Tidel Technologies, Inc. the fastest-growing major U.S. manufacturer of off-premise ATMs, announced Friday that financial results for its fiscal fourth quarter will be below expectations, although the Company still anticipates record revenues and net earnings for the fiscal year ended September 30, 1998 taken as a whole. Tidel will report complete fourth quarter and year end 1998 results in mid December.
Revenues for the fourth quarter are expected to approximate $8.5 million, a decline of 7% from the same quarter in 1997, due to reduced sales of ATM products near the end of the fiscal year. Two factors accounted for the softness in sales. Industrywide concerns about proposed legislation, which would have greatly curtailed ATM surcharge fees, caused several major customers to reduce purchase order quantities to levels below previously expected amounts. This proposed legislation was overwhelmingly defeated by the Senate and is no longer an issue for Tidel. In addition, the Company made sweeping changes to its entire product line for introduction in fiscal 1999, prompting customers to defer some orders to the next quarter to benefit from the new features of the recently introduced Ignition series ATMs. The Company has experienced similar temporary sales declines upon introduction of new equipment in previous years, and accordingly, does not believe that the recent trend will impact the performance of future quarters.
Tidel anticipates that net income and earnings per share will be near breakeven for the fourth quarter, as a result of the reduced sales. In addition, profit margins decreased due to pricing discounts utilized to help sell existing inventories of 1998 model ATM products.
James T. Rash, Chief Executive Officer, noted, “We are entering 1999 with the strongest financial position in the history of the Company. With our recently introduced Ignition series, we have developed an innovative successor to our popular ATM line that will allow us to compete effectively in existing markets, and will accommodate our planned expansion into international markets as well. Going forward, the Company expects record sales and earnings for fiscal 1999. Additional announcements regarding our new product lines and strategic alliances will be forthcoming shortly.”
Tidel Technologies, Inc. is a Texas based manufacturer of automated teller machines and cash security equipment designed for specialty retail marketers. Tidel pioneered the dial-up ATM in 1992, and is the fastest growing major ATM manufacturer in the United States.Details