While Canadian athletes have shown plenty of dominance on the world stage at the Olympics, a homegrown company that’s playing a major role at the Games is having an Own the Podium moment itself.
Ross Video chief executive David Ross took to LinkedIn recently to announce that his Ottawa-based firm exceeded its full-year profit target in the first three months of fiscal 2018 with the most profitable quarter in the company’s 44-year history. Ross also said the revenues during the three-month period ending Jan. 31 were the second-highest quarterly tally for the firm.
After only five days, Ross’s eyebrow-raising post had already garnered a whopping 77,000 views. As a private company, Ross Video is usually pretty tight-lipped about its financials, but its CEO decided now is no time to be bashful.
Ross said the video equipment industry as a whole is being turned upside down as more and more TV viewers are cutting the cord and abandoning traditional networks, turning instead to Internet-based services such as Netflix to get their entertainment fix.
“The world is fragmenting into a bunch of pieces where it used to be plop down in front of the TV and just watch all night,” said the affable chief executive, whose company’s products recently helped create 3D renderings of key players during the Super Bowl and are currently being used extensively by networks covering the Winter Olympics.
“That’s causing a lot of our customer base in the television area to be much more frugal in what they’re buying and much more cautious. And a lot of our competitors have been selling some very, very expensive systems for a very long time. Ross has always been a high-quality-but-good-value-for-the-money brand.”
Meanwhile, the dominant method of delivering that content – coaxial cables – is rapidly being displaced by new technologies that transmit video via the internet, leaving many manufacturers scrambling to catch up.
“That is causing a lot of our competitors to have to do more research and development, more investment than they’re used to. At the same time, our customers are holding off because most manufacturers aren’t ready,” said Ross.
That “double whammy” of higher expenses and lower sales has had a topsy-turvy effect on the industry, leading to a spate of management shakeups, mergers and acquisitions over the past 12 months.
Last week, for example, St. Louis-based networking equipment maker Belden snapped up smaller competitor Snell Advanced Media – a firm that goes head-to-head with Ross in many product lines – for US$92 million.
Ross said his company saw the upheaval coming and was ready for it. The firm has always invested heavily in R&D, he said, and strategic acquisitions such as local video-over-IP equipment provider Coveloz Technologies have helped it nimbly adapt to ever-changing customer demands.
In addition, Ross Video doesn’t rely on the big TV networks to drive sales. About half of its customers are clients such as live concert venues, schools, churches and government legislatures.
“We don’t just focus on television,” Ross said. “We have a double advantage in that first, we’ve been a value brand and I think our technology is quite strong, but also we’ve been able to spread our sales and grow into other markets quite effectively.”
Ross Video now employs about 650 people and has annual revenues approaching $200 million, and the firm has been growing at average clip of 17 per cent a year for more than a quarter-century. That’s quite a streak, and the company’s boss wants everyone to know he has no intention of seeing it end any time soon.
“Being a private company, people don’t have access to your financials,” he said. “If our customers looked at so many of our competitors in the industry, they would have nothing more than to assume that Ross Video was also doing very poorly. I wanted to give them reassurance that Ross is not in that situation and Ross is a very, very safe partner for them to have.
“Every conversation I’ve had in the field, it just almost seems to be common knowledge that all of the manufacturers are in trouble, and I didn’t want to be lumped in with that.”