e-Galleon Card

Schlumberger Tuesday introduced a new range of smart payment cards that offer local customization and the global interoperability of ‘Europay, MasterCard and VISA’ (EMV). With the new ‘e-Galleon’ cards, holders can use the same smart payment card wherever they travel. At the same time, local procedures (the use of a PIN or signature for customer ID, for example) and conditions (such as the perceived level of fraud risk) mean that the card issuer will wish to undertake a degree of customization. The ‘e-Galleon’ offering allows issuers to reflect local practice and strike the right balance between security and speed of transaction. The card can be used off-line to maximize speed and convenience for customers and retailers within high levels of security. Should local conditions require, issuers can specify that certain transactions, those above a certain value for example, should be carried out on-line, as an additional safeguard. The secret of the card’s versatility is its exceptionally powerful processor, supporting high transaction speeds and high levels of security, and the capacity to host multiple applications.


Cross View Solutions

Experian yesterday launched a unique risk management tool which blends debit information with credit data. ‘Cross View Solutions’ will provide shared access to leading nationwide debit and credit databases to facilitate credit card issuers to more confidently offer services to creditworthy consumers with limited or no credit history. Besides Experian’s credit data, ‘Cross View’ collects information from eFunds’ ‘DebitBureau’, the country’s largest single source for debit data, containing more than 2.7 billion records related to checking account opening and closing information, checking account collections data and overdraft histories and check order histories. The repository is updated with approximately 1.7 million records each day, receiving information from more than 82,000 retail locations, 86,000 financial institution locations and other reputable sources. ‘Cross View’ is a highly predictive and customizable resource with real-time access of both credit and debit data, plus prescreen segmentation, account review overlays and account monitoring triggers.


AmEx Williams

eBizJets, a leader in executive jet transportation services, announced the appointment of John I. Williams, Jr. as Chief Executive Officer.

After building Biztravel.com, which was sold to Rosenbluth International, the former American Express veteran fills the top spot for the expanding business jet service provider outside Boston.

An instrument-rated pilot with more than 1,400 logged flight hours and a history of enabling successful business models in both the Internet and travel markets, Williams is a real win for eBizJets. In making the announcement, President and co-founder Jeff Creed said, “John brings with him an intimate knowledge of our customer base from his years with the American Express Platinum Card; experience in Web-enabled travel services from Biztravel.com and exceptional dedication to customer service. In our current expansion, we need someone with a demonstrated track record in building successful businesses. We look forward to benefiting from John’s insights and marketing expertise.”

Williams’ first priority as CEO will be to take over responsibility for the company’s operations, marketing and technology strategy, enabling co-founders Creed and Paul Svensen to focus on business development and carrier relations.

Prior to joining eBizJets, Williams served as president and CEO for Biztravel.com, Inc. While under his stewardship, the privately-held, Internet-based, travel related services company for frequent business travelers won several prestigious industry awards including the 1999 Webby Award and PC Magazine’s Editor’s Choice award. Undoubtedly Williams’ career hallmark is his dedication to customer service. His extensive experience also includes eight years with American Express during which he served as vice president for the highly regarded Platinum Card and as senior vice president/general manager of the Consumer Travel Network where he supervised the company’s 850 retail travel offices, quadrupling earnings.

A graduate of Harvard Law School, Harvard Business School and Amherst College, Williams lives in Boston, Massachusetts with his wife and three children.

eBizJets is privately-held and is a portfolio company of CSFB Private Equity, the $3.7 billion private investment arm of the global Credit Suisse Group. The company serves as an agent for a number of independent air carriers and acts as an intermediary between carriers and passengers. It assists customers to obtain air transportation from a carrier that eBizJets represents. eBizJets is not an air carrier, and does not own or operate the aircraft on which its customers fly. The carriers are fully licensed by the Federal Aviation Administration and the U.S. Department of Transportation and are responsible for the air transportation arranged by eBizJets on behalf of its customers.


LaserCard Shipments

Drexler Technology Corporation, producer of LaserCard optical memory cards, LaserCard read/write drives, and related software, reported results for its fiscal 2001 second quarter and first six months ended September 30, 2000.

