OTI 4Q/02

Rosh Pina-based OTI, a contactless smart card solutions provider, reported that even though revenues were off by 10% last year, the Company successfully reduced its operating loss by 60% and its net loss by 47%. The firm’s “EasyFuel” petroleum payments program in Europe, South America, and South Africa, as well as its involvement with MasterCard’s new “PayPass” contactless smart card payment program in the USA are set to be key revenue drivers for this year and beyond. Revenues for the fourth quarter were $3.9 million compared to $5.7 million for the year-ago quarter. Net loss for the quarter decreased 48%, to $2.0 million, from a net loss of $3.9 million, in the fourth quarter of 2001. The company, which is now listed on Nasdaq, says it expects to reach profitability in 2003.

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Metris Shrinkage

Metris Companies, and Direct Merchants Credit Card Bank, confirmed yesterday they intend to shrink the size of their credit card portfolio this year by $2.1 billion. The sub-prime issuer says it hopes to achieve the target through lower credit card account acquisitions, attrition in the portfolio, and third party sales. Metris has also tightened credit line increases to existing credit cardholders, and selectively repriced loans that exhibited increased risk levels. The issuer says it has already reduced customer commitments by over $3.5 billion by closing inactive credit card accounts and reducing credit lines on higher risk credit card accounts. Last year, Metris’ account base decreased by nearly 500,000 accounts. At the end of 2002, Metris had $11,319,109,000 in credit card loans and 3,425,000 active accounts. Metris also announced yesterday it received a $125 million term loan commitment from the Thomas Lee Equity Fund as a back-up financing facility, with an annual interest rate of 12%. (CF Library 1/29/03)

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Renewal Incentives

Concord’s rising star, Bond Isaacson, is receiving a $500,000 bonus for each large financial institution which renews with the processor. Isaacson is also set to receive an additional $2 million bonus if he renews a certain number of the financial institutions on Concord’s list. He was hired in September of last year as EVP, and was promoted in February to co-CEO and named a director. Dan Palmer, who was chairman and CEO, is now sharing the top executive spot with Isaacson. Palmer is now a director instead of a chairman. Under terms of the employment agreement, Isaacson received a signing bonus of $500,000 and was granted an option to purchase 400,000 shares of the Company’s stock. He also receives an annual salary of $500,000. Next month he will receive a bonus of $600,000 and another bonus of $600,000 in May 2004. Isaacson formerly worked for BofA, VISA, and IBM. (CF Library 9/13/02; 2/13/03).

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Intercept Revisions

GA-based InterCept yesterday re-stated its fourth quarter results which show a net loss of $13.2 million instead of the previously reported loss of $12.0 million. The change was due to a settlement with MasterCard over itsiBill subsidiary. In mid-March First Data notified InterCept that MasterCard had reviewed the historical charge-back percentages for the iBill operations for 2001 to 2003, and had determined that those percentages exceeded MasterCard’s limits. Yesterday, InterCept agreed to pay a total of $5.85 million to First Data and MasterCard for the final assessment. Of that amount, $3.5 million was recorded as an adjustment of the iBill purchase price, $1.9 million was recorded as an expense for the fourth quarter, and $450,000 will be recorded as an expense during the first quarter of 2003. For complete details on InterCept’s revised performance visit CardData ([www.carddata.com][1]).

[1]: http://www.carddata.com

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TRAVEL CARD PROJECT

Stockholm’s public transport authority, AB Storstockholms Lokaltrafik, has inked a deal with Australia’s ERG Group to implement a smart card based automated transit fare collection system throughout the city and county of Stockholm. The “Resekortet,” or travel card project, will produce revenues in excess of A$49 million to ERG. The contract provides for the integration using smart cards across SL’s entire public transport network, comprising 150 rail and metro stations and more than 1,800 buses. The project calls for the issue of one million smart cards within the next two years. The new system is expected to be fully operational by the fourth quarter of 2005.

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ABNH 4Q/02

American Bank Note Holographics, Inc., a world leader in the origination, production and marketing of holograms for security applications, announced financial results for the fourth quarter and year ended December 31, 2002. For the year ended December 31, 2002, net income, excluding non-cash charges to goodwill and fixed assets, increased to $1.2 million or $0.06 per share compared to net income of $0.6 million, or $0.03 per share for the year ended December 31, 2001.

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MBNA Marketing

MBNA has indicated it expects to rely less on telemarketing and more on other marketing channels, such as the Internet, to generate new accounts. The issuer says changing consumer attitudes and acceptance of telemarketing and federal and state regulatory initiatives such as do-not-call lists as the reasons for the change. MBNA Marketing Systems currently has 16 telemarketing facilities in 10 states. At the end of 2002, it employed approximately 4,200, mostly part-time. Last year, MBNA added approximately 34% of its new accounts in the USA through telemarketing. For 2002, MBNA added 14.2 million new customers or 12.0 million new accounts. The company also acquired 405 new affinity deals with organizations and renewed more than 1,100 group contracts during the year. (CF Library 1/24/03)

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Providian Segments

Providian said Monday it cut its work force last year from 12,808 to 6,261 employees with no major cut-backs expected this year. The issuer also reported that $17.70 billion of its $20.0 billion in managed outstandings are to customers in the “standard” and “middle market” segments. Providian says these segments are subject to increased risk weightings under the new FFIEC guidance for sub-prime lending programs. The issuer also noted that it modified its loan re-aging practices in February. If a customer makes a partial payment, that qualifies under its standards and applicable regulatory requirements, Providian will re-age the related account from delinquency status to current status. Providian says it will re-age qualifying accounts once in any 12-month period, but not more than twice within 60 months. Providian previously re-aged qualifying accounts no more than once in any 30-month period and not more than twice within 60 months. As a result of the change Providian’s delinquency rate for February dropped from 9.73% to 9.59%.

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Spiegel 10-K Delay

Spiegel, Inc. announced that the filing of its Form 10-K for its fiscal year ended December 28, 2002 (the “2002 Form 10-K”) with the Securities and Exchange Commission has been delayed. KPMG LLP, the company’s outside auditors recently advised the company that they would not be able to provide the company with an audit opinion that would enable the company to file its 2002 Form 10-K in accordance with the SEC’s rules and regulations until they have had an opportunity to review and consider the report.

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