Digital Label Co. Expands Client Base Across Continent

E-paper and software provider Danavation Technologies Corp. (DVN:CSE; DVNCF:OTCQB) announced it is expanding the reach of its Digital Smart Labels™ technology by securing several new installations across North America.

The new contracts are with North Carolina's Grady-White Boats, Clearway Group in Ontario, Macadoodles in Nebraska, and Eaton Industries in Canada.

"We continue to accelerate our progress securing new contracts for installations of our Digital Smart Labels™ with both new and established brands in various business sectors throughout North America," said John Ricci, chief executive officer of Danavation. "We look forward to building on this momentum with further coming installations, partnerships, and deployments of our Digital Smart Labels™ into new brands and verticals."

Danavation's labels automatically update the prices of merchandise on the shelves, technical analyst Clive Maund wrote.

"Although already in widespread use in Europe, this is not the case in the U.S., and with inflation having taken hold and trending in the direction of hyperinflation, the need to implement this technology in stores nationwide across the U.S. is becoming urgent," Maund said.

The Catalyst: New Contracts

Grady-White Boats is one of the most respected boatbuilding companies in the world, Danavation noted.

In business since 1959 in Greenville, N.C., Grady-White was ranked "Highest in Customer Satisfaction with Coastal Fishing Boats" eight times in a row by data company J.D. Power and Associates.

Danavation said its installation of a Digital Smart Labels™ system in Grady-White's North Carolina warehouse is expected to be finished between the first and second quarter of 2024.

The company is also working with the Clearway Group of Maple, Ontario, to create room signage to display calendars with live updates linked to their calendar software. It's expected to be completed between the first and second quarters.

Clearway, which has been operating for more than 50 years, specializes in sewers and water mains, transportation, dry utilities, shoring, road reconstruction, bridges, concrete forming, marine, environmental remediation, and treatment plants/pumping stations.

Danavation will also be expanding its installations for Macadoodles in Omaha, Nebraska.

"Following two successful installations of our Digital Smart Labels™, Macadoodles (franchise) recognized the benefits and return on investment of Danavation's solution, which ultimately drove the decision to add a third store location under the banner to go digital," the company said in a release. "Installation will be completed in the second quarter of 2024."

Eaton Industries Canada Co. in Mississauga, Ontario, is also expanding its use of Danavation's technology.

Following previous successful projects with the company, another division is looking to deploy Digital Smart Labels™ in their manufacturing plant. Installation with be completed in the second quarter of 2024.

Eaton is the Canadian division of global power management with more than 97,000 employees and operations in more than 175 countries, Danavation said.

What Are Digital Smart Labels™?

Danavation's Digital Smart Labels™ are powered by proprietary automation technology and an underlying Platform-as-a-Service (PaaS) model. The company said using the technology enhances data accuracy and improves performance by optimizing inventory and removing the high labor costs and low productivity traditionally associated with labor-intensive merchandising workflows.

The company has introduced its solution to retailers across North America, including True Value in addition to Ace Hardware. It is also targeting new markets, including healthcare providers, manufacturing, and logistics companies. 

The labels offer high-resolution, high contrast, wide viewability, and vibrant color displays for prices. The displays, which allow for both text and graphics, are housed in durable and strong polycarbonate housing.

With the company's automatic price updating system already tried and tested, it is highly likely that it will receive orders for its system from at least one big retailer soon, the technical analyst Maund noted.

"This is truly a company that will benefit from the effects of hyperinflation," he wrote.

Maund said that the "low-priced tech-type" stock would not appeal to everyone, "but those of you who are interested should look to buy immediately."

Dozens of retailers, brands, and businesses are now using the labels, the company said in a recent corporate update. They span in size from local family-owned businesses to large, multi-national corporations.

Market Gaining Traction

Globally, the retail automation market — which also includes electronic shelf labels — was valued at nearly US$15 billion in 2021, according to a report by Straits Research. It is predicted to reach US$34.5 billion by 2030 with a compound annual growth rate (CAGR) of 9.8%.

"Retail automation is gaining high traction and expanding at a rapid rate," the report said. "The need to provide exquisite shopping experiences that can help retailers increase customer retention is fueling the need to adapt to ongoing digitalization strategies such as automation."

Automation can "reshape retail business models and provide value chain opportunities for players operating in the market," Allied Market Research wrote. 

Internet-of-Things (IoT) devices like smart labels are poised for growth. According to a report from Mordor Intelligence, the IoT market is expected to register a CAGR of 10.53% during the forecast period (2022-2027). 

"Enterprises and service providers have been looking at IoT as the key enabler to augment digital transformation and unlock operational efficiencies," the report said. 

Ownership and Share Structure

Management owns roughly 34% of the share base. The company reports no institutional owners.

Strategic investor T. Sean Harvey holds 11% or 13.31 million shares, and Independent Director Vivek Jain owns 0.13% or 154,000 shares, according to Reuters.

Danavation has a market cap of about CA$7.25 million with about 120.8 million shares outstanding. It trades in a 52-week range of CA$0.29 and CA$0.04.

Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Danavation Technologies Corp.
2. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
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