While farmers cringe in the face of potentially catastrophic energy costs, the latest acquisition by CSI Wireless Inc. looks like a masterstroke of timing.

On April 4, USA Today reported that U.S. farmers will pay 21 per cent more for fuel this year than they did in 2003.

On April 5, CSI Wireless announced a multimillion-dollar deal to buy assets from Kansas-based RHS Inc. It's a transaction the Calgary-based public company (TSX: CSY) claims will make it the world's largest provider of GPS guidance products for the agricultural industry.

There's a connection that may mean good news for an evolving organization originally created in 1990 to sell accuracy-enhancement technology to the oil and gas industry.

Photo courtesy of CSI Wireless
Stephen Verhoeff and CSI Wireless managed to survive the tech meltdown.

Though it's best known for the production of fixed-wireless desktop telephones, which accounted for the lion's share of the company's record-breaking ($82 million) total sales last year, CSI also runs a GPS business unit which brought in $32 million.

Among its products are GPS guidance systems that help farmers to conserve fuel by enabling their machinery to criss-cross vast fields with minimal overlap and no skipped areas. CSI Wireless says the devices save their users time and fertilizer, as well as precious fuel.

Farmers large and small are using these CSI-manufactured gizmos in B.C., the Prairie provinces and Ontario as well as the U.S. The products are also finding favour in Europe and Australia. Prior to the RHS deal, CSI Wireless was claiming a 40-per-cent global market share for ground-based devices and 70 per cent for air-based (i.e. cropdusters) guidance systems.

In 2004, CSI Wireless emerged triumphant from the Dark Age that descended on the heels of the tech-market crash, enjoying its best year (profit: $4.3 million) since going public in 1997.

"It was a huge milestone," agreed founder/CEO Stephen Verhoeff, heaving a large sigh of relief.

"We were fortunate to survive those years," he adds. "We had a good base of investors who helped us through that period. And over time, we're confident we can improve on what we accomplished last year."

One key to profitability has been a critically important relationship with Brightstar Corp. of Miami, established after 18 months of tire-kicking. A Motorola licensee, Brightstar was responsible for a fraction less than 50 per cent of all wireless sales in Latin America last year.

So Verhoeff was overjoyed when the U.S. company invited CSI Wireless to team up on the manufacture of wireless desktop phones, to be sold under Motorola's brand, for distribution across Latin America. That's where about half of CSI's phones wound up in 2004.

"I think Motorola liked our (business) model as a North American-based engineering team with offshore manufacturing capabilities," says Verhoeff, whose company also works from offices in Phoenix and Silicon Valley.

Under terms of the deal with Brightstar, CSI Wireless filled an order for TDMA (time division multiple access) phones worth $8.3 million. TDMA is described as one of three technological standards for cellular communication, as well as the dominant format in Latin America.

However, last year CSI Wireless engineers developed a new phone on the global system for mobile communication (GSM) standard, for sale in fresh markets.

"This product gives us access to pretty much every other market in the world," Verhoeff enthuses. "Meanwhile, GSM is transitioning heavily in Latin America. We're having good success with it there, along with Brightstar."

At the same time, Verhoeff hopes to introduce the CSI Wireless GSM phone elsewhere, specifically Eastern Europe, North Africa and India, where Brightstar has recently opened a sales office.

"We'll cater to rising middle-class markets that are growing in many places around the world," Verhoeff continues.

"These are developing countries whose residents are adding disposable income. Countries such as Mexico, China, India - people in these places are starting to make reasonable money. They want a telephone at home."

Born and raised in Alberta, Verhoeff earned a business degree from the University of Calgary before founding his first tech-related enterprise. He sold modems, "back when 2,400 bits per second and 960 bits per second over a telephone line was a big deal."

After he set up CSI Wireless as a private company 15 years ago, Verhoeff's little team (the company now employs a staff of 185) enjoyed modest profitability until the Dark Days came in 2000.

"Last year was evidence of our turnaround," says Verhoeff, adding a solemn pledge: "We don't ever plan to be in that position again."

(Tom Keyser can be reached at keyser@businessedge.ca)