Equifax 1Q/99

Equifax Inc. reported Tuesday first quarter results driven by double digit revenue growth, and the strong performance of North American Information Services and Payment Services.

First quarter highlights include:

* Revenues for the quarter ending March 31, 1999, climbed 19.4% to $421.5 million compared to the prior year period.

* Operating income was $88.8 million versus $81.0 million in 1998.

* First quarter earnings per share were $.31.

Equifax president and CEO Thomas F. Chapman said, “First quarter 1999 results set the stage for a record 1999. We are pleased with the performance in Europe as well as their business outlook, with deals like the recently announced Marks and Spencer contract. Our Latin America strategy is working — the information business is performing well. We just announced the divestiture of our minority interest in Proceda, a non-core business in Brazil, on which Equifax will record a slight second quarter gain. We are encouraged by the business climate for both our processing and information businesses in Brazil. We continue to see solid financial performance from our domestic operations as well, both information services and transaction processing. Equifax Secure, the business that promotes privacy and security of Internet transactions, is positioning itself as the leading provider of authentication services. Looking forward to the rest of the year, we still expect full year earnings growth in the 17% range.”

During the quarter, the Company’s stock repurchase program remained active, with the Company purchasing 1.7 million shares of stock for $61 million. In January, the Board of Directors increased its share repurchase authorization by $250 million. Approximately $250 million remained available for repurchase as of March 31, 1999. Equifax has continued to repurchase its stock during the second quarter of 1999.

During the quarter, Equifax incurred Year 2000 readiness expenses of about $4 million after tax, or $.03 per share.


Payment Services, which operates globally through Card Services and Check Services, increased revenue 28.1% to $151.1 million in the first quarter. Card Services is the leading provider of third party full-service processing solutions to credit unions and independent banks in the U.S. The revenue increase in Payment Services was led primarily by growth in new accounts, new customers and transactions processed in domestic Card Services, as well as the September 1998 acquisition of 59% of Unnisa, a card services business in Brazil, which contributed revenue of $13.0 million for the quarter. Operating income of $28.6 million increased 48.9% primarily as a result of license sales from Card Software, continued growth of the Card Services business and strong performance of Check Services in addition to continuing expense management within this operation. Just last week, Equifax announced the extension of its card processing contract with Card Services for Credit Unions (CSCU) through 2004. This contract has estimated revenue of $500 million over the five-year period.

For the quarter, revenue in North American Information Services of $192.0 million increased 6.5% versus first quarter last year. Revenue performance benefited from growth in U.S. Information Services, with increased sales from telecommunications and utilities industries, as well as marketing services. This group had operating income of $65.7 million, increasing 6.2% versus first quarter 1998. Operating income growth in North American Information Services was in the low double digits, excluding investments in Knowledge Engineering and Equifax Secure, the business that enhances the security and privacy of Internet transactions.

Revenue in Equifax Latin America (which does not include the Company’s Payment Services operation in Brazil) was $29.9 million for the first quarter, with much of the growth from the recent acquisition of SCI in Brazil, which contributed revenue of $13.7 million. Operating income of $4.2 million in the first quarter of 1999 was comparable to last year. The overall performance of the information business in Brazil exceeded expectations in local currency as Equifax is successfully integrating and managing the operations of this new acquisition. Despite the economic volatility in Latin America, efficient expense management has helped contribute to these results.

Equifax Europe revenue was $46.1 million versus $36.7 million in first quarter 1998. This group reported a loss of $1.7 million for the quarter, a significant improvement from the loss in the fourth quarter 1998. Equifax is making substantial progress in lowering the expense base in the U.K. and expects continued improvement in the second quarter. Last month, Equifax announced its biggest ever U.K. marketing contract — a three-year project with Marks and Spencer to build a unique marketing database for that company, in alliance with Claritas.

Equifax ([www.equifax.com][1]), a worldwide leader in shaping global commerce, brings buyers and sellers together through its information management, transaction processing and knowledge-based businesses. Atlanta-based Equifax (NYSE: EFX) serves the financial services, retail, credit card, telecommunications/utilities, transportation, information technology and healthcare industries and government. Equifax adds knowledge, expertise, convenience and security to provide value-added solutions and processes for its customers wherever they do business, including the Internet and other networks. Entering its second century in business, Equifax employs more than 14,000 associates in 18 countries with sales in nearly 50 and has more than $1.6 billion in revenue.

