American Express predicted yesterday the economy will remain weak into 2002 and said the company plans to cut between 4,000 and 5,000 jobs during the third quarter. AmEx will announce Monday a 76% decline in earnings for the second quarter due to pre-tax charge of about $826 million for additional write-downs in the high-yield portfolio at American Express Financial Advisors. During 3Q/01, AmEx says it will trim costs by relocating certain finance, operations and customer support functions to lower-cost overseas locations; accelerating the transition of business travel operations to the Internet, and moving certain employee processing and service functions, including Human Resources processes, expense report processing and employee travel bookings, to the Internet and reducing the staff levels currently needed to provide these services.Details
Certegy Inc. reported second quarter 2001 basic earnings per share of $0.31 ($0.26 on a pro forma basis), in line with expectations. Certegy was established as a separate public company through a tax-free distribution to Equifax Inc. shareholders on July 7, 2001. Pro forma results include adjustments to historical results to reflect additional expenses that would have been incurred had the distribution occurred at the beginning of the reporting periods.
FINANCIAL AND BUSINESS HIGHLIGHTS
* Revenue growth of 6.4 percent to $205.4 million, compared to 2000 second quarter revenue of $193.1.
* Operating income of $35.9 million ($34.2 million pro forma) compared to $36.5 million ($34.9 million pro forma) in the prior-year quarter.
* Net income of $21.3 million ($18.0 million pro forma), versus $22.5 million ($18.1 million pro forma) in the prior-year quarter.
* Diluted shares would have approximated 69.3 million for the second quarter of 2001, based upon a common stock market price in the $29 to $30 range, which would have resulted in diluted pro forma earnings per share of $0.26.
“We continue to grow the business profitably and gain significant new customer relationships,” said Lee Kennedy, President and CEO of Certegy. “Revenue, operating income and net income increased 11.7 percent, 11.1 percent and 15.1 percent on a pro forma basis, excluding the impact of currency and non-recurring software sales.”
Kennedy continued, “We have achieved a high degree of credibility in the markets we serve by maintaining exceptional customer service and advanced technology. During the second quarter and early July, we successfully converted the National Australia Group card portfolios in the United Kingdom, Ireland and Australia to our Base 2000 card processing platform. The final phase, the New Zealand portfolio, is scheduled for completion in early August. In Brazil, we also converted two million existing Banco Real accounts to our Base 2000 processing platform. These projects were completed on time, within budget and with a high degree of accuracy.” Kennedy added, “We will continue to aggressively pursue new customer opportunities which leverage our existing operations.”
Card Services generated revenue of $138.6 million in the second quarter of 2001, a 6.5 percent increase compared to 2000. On a local currency basis, international card issuing revenue rose by 25.1 percent. Card Services’ revenue and operating income grew 13.8 percent and 15.5 percent exclusive of software sales and currency.
Check Services reported second quarter revenue of $66.8 million, a 6.1 percent increase (7.6 percent excluding the impact of foreign currency) over 2000. Operating income declined modestly to $10.5 million. Net loss rates have begun to decline but remained at a higher rate than in the prior year quarter, including the effects of new customer start-up loss experience that typically exceeds ongoing loss rates.
The company reconfirmed previous financial guidance for full year 2001 and 2002. For 2001, 9 to 10 percent revenue growth, including the impact of foreign currency, and 14 to 16 percent net income growth. For 2002, the company expects revenue growth between 11 and 13 percent, and net income growth between 14 and 16 percent. Stated growth rates are organic, based upon pro forma comparative results and assume constant currency in 2002.
Certegy Inc. provides credit, debit and merchant card processing, e-banking services, check risk management and check cashing services to financial institutions and merchants worldwide. Headquartered in Alpharetta, Georgia, Certegy maintains a strong global presence with operations in the United States, Canada, the U.K., Ireland, France, Chile, Brazil, Australia and New Zealand. As a proven global payment services provider, Certegy enables transaction certainty, brings customers and commerce together and provides business results through leading technology. Certegy employs about 5,800 associates in 9 countries and had $779 million in revenue in 2000.
