IVI Checkmate Corp. announced its financial results for the second quarter ended June 30, 2000.
Revenue for the second quarter of 2000 declined 13% to $24.9 million, compared with $28.6 million in the second quarter of 1999. Revenue for the six months ended June 30, 2000 of $48.2 million still remained 10% higher than the $43.7 million recorded in the same period a year ago.
The decline in quarter-to-quarter revenue was attributed to component supply issues, a transition to outsourced manufacturing and strong order levels during the same period a year ago.
During the second quarter of 2000, the Company incurred supply problems of available component parts used in the manufacturing of products. As a result, several orders that were to have been filled during the second quarter, were instead deferred until the third quarter. The Company continues to monitor the supply of these component parts and is assessing the feasibility of other supply alternatives. In late June 2000, IVI Checkmate also completed the outsourcing of its entire manufacturing operations. Due to this transition, several product orders that were to have been shipped during the quarter, did not ship until early in the third quarter. Additionally, the Company experienced higher than normal revenue during the second quarter of 1999, as a result of a large point-of-sale terminal rollout by Bank of America.
Net losses for the second quarter and six months ended June 30, 2000 were $426,000, or $0.04 per share, and $1.3 million, or $0.09 per share, respectively. These losses are a significant reduction from 1999 losses of $3.2 million or $0.19 per share for the second quarter and $5.5 million or $0.32 per share for the six months.
Barry Thomson, President and CEO of IVI Checkmate, said, “We are disappointed that limited supply of component parts and the manufacturing transition have hampered our ability to fulfill several sizeable sales orders in the second quarter. However, these sales will be realized in our third quarter results.” Thomson continued, “Notwithstanding the effect of these deferred sales, we are nevertheless pleased with our second quarter financial results, which reflected positively the effect of strategic initiatives previously implemented.”
Financial results for the second quarter of 2000 reflected (1) significant sales of our e(N)-Touch 1000(TM) touch screen terminal; (2) a 25% increase in professional services revenues to $3.0 million in 2000 from $2.4 million in 1999; and (3) a $1 million reduction in selling, general and administrative expenses.
The Company’s second quarter activities centered on promoting wireless telecommunications and the Internet, while expanding distribution channels and strengthening retail market penetration.
Wireless
Development of a new wireless terminal, utilizing short-range radio frequency, has been completed and is currently in beta testing. This new terminal is anticipated to be available in the third quarter.
Internet
IVI Checkmate continues to adapt its point-of-sale solutions to help retailers utilize the power of the Internet to drive incremental sales and reduce transaction costs.
In the second quarter, the Company introduced the e(N)-Touch 3000(TM), a new touch screen-based internet-capable point-of-sale terminal. The e(N)-Touch 3000 is designed to deliver Internet-based applications such as advertising, loyalty, coupon issuance, e-mail and merchant home pages, while still providing the traditional credit, debit, EBT and smart card payment transactions.
The Company also unveiled its Application Services Provider (ASP) initiative, which will bring together premier Internet-based applications and tools that will guide retailers in the design and implementation of interactive campaigns and services targeted to individual consumers. This ASP initiative will solve three issues faced by retailers that are looking to grow their Internet presence — reduced up-front cost of software licenses, reduced need for in-house IT resources to implement and support the software, and reduced cost of building and maintaining an IT infrastructure to support these applications.
Furthermore, this ASP initiative will be instrumental in allowing IVI Checkmate to strategically partner with many Internet-based content suppliers such as the recently announced partnership with Ten Square, to provide a secure Internet broadcasting system or “digital neighborhood” for consumer promotions, messaging, advertising and other services in retail stores.
Expanding Distribution Channels
IVI Checkmate continued to enhance its ability to deliver point-of-sale solutions to retailers in the most effective and efficient way. Market penetration into the small retail business segment increased significantly in 1999 with the acquisition of the Financial Systems division of DataCard Corporation. In the second quarter of 2000, the Company continues to strengthen its market penetration with significant sales to Concord EFS and TASQ, a large value-added reseller. In addition, IVI Checkmate was named exclusive supplier of point-of-sale terminals to Royal Consumer Business Products, a division of Olivetti Office USA — a worldwide leader in consumer electronics and office automation solutions, for resale to office supply superstores nationwide.
About IVI Checkmate
IVI Checkmate is the third largest electronic transaction solutions provider in North America. The Company designs, develops and markets innovative payment and value-added solutions that optimize transaction management at the point-of-service in the retail, financial, hospitality, healthcare and transportation industries. IVI Checkmate’s software, hardware and professional services minimize transaction costs, reduce operational complexity and improve profitability for its customers in the U.S., Canada and Latin America. For more information on IVI Checkmate, please visit our web site at .
For more details on IVI Checkmate’s 2Q and prior quarter results visit CardData ([www.carddata.com][1]).
[1]: http://www.carddata.com