb ex
15:59:54 100 7.29 - BATS bb ex
15:59:54 100 7.29 - NASD bb ex
15:59:54 100 7.29 - NASD bb ex
15:59:51 450 7.35 + NASD
15:59:51 300 7.35 + NASD
15:59:51 100 7.35 + NASD
15:59:51 1000 7.35 + NASD
15:59:51 100 7.35 + NASD
15:59:51 100 7.24 + PAC bb ex
15:59:51 100 7.24 + PAC bb ex
15:59:51 300 7.23 - NASD bb ex
15:59:51 100 7.24 - NASD bb ex
15:59:51 100 7.24 - NASD bb ex
15:59:51 100 7.36 + PAC
15:59:39 100 7.29 + PAC bb ex
15:59:33 135 7.24 - BATS bb ex
15:59:33 100 7.24 - BATS bb ex
15:59:30 100 7.29 + NASD ADF bb ex
15:59:30 100 7.22 - BATS bb ex
15:59:30 100 7.22 - BATS bb ex
15:59:30 100 7.28 - PAC bb ex
15:59:30 100 7.29 + NASD bb ex
15:59:30 100 7.28 + NASD bb ex
15:59:27 700 7.23 - NASD bb ex
15:59:24 900 7.29 + PAC bb ex
15:59:24 100 7.23 - NASD bb ex
15:59:24 200 7.23 - NASD bb ex
15:59:24 300 7.29 + NASD bb ex
15:59:24 100 7.29 + NASD bb ex
15:59:21 100 7.22 - BATS
15:59:18 1000 7.27 + NASD bb ex
15:59:15 100 7.22 + BATS bb ex
15:59:15 100 7.21 - PAC bb ex
15:59:15 300 7.24 - PAC bb ex
15:59:06 235 7.27 - NASD bb ex
15:59:03 261 7.30 + BATS bb ex
15:59:03 500 7.30 + NASD bb ex
15:58:57 100 7.29 + NASD bb ex
15:58:57 100 7.29 + NASD bb ex
15:58:57 393 7.29 + NASD bb ex
15:58:57 100 7.29 + NASD bb ex
15:58:57 100 7.29 + NASD bb ex
15:58:57 100 7.29 + NASD bb ex
15:58:54 100 7.29 + NASD
15:58:54 100 7.28 - NASD bb ex
15:58:51 100 7.28 - NASD
15:58:48 311 7.30 - NASD bb ex
15:58:48 100 7.30 - NASD bb ex
15:58:39 100 7.30 - NASD
15:58:36 100 7.30 - NASD bb ex
15:58:36 100 7.30 - NASD bb ex
15:58:30 100 7.30 - NASD bb ex
15:58:30 100 7.31 - NASD bb ex
15:58:30 200 7.32 - NASD bb ex
15:58:30 100 7.32 - NASD bb ex
15:58:30 100 7.33 - NASD bb ex
15:58:30 100 7.33 - NASD bb ex
15:58:30 100 7.33 - NASD bb ex
15:58:30 100 7.33 - NASD bb ex
15:58:27 200 7.34 - NASD bb ex
15:58:27 100 7.34 - NASD bb ex
15:58:18 100 7.35 - NASD bb ex
15:58:18 200 7.35 - NASD bb ex
15:58:18 100 7.35 - NASD bb ex
15:58:15 100 7.35 - NASD bb ex
15:58:15 100 7.35 - NASD bb ex
15:58:12 100 7.35 - NASD bb ex
15:58:03 100 7.35 - NASD bb ex
15:58:03 100 7.35 - NASD bb ex
15:58:03 100 7.35 - NASD bb ex
15:58:03 100 7.35 - NASD bb ex
15:58:03 100 7.35 - NASD bb ex
15:58:03 200 7.35 - NASD bb ex
15:58:03 100 7.35 - NASD bb ex
15:57:57 100 7.36 - EDGA
15:57:48 100 7.36 - NASD ADF tq