For more details on Certegy visit CardData ([www.carddata.com]).
J.P. Morgan Chase & Co. reported Wednesday it added more than one million accounts during the second quarter as credit card outstandings continue to grow at an annual rate of 15% from one year ago. Credit card revenues hit $1.1 billion for 2Q/01, a 15.3% increase over second quarter 2000. Credit card earnings rose 7.1% over the same period, from $126 million to $135 million. As with other major issuers, earnings have been dampened by higher charge-offs. Chase reported 2Q/01 charge-offs of 5.54%, a 13% rise since the start of this year. The issuer notes that the increase in charge-offs from the first quarter primarily was the result of higher bankruptcy filings, which were leveling off during the latter half of the second quarter. For complete details on Chase’s 2Q/01 current and past performance visit CardData ([www.carddata.com])
CHASE TRACK RECORD
2Q/01 1Q/01 4Q/00 3Q/00 2Q/00
AVG RECV: $36.7b 36.4 34.4 32.9 32.6
CHG-OFFS 5.54% 5.05 4.90 5.00 5.16
DEL (90+dy) 1.90% 1.99 2.07 1.84 1.68
Source: CardData (www.carddata.com)
As part of his strategic plan to grow the value and relevance of the company’s standard-setting decision technologies far beyond markets it currently serves, the CEO of Fair, Isaac and Company, Inc. announced that Steven Sjoblad, a top corporate strategist and marketer, would join the company to lead its corporate development.
Sjoblad represents a pivotal addition to the Fair, Isaac senior leadership team. As leader during Fallon McElligott’s rise from start-up to one of the world’s preeminent advertising agencies, Sjoblad has fine-tuned the art of creating and the science of executing market-making corporate development strategies. As Fallon’s president, Sjoblad guided global strategy and marketing campaigns for dozens of industry-leading companies, including Coca-Cola, FedEx, Northwest Airlines, Lee Jeans, the NBA, Conseco Financial Services, and many others others.
“Steve is a catalyst for new ideas,” said Tom Grudnowski, CEO of Fair, Isaac. “He causes us to look at our business, our markets and our opportunities in entirely different ways. I am confident that his perspective and his experience will be valuable assets in moving Fair, Isaac into significant new arenas,” he said.
Sjoblad, who was advising Fair, Isaac before agreeing to join the company as vice president of corporate development, said he “sees a huge upside for Fair, Isaac. Over the years, I’ve worked with a number of companies that have distinct windows of opportunity to achieve significant success. But the potential for Fair, Isaac to create a fundamental shift in how corporations think about and use mission-critical data is the most impressive–bar none–I’ve ever seen,” Sjoblad said.
During his 25-year career, Sjoblad has worked in virtually every consumer and business-to-business category, developing a broad knowledge base and a deep expertise in creating powerful, profitable corporate strategies and translating them into compelling marketing programs. At Fair, Isaac, Sjoblad will focus on identifying new categories of products and new market opportunities for the company, and on building a global presence for Fair, Isaac.
In addition to his position at Fair, Isaac, Sjoblad serves as non-executive Chairman of the Board of Ellerbe Becket, the world’s second largest architectural and engineering firm, and is a board member of Schwans Sales Enterprises, a $3.3 billion food company. He also is an investor and Board member of CDXC, a digital asset management company based in the Twin Cities.
About Fair, Isaac
Fair, Isaac and Company is a global provider of customer analytics and decision technology. Widely recognized for its pioneering work in credit scoring, Fair, Isaac revolutionized the way lending decisions are made. Today the company helps clients in multiple industries increase the value of customer relationships. Fair, Isaac has made the Forbes list of the top 200 U.S. small companies eight times in the last nine years. Headquartered in San Rafael, California, Fair, Isaac reported revenues of $298 million in fiscal 2000.