FOR MORE 1Q/99 INFO ON EQUIFAX VISIT CARDDATA ([www.carddata.com][2])

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



SDM International, a leading provider of electronic payments (e-payments) software, to announced that IBM-Venezuela has licensed SDM’s flagship product, OCM24, to operate SUICHE 7B, a national automated teller machine (ATM) switch network in Venezuela.

IBM-Venezuela currently uses SDM’s Central Switch Network Application (CSNA) to operate SUICHE 7B, which serves 31 financial institutions. IBM has contracted with SDM to migrate the CSNA platform to OCM24, which will be modified to play the role of a switch. Work on the upgrade project began this month.

SUICHE 7B, the larger of two switches in Venezuela, supports 15 banks directly and another 16 banks indirectly (through the 15 member banks). These banks account for about 1800 ATMs serving approximately 2 million cardholders, who generate an average of 3 million transactions a month. Three transactions-withdrawal, balance inquiry, and transfer-are offered. Besides processing transactions, SUICHE 7B provides centralized settlement and reconciliation services to the member banks. Planned enhancements to the switch will support POS devices, smart cards, and Internet-based transactions.

“SDM is pleased to have this opportunity to continue our relationship with IBM-Venezuela and SUICHE 7B,” said Jim Perry, vice president and general manager of sales and marketing for SDM. “SUICHE 7B will provide an excellent demonstration of the performance and scalability of OCM24’s switching capabilities.”

OCM24 is an advanced e-payments system used by financial institutions of all types and sizes to manage proprietary and shared automatic teller machine (ATM) and point-of-sale (POS) networks. Running on the full range of IBM S/390 platforms, OCM24 provides device management, transaction control, authorization, shared networking, cardholder management, and data encryption.

SDM International has been delivering e-payments and EDI communication software solutions since 1980 and is based near Raleigh, North Carolina. The company is an IBM Business Partner and supports hundreds of product licenses worldwide. For more information on any of SDM’s software products, please contact the SDM sales and marketing department at 919-552-1100, by FAX at 919-552-6116, or via e-mail at sales@sdm-international.com. Visit our Web site at


E-Commerce Remains Strong

CyberCash says this morning that e-commerce transaction volumes increased by about 30% from the day after Thanksgiving until Christmas, and have dipped by no more than 5% since that time. The firm says that Internet payment transactions processed by the company have remained at levels near those at the height of 1998 holiday shopping season. CyberCash says physical world merchants usually see a significant drop-off in business during the months following the year’s busiest shopping period. That, the company says, hasn’t happened on the Internet.


Chase Flattens

Chase Manhattan’s credit card portfolio was virtually unchanged between first quarter 1999 and first quarter 1998, however charge-offs climbed and delinquency improved. Chase reported yesterday end-of-quarter card loans of $31.4 billion, net charge-offs (as a percentage of average loans) of 6.11% and delinquency (90+ day) of 1.95%. Average credit card receivables for the first quarter stood at $32.1 billion. According to CardData ([www.carddata.com][1]) Chase’s fourth quarter receivables stood at $32.2 billion. CardData shows Chase’s net charge-offs for the fourth quarter logged in at 6.27% and 5.70% for first quarter 1998. Chase’s 90+ day delinquency dropped slightly from 2.17% for fourth quarter 1998 and 2.02% for first quarter 1998, according to CardData. Chase also reported Tuesday that noninterest credit card revenue grew 26% over the past twelve months, from $300 million to $379 million. For complete first quarter financials for Chase Manhattan visit CardData ([www.carddata.com][2]).

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


Smart Card Acceptance

The Smart Card Forum released a new report this morning that concludes Americans are ready, willing and anxious to start using smart cards. A significant number of respondents said they would want to use the cards for functions including bank access and ATM services, to carry a record of driver and health insurance information, and as credit cards. They would be willing to pay up to $50 for the card itself and a $25 annual fee. Generally, those most interested in smart cards were early adopters with PCs, cell phones or other high-tech devices, tended to be in their 30s, had higher incomes and already carried an average of more than six cards in their pockets. Respondents favored a card with the look and feel of a credit card, probably with a photo of the bearer on it. Focus group participants indicated that the ideal smart card could do many things as well as a current card does, but should not be a card that can do one thing better than anything else. The SCF study is available for $6,000 per copy.


