10 New Baby Blues
Oct 1, 2005

Prosper Magazine

Some people might be tempted to say that Prosper magazine has a case of “the blues.” We do, indeed, and we’re feeling terrific about it. Since the release of our first list of the region’s Top 10 Baby Blue Chip companies last October, people have been talking up the vitality of emerging firms in the Sacramento Metro Marketplace.

Prosper has compiled its second roster of Baby Blue Chips by polling Sacramento-area investment advisers, venture capitalists, business owners and executives.

We asked each to identify up to three companies they deem worthy of recognition because of their potential to grow, prosper and mature. Public and privately held companies within the Sacramento economic area (encompassing Amador, Butte, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo, and Yuba counties) were eligible for consideration. Companies on last year’s Baby Blue Chips list were excluded from balloting.

Our panelists collectively identified 24 companies within the Sacramento region. We present the 10 that captured the most nominations, in alphabetical order.

bioCOOL Technologies
Based at McClellan Technology Incubator, bioCOOL Technologies LLC has developed a scalp cap to administer therapeutic regulated pressure and cooling for those suffering from multiple sclerosis, stroke and head trauma. The company is also testing a liquid-cooled vest and cap for military personnel stationed in Iraq and other hot regions.
Comments:
• “I think bioCOOL is a product that will save lives, has a deep-pockets customer in the Defense Department and an experienced CEO who knows this technology inside out.” — Nicole Woolsey Biggart
• “Huge business potential in multiple industry verticals: military, fire/rescue, surgery rooms, medical therapy, exercise/fitness, construction and steel. (The) founder is a NASA rocket scientist who is in the NASA Hall of Fame for his patents and inventions. He and his small team have convinced angel investors to support the company, and (convinced) a four-star general to (join) the board of directors.” — Oleg Kaganovich

International DisplayWorks
International DisplayWorks Inc. (Nasdaq: IDWK) in Roseville designs and creates high-quality liquid-crystal and “thin-film transistor” displays, modules and assemblies that it makes in its plants in China. The displays are used in mobile phones and other telecommunication applications, as well as automotive, industrial, medical and consumer products.
Comments:
• “The company put in place a top management team led by Tom Lacey, former Group VP of Intel responsible for Intel’s flash memory business. Success of IDWK is a demonstration that world-class growth companies find the Sacramento area an excellent location from which to conduct world operations.” — John M. Dutton
• “(This is a) substantial public company based in the Sacramento area. Tom Lacey is an experienced and knowledgeable manager. (The region will benefit) not in terms of employment, but because it helps to have public companies based here.” — Corley Phillips

Jadoo Power Systems
Folsom-based Jadoo Power Systems Inc. develops and markets portable energy storage and power-generation products for law enforcement, the military and news-gathering organizations. Its hydrogen fuel-cell technology, which produces power noiselessly and without moving parts, gave rise to the company name, Jadoo, which means “miracle” or “magic” in Hindi.
Comments:
• “Recently funded by Mohr, Davidow Ventures (a top-tier VC fund in Menlo Park); and in a hot sector.” — Jon Gregory
• “The $3 billion professional video market is a sound launching pad for commercialization of Jadoo’s portable fuel-cell system, NABII. Jadoo has a list of more than 500 company representatives who are prepared to purchase or distribute NABII now. The company is in advanced discussions with several governmental surveillance agencies on its next product. The combined market size for these and two other portable power markets is more than $12 billion.” — James Kitchel

JiWire
JiWire, with offices in Folsom and San Francisco, produces a global hotspot directory listing more than 60,000 wireless hotspots for notebook computer users. The firm also markets SpotLock wireless internet security technology and licenses software for hotspot operators. JiWire’s name is a contraction of “joining invisible wires.”
Comments:
• “JiWire is just so cool. It is the new yellow pages for those of us who are road warriors. I use it all the time!” — Nicole Woolsey Biggart
• “Another great Sacramento-based technology company with an opportunity to be the No. 1 business in its space: WiFi software and information services. With its expansion into software that supports finding, enabling and securing wireless communication access, this company has the potential to be quite large. Think of Symantec — take everything they do and make it wireless — that’s JiWire’s future potential.” — Scott Lenet