For more information, visit the company’s Web site at .Details
The U.S. Senate unanimously agreed this week to substitute the language of a pending House bankruptcy reform bill (H.R. 333) with that of the Senate-passed version (S.420). The Senate then passed the reform legislation by a 82-16 vote. As a result the House-Senate conference committee has established. So far, the Senators on the committee include: Patrick Leahy (D-VT), Orrin Hatch (R-UT), Joseph Biden (D-DE), Edward Kennedy (D-MA), Herb Kohl (D-WI), Russell Feingold (D-WI), Charles Schumer, (D-NY), Richard Durbin (D-IL), Charles Grassley (R-IA), Jon Kyl (R-AZ), Mike DeWine (R-OH), Jeff Sessions (R-AL), and Mitch McConnell (R-KY). The Senate also voted to approve an amendment that calls for the GAO to track and report on the effect of the bankruptcy law two years after its enactment.Details
Sears, Roebuck and Co. reported that 2Q/01 domestic credit revenues declined 0.5% from a year ago, to $1.28 billion. Operating expenses increased by $19 million over last year due partly to the continued rollout of the ‘Sears Gold MasterCard’. Sears now has more than 10 million cardholders for the new MasterCard and approximately $2.2 billion in bank credit card receivables. Meanwhile the managed net charge-off rate increased to 5.42% from 5.09% a year ago, reflecting increased write-offs as a result of higher credit customer bankruptcy filings this year. However, Sears notes that more recently, bankruptcy filing trends have moderated. For complete details on Sear’s 2Q/01 current and past performance visit CardData ([www.carddata.com])
SEARS TRACK RECORD
2Q/01 1Q/01 4Q/00 3Q/00 2Q/00
EOP RECV: $26.0b 25.7 27.0 25.7 25.1
CHG-OFFS 5.42% 5.07 4.79 4.97 5.09
DEL (30+dy) 7.26% 7.50 7.56 7.47 7.15
Source: CardData (www.carddata.com)
American Bank Note Holographics, Inc., a world leader in the origination, production and marketing of holograms for security, authentication and design, Wednesday commented on the announcement of its settlement with the Securities and Exchange Commission as well as the indictment of its former senior officers by the U.S. Attorney’s Office for the Southern District of New York.
“Today’s announcements by the SEC and US Attorney reiterate the disclosure we made in our most recent Form 10-K, relating to the conclusion of the SEC’s investigation of ABNH and its acceptance of our offer of settlement,” said Kenneth H. Traub, ABNH’s President and CEO. “Today’s announcement further confirms that ABNH is not a target of the U.S. Attorney and that the prosecution of certain former senior officers of the company in no way reflects on ABNH’s current employees, officers, directors and activities.”
“ABNH has succeeded in resolving the problems created by the former management, and we have reestablished the Company’s strong reputation in our industry,” continued Mr. Traub. “ABNH now has a completely new management team, the SEC investigation and class action litigation have all been settled, we are now well-capitalized, and we have recently developed and introduced a host of new products to address the growing demand for holographic security in our target markets.”
About American Bank Note Holographics, Inc.
American Bank Note Holographics is a world leader in the origination, production, and marketing of holograms. The Company’s products are used primarily for security applications such as counterfeiting protection and authentication of transaction cards, identification cards, documents of value, consumer and industrial products as well as for packaging and design applications. ABNH is headquartered in Elmsford, NY. For more information, visit [www.abnh.com].
InnoVentry, the nation’s leading provider of automated cash management services through its RPM self-service check-cashing kiosks, will be poised to help millions of Americans cash their tax rebate checks 24-hours a day. The checks will be distributed starting July 23.
As 96 million Americans look forward to receiving their checks this summer, InnoVentry is preparing its staff, machines and network operations center to cash tens of millions of dollars worth of checks in just 10 weeks. Frank Petro, InnoVentry chairman and CEO, said, “It’s Christmas season in August for InnoVentry and for millions of people receiving checks. Just as retail stores prepare early for the holiday season in December, we are getting ready for the busiest check-cashing volume of 2001. The tax refund program is unprecedented in terms of the volume of ‘live’ checks that will be disbursed in a short period. Our kiosks will be ready, day and night, to accept these checks from customers who want to get instant access to their tax rebate payments.”
