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TheStar.com
Oct. 14, 2004. 01:00 AM
Certicom sees lift from entertainment industry
Certicom Corp. sees growing demand for its data encryption technology in
both government and the private sector, its CEO told the annual meeting
yesterday.
The explosion of digital music, movies and books that are easily copied is
causing companies such as The Walt Disney Co. and Time Warner Inc. to
demand electronic devices and distribution networks be fully secure, Ian
McKinnon said.
"DVD players, set-top boxes and digital cable carry vast amounts of
valuable content, all of which is very easy to copy," McKinnon said. "Very
soon, every consumer device needs to have security embedded in its hardware
to protect content. That's obviously a vast market."
The technology at the core of Certicom's products - elliptic-curve
cryptography, or ECC - is well suited to such purposes since it can work
faster and requires less computing power and storage than conventional
forms of cryptography, he said.
Certicom got a lift from a $25 million (U.S.) contract to supply software
to the U.S. National Security Agency, giving the Mississauga-based company
its first profitable year and endorsing ECC as its new encryption standard,
McKinnon said.
The security agency's purchase provided most of Certicom's revenue of
$34.5 million in its financial year ended April 30. The year's profit was
$16.8 million, or 47 cents per share.
The contract was followed by a deal with Research In Motion Ltd., which is
embedding Certicom's technology in its BlackBerry wireless e-mail products
and paying royalties over a number of quarters.
In the first quarter of its current fiscal year, Certicom's revenue was up
by $700,000, or nearly 32 per cent, from $2.2 million a year earlier. But
the company fell back into the red in the May-July quarter, albeit with a
$1.2 million loss that was 25 per cent smaller than the $1.6 million
reported a year earlier.
Asked by a shareholder when Certicom would achieve sustainable
profitability, McKinnon said he is "extremely upbeat about the company's
future" but is not prepared to provide guidance on revenue or profitability.
"As goes ECC adoption will go the growth of the company."
CANADIAN PRESS
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R. A. Hettinga