For the second quarter of fiscal 2001, income before taxes rose 63%, to $1,193,000, on a 30% revenue increase, while for the first six months, income before taxes rose 70%, to $2,005,000, on a 34% revenue growth as compared with the same periods last year. Net income, revenues, and cash status are reported below.

For the fiscal 2001 second quarter ended September 30, 2000, net income rose 19% to $1,654,000, or 16 cents per share diluted, versus $1,387,000, or 14 cents per share diluted, for last year’s second quarter. Fiscal 2001 second-quarter revenues rose 30% to $5,531,000 compared with $4,252,000 for the fiscal 2000 second quarter.

For the six months ended September 30, 2000, net income rose 39% to $3,094,000, or 30 cents per share diluted, versus $2,232,000, or 23 cents per share diluted, for the six months ended September 30, 1999. Revenues for the first six months of fiscal 2001 increased 34% to $10,702,000 from $7,993,000 for last year’s first six months.

The Company’s stockholders’ equity and cash position have improved significantly. For example, stockholders’ equity has risen to $24.9 million from $17.3 million a year ago and from $4.3 million in mid- 1997, just before the Company began generating profits from sales of its optical memory cards. The Company has no debt. Also, the Company’s cash, cash equivalents, and short-term investments rose 45% in the first six months of fiscal 2001, to approximately $11,891,000 at September 30, 2000, from approximately $8,221,000 at March 31, 2000. In anticipation of this cash increase, on July 13, 2000 the Company announced a plan to spend up to $3,000,000 in repurchasing shares of the Company’s common stock in the open market, of which less than $300,000 of this amount has been spent thus far.

Net income for the fiscal 2001 second quarter included an income tax benefit of $461,000 compared with $657,000 for last year’s second quarter. Net income for the first six months of fiscal 2001 included an income tax benefit of $1,089,000 compared with $1,056,000 for last year’s first six months. These amounts were recorded under Statement of Financial Accounting Standards No. 109 (SFAS 109), “Accounting for Income Taxes.”

LaserCard(R) optical memory card shipments reached 1,279,000 cards in the second quarter compared with 1,070,000 cards in the second quarter of fiscal 2000. LaserCard(R) read/write drive shipments set a quarterly record of 499 drives, which compares to 258 drives in last year’s second quarter. The optical memory cards and read/write drives are manufactured by Company personnel in Mountain View, California.

Headquartered in Mountain View, Drexler Technology Corporation ([www.lasercard.com][1]) manufactures LaserCard(R) optical memory cards used for immigration, healthcare, automotive, ID/access, data logging, and other digital read/write wallet-card applications for optical memory cards and hybrid smart optical cards. Drexler’s wholly owned subsidiary, LaserCard Systems Corporation, makes optical card read/write drives, develops optical card system software, and markets card-related systems and peripherals.

As of September 30, 2000, there were 9,941,051 shares of Drexler Technology Corporation common stock outstanding compared with 9,814,904 shares outstanding as of September 30, 1999.

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

Three Months Ended Six Months Ended
9/30/00 9/30/99 9/30/00 9/30/99
——- ——- ——-

Revenues $5,531 $4,252 $10,702 $7,993

Cost of sales 2,872 2,357 5,886 4,520

Selling, general, and
administrative expenses 1,010 989 2,038 1,993

Research and engineering
expenses 606 269 1,035 483

Other income, net 150 93 262 179
—— —— ——
Income before income taxes 1,193 730 2,005 1,176

Income tax expense
(benefit) (461) (657) (1,089) (1,056)
—— —— ——
Net income $1,654 $1,387 $3,094 $2,232
====== ====== ======
Net income per share:

Basic $ .17 $ .14 $ .31 $ .23
====== ====== ====== ======
Diluted $ .16 $ .14 $ .30 $ .23
====== ====== ====== ======

Shares used in computing
net income per share:

Basic number of shares 9,904 9,799 9,888 9,797
====== ====== ======
Diluted number of shares 10,540 9,856 10,394 9,875
====== ====== ====== ======