15:57:48 200 7.37 + NASD bb ex
15:57:48 100 7.37 + EDGA bb ex
15:57:48 200 7.37 + NASD bb ex
15:57:42 200 7.36 - NASD bb ex
15:57:42 100 7.36 - EDGA bb ex
15:57:42 100 7.36 - NASD bb ex
15:57:36 100 7.38 + EDGA
15:57:36 100 7.38 + NASD bb ex
15:57:30 100 7.38 + NASD bb ex
15:57:27 100 7.37 - EDGA bb ex
15:57:27 100 7.38 + NASD bb ex
15:57:24 100 7.37 - CINC bb ex
15:57:24 100 7.37 - NASD bb ex
15:57:24 100 7.37 - NASD bb ex
15:57:18 100 7.38 + EDGA bb ex
15:57:15 100 7.37 - CINC bb ex
15:57:12 100 7.38 + BATS
15:57:12 100 7.37 - CINC bb ex
15:57:12 100 7.37 - CINC bb ex
15:57:12 100 7.37 - NASD bb ex
15:57:12 100 7.37 - NASD bb ex
15:57:12 100 7.37 - NASD bb ex
15:57:12 100 7.37 - BATS bb ex
15:57:12 100 7.37 - EDGA
15:57:06 100 7.42 + NASD bb ex
15:57:06 112 7.38 + NASD bb ex
15:57:06 100 7.38 + NASD bb ex
15:56:57 100 7.38 + BATS
15:56:57 100 7.37 - BATS bb ex
15:56:57 100 7.38 - NASD bb ex
15:56:48 100 7.40 - PAC bb ex
15:56:48 144 7.41 + PAC bb ex
15:56:48 100 7.40 + PAC bb ex
15:56:48 100 7.39 - NASD bb ex
15:56:48 100 7.40 + CINC bb ex
15:56:48 144 7.40 + NASD bb ex
15:56:45 100 7.39 - NASD bb ex
15:56:45 100 7.39 - NASD bb ex
15:56:39 100 7.40 - NASD bb ex
15:56:39 100 7.40 - NASD bb ex
15:56:36 100 7.41 - NASD bb ex
15:56:30 100 7.41 - NASD
15:56:27 100 7.42 - NASD bb ex
15:56:15 100 7.46 - NASD bb ex
15:56:12 100 7.51 + NASD bb ex
15:56:12 100 7.51 + NASD bb ex
15:56:09 100 7.51 + NASD bb ex
15:56:03 100 7.51 + NASD bb ex
15:56:00 100 7.42 - NASD bb ex
15:56:00 100 7.43 - NASD bb ex
15:56:00 100 7.51 + NASD bb ex
15:55:51 200 7.51 + NASD
15:55:51 200 7.43 - PAC bb ex
15:55:51 347 7.51 - NASD bb ex
15:55:48 100 7.51 - NASD
15:55:45 100 7.51 - NASD bb ex
15:55:45 100 7.51 - NASD bb ex
15:55:39 100 7.52 - NASD bb ex
15:55:39 100 7.52 - NASD bb ex
15:55:39 100 7.52 - NASD bb ex
15:55:39 300 7.57 + NASD bb ex
15:55:39 100 7.56 + NASD bb ex
15:55:30 100 7.51 - PAC bb ex
15:55:27 100 7.57 + NASD ADF tq
15:55:27 200 7.52 + NASD bb ex
15:55:24 200 7.51 - BATS bb ex
15:55:18 100 7.60 + NASD
15:55:18 100 7.57 + NASD bb ex
15:55:03 100 7.57 + NASD bb ex
15:54:57 100 7.51 - CBOE bb ex
15:54:57 100 7.56 - CINC bb ex
15:54:57 100 7.58 + NASD bb ex
15:54:57 100 7.56 - BATS bb ex
15:54:57 100 7.57 + BATS bb ex
15:54:54 100 7.50 - NASD ADF tq
15:54:54 300 7.51 + NASD bb ex
