Drexler Ships 1 Million Cards

Drexler Technology Corporation, a supplier of PC-based optical memory cards and related system software and peripherals, today announced results for its fiscal 2000 second quarter and first half ended September 30, 1999.

Net income for the three months ended September 30, 1999, was $1,387,000, or 14 cents per share diluted, compared with $993,000, or 10 cents per share diluted, for last year’s second quarter. Fiscal 2000 second-quarter revenues increased to $4,252,000 from $3,661,000 for the year-earlier quarter.

For the six months ended September 30, 1999, net income was $2,232,000, or 23 cents per share diluted, versus $1,968,000, or 20 cents per share diluted, for the six months ended September 30, 1998. Revenues for the first six months of fiscal 2000 increased to $7,993,000 from $7,507,000 for last year’s first six months.

At September 30, 1999, the Company’s cash, cash equivalents, and short-term investments totaled approximately $7,056,000 versus approximately $8,066,000 at March 31, 1999. The Company has no debt.

Net income for the quarter and six months included recognition of a portion of the Company’s accumulated income tax benefits under Statement of Financial Accounting Standards No. 109 (SFAS 109), “Accounting for Income Taxes.”

In the second quarter the Company shipped a total of 1,070,000 LaserCard(R) optical memory cards and also built a reserve stockpile of several hundred thousand cards as required by a principal customer. Company president, Richard M. Haddock, remarked, “We congratulate our executive vice president, Dr. Christopher Dyball, and his team for manufacturing a record 500,000 optical memory cards in September for both government and commercial use. This demonstrates our ability to meet the 500,000-cards-per-month manufacturing capability requirement for a five-year procurement program described in an RFP (Request for Proposal) we received in August from the U.S. Immigration and Naturalization Service (INS).”

Based in Mountain View, Drexler Technology Corporation is the world’s leading manufacturer of optical memory cards. Drexler’s wholly owned subsidiary, LaserCard Systems Corporation, develops and markets LaserCard(R) optical memory card systems and related software. At September 30, 1999, there were 9,814,904 shares of Drexler Technology common stock outstanding.

Drexler Technology Corporation and Subsidiaries
Summary Consolidated Statements of Operations (Unaudited)
(In Thousands, Except per Share Data)

THREE MONTHS ENDED SIX MONTHS ENDED
9/30/99 9/30/98 9/30/99 9/30/98

Revenues $ 4,252 $ 3,661 $ 7,993 $ 7,507
Cost of sales 2,357 1,727 4,520 3,692
Operating expenses 1,258 964 2,476 1,925
Other income, net 93 51 179 137
Income tax expense
(benefit) (657) 28 (1,056) 59
Net income $ 1,387 $ 993 $ 2,232 $ 1,968
Net income per share:
Basic $ .14 $ .10 $ .23 $ .20
Diluted $ .14 $ .10 $ .23 $ .20
Shares used in
computing net income
per share:

Basic number of
shares: 9,799 9,733 9,797 9,713

Diluted number of
shares 9,856 9,964 9,875 10,056

For Drexler Technology news on the Internet: [http://www.businesswire.com][1]

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

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Diebold Buys Nexus

Diebold, Incorporated has agreed to purchase Nexus Software, Inc., for an undisclosed sum. Nexus Software is a technology development and retail bank branch connectivity company that markets its suite of products to financial institutions around the world. They have installations in more than 250 banks in 77 countries.

Under the agreement, Nexus will operate independently as a wholly owned subsidiary of Diebold. Nexus will leverage its retail branch integration expertise to market Internet and middleware software solutions to customers in the retail banking marketplace. Executive structure and staffing for Nexus will not be affected by the acquisition. Nexus will also continue to provide vendor-neutral retail banking middleware products based on industry- established open standards.

Nexus provides the financial industry with specialized device connectivity for the retail branch operation. Their solutions support financial institutions moving to Windows NT operating system environments and facilitate migration from legacy products to new Windows NT Client, Windows NT Server Back Office products and XFS open environments. Also, Nexus products preserve major capital investments in existing hardware and software while simultaneously taking advantage of the benefits of new Windows NT client/server technology.

Founded in 1985, Nexus Software is based in Raleigh, N.C., and maintains offices in Charlotte, N.C. and Portsmouth, England. For more information, visit the company’s Web site at [http://www.nexussoft.com][1].