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


First USA 3Q/00

First USA continues to struggle with profitability but appears to be making progress. Yesterday First USA reported net income of $177 million, a 39% decrease from the year-ago quarter. Third quarter results reflected a 1.7% pretax return on outstandings, down from 2.5% in the year-ago quarter, but up from 1.1% in the second quarter on an adjusted basis. Net interest income of $1.442 billion was essentially unchanged from the second quarter but decreased $291 million, or 17%, from the year-ago quarter. First USA says the principal drivers were lower average outstandings and fee revenue, as well as a narrower spread. Average managed outstandings for the third quarter were $65.9 billion, down 5% from the year-ago period and relatively flat with the second quarter average. First USA had 53.6 million cards issued at quarter end, with 727,000 new accounts opened during the quarter. The managed net charge-off rate declined to 5.03% from 5.33% in the year-ago period and from 5.44% in the prior quarter reflecting lower bankruptcies. The managed 30-day and 90-day delinquency rates were 4.14% and 1.79%, respectively. These were down from 4.74% and 2.07%, respectively, in the year-ago quarter, but up slightly from the prior quarter. Third quarter charge volume was $34.6 billion compared to $35.8 billion for 2Q/00 and $36.1 billion one year ago. For complete details on Bank One/First USA’s 3Q/00 results as well as prior quarter financials visit CardData ([www.carddata.com][1]).

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


GiftCertificates New CEO

GiftCertificates.com, a leading online marketplace for gift certificates and a provider of technologies and services, announced that Michael Ahern has been named chief executive officer. He will be succeeding the company’s founder, Jonas Lee, who will assume the position of vice chairman of the company’s board. These appointments are effective immediately.

“It has given me great pride to see GiftCertificates.com grow from an idea into a company with over 300 talented people and hundreds of thousands of consumers and businesses that use our services,” said Jonas Lee, vice chairman of the board. “With Mike’s leadership ability and execution experience, I am confident that the company will have the right guidance to ensure its continued success.”

“GiftCertificates.com has achieved a great formula for success in offering gifts to consumers and is in a very favorable position to capitalize on the trend toward businesses offering gift certificates for rewards, incentives and promotions,” said Michael Ahern, CEO of GiftCertificates.com. “I look forward to continuing to work with our management team to successfully deliver on our plans.”

Ahern assumes the day-to-day responsibilities of CEO from Lee who moves into an active advisory position as vice chairman of the board. He will be working closely with recently named chairman of the board, William Ackman, in addition to pursuing new entrepreneurial interests.

Ahern most recently served as the company’s chief operating officer with responsibility for directing all internal operations and overseeing all aspects of technology and product development for the company. He joined GiftCertificates.com after the company’s May 2000 acquisition of GiftSpot.com, where he had been co-founder, president and CEO. Previously, Ahern was an executive at Microsoft Corporation where he held various management positions and served as group project manager for Microsoft’s $350 million Project Management product line, as well as Microsoft NetShow, Commerce Server and SiteServer. Before his tenure at Microsoft, Ahern was a founding member of Autodesk’s Multimedia Division serving as product manager for Animator, 3D Studio and AutoCAD.

About GiftCertificates.com

Established in 1997, GiftCertificates.com(TM) is a leading Internet marketplace for gift certificates and a provider of related technologies and services. The company offers physical and emailable gift certificates for employee incentives, customer loyalty programs, marketing promotions, and consumer gifts. GiftCertificates.com also provides turn-key solutions that allow merchants of all sizes to outsource their physical and emailable gift certificate fulfillment requirements. The company represents more than 500 merchants, including luxury retailers like CHANEL, Neiman Marcus, and Tourneau; national retailers like Barnes & Noble, Bloomingdale’s, Brooks Brothers, Crate and Barrel, Macy’s, and The Sharper Image; travel-related services like American Airlines(R) and Marriott Hotels, Resorts and Suites; and popular restaurants like the Palm, McCormick & Schmick’s, Benihana, and T.G.I. Fridays(R). The company also offers the SuperCertificate(TM), a flexible gift certificate that can be redeemed at GiftCertificates.com for original gift certificates to 100’s of participating merchants. For more information, visit [www.GiftCertificates.com][1].

