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IVICheckmate Rotools, Relishes Revenue Increase

IVI Checkmate recently announced that their fourth quarter revenues increased 25% to $27.1 million from $21.6 million in the same quarter last year. Net losses in the quarter declined to $2.7 million from net losses of $15.0 million for the same quarter last year.

As you may remember from issues 99:08:01 and 00:01:02, in the last couple of years IVICheckmate faced operational glitches that affected revenues. The biggest factor was the discovery of problems relating to the eN-Touch 1000 touch screen terminal. The company spent a year and a half using significant financial and operational resources to redesign the terminal and resolve the problems once and for all.

The company reports that other troubles plagued them as well, including “internal manufacturing operations that were not efficient nor effective in relation to rapidly changing technologies” and component part shortages, which affected manufacturing and the availability of certain products. Furthermore, the company reports that they did not “have in place the proper processes and procedures necessary to support the size and complexity of the company due to its rapid expansion through various mergers and acquisitions over the past three years.”

Therefore, a number of initiatives were completed that changed the way the company operated. They began marketing a new eN-Touch 1000-and report that the eN-Touch 1000 is now the market leader in screen-based terminals used by multi-lane retailers. In addition, the company has also replaced all of the original terminals that were shipped to a major retail chain with new modified versions, which was at a considerable financial cost.

Other initiatives that were undertaken have resulted in a reduction in operating expenses. The Company reduced the number of its business units from six to three, as well as flattened its organizational structure to reduce the various levels of management . The company reports that these steps have resulted in more efficient sales efforts, reduced sales costs, and placed management in direct contact with customers.

Furthermore, research and development costs have been reduced as the company continues to leverage on its relationship with Ingenico and their product development resources in order to bring wireless and smart card point-of-sale technology and terminals to the North American market faster and cheaper. In January 2001, IVI Checkmate announced that its board of directors was in discussions with Ingenico, which may result in Ingenico acquiring majority control of IVI Checkmate (see 01:02:02). Neither IVI Checkmate’s board of directors nor the board’s special committee has accepted or recommended any transactions at this time.

Many of the initiatives implemented over the past year have been to resolve issues and improve processes that have adversely affected the company’s retail solutions and financial systems divisions in the U.S. These efforts will continue into 2001, as the company focuses on returning its U.S. operations to profitability. IVI Checkmate is a major provider of electronic transaction solutions in North America. For more information visit www.ivicheckmate.com.