MaxPreps
On the web, MaxPreps Inc. of Cameron Park is publishing schedules and standings for all the nation’s 15,574 varsity high school football teams, as well as scores from each of 78,750 scheduled games this season. MaxPreps sells advertising and licenses high school sports data and photos by freelance photographers to newspapers, magazines and websites.
Comments:
• “MaxPreps, in El Dorado County, appears to be the front-runner, first mover in a massive market — high school sports-data aggregation — and has built upon that.” — Jon Gregory
• “MaxPreps will grow to become a premium sports media brand. We believe that MaxPreps will generate substantial earnings while controlling a sizable segment of the $7 billion high school sports market. With 7 million participants and annual fan attendance of 140 million, the prep sports space may be the largest underserviced sports-marketing segment available in the United States.” — James Kitchel

Placer Sierra Bank
Placer Sierra Bank, which operates Sacramento Commercial Bank, Bank of Orange County and Bank of Lodi, is the Sacramento region’s largest locally operated bank. Parent company Placer Sierra Bancshares (Nasdaq: PLSB) reported net income of $5.2 million for this year’s first quarter, nearly 24 percent more than it reported in the same period of 2004.
Comments:
• “It is public with a $400 million-plus market cap and is attracting talent from the Bay Area and elsewhere.” — Scott Lenet
• “Placer Sierra Bank operates with the flexibility of a small community bank but with the financial strength and lending limits of a large national bank. It doesn’t let its own growth and success prevent it from leading countless philanthropic endeavors. It is an SBA Preferred Lender, which enables it to offer highly attractive lending options to our region’s small businesses.” — Stella F. Premo

Travidia Inc.
Based in Chico, Travidia Inc. performs internet marketing and digital advertising services for newspapers and retail advertisers. Travidia, which has 130 employees, works with Lowe’s Home Improvement, Petco, OSH, Red Lobster, the San Francisco Chronicle, the Orange County Register, St. Louis Post-Dispatch, the Dallas Morning News and all 32 Knight-Ridder newspapers.
Comment:
• “Travidia has staying power. Management survived the dot-com bubble bursting, without formal VC assistance. It has kept its act together on several fronts. The longer management can resist the VC temptation, the better for the founding shareholders. Good for them! They have a great business model, as evidenced by their growing success since 2000. Will the dogs eat the dog food? (Travidia has) a good base of blue chip customers. It also has significant revenue for an early-stage company and has been operating in the black for a couple of years. And the No. 1 reason most people should care about this little company: it hires people. Not bad for a small company in Chico outside the mainstream economic capitals.” — James Kitchel

TriCo Bancshares
TriCo Bancshares (Nasdaq: TCBK) of Chico is the parent company of Tri Counties Bank, which operates 32 traditional branch locations and 15 in-store locations in 22 California counties. In June, TriCo began construction of a new banking “hub” facility on Challenge Way near Arden Fair Shopping Center to serve its expanding network of branches in the Sacramento area.
Comment:
• “TriCo Bancshares is a publicly traded Chico-based regional bank with a market capitalization of roughly $300 million. TCBK has created a 13-year track record of increasing economic profitability as well as responsible asset growth throughout various interest rate and economic cycles, and has ultimately created shareholder value. For the last five calendar years, TCBK shares have handily outperformed the S&P 500, and (they have) also bested the benchmark by roughly 9 percent over the past 52 weeks.” — Jason Bell

Waste Connections
Waste Connections Inc. (NYSE: WCN), with headquarters in Folsom, is a rapidly growing solid-waste management company that has amassed more than 1 million customers in 22 states, largely through acquisitions. The company performs solid-waste collection, transfer, disposal and recycling services.
Comment:
• “WCN has a demonstrated ability to create returns that far exceed its cost of capital and has consistently grown its asset base by roughly 20 percent since its inception. WCN’s strategy has been to enter nonurban-center markets by acquiring smaller players and locking up exclusive contracts for waste-management services with municipalities. The fact that it is flourishing and is one of the leading competitors in its industry is something our region can be proud of. There aren’t too many Sacramento-based firms that make the Forbes Top 200 Small Companies list two years in a row.” — Jason Bell

WebRaiser Technologies Inc.
WebRaiser Technologies Inc. of Sacramento has developed more than 200 products to operate kiosks for retailers and service businesses. The firm’s VendiSoft and VendiStore software lines are used in self-service kiosks for job application submission, utility bill payment, propane gas-tank exchange and even a hotel check-in system that dispenses room keys.
Comments:
• “WebRaiser is in a business that has extremely high margins, which it can protect via patents and industry specialization. The company’s solutions can be applied to a wide range of industries and adaptations, so it’s not locked into one specific market niche.” — Jason Bell
• “I have been close to WebRaiser for a few years and have observed a team that knows how to execute tactically while creating a long-term strategy. The self-service software market is now taking off and the company is positioned to be a major player. — Steve Nilan