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


Associates 3Q

Associates First Capital reported this morning record third quarter earnings of $442 million, a 15% increase per share over the same period a year earlier. In the quarter, the company surpassed $88 billion in managed receivables. Associates reported $14.8 billion in credit card receivables compared to $13.5 billion for 2Q/00 and $11.1 billion for 3Q/99. During the third quarter, Associates formally launched its private label credit card partnership with Zale Corp. by acquiring $620 million in receivables and 840,000 active accounts. This brings to 23 million the total number of active Associates credit card accounts. Chargeoffs and delinquency both increased during the third quarter. Net chargeoffs grew from 5.77% for 2Q to 6.13% for 3Q. Delinquency (60+ days) also increased from 3.77% for the second quarter to 4.09% for the third quarter. For complete details on Associates’ 3Q/00 performance as well as historical data visit CardData ([www.carddata.com][1]).

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


Zaxus Goes SafeDebit

NYCE Corporation Monday announced that Zaxus, Inc. (formerly Racal Security & Payments) has joined the team of technology companies supporting SafeDebit, the PIN-secured Internet payment product developed by NYCE. As part of its agreement with NYCE, Zaxus will modify its Hardware Security Module to securely process SafeDebit transactions using advanced data and PIN cryptography technology. The addition of Zaxus to the SafeDebit roster reinforces the collective efforts to bring optimum security to Internet payments.

![][1] SafeDebit, which has a patent pending, is the first convenient and portable way to make real-time PIN-secured purchases on the Internet with funds withdrawn directly from deposit accounts. It’s also the only debit payment method that can be used with any standard PC with a CD-ROM drive — and consumers do not have to install any special hardware. In essence, SafeDebit works just like an ATM card for the Internet.

The Zaxus HSM is a back-office processor that combines tamper-resistant hardware and data/PIN cryptographic software. Widely used by debit processors, the HSM leverages the latest security technology to provide PIN encryption and decryption, and message authentication capabilities for securing transactions in electronic payments networks.

Zaxus will modify its HSM standard software to support SafeDebit on two levels:

when the SafeDebit CD-ROM “card” is created, and then whenever the card is used. At level one (residing at the card production facility), the HSM will “lock and secure” the encrypted PIN and cardholder data before they are recorded to the CD-ROM. At level two (residing at the IIP), the HSM will “unlock” and verify the PIN, extracting the appropriate PIN block and data elements from the encrypted SafeDebit data block to complete a secure and successful transaction. SafeDebit transactions are triple DES encrypted, a higher level of security that is newly employed to the electronic payments arena, where single DES encryption is considered standard.

NYCE developed SafeDebit with the support of participating software vendors and operators around the globe, including Australia-based QSI Payment Technologies, which supplies merchant Web site software, U.S.-based eFunds and France-based GlobeID, which both contribute IIP (Internet Intercept Processor) components to SafeDebit. Other contributors include Media Services, which provides CD-ROM production services, and Metavante, supplying card personalization services. Zaxus joins Atalla in contributing to SafeDebit’s encryption/decryption technology. “Security and privacy are leading concerns among consumers on the Internet, and we keep these factors top-of-mind as we assess new products,” said Paul Turgeon, senior vice president with NYCE. “NYCE’s expertise in risk management and Zaxus’ heritage in security solutions will help consumers, financial institutions and retailers all feel confident that their transactions are in good hands.” “Zaxus has been at the forefront of providing products and solutions for the secure exchange of payment data,” said Cynthia Provin, chief operating officer of Zaxus, Inc. “And the agreement with NYCE and our role in SafeDebit are instrumental for our continued success in the expansive e-commerce arena.”

