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IVI Checkmate Update
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IVI
Checkmate Corp., recently announced its third quarter financial results.
During this period, IVI Checkmate surpassed $30 million in quarterly
revenue for the first time ever. They have also become the number two
provider of POS products and services in North America for the
second consecutive quarter, which places them just behind VeriFone and
ahead of Hypercom.
Referring
to the company’s troubles with the eN-Touch 1000 terminal (see issue
99:08:01), Barry Thomson, President and CEO said, “After the product and
sales issues that we faced earlier this year, we are pleased to have
rebounded with our highest quarterly revenue ever recorded. Our improved
performance can be attributable to strong sales to key customers and
shipments of eN-Touch 1000 terminals.”
The
company reports that overall the eN-Touch 1000 is making good strides and
sales continue to increase. However, they continue to work on the
manufacturability and yield aspect of the eN-Touch 1000 and are “having
to test product much more often than we would like, thus causing the
product costs to rise.” They are continually refining the terminal so
that they can get the product’s margins within their goals.
Total
revenue for the year to date was $76.3 million, which is down from the
$80.7 million of the same period last year. According to the company, the
declines are due to the production and sales issue of first half of 1999,
including those of the eN-Touch 1000.
On
an up note, strong sales to the top 100 multi-lane retailers of the eN-Touch
1000 and the eN-Crypt 2100, along with the Jigsaw products acquired
earlier in the year, resulted in strong gains in EFT revenue.
Check
reader sales declined in the third quarter. Direct sales of check readers
to retailers remained solid. However, sales of check readers to VARs
continued to be less than anticipated. Despite an increase in sales, gross profit declined in the third quarter as a result of continuing large sales to major U.S. retailers at discounted prices. “Our goal is a 40 percent margin and we have a lot of work to achieve that,” the company stated in telephone interview. “Hypercom and VeriFone are in a price war and although we are not caught in the middle of it, we are getting some of the backlash,” meaning that potential customers can apply price pressure. Customers
Over
the third quarter 1999, a number of prospects became IVI Checkmate
customers, including Service Merchandise. The initial rollout is complete
and as we begin 2000, Service Merchandise is employing a variation of eN-Touch
1000 the portable eN-Touch 1000. The terminal is not a wireless
terminal, but it does allow employees to bring the terminal to the
customer as they are purchasing items. The terminal is brought back to a
docking station where the transaction is transmitted.
They
have also sold 40% of the PETsMART locations. They are using the encrypt
2100 payment terminal, as well as the check reader.
If
you’re familiar with the eN-store and eN-products, you know that they
have normally dominated the grocery market. But, they have now been
introduced to Kmart. IVI has installed 1500 stores to date and will be
working on more in the near future. This is important because Kmart is not
in the grocery market, and these solutions are traditionally used in the
grocery market. Also, IVI will be able to handle four different POS
systems with one set of software, which reduced Kmart’s costs associated
with refunds, gift certificates, and internal fraud. The company also announced that they will be moving beyond the mass merchants and into the drugstore market. Currently, their eN-Concert payment software is in Eckerd, so IVI Checkmate has experience and exposure in the grocery, mass merchant, and drug store markets. Future
As
far as the future, Mr. Thomson stated, “We intend to build on our
positive momentum, as well as continue our focus on the ongoing
development of our eN-to-eNsolutions platform.” IVI Checkmate has also
had continued progress with their dial check reader and they expect
respectable growth in dial check reading market during the first part of
next year.
Company
representatives stated, “We have had a very challenging first half of
the year and I must tell you we have learned a lot from these challenges
and as a result we are a stronger entity. We look forward to next year as
one that puts us back on track and should provide excellent results.” For more information on IVI Checkmate please visit www.ivicheckmate.com.
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