15:54:54 100 7.50 - NASD ADF tq
15:54:39 200 7.50 - PAC bb ex
15:54:39 100 7.51 - PAC bb ex
15:54:21 100 7.55 - BATS
15:54:15 100 7.59 + NASD ADF tq
15:54:15 100 7.56 - PAC bb ex
15:54:15 100 7.56 - NASD bb ex
15:54:09 400 7.58 - BATS bb ex
15:54:09 300 7.59 + NASD bb ex
15:54:09 100 7.57 - BATS
15:54:09 100 7.57 - BATS
15:54:03 100 7.58 - CINC bb ex
15:54:03 100 7.59 + NASD bb ex
15:54:03 100 7.58 + NASD bb ex
15:54:00 100 7.58 + BOST bb ex
15:54:00 100 7.58 + CINC bb ex
15:54:00 100 7.58 + CINC bb ex
15:54:00 100 7.58 + CINC bb ex
15:53:54 100 7.58 + PAC bb ex
15:53:54 100 7.58 + BATS bb ex
15:53:54 200 7.58 + NASD bb ex
15:53:48 100 7.52 - NASD bb ex
15:53:45 200 7.52 - NASD bb ex
15:53:42 100 7.62 + NASD bb ex
15:53:42 100 7.62 + NASD bb ex
15:53:30 100 7.47 - EDGX
15:53:27 200 7.50 - NASD ADF bb ex
15:53:15 100 7.62 + BATS bb ex
15:53:09 100 7.60 + CINC bb ex
15:53:09 100 7.52 - CINC bb ex
15:53:09 100 7.59 + NASD bb ex
15:53:00 200 7.58 + NASD bb ex
15:52:57 100 7.50 + NASD bb ex
15:52:57 100 7.50 + NASD bb ex
15:52:57 100 7.50 + NASD bb ex
15:52:45 200 7.48 - PAC bb ex
15:52:27 100 7.52 - CINC bb ex
15:52:27 300 7.64 + NASD bb ex
15:52:24 100 7.62 - NASD bb ex
15:52:24 100 7.62 - NASD bb ex
15:52:15 100 7.63 - NASD
15:52:09 100 7.64 + CINC bb ex
15:52:09 100 7.64 + NASD bb ex
15:52:09 100 7.64 + NASD bb ex
15:52:03 100 7.61 + NASD bb ex
15:51:54 200 7.60 - PAC bb ex
15:51:54 100 7.61 + NASD bb ex
15:51:54 100 7.58 - NASD ADF tq
15:51:51 100 7.62 - CBOE bb ex
15:51:51 100 7.62 - BATS
15:51:48 100 7.64 + BATS
15:51:48 100 7.62 - NASD bb ex
15:51:48 100 7.62 - NASD bb ex
15:51:45 100 7.62 - NASD bb ex
15:51:45 100 7.62 - NASD ADF tq
15:51:45 100 7.66 + NASD bb ex
15:51:42 100 7.63 + NASD ADF tq
15:51:42 100 7.63 + NASD ADF tq
15:51:42 100 7.63 + BATS bb ex
15:51:42 100 7.63 + BATS
15:51:42 100 7.63 + CINC bb ex
15:51:42 100 7.63 + BATS bb ex
15:51:42 100 7.63 + BATS bb ex
15:51:42 100 7.63 + BATS bb ex
15:51:42 100 7.62 - NASD bb ex
15:51:42 100 7.63 + BATS
15:51:42 100 7.63 + BATS
15:51:42 100 7.62 + NASD bb ex
15:51:42 100 7.56 - NASD bb ex
15:51:39 100 7.62 - CINC bb ex
15:51:39 100 7.63 + BOST bb ex
15:51:39 100 7.63 + BATS bb ex
15:51:39 100 7.63 + NASD bb ex
15:51:39 100 7.55 - NASD bb ex
15:51:33 100 7.62 + CINC bb ex
15:51:33 100 7.58 - CINC bb ex
15:51:33 100 7.62 + BOST bb ex