About NYCE

Headquartered in Woodcliff Lake, NJ, NYCE Corporation is one of the largest electronic payments companies in the U.S. The NYCE Network provides financial institutions and retailers with shared network services for automated teller machines (ATMs), on-line debit point-of-sale and electronics benefits transfer transactions. Currently, the Network has 2,400 financial institution participants and services more than 45 million cardholders through 38,000 NYCE-branded ATMs and 224,000 point-of-sale retailer locations. The company processes nearly 83 million transactions each month. In addition, NYCE Corporation provides financial institutions with real-time processing services that support ATM management and monitoring services, as well as debit card issuance and authorization solutions. Innovations such as SafeDebit(TM), a real-time PIN-secured Internet debit payment solution, have established NYCE as a frontrunner in the payments industry. NYCE’s web site address is [http://www.nyce.net][2].

About Zaxus

Zaxus, a Thomson-CSF Racal company, provides e-business security solutions to several thousand customers worldwide. Over half of the world’s banks, together with the majority of the busiest stock exchanges, currently use Zaxus technology. Operating in three main markets – card payments, e-security and network security – Zaxus addresses the business security needs of corporations and governments alike. For more than 20 years the company has been at the forefront of security and payment technology, co-operating and contributing to establish the industry standards used globally for financial transactions and electronic commerce.

The HSM is designed for the ATM interchange environment and is in use in many of the world’s major ATM networks’ data centers. It is used for 70 percent of the world’s card transactions and is used by all major card associations. For more information, visit the company’s Web site located at or call Cynthia Provin at 1-888-744-4976, 1-954-846-5103, e-mail: cindy.provin@zaxus.com or Brendan Jones, Director Marketing, Card Payments and E-Security, at 011-44-1844-201800, e-mail: brendan.jones@zaxus.com.

[1]: /graphic/zaxus/zaxus.gif
[2]: http://www.nyce.net/


Citi 3Q/00

Citigroup reported this morning a strong 5.3% increase in North American credit card receivables between the second and third quarter. However credit card volume slipped slightly between 2Q/00 and 3Q/00, but remains 17% above last year’s activity. At the end of the third quarter Citigroup held $83.7 billion in North American card receivables compared to $79.5 billion for 2Q/00 and $71.0 billion for 3Q/99. (For the U.S. segment Citi reported 2Q/00 receivables of $79.1 billion according to CardData.) Credit card volume for the North American sector logged in at $48.0 billion compared to $48.7 billion for the prior quarter and $41.2 billion one year ago. (For the U.S. segment Citi reported 2Q/00 volume of $48.4 billion according to CardData.) North American gross accounts hit 43.9 million for 3Q compared to 42.7 million for 2Q and 41.0 million for 1999’s 3Q. (For the U.S. segment Citi reported 2Q/00 gross accounts of 42.1 million according to CardData.) Net chargeoffs declined from 3.96% in 2Q/00 to 3.50% for 3Q/00. However, delinquencies (90+ days) edged up from 1.18% to 1.23%. Internationally Citigroup reported 11.8 million accounts that produced $11.9 billion in receivables and $9.3 billion in 3Q charge volume. For complete details on Citigroup’s 3Q/00 performance as well as historical data visit CardData ([www.carddata.com][1]).

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



Hypercom yesterday rolled out the ‘ePic ICE 7000CE’ payment terminal for the high-end multi-application market. The new terminal is specifically geared to healthcare, government, payments and other industrial-commercial sectors requiring custom applications such as prescription adjudication, interactive e-mail, access to Internet-based services or complex on-line, and advanced server-based applications. The new terminal incorporates a 32-bit processor, 33.6Kbps integrated modem and Microsoft ‘Windows CE’ operating system. The multi-function ‘ePic ICE 7000CE’ features a large 6″, 256-color 1/4 VGA touch graphics and pen input screen. The terminal incorporates the Hitachi 32 bit CPU running at 128MHz, up to 32Mbyte of Flash ROM and up to 32Mbyte of RAM. It incorporates all of the features of Hypercom’s ‘ePic ICE’ terminals including: multi-application operating system with firewalls, EMV chip card compatibility, built-in HTML/HTTP web browser and integrated printer/paper cutter. In addition to its embedded applications, the device supports a range of value-added services including: e-mail, on-screen advertising, interactive electronic coupons, electronic receipt capture, user e-commerce function and cash management reporting through a standard browser, as well as secure credit, debit and smart card payment functions. The ‘ePic ICE 7000CE’ offers communication options including Hypercom’s 9600 bps ‘FastPOS’ dial modem for fast financial transactions, a 10BaseT Ethernet interface and a 33.6Kbps integrated modem. The modem is also backwards compatible with 300/1200/2400 bps POS dial services.