Diebold, Incorporated is a global leader in providing integrated self- service delivery systems and services. Founded in 1859, the company employs more than 7,000 associates in more than 135 locations worldwide with headquarters in Canton, Ohio, USA. Diebold reported revenue of US$1.2 billion in 1998 and is publicly traded on the New York Stock Exchange under the symbol ‘DBD.’ For more information, visit the company’s Web site at [http://www.diebold.com][2].

[1]: http://www.nexussoft.com/
[2]: http://www.diebold.com/

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Providian’s New Oakland Center

Providian Financial Corporation announced Monday the official opening of its new Oakland, California banking operations center. Providian employs 650 people at the center and expects to have 1,000 employees there by year end. “We’re glad to share our success with the City of Oakland,” said Providian Chairman and Chief Executive Officer Shailesh Mehta, “and we hope that bringing 1,000 jobs to the city will go a long way towards helping Oakland achieve its vision of creating a dynamic, vibrant and renewed downtown Oakland.”

Community members and government officials, including Oakland Mayor Jerry Brown, joined Providian senior management and employees for a ribbon cutting ceremony. Mayor Brown noted, “Providian’s coming to Oakland is another sign that Oakland is on the move and its downtown is once again becoming the business center of the East Bay.”

Providian has created more than 6,000 jobs nationwide since becoming a public company in June 1997. The company is the sixth largest bankcard issuer in the U.S. and also offers home equity loans and high yield money market deposit accounts and certificates of deposit. Through its innovative Aria.com website, launched in May of this year, consumers can apply for a Providian credit card over the Internet and get approval in seconds.

Providian has been an active charitable contributor in the San Francisco Bay Area for more than ten years. As a part of its community commitment in Oakland, Providian today announced a $400,000 donation to the Alameda Child Care Facilities Development Program, a new public/private venture which is the first program of its kind in Alameda County to address the critical need for flexible loans and grants to improve and increase child care facilities.

“Both the Local Planning Council and Alameda County welcome Providian as a true community partner,” said Rose Padilla Johnson, Chair of Alameda County Child Care Planning Council. Johnson added, “Providian’s $400,000 grant will help increase the flow of capital for development of viable, well-designed child care facilities and to promote better business practices among child care programs in Alameda County.” Providian’s donation is part of the company’s national Providian Child Care Initiative, through which Providian has made significant contributions to child care programs in the San Francisco Bay Area, Salt Lake City, Utah and the State of New Hampshire.

Providian Financial has over 10,000 employees in the U.S. and the U.K, with facilities in California (Pleasanton, Fairfield, Sacramento, Oakland and San Francisco), Kentucky, New Hampshire, Utah, Texas, and London, England. Providian’s Oakland offices are located at 1333 Broadway..

San Francisco-based Providian Financial Corporation ([http://www.providian.com][1]) is a leading provider of lending and deposit products to customers nationwide and now offers credit cards in the United Kingdom. Providian serves a broad, diversified market with loan products that include credit cards, home equity loans, secured cards and membership services. With a commitment to 100% customer satisfaction, Providian’s mission is to help its customers build or rebuild, protect and responsibly use credit by providing a quality borrowing experience that leads to active and lasting customer relationships. The sixth largest bankcard issuer in the nation, Providian has $18 billion in assets under management and over 10 million customers.

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

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GE Buys JCP Cards

GE Capital announced Monday it has signed a definitive agreement to acquire JCPenney’s private label credit card accounts receivable portfolio and JCPenney’s credit card service facilities. Under other terms of the deal, GE Capital will provide JCPenney with private label credit card services for an initial 10-year term. GE Capital is paying between $3.8 billion and $4.0 billion for the acquisition. The deal is expected to close by Dec. 31. Last year, JCPenney had credit card volume of $7.8 billion generated from 35 million private label card accounts. Card receivables are slightly less than $4 billion. GE will assume the operations of JCPenney’s 11 credit card service facilities, which employ about 2,500 people in 10 U.S. cities and Puerto Rico. GE indicated yesterday that it will continue to operate all facilities with existing personnel. JCPenney says by selling its receivables portfolio, the company will free up substantial cash to reduce debt, strengthen its balance sheet and pave the way for the creation and IPO of approximately 20% of a tracking stock covering JCPenney’s Eckerd Drugstore business.