MasterCard ’98

MasterCard International reported yesterday that the number of acceptance locations is growing by 3,300 a day and ended 1998 with 16.2 million locations, an industry record. At the end of 1998, nearly 700 million MasterCard, Maestro, and Cirrus cards were in the hands of consumers in 220 countries. MasterCard says gross dollar volume worldwide for 1998 totalled $650.2 billion, up 7.6% from the $604.4 billion charged in 1997. In the U.S. market, MasterCard’s gross dollar volume rose by 17% to $310.7 billion. In Latin America, gross dollar volume rose 13.8%; in Canada, it was up 16.8%; in Europe, 17.5%; Mideast/Africa, up 22.8%; while Asia/Pacific declined 8.4%. MasterCard cards, excluding Maestro, were used for more than 7.4 billion transactions, up 14% year-to-year. The MasterCard/Cirrus ATM network handled 609 million transactions in 1998, a 28% increase. MasterCard says it demonstrated its Y2K readiness last year by processing flawlessly an average 6.7 million transactions on cards with 2000 or later expiration dates.



First Ecom.com, Inc., and Asia Internet Limited (), a Hong Kong based ISP, Monday announced the signing of an agreement to provide Electronic Bill Presentment and Payment services to Asia Internet customers.

This will also include a revenue sharing program, ultimately designed for ISPs around the world.

Under the agreement Asia Internet will use the First Ecom.com credit card processing systems to enable all Asia Internet customers to pay their monthly bills over the Internet. Additionally, Asia Internet will be able to process all its web hosting clients’ online credit card sales in real time, again using the First Ecom.com processing systems. Asia Internet is currently ecommerce enabled via the First Ecom.com systems, and is now processing credit card sales. The EBPP systems are expected to be fully operational by the end of June 1999.

Under the joint revenue sharing program, Asia Internet will refer all its web hosting clients to First Ecom.com for merchant approval, and will be able to earn a commission on all the sales of its clients. Clients whose web sites are hosted with Asia Internet will now have the ability to transact in multiple currencies and carry out batch processing.

This is the first time in Hong Kong that an ISP will be able to offer its customers easy sign up and auto payment options, a development made possible through the use of the First Ecom.com payment gateway. With this system in place, customers will be able to choose the billing plan that best suits them, and review their statement of account online. Customers will also be able to make changes to their credit card details and pay their bills online. Asia Internet will be the first ISP to offer this ecommerce solution to its clients and will participate in the ISP referral program.

“The First Ecom.com payment gateway fills a vacuum in Asia,” said Mike Mahboobani, President of Asia Internet. “For a long time now we have been asked by our web hosting clients to commerce enable their web sites. Without an online processing system, this has simply not been possible, as the banks do not issue Internet Merchant Id’s. We are excited to be the first ISP to offer these services to our clients, and see our relationship with First Ecom.com as providing us with the ability to earn additional recurring income from our web hosting clients. We plan to now offer free web hosting facilities to all our merchants who sell over the Internet.”

“Increasingly Internet Presence Providers are under competitive pressures to reduce web hosting charges,” said Gregory Pek, President of First Ecom.com. “The revenue sharing plan that we offer to ISPs that host web sites helps them to replace declining web hosting revenue streams with a transaction based revenue model. We see our processing system as being a major marketing tool for ISPs around the world, as they can offer free web hosting, yet still experience earnings growth.”

About First Ecom.com

First Ecom.com, Inc., is a U.S. company trading on NASDAQ OTC-BB under the symbol FECC. First Ecom.com provides online credit card transaction processing services for merchants outside of North America. Through a series of strategic alliances, First Ecom.com approves merchants and processes transactions in a tax-neutral jurisdiction without the need for using U.S. banking institutions or U.S.-based ISPs. Using First Data Corp.’s processing platform, First Ecom.com offers online credit card processing solutions for merchants in their preferred currency. For more information, contact First Ecom.com at (888) 305-8233 or by email at ir@firstecom.com.

About Asia Internet

Established in 1997, Asia Internet is one of the fastest growing web hosting companies in Hong Kong. Asia Internet currently hosts approximately 10% of Hong Kong’s active web sites, and more recently has established a branch office in Singapore. The company offers systems integration, leased line, web hosting and consumer dial up services to the general public.


Scan Debit Bureau

Deluxe Payment Protection Systems announced Monday that ‘SCAN Electronic Check’ is now enhanced with ‘Debit Bureau’. The check service, which converts paper checks into electronic transactions at the point-of-sale, draws on ‘Debit Bureau’ to improve front-end authorization and provide higher back-end collection rates. Retailers using ‘SCAN Online’ for paper check authorization experienced a 38% improvement in their ability to prevent losses by identifying high-risk transactions. ‘Debit Bureau’ information includes check order history, check-writing histories, account opening and closing data, information about lost or stolen checks and external data sources. Debit Bureau now has more than 1.7 billion records.