15:51:33 200 7.62 + NASD bb ex
15:51:33 200 7.53 - NASD ADF tq
15:51:27 200 7.53 - NASD bb ex
15:51:27 100 7.54 - NASD bb ex
15:51:24 100 7.64 + PAC bb ex
15:51:24 100 7.54 - CINC bb ex
15:51:24 100 7.64 + NASD bb ex
15:51:12 100 7.57 - CINC bb ex
15:51:12 200 7.64 - NASD bb ex
15:51:09 100 7.65 + PAC bb ex
15:51:09 100 7.65 + PAC bb ex
15:51:09 100 7.65 + PAC bb ex
15:51:09 100 7.65 + PAC bb ex
15:51:09 100 7.64 - NASD bb ex
15:51:09 100 7.65 - BATS bb ex
15:51:03 100 7.73 - PAC bb ex
15:51:03 100 7.73 - PAC bb ex
15:51:03 100 7.73 - PAC bb ex
15:51:03 100 7.73 - NASD bb ex
15:51:03 200 7.73 - NASD ADF bb ex
15:51:03 200 7.74 - NASD bb ex
15:51:00 100 7.77 - NASD bb ex
15:50:54 400 7.80 + NASD bb ex
15:50:51 100 7.76 - BATS
15:50:51 898 7.76 - BATS
15:50:51 200 7.76 - BATS
15:50:51 100 7.775 + BATS
15:50:48 100 7.75 - NASD bb ex
15:50:45 100 7.80 + NASD ADF tq
15:50:45 100 7.78 - CINC bb ex
15:50:45 100 7.80 + NASD ADF tq
15:50:45 200 7.78 - NASD bb ex
15:50:39 500 7.80 + NASD bb ex
15:50:39 100 7.79 + NASD bb ex
15:50:30 600 7.62 + NASD bb ex
15:50:30 300 7.61 + NASD bb ex
15:50:24 100 7.61 + BATS
15:50:24 300 7.61 + NASD bb ex
15:50:24 800 7.61 + NASD bb ex
15:50:18 1200 7.61 + NASD bb ex
15:50:15 100 7.47 - NASD ADF tq
15:50:15 100 7.61 + NASD ADF tq
15:50:15 100 7.49 + CBOE bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + PAC bb ex
15:50:15 100 7.49 + BATS bb ex
15:50:15 100 7.49 + NASD bb ex
15:50:09 100 7.49 + NASD ADF tq
15:50:09 300 7.36 + PAC bb ex
15:50:09 100 7.36 + PAC bb ex
15:50:09 100 7.36 + PAC bb ex
15:50:09 200 7.35 + PAC bb ex
15:50:09 100 7.35 + PAC bb ex
15:50:09 100 7.26 - BOST
15:50:09 100 7.34 - EDGA bb ex
15:50:09 100 7.36 + BATS
15:50:09 100 7.36 + BATS
15:50:09 100 7.34 - EDGX bb ex
15:50:09 100 7.36 + NASD bb ex
15:50:09 100 7.35 + BATS
15:50:09 200 7.35 + NASD bb ex
15:50:09 100 7.35 + NASD bb ex
15:50:09 100 7.35 + NASD bb ex
15:50:09 100 7.35 + NASD bb ex
15:50:09 100 7.34 - BATS
15:50:03 100 7.36 + NASD ADF tq
15:50:03 100 7.36 + NASD ADF tq
15:50:03 400 7.34 + NASD bb ex
15:50:03 800 7.31 + NASD bb ex
15:50:03 100 7.25 + NASD bb ex
15:50:03 100 7.21 - NASD ADF bb ex
15:50:03 100 7.21 - NASD ADF bb ex
15:50:03 100 7.21 - NASD ADF bb ex
15:50:00 200 7.25 + PAC bb ex
15:50:00 100 7.24 + PAC bb ex
15:50:00 100 7.21 + NASD

