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TWST: Would you give us a brief historical sketch of the company and a picture
of the things you are doing at the present time?
Mr. Knitowski: Caneum is the fourth company created by a group of serial
entrepreneurs that have successfully sold three companies in the last five years
to Cisco Systems, Level 3 Communications, and Internet Security Systems (which
was itself recently bought by IBM), respectively, for approximately $200
million. When we were setting up Caneum in the middle of 2003, the company was
predicated on the fundamental goal of competing within the $1 trillion worldwide
outsourcing industry. The first three companies that our team created, which
were all tied heavily to technology-oriented products and services, set the
basis for how we have built Caneum from the ground up. Namely, we have focused
on leveraging our company building background to provide customers in-house, on-
shore, near-shore, and off-shore types of business process and information
technology outsourcing services on a worldwide basis.
What we ourselves found in being extensive consumers of the outsourcing products
and services in our past companies was that everyone already in the outsourcing
business had a "religion" about the way that they wanted to do outsourcing. That
"religion," if you will, was a business model that said, "Focus on what you do
well internally, outsource everything else, and then whatever you've outsourced
should be taken off-shore and executed specifically in the country of India."
What we quickly realized is that it was far more compelling to be agnostic about
outsourcing and not worrying whether the outsourcing was done domestically in
the United States in-house at the customers' facilities and location versus
doing it on-shore here in the United States or near-shore in Canada or Mexico,
or off-shore. Then if you went off-shore, it shouldn't matter whether it was in
an English speaking or non-English speaking country, so that you could do it as
equally likely in New Zealand or Australia as you would in Pakistan or India.
For non-English speaking outsourcing countries, you could go to Russia, to the
former Eastern bloc such as Romania or Bulgaria or to Asia Pacific countries
such as China or Vietnam.
We set up a global outsourcing business and we've grown it from absolutely
nothing to where it is today. Over the past 13 quarters of consecutive record
growth and record sales, we have built Caneum from zero to a run rate that is at
approximately $10 million on an annual run rate basis. We have accomplished this
by adding customers as large as DirecTV, Countrywide Financial Corporation, and
Panasonic. In the public sector, we have added the Los Angeles Unified School
District, the US government tied to the General Services Administration, and
multiple other companies of all sizes, public and private, small and large. We
have won a wide range of business and customers over the past several years and
have effectively grown to a point of being better than cash neutral from
operations as a public company, but we still report a GAAP loss because of the
effects of expensing stock options under the new FASB rules as of January 1,
2006. With that said, we have successfully achieved our goal for phase one of
building Caneum, which was to get to a $10 million run rate, be cash neutral or
better from operations, have little or no debt, be open for trading on the OTC
bulletin board, have 10 million shares outstanding or less and a full path to
phase two, which is to achieve $25 million in revenue, $5 million in profit,
maintain little or no debt, have 15 million shares outstanding or less and
migrate from the OTC Bulletin Board to an exchange, most likely AMEX, sometime
in 2007.
Tickers included in this excerpt: CANM
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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