To support this increased volume, InnoVentry will more than double the number of machine service calls to make sure that the RPMs are prepared to accept a higher volume of transactions. In addition, the company will increase the number of customer service representatives by 20 percent to handle the increase in transactions, and will deploy more staff performing online monitoring of every machine in the network. InnoVentry has deployed more than 1300 RPM(TM) automated financial kiosks, which allow users to automatically cash checks in major retail locations including Kroger, Albertson’s, Circle K, and K-mart stores. According to a major retail chain, 51% of RPM users are new to their stores, and nearly two thirds of them stay in the stores to shop after cashing their checks.
How RPM Kiosks Work
InnoVentry targets the more than 60 million Americans who cash checks and perform other routine financial transactions outside of the banking system. RPM kiosk transactions do not require a card, PIN or membership. To receive cash, customers insert their check into the machine and follow simple instructions on an interactive touch screen. First-time customers use an on-machine telephone to provide basic identification information to a customer service representative. Most subsequent transactions are completely automated and can be completed in less than three minutes.
InnoVentry facilitates secure transactions by utilizing biometric facial recognition technology to quickly verify a customer’s identity. Upon receiving the user’s consent, RPM kiosks capture a digital photo of the customer’s face. Facial recognition software then generates a confidential biometric “signature” from the photograph that can be used to verify identity and protect customers against identity theft and fraudulent transactions.
Backed by strategic partners that include Capital One Financial (NYSE: COF) and Wells Fargo & Co. (NYSE: WFC), InnoVentry Corp. ([www.innoventry.com]) is the creator of the RPM(TM) Network of automated financial kiosks, which allows consumers to cash checks, withdraw funds and perform other financial functions. With more than 1300 RPM machines deployed across 27 states, InnoVentry operates the largest independent network of check-cashing locations in the country. A privately held company based in San Francisco, InnoVentry has enrolled more than 1.3 million customers and cashed more than $1.5 billion worth of checks.
RPM is a trademark of InnoVentry Corp., San Francisco, Calif. Product and company names are used herein for identification purposes only, and may be trademarks of their respective companies.
Global Payments reported yesterday that revenue grew by 25% to $102.7 million and net income hit $8.7 million during the fiscal quarter ending May 31. Results for the fourth quarter also include a restructuring charge of $4.9 million relating to facilities consolidation and severance ($2.2 million of which is non-cash), a non-recurring reserve of $3.0 million involving a change in operating guidelines concerning aged charge-backs in the merchant settlement function, as well as a non-operating, non-cash loss of $5.0 million on the write down of Global’s sole Internet-related investment. Global expects to achieve fiscal 2002 revenue of $455 to $462 million, reflecting growth of 30% to 32% over fiscal 2001 normalized results of $350.3 million. For complete details on Global’s 2Q/01 current and past performance visit CardData ([www.carddata.com]).
PubliCARD, Inc. announced a shift in its strategic focus and reported its financial results for the three and six months ended June 30, 2001.
After evaluating the timing of potential future revenues, PubliCARD’s board of directors has decided to shift the Company’s strategic focus. While the board remains confident in the long-term prospects of the smart card business, the timing of public sector and corporate initiatives utilizing the Company’s smart card reader and chip products has become more uncertain. Given the lengthened time horizon, the board does not believe it would be prudent to continue to invest the Company’s current resources, including its $8,472,000 in cash, in the ongoing development and marketing of these technologies.
Accordingly, the board has determined that shareholders’ interests will be best served by pursuing strategic alliances with one or more companies that have the resources to capitalize more fully on PubliCARD’s smart card reader and chip-related technologies. In connection with this shift in the Company’s strategic focus, workforce reductions and other measures will be implemented to achieve cost savings.
The board has also authorized management to seek acquisitions of businesses in areas outside the technology sectors in which the Company has recently been engaged, so as to diversify its asset base.
The Company will continue to develop and market its closed environment smart card transaction solutions to the educational and corporate campus markets through its U.K. based Infineer Ltd. subsidiary, which represented 73 percent of consolidated revenues for the first half of 2001.
In addition, Antonio L. DeLise, Vice President and Chief Financial Officer, has been appointed to serve on the Company’s board of directors.