[MWM]

Big Pop here right at the eod...

[MWM]

$7 holding well, I think this is ready for another leg up, smart grid tech is a good place to be...

[MWM]

Looks like $7 has become support...

[MWM]

Sweet Bounce off today's lows...

[MWM]

Nice block of 50K shares got goobled up at $7.55, hopefully marking the bottom of this pullback...

[MWM]

looks like we are going to break the yearly high in volume...

[MWM]

$8 print

[MWM]

edit

[MWM]

Closing strong today!

[MWM]

Quest to reinvent Tollgrade reflects telecom shakeup
By Kim Leonard, TRIBUNE-REVIEW
Sunday, August 2, 2009

Tollgrade Communications Inc. is one of the few survivors from the days when the Baby Bells and other telephone companies spent millions for devices to test their copper and fiber-optic networks for trouble.

Most of its rivals from that 1990s era later dissolved or were absorbed into other companies. Tollgrade — once a leader in the Pittsburgh region's technology sector — has struggled in the last decade and now is in the final days of a proxy contest that could change its course once again after results are tallied at Wednesday's annual meeting.

A group of investors led by New York hedge fund Ramius LLC is working to convince shareholders that Harmar-based Tollgrade has made a series of missteps — including overspending on research and development, and making too many acquisitions that never added much to the bottom line.

Those errors, and a board that was short of experienced telecommunications industry leaders, explain why the company's stock has lost more than half its value in two years and now languishes in the $4 to $6 range, the fund contends. The Ramius group is backing one of the fund's own executives and two nominees with telecom backgrounds for seats on what will be an eight-member board.

Tollgrade's leaders announced a second-quarter loss of almost $1.51 million last week on revenue of $10.6 million for ongoing operations, the company's third consecutive quarter in the red.

CEO Joseph A. Ferrara said the company's renewed focus on service assurance products, primarily software, for telecom providers along with network service and maintenance contracts is showing promise, but financial results in the midst of a recession don't reflect it yet.

Tollgrade's board, following Ramius's criticisms, recently added two telecom veterans and expanded from seven to eight members.

The story of the company's rise and decline — and its current quest to reinvent itself — traces dramatic changes in the telecom industry in recent years.

Changing technology is a key factor.

"A lot of what Tollgrade has traditionally done for networks is being provided in routers and switches and software now," said Matt Robison of Wedbush Morgan Securities in San Francisco, who covered Tollgrade when he was an a securities analyst with another firm. He still owns "a few shares," he said.

No Wall Street analysts follow Tollgrade these days, and several of its largest shareholders declined comment or didn't return phone calls last week when asked about the proxy battle with Ramius.

Tollgrade hit its zenith in 2000, when revenue nearly doubled to $114 million and its per-share price hit a high point of $166 in July.

"We reached our peak at the peak of the dot-com era," recalled Chris Allison, who retired four years ago as chief executive of the company his father founded in 1986. Allison took the company public in 1995.

Regional Bell phone companies at that time were focused on service quality to win customers, Allison said, and they and smaller phone companies invested in systems to move voice and data communications faster and more smoothly.

Forbes magazine named Tollgrade to its list of 200 Best Small Companies in America several times.

Changes in federal law forced the industry's biggest phone companies to sell parts of their networks to competitive carriers. "They lost, like 20 percent of their line base," Allison said, "and they made the decision around 2000 that until they got regulatory relief they were going to pull in their horns from a (capital expenditure) standpoint."

Faced with falling profits, Tollgrade cut 80 jobs in 2001 and dozens more in subsequent years as it tried to develop new businesses. The company now has about 200 employees.

In 2004, Tollgrade acquired a division of former rival Acterna Inc. that built devices to monitor cable broadband lines, then just starting to be used for Voice over Internet Protocol phone systems.

Tollgrade's venture into cable products did well for a while, Allison said, but a change in industry standards led to more generic, lower-priced equipment. "There were no more proprietary interfaces for cable technology," he said.

The company sold its cable status monitoring line in May for $3.15 million to an investment group. Ramius points out this was far less than the $14.3 million the Acterna deal cost.

Ferrara, Tollgrade's CEO since November 2007, said last week the company will introduce its latest software platform this fall at the Broadband World Forum in Paris.

"We are positioning the company for long-term success and growth when the economic environment improves," he said.

The company has a new managed service agreement with a network equipment provider that is expected to bring in $20 million over four years, and is seeking out similar service and maintenance deals.

And it's continuing trials of its LightHouse test product for power utility lines, which Ramius has criticized as being long-delayed and related only marginally to Tollgrade's core business. Ramius has advocated letting existing customers' needs determine what products Tollgrade develops.