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FDR Buys USPI

First Data Resources has purchased Milwaukee-based USPI, LLC from Transaction Systems Architects. USPI provides transaction processing services for the EFT industry, including on-line debit card processing and ATM switching. Under the agreement, approximately 60 employees will join First Data and will remain in Milwaukee. First Data processes over 658 million off-line debit card transactions annually, from more than 56 million debit cards issued by over 450 financial institutions. First Data says the acquisition will give the company the ability to enter the on-line debit processing arena.

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Cybermoola Update

San Francisco-based Cybermoola that is has selected CyberSource to power the buy button for its recently launched pre-paid Internet shopping card for teenagers. Cybermoola provides the Internet’s first pre-paid card that allows teens to shop and make purchases directly and independently online. Cybermoola also offers online merchants customized marketing initiatives such as sponsorships, banner ads and co-branded opportunities to build their brands, Web site traffic and online sales. On the Cybermoola site, CyberSource ‘Credit Card Services’ is used in conjunction with CyberSource ‘Internet Fraud Screen’ enhanced by VISA.

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Cap One UK Goes Tower IDM

Tower Technology, the fastest growing provider of Integrated Document Management solutions in Europe, announced that Capital One, a world-leading credit card provider, has chosen Tower Technology to implement an advanced customer relationship management system to support is continuing rapid growth in the U.K.

Capital One is one of the world’s largest issuers of credit cards, with Business Week ranking it 15th in its list of the top 50 performers of the Standard & Poors 500, and Fortune Magazine naming the company one of the “100 Best Places to Work”. Established in the U.K. for only three years, Capital One has experienced dramatic growth due to superior customer service and its flexible product range.

The award-winng integrated document management system, Tower IDM from Tower Technology, has been chosen to form an integral part of Capital One’s electronic customer information system designed to support the customer services departments at its Operations Center in Nottingham, England.

A Capital One spokesperson said that by adopting this technology the company would be able to provide further improvements to the customer service operation while continuing its rapid expansion in the U.K.

“The potential of this system is to greatly improve our speed of response in processing credit card applications and will underpin all our customer service activities,” the spokesperson said.

Damian Hyland, managing director of Tower Technology, Ltd. said, “Capital One is an innovative leader in its business and we are very pleased to be able to assist them in their growth.”

About Capital One

Headquartered in Falls Church, Virginia, Capital One Financial Corporation is a holding company whose principal subsidiaries, Capital One Bank and Capital One, F.S.B., offer consumer lending products.

Capital One’s subsidiaries are among the largest providers of MasterCard and Visa credit cards in the world. Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 500 Index.

Using its proprietary Information-Based Strategy (IBS) to generate constant innovation, Capital One has quickly become one of the world’s largest issuers of credit cards and wireless phone service. The IBS combines advances in information technology and sophisticated analytical techniques to identify, manage and take advantage of business opportunities.

[www.capitalone.com][1]

About Tower Technology

Tower Technology is a worldwide leader in delivering award winning, high-volume, production imaging, case management and integrated document management solutions. Tower Technology has a proven track record of providing mission-critical solutions on time and on budget. Many of the world’s largest imaging and document management systems, some of which have hundreds of millions of objects on-line, are powered by Tower Technology. Tower Technology supports customers around the world and has offices in the North America, Australia and Europe. For more information on Tower Technology and Tower IDM, contact Tower Technology by e-mail: inquiry@towertech.com or visit the web site at [www.towertechnology.com][2].

[1]: http://www.capitalone.com/
[2]: http://www.towertechnology.com/

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Signio AS/400

Signio, Inc. has expanded its transaction processing platform to include native support for the ‘IBM AS/400’. Through seamless integration, Signio offers all the key components to automate payment for ‘IBM AS/400’-based Web sites and enables companies to authorize, process, and manage multiple payment types, multi-currency options and different payment schemes online. The solution uses a fixed, flat fee monthly pricing model. There are more than 650,000 ‘AS/400’ servers shipped worldwide. Pacific Sunwear is the first company to integrate the ‘Signio AS/400’ solution.

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Bank One Skids

Bank One reported this morning that the net interest margin for the First USA credit card unit declined an estimated 40 basis points in the third quarter from the second quarter. The nation’s second largest bank credit card issuer also confirmed that growth of its credit card outstandings slowed significantly in the third quarter. Total managed loans (which includes private label cards) were $70.0 billion at Sept. 30, a 7% increase from one year ago and up 1% from the end of the second quarter. Bank One says actions are underway to reduce customer attrition and stabilize returns at First USA. The issuer opened 1,835,000 card accounts during the third quarter, sharply lower than the 2.5 million accounts opened during 3Q/98 and the 2.3 million accounts opened in 2Q/99. Delinquency (30+ day) also notched up for 3Q/99 to 4.74% from 4.30% in 2Q/99 and 4.50% in 3Q/98. The only good news is that chargeoffs declined to 5.33% from 5.43% one year ago. However chargeoffs inched up between the second quarter and the third quarter by eight basis points. At the end of the third quarter Bank One has 64,523,000 cardholders and third quarter volume of $29.6 billion. For more details on Bank One/First USA’s third quarter results visit CardData ([www.carddata.com][1]).

[1]: http://www.cardweb.com/carddata/main.html

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PULSE & Infolynx

PULSE EFT Association and New Jersey-based Infolynx have jointly announced that PULSE has chosen Infolynx, a PC-based information management and invoicing system, as a data warehouse solution for its member financial institutions.

Infolynx will be used as a key resource in PULSE’s efforts to manage information effectively across many functions and will streamline such functions as database management, management reporting, profitability analysis and invoicing.

“The selection of Infolynx will enable PULSE to leverage its information more effectively and in ways that bring real benefits to our member financial institutions,” notes Stan Paur, PULSE’s president and chief executive officer. “The software will allow us to support multiple applications and advanced functionalities.”

The Infolynx platform will consolidate and integrate various databases, expand PULSE’s management reporting capabilities and boost service to PULSE members through the use of improved data retrieval capabilities.

To facilitate the evaluation and selection of a vendor, PULSE issued a Request for Proposal in May 1998. Out of the six vendors who responded, Infolynx was chosen as the system that can best meet the needs identified by PULSE.

“We are excited that PULSE has selected Infolynx,” said Raymond J. Zoltowski, president of Infolynx Inc. “The unique structure of Infolynx, combining the power of an extensive data warehouse with the convenience of a PC-based system, makes it a perfect fit for PULSE and its member financial institutions.”

PULSE is one of the nation’s leading electronic financial services networks. The Houston-based not-for-profit cooperative serves more than 2,000 member banks, credit unions and thrifts in nine primary states including Alabama, Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee and Texas. The network processes in excess of 37 million transactions monthly between member institutions and features more than 52,000 ATMs and 202,000 PULSE(R) PAY point-of-sale terminals in all 50 states.

Infolynx Inc., based in Iselin, N.J., is a privately-held software development company dedicated to serving the needs of the EFT and retail payments industry by providing solutions for administrative and back-office support. Alliast LLC is the exclusive distributor of Infolynx products, with offices in Ridgewood, N.J. and Madison, Wis.

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Triad & Creative Payment

Creative Payment Services , a leading provider of pre-authorized check and electronic payment services to merchants in the direct marketing industry, announced Friday that it will be processing payments for one of America’s leading discount shopping services.

Triad Marketing, of Boca Raton. Florida and its affiliate companies provide programs for direct marketers to help them maximize profit potential of each customer. Triad has developed an array of exciting premium programs used by catalog centers and telemarketers as an add-on to each sale. These unique add-on programs help direct marketers build additional revenue streams, customer loyalty, and recurring revenues.

CPS President David Weiss estimates that direct marketers could be losing 20% to 35% of their potential customers every day by not accepting checks over the phone the same way they accept credit card orders.

Triad’s “Best Price” Membership Program is offered as an after-sale add-on by some of the largest direct marketers and catalog order processors in the country. Among the companies offering one or more of Triad’s programs are: American Express, Hanover Direct, Citibank, HBO, Omaha Steaks, Time-Life, Smirnoff, and many more.

Triad has contracted with CPS in order to allow the direct marketing companies who are offering Triad’s add-on products to accept checking information directly from consumers over the phone. It is believed that check acceptance will dramatically increase sales and improve customer relations, by targeting consumers who do not have, or do not wish to use, credit cards for purchases over the phone, fax, or Internet.

Triad’s “Best Price USA” membership program contains name brand products and services at the lowest prices, including travel, entertainment, electronics, car rentals, appliances, furniture, moving, flowers, and more.

Businesses using CPS’ services can take orders by any means (phone, fax, or Internet). CPS processes payments for some of the Country’s largest direct marketers, and provides live account verification, pre-authorized draft printing, and electronic fund transfer services.

CPS is a privately held Florida corporation.

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