Second quarter results
Revenues for the second quarter of 2001 were $1,339,000, up from $1,091,000 a year ago. The net loss from continuing operations for the quarter, excluding a repositioning charge of $6,085,000 principally reflecting the non-cash write-offs associated with the smart card reader and chip business, was $3,425,000, or $0.14 per share, compared with $5,489,000, or $0.24 per share, a year ago. The decline in the net loss is attributable primarily to a 33 percent reduction in general and administrative, sales and marketing and product development expenses from last year’s second quarter. Operating expenses are expected to decrease as the benefits from various headcount reduction programs and cost containment measures materialize. Also during the quarter, the Company revised its estimates of expenses associated with previously discontinued operations and reversed reserves amounting to $2,350,000, or $0.10 per share. In the third quarter of 2001, the Company expects to record a charge related to the work-force reductions described above and other repositioning actions in the range of $1,000,000 to $1,500,000.
For the six months ended June 30, 2001, revenues increased to $2,859,000, from $2,642,000 a year ago. The net loss from continuing operations, excluding the repositioning charge, for the six months ended June 30, 2001 was $6,934,000, or $0.29 per share, compared with $10,260,000, or $0.45 per share, a year ago. As of June 30, 2001, cash and short-term investments totaled $8,472,000, exclusive of approximately $2,200,000 of escrow deposits established in connection with prior dispositions.
About PubliCARD, Inc.
Headquartered in New York, NY, PubliCARD, through its Infineer subsidiaries, is a smart card technology company providing infrastructure products and solutions to facilitate secure access and transactions. The Company’s product range includes industry compliant smart card reader solutions and application specific integrated circuits, also known as ASICs, for television set-top boxes and PC keyboards for electronic commerce. The Company designs closed environment smart card transaction solutions, including small value electronic cash systems and database management solutions. More information about PubliCARD can be found on its web site .
For more information on PubliCARD’s 2Q/01 performance visit CardData ([ww.carddata.com])
National Processing reported 2Q/01 net income of $14.1 million on revenues of $117.9 million compared to net income of $11.5 million on revenues of $104.5 million. Total merchant transactions processed were 840 million for the quarter and 1.6 billion year to date, representing 23% and 25% increases over prior year. Total dollar volume processed was $37.7 billion and $71.0 billion for the quarter and year to date periods representing 24% and 25% increases over prior year. Revenue for the Merchant Card Services business line was $95.4 million and $180.7 million for the quarter and six months ended June 30, representing increases of 25% and 23% over the comparable prior year amounts. For complete current and historical data on NPC visit CardData ([www.carddata.com]).
Capital One reported yesterday its super-prime credit card offers are driving loan growth, as receivables grew 47% over the past twelve months. As a result of the 0% teaser interest rate offers, the company’s managed net interest margin declined to 9.11% for the second quarter, compared to 9.21% for 1Q/01 and 10.88% for 2Q/00. Marketing expense for the second quarter hit $268.7 million, up $37.5 million from the first quarter, and $57 million more than the comparable period last year. The marketing efforts in both the sub-prime and super-prime sectors has generated 1.7 million net new accounts for 2Q/01, bringing total accounts to 38.1 million. The company’s managed consumer loan balances stood at $35.3 billion for 2/01. The managed net charge-off rate increased to 3.98% for the second quarter, compared with 3.75% for the first quarter of 2001. The managed delinquency rate (30+ days) increased slightly to 4.92% as of June 30, compared with 4.72% for the first quarter. Earnings for the second quarter were $155.3 million compared to $112.5 million for 2Q/00. For complete current and historical data on Capital One visit CardData ([www.carddata.com]).
CAPITAL ONE TRACK RECORD
2Q/01 1Q/01 4Q/00 3Q/00 2Q/00
EOP RECV: $35.3b 31.6 29.5 24.2 21.9
ACCTS: 38.1m 36.5 33.8 29.4 27.1
CHG-OFFS 3.98% 3.75 3.98 3.80 3.97
DEL (30+dy) 4.92% 4.72 5.23 5.32 5.35
Source: CardData (www.carddata.com)