Intermap Technologies Corporation CEO Todd Oseth Interview Podcast

James West
|

Intermap Technologies Corporation (TSE:IMP) (OTCMKTS:ITMSF) CEO Todd Oseth describes his companies growing market share in the geospatial data business, and competing with companies like Fugro N.V. (AMS:FUR) and Corelogic Inc. (NYSE:CLGX).

Midas-Letter-financial-radio-podcast-thumb[four_fifth_last padding=”0 0 0 20px”]Listen to the interview with Todd Oseth:

[/four_fifth_last]

Full Transcript:

 

James West:Todd, thank you for joining us today.

Todd Oseth: Thank you.

James West: Todd, can you give me an overview of the value proposition for investors in Intermap Technologies?

Todd Oseth: The main proposition of Intermap is, we’re one of the only geospatial companies that focus on delivering answers from geospatial data. Most people don’t realize, but about 80 percent of all data has geospatial content.

James West: Can you elaborate on that a little bit? What do you mean by geospatial content, and why is that important?

Todd Oseth: So for instance, census data is geospatial. So all the information about a specific location of how many people, the ages, their incomes, where they’re going, how many miles they go to work, all of this is important geospatial content; it’s not just about imagery or digital elevation models.

James West: I see. So geospatial information is the basis of demographics, by the sounds of it.

Todd Oseth: You bet it is.

James West: Okay, and so how does your company make money?

Todd Oseth: We make money a couple of different ways. One, we help establish a spatial data infrastructure for countries that don’t have up to date geospatial models that are already in use. Two, we have software that delivers specific answers for industries like risk of flooding, determining if locations are in flood zones, not in flood zones, how many kilometers are they to a flood zone, where should they put a dam, where should they put water flow so that it does not affect mass amounts of people.

Our software goes as far as, it’s a very large analytical engine, so it’s able to score based upon a set of criteria established by customers.

James West: I see. So then, what is the source of your sensory input?

Todd Oseth: So we take data from almost everybody, as well as, we acquire data ourselves. We still maintain two new jets with large radar systems that give us very highly accurate 3D models of the Earth’s surface. In addition, though, we have partners that deliver 2D imagery, and then we work to rectify that information so that we have good visual imagery in our database. And then depending upon the type of other data – census data, we work directly with governments. For instance, in our advertising app, we may get the locations of a billboard from some of the largest billboard owners in the country.

James West: Interesting. So then, what is the shape of the company financially? Are you profitable at this point?

Todd Oseth: We’re not profitable at this time. We had a major win for our spatial data infrastructure this summer, of which is very large in size; it starts at around 125 million in a development mode and moves all the way up probably north of 200 million over time.

James West: That’s significant. So the path to profitability is clearly dead ahead. When do you anticipate becoming profitable, or do you give that guidance as of yet?

Todd Oseth: We don’t give any guidance on profitability at this time.

James West: That’s understandable.

Todd Oseth:You’ll be able to see through our announcements, we are in the midst of closing all of the financial terms of that deal very soon.

James West: Okay. So are you going to need to raise more capital from the equity markets to achieve profitability?

Todd Oseth: That’s unclear. It all depends upon how quickly we are able to get all of the project financing in place for this large project.

James West: Okay. Who are the big competitors in this space? Who is the 900-lb gorilla in the room?

Todd Oseth: Well, there’s a number of companies like you would imagine. Many geospatial companies do data acquisition. Very few of them do any analytical or manipulation of the data to deliver answers. So I’m going to break it down into two spaces: from an acquisition standpoint, there are companies like Fugro  and Pasco  that do acquisition around the world, just like we do, and then there are a number of imagery companies, and you know who those are: those are the satellite guys, the Urthecasts of the world. They’re not really competition; we use their data. They’re really partners of ours. They don’t really develop elevation models from their data, they just provide the imagery.

And then on the software side, for instance, for flood modelling, we can tee up against Core Logic’s RiskMeter , which is the name of their software product, as an underwriting tool.

James West: Interesting. So are you going to be taking market share from any of these larger competitors, and if so, do you anticipate a sort of defensive response from them?

Todd Oseth: I think the answer is yes, for those areas that need new elevation models, we believe we are the best solution in the industry. And our pricing is very competitive, so if we run into a country that is in the need of more accurate elevation content, we believe we will take that market share.

James West: Okay. How did this company get founded, and what is the basis of the concept? Who came up with the idea?