Robison said moving into an electric smart grid product could help the company build sales, but because Tollgrade isn't known in that arena "it's a long-term strategy, and not the primary one."

[MWM]

The 15 year chart is fun here, old tech bubbler...

[MWM]

Tollgrade ended July 2010 with $66.6 million in cash and no debt, giving shareholders $5.23 cash per share. They have an enterprise value, with $50 million in annual sales, of only $18 million, or just $1.45 per share. This is an outstandingly strong balance sheet.

[MWM]

After a few rough years, Tollgrade seems to have turned the corner
Making the grade -- with its first profit since fiscal '08
Thursday, August 26, 2010
By Erich Schwartzel, Pittsburgh Post-Gazette

Earlier this month, Tollgrade Communications reported second-quarter earnings and the news was good: The Cheswick telecommunications company showed its first profit since the third quarter of fiscal 2008.

How did the company celebrate?

"We bought a coffee machine," said Michael Bornak, the company's new chief financial officer and treasurer.

Mr. Bornak and two other new executives seem to be putting the coffee pot to good use since taking the reins at the troubled company. All hired in the past 10 months, they're focusing on expanding investments outside the 22-year-old company's traditional telecommunications portfolio.

Edward Kennedy became chief executive and president in June after being elected to the board in the middle of a proxy fight. Greg Nulty, who worked at Tollgrade in 1995 when the company became one of the region's few public tech firms, returned last month as vice president of marketing and business development.

The three inherited Tollgrade at a low point in the company's history, a time when it was making headlines for drama in the boardroom.

Over several months in 2009, Tollgrade's largest shareholder, a New York City hedge fund called Ramius LLC, waged a proxy fight over the company's poor performance. That lead to three Ramius-backed candidates being elected to the nine-person board.

Mr. Kennedy joined the board while Ramius and Tollgrade were still playing tit for tat with proxy documents. He had most recently served as the CEO and president of video networking equipment company Rivulet Communications Inc. of Herndon, Va., and eventually replaced former Tollgrade CEO Joseph Ferrara.

But all's well that ends well, and Mr. Kennedy had only compliments for the current board members, who he called "interactive," "focused," chock-full of "business acumen" and intent on keeping the company at a "new pace."

Nearly three months into the job, he keeps a "kinetic" personal pace that he hopes translates to a sense of urgency in company culture.

The trio's most urgent priority since coming on board has been making money again.

Last quarter, the company reported a net income of $1.2 million, or 10 cents per share, up from the $1.5 million, or 12 cent per share, losses reported that quarter one year ago.

The success came with some cost-cutting sacrifice: During the first quarter of this fiscal year, Tollgrade laid off 48 full-time employees. The company now has 200 workers.

Mr. Kennedy said there were no plans to hire more workers to accommodate the improved balance sheet but any future expansion would occur in Tollgrade's three main locations -- Cheswick; Piscataway, N.J.; and Bracknell, United Kingdom.

Though a majority of its revenue continues to come from its "staid, organized, methodical" telecommunications contracts, Mr. Kennedy said the executives decided to try other large-scale infrastructure projects.

He expects expansion in smart grid technology to become a bigger player on the third-quarter balance sheet. Smart grid products provide digital ways for utility companies to control electricity and have been used to cut wasteful energy practices.

One trumpeted Tollgrade product, LightHouse, sends "wavelength signatures" to system administrators that diagnose the cause of a power outage without having to send field crews out to physically look for a fire or downed tree. LightHouse also analyzes electric wire performance to make sure extra currents aren't being sent to compensate for one weak portion of the line.

"A lot of electricity is lost due to inefficient cable," said Mr. Nulty. "We want to make the smart grid smarter."

A national push toward green energy practices helped Tollgrade "bet on the right racehorse" with the smart grid investments, said Mr. Kennedy. That put them in a position to seize some contracts backed by federal stimulus funding allocated for environmentally friendly projects.

The caffeinated executives are also looking to expand into other technology markets like high-speed data services that deliver television via the Internet.

"We want people to think, 'These guys are fleet of feet,'" he said.