Tasty Booshers

[triplet_dad36]

EP~, ICOP update

You probably remember from our conversations last summer that ICOP's CEO rubs me the wrong way, but ICOP certainly has a good product and is making good partnerships with larger companies--Sprint in particular. (Sounds a little like another company you and I are very familiar with, LOL.)

ICOP's potential is huge, although they are in a crowded field with bigger players. Still, their in-car video systems have made leaps beyond their competitors in some areas, and I have spoken to a couple of their sales guys in the field and have been impressed by them and by the product.

Typically, ICOP sells off somewhat after earnings, and like CPTC, shareholders are always hoping that tomorrow brings the huge order that is always around the corner. But ICOP held its Q1 (Jan-Mar) earnings call yesterday after market close, and they hinted of very big orders but said they will probably not be able to PR them, so shareholders will have to wait until the next 10Q or conference call to see whether the big orders went through.

It will be interesting to see if the info on yesterday's conference call could be enough to give ICOP's PPS another boost, or at least a reason not to sell off, or if the sell-off after earnings will occur as usual.

Here are some smippets from yesterday's call:

--NYPD (New York Police Dept) has made its first trial order of in-car video, and that order is with ICOP. Most callers on the conference call were pretty happy with that teasing news. Note that Lou Anemone, member of ICOP's Advisory Board since November 2005, was COO of the NYPD until his retirement in 1999. With Anemone's connections, ICOP shareholders have been dreaming for a year of landing very large orders from the NYPD. The trial order is no guarantee of future large orders from the NYPD, but...

--Maryland
On the call Laura Owen (Pres/Director) said two Maryland communities were close to large orders. One was in the hundreds of units; one was 1200 units (probably over years--not 1200 all at once I assume). (Each unit sells for ~$5k, but for large orders there will most likely be a discount.) [To put this in perspective, a year ago ICOP's typical order (with a small community's police department) was 10 units and a server (~$50k order). Dave Owen said the typical order now is 50 units (~200k+ order).]

--backlog of sales of ICOP 20/20 units
$1.25MM of inventory as of 3/31/07 was already spoken for, and when asked if it would all be shipped in Q2, Dave Owen said he expected it to be sold soon and the CFO said it should bring in an expected $2.5MM revenue in Q2 2007. Total Q1 revenue was ~$2.3MM, and Q4 2006 revenue was $2.9MM, the highest ever.

--new orders of new ICOP 20/20-W units
The 20/20-W adds wireless download capability (which the 20/20 did not have). Per Dave Owen, CEO, about 100 units of the 20/20-W have been sold so far in Q2. Assuming $5k/unit, that would add another $500k revenue to the $2.5MM of 20/20 revenue mentioned above. So, ICOP should have Q2 revenue of ~$3MM before any additional sales of the 20/20-W made in the last 7 weeks of Q2. Owen said ICOP received 250 units of the new 20/20-W from the manufacturer, so in addition to the 100 units already sold in Q2, ICOP has 150 more in inventory. More shipments of the new 20/20-W (from the manufacturer) are arriving weekly to ICOP.

--international orders
Ah yes, the hint of big international orders. Unlike the US, where there are 18,000 or so local police departments across the country, many other countries have a single national police force. So it takes longer to negotiate an order with such a large customer, but ICOP says they are getting closer to landing a big one. (This has been said for a couple quarters, now.) Could Q2 be the first one?

--relationship with Sprint
Sprint and ICOP will be holding Press Conferences this weekend in Washington DC (Sunday) and again in NYC (Monday--Times Square) to announce the rollout of ICOP LIVE (ability to provide streaming video from patrol cars or stationary cameras to police HQ (or other locations). See my post #233 for more info regarding ICOP Live.

--relationship with Hewlitt Packard
HP makes the servers for ICOP's products, and Laura Owen touted the leverage ICOP should receive with Sprint and HP's association with ICOP. She said Sprint has paid for ICOP to accompany Sprint at its booths at several recent tradeshows, touting the ICOP LIVE product.

I do own ICOP, so any advice you have for me would be appreciated.

BTW--I still owe you dinner. I don't know when I will be in your neck of the woods again, but I owe you. Thanks.