Flying off shelves

Business is booming for makers of device that tracks stolen cars; now they're eyeing expansion

The Gazette

Francois Shalom

9/23/00

RICHARD ARLESS JR., GAZETTE / Peter Lashchuk, Phan Hung and Andre Boulay of Rankin Technologies, which makes Boomerang. The Boomerang 2 is expected to be launched next month.

Speaking at a symposium on car theft last October, Claude Lapointe, in charge of the Insurance Bureau of Canada's auto-theft division, parked his girlfriend''s 1998 Volkswagen Jetta TDI near the Olympic Stadium - across the street from a police station.

That's right, you've guessed it: when he came out a couple of hours later, the black turbo diesel had vanished into the night.

Doubly ironic, because she had not heeded the stern advice of Lapointe''s own bureau: buy a tracking device for your car.

In fact, the refrain from Quebec insurers these days is increasingly: buy the Boomerang tracking device for your car, especially if it's an expensive model.

This couldn't please Andre Boulay and Peter Lashchuk more. They're the top executives of Rankin Technologies Inc., which will soon its change its name to Boomerang Tracking Inc. for greater clarity.

Boomerang - which has developed a cellular-phone-based tracking device in partnership with telecommunications firm Bell Mobility, used mostly to recover stolen cars - has been, well, booming since going public one year ago.

And company director Pierre Laurin - one of two star recruits to the board, along with Quebecor's Erik Peladeau - said he has joined the firm to help in the next step: Boomerang's imminent expansion into the rest of Canada, then into the U.S.

Until last year, Laurin was managing director of Merrill Lynch Canada Inc., a brokerage that put together several deals in the telecommunications industry, said Laurin.

"So I know a lot of people in that industry in the U.S.," said Laurin, adding that he was off to New York the next day to meet with some of them.

In a reverse takeover of small firm Cervin Capital Corp., the company's initial public offering last September went for 60 cents per share. By February, the stock had shot up 11-fold, to $6.70. It's currently trading at about $4.8 on the CDNX.

This stellar performance is a reflection of Boomerangs flying off the shelves.

The company sold more than 10,000 units in the latest quarter ended July 31, compared with 2,312 in the quarter last year.

In that period, sales jumped 272 per cent to $2.7 million, while pre-tax profits soared more than 700 per cent, from $146,180 to $1.07 million.

And that's just the beginning, said Boulay, vice-president (technology), company co-founder and the technical whiz behind the firm''s products.

Next month, the company is rolling out its Boomerang 2.

The original Boomerang is a device hidden in the car - even the owner does not know where it''s located - which emits a signal every 15 minutes, transmitted via Bell Mobility's cellular-phone network towers and monitored at Bell's command centre in Montreal North.

Once the car is reported stolen by the owner, Bell Mobility console technicians enter the car''s code number, retrieve the signal and track the car''s movements through Bell's 1,158 transmission towers in Quebec and Ontario.

With Boomerang 2, the system actually detects the theft before the owner does.

Boulay said transponders will be placed on the owner's key chains. When the car moves without the keys having been inserted into the ignition, "the machine will know that it's not you driving."

That will come in handy at airports, for example, a favourite target of car thieves because the heist can go undetected for a week or two, by which time the vehicle has often been shipped overseas on the black market.

One of the people propelling the Boomerang boomlet is Michael Page.

"I parked my Grand Cherokee at about 8 p.m. in front of my brother-in-law''s house on Roslyn (Ave. in Westmount)," said the 37-year-old owner of a courier company.

"I came back out at 10:30 or so, and it was gone, just like that," Page said. After filing a police report, he called Boomerang, which located the car on Cedar Crescent in Snowdon.

They called to advise the police, who found it with its engine still running - the thieves fled at the sight of the police car.

They had smashed a good part of the dashboard to try to find and rip out the Boomerang system and to hotwire the car, and inflicted other minor damage - although they didn''t take Page''s Palm Pilot or 50 CDs, or the irreplaceable baby pictures of his 11-week-old.

Which made a real Boomerang believer out of Page.

"I installed it begrudgingly, only because my insurance company said I had to," he said.

It cost him $300 for the system and installation, but he got a $200 rebate on his insurance, "leaving me just $100 out of pocket."

But that doesn't include the $120 annual monitoring fees, the $20 CRTC fee and the $250 recovery fee charged by Boomerang if the car is stolen and recovered. But Lapointe said that insurers will reimburse the recovery fee if the car is found.

"I absolutely think it's great," said Page, who didn't have to pay the $1,000 deductible he would have had to disburse had the car not been found - or the $500 deductible he escaped paying on his home insurance to cover his personal effects.

So his $100 out-of-pocket costs look good to Page by comparison.

"I had argued with the insurance company that I've never had a car stolen, and live in Westmount, not a high-risk neighbourhood," he said.

"But they insisted - and I now think they should insist."

Cars are by far the greatest application for the Boomerang. But that also may change, if Boulay has his way.

There are plans for "people" applications: locating Alzheimer's patients who have gone astray and are unable to find their way home; making sure a wife-batterer does not enter a perimeter around his wife''s residence that he is not allowed to enter; keeping track of toddlers at playgrounds; and keeping a better tab on prisoners out on day passes with a better system than the current ones, most of which are hooked up to their telephones.

"Basically, anything that has to do with tracking," Boulay said.

There have been 41,000 Boomerangs sold in the last couple of years, with about 33,000 of those already installed on cars, trucks and other products (the rest are in stores).

The vast majority are installed in cars, but a smattering also can be found on heavy machinery, boats and shipments on which the owner wants to keep a tab.

Nearly 650 items, mostly cars, have been recovered with the aid of the Boomerang, with a total value of $32 million - which accounts for the willingness of insurers to provide Boomerang discounts.

Although Montreal was long the car-theft capital of Canada, it no longer is, said Commander Doug Hurley, head of the property-crime division for the Montreal Urban Community police.

In fact, car thefts dropped from about 23,000 in 1997 to 18,300 last year - and have dropped another 7 per cent this year.

But Hurley said almost none of that can be attributed to the Boomerang, which is an after-the-fact device rather than for theft prevention.

"What's happened is that all the different systems like kill switches, ignition systems and key engravings have pretty much eliminated the amateur part of the auto-theft business," Hurley said.

Criminal organizations devoted almost solely to stealing cars, on the other hand, are thriving.

"The Boomerang is basically effective for recovery," said Hurley, "a good intermediate product. But it's one among many."

Hurley believes the satellite-based GPS (global positioning system) is "the way of the future," a notion hotly disputed by Boulay and Lashchuk, who say that GPS is useless when the tracked object is obstructed - in a shipping container or in an underground garage.

But company president Lashchuk, also president of the Cellular One Inc. chain of cell-phone stores, said the Boomerang 2 will address part of the theft problem itself with its ability to monitor the car's movements even as it's being stolen.

In the meantime, he added, the company will concentrate on the rest of Canada, probably followed by Florida, where cars are being stolen in bulk and shipped out of the port of Miami by the freighter-full.

"The reason we aren't in the U.S. now is because we totally miscalculated the demand in Quebec for our product.

"And, frankly, we haven't quite settled on how we're going to proceed: are we going to do it ourselves or will we have a licensee? Don't know yet.

"But stay tuned. I think we'll have the deal in place by the end of the year."

Boomerang® is a registered trademark of Boomerang Tracking Inc. It's headquarters are located in Montreal, Quebec. Boomerang products are sold and distributed in the provinces of Quebec, Ontario, British Columbia and in the Dominican Republic. Boomerang Tracking Inc. shares are traded on the Toronto Stock Exchange (TSE) under the trading symbol "BMG".