Schlumberger-Convergent Merger

Schlumberger Limited and Convergent Group Corporation announced Monday the execution of a definitive merger agreement whereby Schlumberger has agreed to acquire a majority interest in Convergent Group for cash consideration of $8.00 per share, for approximately $276 million.

The transaction will be structured as a tender offer to be commenced within ten business days from October 13, 2000 for any and all outstanding shares of Convergent Group common stock, followed by a merger cashing out any untendered shares at the same $8.00 per share price. The executive management of Convergent Group and an affiliate of Convergent Group’s largest client Cinergy Corp. (NYSE:CIN), representing approximately 28% of the Convergent Group outstanding shares will become stockholders of the new entity, Convergent Holding Corporation. Glenn E. Montgomery will remain President and Chief Executive Officer of Convergent Group, which will continue to operate as a separate company. The merger agreement and the tender offer were negotiated and approved by a committee of independent directors of Convergent Group.

Before goodwill amortization the effect on Schlumberger 2001 operating income is expected to be slightly accretive. The anticipated effect on 2001 net income and earnings per share is not material.

Convergent Group is a leading builder of digital enterprises, providing business consulting, software engineering, system integration and project management services that enable utility and local government clients to increase operational efficiencies, improve customer service and implement Internet-based business systems.

“Convergent Group’s unique professional services offering and knowledge of the utility industry is a natural fit complementing the Schlumberger value-added solution approach to business in the utility sector,” said Clermont Matton, executive vice president of Schlumberger Resource Management Services. “Convergent Group’s expertise in system integration, combined with CellNet’s fixed-network and data management technologies, positions Schlumberger as a leading provider of business solutions to the increasingly competitive utility sector.”

“We are very excited to be joining forces with Schlumberger,” said Glenn E. Montgomery, chief executive officer of Convergent Group. “The combined services portfolio of Convergent Group and Schlumberger will allow our companies to bring a new level of service and technology to the marketplace and significantly enhance our ability to expand Convergent Group’s presence in the global digital economy.”

About the companies

Schlumberger Limited is a global leader in technical services spanning the oil and gas, utility, semiconductor testing, smart cards, and network and Internet solutions industries. Schlumberger revenue was $8.4 billion in 1999. Additional information is available from Realtime [[www.slb.com][1]], the Schlumberger corporate website.

Convergent Group, founded in 1985, is a leading end-to-end business transformation provider for utilities and local government. The company engineers, builds and manages digital business solutions that allow utilities and local governments to transform their organizations into digital business enterprises where employees, contractors and customers can transact business on a real-time basis using the Internet. The company has offices in Denver, Boston, London and Brisbane. Visit Convergent Group on the World Wide Web at [www.convergentgroup.com][2].

[1]: http://www.slb.com/
[2]: http://www.convergentgroup.com/



Beenz is branching out into the offline market. Beenz.com announced Monday the launch of ‘beenzCodes’, following the acquisition of a patent that provides beenz with the exclusive right to place alphanumeric codes on or inside product packaging in conjunction with the purchaser earning beenz by submitting that code through a website. ‘BeenzCodes’ are simple-to-enter codes issued inside product packaging by manufacturers or given to the purchaser at point of sale. They may also be used in direct mail to increase response rates or in print media to track performance. Each code is unique and allows the merchant to track the product from its point of manufacture to its purchase by the ultimate consumer. The purchaser enters a code at a specified website, along with personal information that might be requested by the manufacturer, to earn beenz. The beenz earned by the consumer can be spent on products and/or services offered by the manufacturer, in online stores worldwide that form part of the beenz network, or transferred to the consumer’s ‘beenz rewardzcard MasterCard’.