Todd Oseth: So the company was founded quite a few years ago; 1996. In ’97 the company went public, and it was really based on the idea of just data acquisition and then letting customers do whatever they want with the data. Roughly five years ago, we changed our objective into really providing answers for customers, so that we would be the ones that were manipulating the geospatial content and delivering answers in a way that our customers needed. Sometimes, it’s as simple as compute 5 terabytes of data into a single byte: Yes/No.

James West: I see. So give me some examples of who are your biggest clients and most important industries.

Todd Oseth: Our biggest clients are governments of different countries. Many people know we’ve flown most of southeast Asia, so you can go down the list of all of the southeast Asian countries. We continue to explore opportunities in additional countries too, as well as into Africa. That’s for our spatial data infrastructures.

As for our software applications, our biggest customers are some of the largest underwriters in the world. We can’t really give the specific names, but I can say that they’re in the Top 10 largest reinsurance companies in the world.

James West: Okay. Well, that kind of gives a strong indication of who those players are. Great. So then, what is the industry outlook, the market outlook, for your products? How fast is it growing, what’s the size of it globally, how quickly will you obtain what percentage of it?

Todd Oseth: The software verticals, the applications from the geospatial content, is where most of the growth will come from. So in the advertising space, we’re talking about as much as a $300 Million market..

As for the insurance industry, we’re talking about as much as a $825 Million market. .

James West: Okay. How much capital has gone into this company so far?

Todd Oseth: Over $200 million.

James West: Wow. So this has been a very, very costly development over time.

Todd Oseth: Yeah. the development of our acquisition technologies using IFSAR  is a very costly endeavour, and the majority of that $200 million was in the development of our IFSAR technology. And then over the last few years, in our software, we’ve probably invested about $20 million in creating a platform as a service, that’s what Orion  is, and then the unique verticals are $3 million each.

James West: Okay, and when you say IFSAR, what exactly are you referring to?

Todd Oseth: It’s Interferometric Synthetic Aperture Radar.

James West: Is that your secret sauce?

Todd Oseth: It’s a way of using radar sensors so that we’re able to acquire three dimensional content from Lear jets from the Earth’s surface. Basically, we bounce signals to the Earth and then measure the distance between them.

James West: Interesting. So then what is your plan to sort of build this out? How many governments out there are still yet to acquire something like this, and what is the growth curve look like going out into the next quarter, next year, next three years?

Todd Oseth: So for new acquisitions, you can imagine that all of the countries around the equator really need radar-type technologies, because they’re in the cloud belt. This cloud belt makes it very difficult for optical technologies to deliver decent answers. So we’re able to see through clouds, so that’s why southeast Asia is one of the areas where we have so much business, because we can see through clouds, we can give guaranteed performance. Where if you’re in the optical world, you have to wait for clear days in order to satisfy these specifications. Many countries still need, one, new data to be made available, and two, almost all of southeast Asia and Africa and even large parts of Europe need our applications to manage their geospatial data so that it actually becomes productive for their users.

Let’s just say that it’s probably one of the misses in the industry, is that we have so many people focused on acquiring data, and yet people don’t know what to do with the data.

James West: Right. The big data conundrum.

Todd Oseth: It’s big data, and it’s, you’re generating terabytes, sometimes petabytes  and then just storing this data, and no one’s using it, so why collect it? It kind of went backwards. Usually you want to start with an application and then you decide what needs to be acquired to produce the output for that application, and the industry kind of went the other direction.

James West: Yes, I see. Okay, so let me ask you, what are the issues surrounding your business that keep you awake at night?

Todd Oseth: Political unrest always keeps us awake, because a lot of our deals are based on governments that have issues and are dealing with them, but sometimes they have to re-allocate money depending upon which is the most pressing issue of the day or week or month.

James West: Okay. Well, that’s a great first interview, Todd. We’re going to leave it there for now, and I’m going to come back to you in a quarter’s time or so and see how you’re making out. Thank you so much for taking the time to join us today.

Todd Oseth: Thanks for your time.

James West

James West

Editor and Publisher

James West founded Midas Letter in 2008 and has since been covering the best of Canadian and US small cap companies. He covers global economics, monetary policy, geopolitical evolution, political corruption, commodities, cannabis and cryptocurrencies. As an active market participant, James is not a journalist and is invariably discussing markets...
More Info...

[email protected] | |

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.