Zebeck Wins Marketing Award

The Midwest Direct Marketing Association announced that Ronald N. Zebeck has been presented with the prestigious Direct Marketer of the Year Award. Zebeck is president and CEO of Metris Companies Inc., one of the nation’s fastest-growing direct marketing companies.

The award, which was presented at a luncheon in Zebeck’s honor Thursday, is given to an individual who has influenced a company’s direct growth in sales revenue and profitability, expanded direct marketing into new industries, received a high level of national and international publicity, maintained a high level of professional and ethical conduct and adapted cutting-edge technology to further advance the industry.

“I am deeply honored to accept this award on behalf of Metris, in part because it reflects our innovation and success in the industry, but also because it mirrors the contributions of the more than 2,200 Metris employees nationwide,” Zebeck said.

Zebeck, a recognized leader in the credit card and financial services industries, was recently elected chairman of MasterCard’s U.S. Board of Directors and also serves as a member of MasterCard’s Global Board of Directors.

Over the last five years, Zebeck has established Metris as one of the nation’s top five providers of fee-based services and the thirteenth largest issuer of credit cards. An industry pioneer, Zebeck has received awards from American Banker, Direct Magazine, Credit Card Management and the Direct Marketing Association.

During his 25 years in direct marketing and financial services, Zebeck helped build successful credit card businesses at Citicorp, Advanta and General Motors. His accomplishments include developing Advanta into one of the most sophisticated direct response companies and credit card lending organizations in the nation. In 1992, Zebeck launched the GM card, which set an industry record by amassing one million accounts less than one month after its introduction and is still considered one of the most successful credit card introductions ever.

Zebeck also spent ten years with Citicorp, New York, where he was responsible for the Citibank Visa, the Choice Card and Citicorp Ready Credit Products. Before serving as Managing Director of The GM Card, Zebeck served at Advanta Corporation and Colonial National Bank USA as Director of Marketing. During this time he was responsible for the development of Advanta’s Gold card program, one of the first no-fee gold card programs to be introduced on a national scale.

A native of Baltimore, Maryland, Zebeck is a graduate of Towson State University with a bachelor of science degree in business administration and marketing.

Metris Companies Inc. is an information-based direct marketer of fee-based services and consumer credit products primarily to moderate income consumers. Based in St. Louis Park, Minnesota, Metris also has operations in Tulsa, Oklahoma; Baltimore, Maryland; Champaign, Illinois and Phoenix, Arizona and Jacksonville, Florida and currently employs over 2,200 people.

Visit Metris on the internet at [www.metriscompanies.com][1].

Since 1960, the Midwest Direct Marketing Association (MDMA) has served professionals who work in all facets of direct marketing, including advertising agencies, marketing consultants, printers, telemarketers, copywriters, designers, illustrators, publishers and retailers

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


Citibank #1 Again

Citibank has reclaimed its ranking as the #1 U.S. bank credit card issuer with $69.4 billion in first quarter managed card receivables compared to BankOne/First USA’s $68.4 billion. Delinquency and losses also improved in Citibank’s card portfolio during the first quarter according to statistics released by Citigroup yesterday. Full financial details for Citigroup’s first quarter as well as historical data are available via CardData ([www.carddata.com][1])


1Q/99 4Q/98 1Q/98
Receivables $69.4b $69.6b $46.8b
Volume $36.8b $42.2b $25.3
Accounts 41.4m 40.5m 25.6m
Chargeoffs 5.34% 5.30% 5.98%
Delinquency 1.46% 1.45% 1.85%

volume- quarterly volume only; charge-offs- 12 month lagged net credit
loss excluding Universal Card Services; delinquency- 90+ days past due
Source: CardData (www.carddata.com)

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


Diebold 1Q/99

Diebold, Incorporated announced Monday its 1999 first quarter earnings, which include record first quarter earnings per share (EPS).

In the quarter ended March 31, Diebold reported net income of $29,124,000, or diluted $.42 per share, on revenue of $283,483,000. This compares to first quarter 1998 net income of $26,850,000, or $.39 per share, on revenue of $295,739,000. This represents an increase of eight percent over the first quarter in 1998.

Highlights include:

* Total operating expenses down eight percent compared to the same period in 1998.

* Product gross margins increased to 40.1 percent while service gross margins increased to 29.1 percent.

* Increased service revenue of $11.8 million, or 11.5 percent.

* United States and Diebold direct international business both improved.

* Software and professional services, Campus Systems and MedSelect grew, reflecting Diebold’s commitment to expand those portions of its business.

As expected, revenue reflected the drop-off in IBM business. However, product gross margins continued to rise because of the higher profits on product sold through Diebold direct sales channels.

“We continue to make important progress toward recovering from the setbacks we experienced in the first half of 1998 and are growing those areas of our business which will move us forward in our industry,” said Robert W. Mahoney, Diebold chairman and chief executive officer. “Favorable gains in our software and service-related businesses as well as continued cost-control efforts will help us produce profitable returns well into the future.”

Given this shift of Diebold’s overall business, which is resulting in a greater mix of professional services, software and networking services, incoming product orders can no longer be considered a reliable barometer for future results. As such, the company will no longer report product orders.

Diebold, Incorporated is the global leader in providing integrated delivery systems and services. Founded in 1859, the company employs more than 6,000 associates in some 120 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 www.diebold.com .


Three Months Ended
March 31,
1999 1998
Net Sales
Product $169,113 $193,130
Service 114,370 102,609
Total 283,483 295,739

Cost of Goods 182,395 193,604

Gross Profit 101,088 102,135

Percent of Net Sales 35.7% 34.5%

Operating Expenses
Selling, General and
Administrative 47,457 49,746
Research, Development
and Engineering 11,951 14,930
Total 59,408 64,676
Percent of Net Sales 21.0% 21.9%

Income Before Taxes 45,864 40,993
Percent of Net Sales 16.2% 13.9%

Taxes on Income 16,740 14,143
Effective Tax Rate 36.5% 34.5%

Net Income $29,124 $26,850
Percent of Net Sales 10.3% 9.1%

Basic Weighted Average
Shares Outstanding 68,927 69,045

Diluted Weighted Average
Shares Outstanding 69,177 69,647

Basic Earnings Per Share $0.42 $0.39

Diluted Earnings Per Share $0.42 $0.39


Compaq Goes Skipjack

Skipjack Merchant Services has been selected by Compaq Computer Corporation to provide online credit card transaction processing as part of its new Online Services initiative.

Compaq, whose servers process close to 90 percent of the world’s securities transactions and 66 percent of all credit card transactions, has named their new electronic commerce storefront service “ezStore.” It comes complete with Skipjack Merchant Services’ credit card transaction payment gateway, protected by the highly secure Skipjack IC encryption protocol.

Compaq’s ezStore enables merchants to set up and create their Web stores using an easy interface and pre-designed templates. Skipjack Merchant Services provides the technology to automate the acceptance and real-time processing of credit card payments for online sales orders. “Compaq’s ezStore is a browser-based, complete web storefront solution,” explains Kenny Kurtzman, VP, GM, Compaq.com Division. “With their customers rushing to the Web, merchants need an answer like this.”

Skipjack Merchant Services is a service of Evolv. Brad Hoeweler, President, Evolv, said, “We’re excited Compaq has selected Skipjack, and we’re looking forward to contributing to the inevitable growth of online sales.”

“There is a solid base of small and medium-sized businesses out there who are going to love the ezStore service,” says George M. Farnell, Jr., Vice President, CTO of Evolv. “Up until now, a company had to play Sherlock Holmes just to figure out all the pieces of the e-commerce puzzle. This is an excellent answer because of the best-of-breed technologies involved. As an example, Skipjack benefits from the fast, stable and flexible qualities of the ProLiant server platform and Compaq’s DISA architecture.”

“Skipjack proves itself in the field every day and serves a growing population,” said Brian D. Griffin, Evolv Vice President, Business Development. “It has been adopted by a wide range of merchant acquirers, acquiring banks, Internet Service Providers, and back-end processors. Plug-ins have been developed for an array of shopping cart and catalog developers such as INEX, Deadline Solutions, Inc. and ShopSite and the company makes its API available to developers of all types,” he said.

Skipjack Merchant Services supports Visa, MasterCard, American Express, Discover Card, Diners Club, JCB, and debit cards. It features real-time authorization and settlement as well as email receipts for customers and fulfillment entities.

More about Compaq and services designed for the small and medium-sized business at: . More about Skipjack at: