American Banknote Buys Two French Firms

American Banknote Corporation announced the acquisition of MCE S.A., the fourth largest check personalizer in France, and CPS Finances S.A., the fifth largest card personalizer in France for an undisclosed amount.  MCE and CPS together generated sales of over $15 million in 1997.

American Banknote will now be the leading check personalizer in France with expanded printing services, outsourcing and electronic printing capabilities (EPA) through the combination with the Sati Group, acquired by American Banknote in August, 1997.

The acquisition of CPS marks American Banknote’s entry into Europe within its Transaction Card & Systems group, which has been the company’s highest growth area.  CPS is  MasterCard, VISA, and Europay certified, which attests to its strict security standards, and offers card personalization and distribution for both magnetic stripe and smartcards.

Morris Weissman, Chairman and Chief Executive Officer, said, “We’ve continued our expansion in Europe where we see exciting growth opportunities with the emergence of the European Union.  We plan to increase operating efficiencies through the consolidation of the acquired businesses with existing production facilities in France.”

Weissman concluded, “Smartcard technology was originally developed in France and we look forward to working with some of the leaders there. Smartcard applications within major industries such as transportation, communication, health and banking are numerous and growing rapidly, and we are planning to participate in that growth.  We are fortunate to have Francis Lavelle, former CEO of Solaic, one of the pioneers in smartcard technology that was purchased by Schlumberger, as Managing Director of the Sati Group spearheading our entry into the smartcard arena in Europe.”

American Banknote Corporation is a leading global full-service provider of secure transaction solutions in carefully selected markets along three major product groups Transaction Cards & Systems, Printing Services & Document Management, and Security Printing Solutions.  A combined strategy of operating along product lines and constant expansion of transaction activities worldwide reflects the rapidly changing field of electronic commerce.  Additionally, American Banknote, via its Holographics subsidiary, is the world leader in security for financial transaction cards, including VISA, MasterCard, Discover, Diners Club International, and Europay.

This release contains forward-looking statements relating to future financial results.  Actual results may differ materially as a result of factors over which the Company has no control.  These risk factors and additional information are included in the Company’s annual report on Form 10-K and quarterly reports on Form 10-Q on file with the Securities and Exchange Commission.

Details

Storefront Software

Fourth Shift Corporation and WrightTools announced Thursday the Storefront credit card validation and prepaid cash management system for the Fourth Shift manufacturing Software System (MSS for OBJECTS).  Storefront allows manufacturers to set minimum amounts due at order time.  It is one of several new Fourth Shift products and complementary applications that have been developed recently to help manufacturers meet customer demands, manage changes in their operations, and increase profitability.  The announcement was made at the International Fourth Shift User Group Conference in San Diego.

“Storefront was developed for manufacturers who need an over the counter and catalog sales solution,” said John Pohl, President of WrightTools.  The system makes it possible to take cash-based orders and interface them with an accrual-based financial system.  The system addresses the order as a cash liability until the product is shipped, at which time the cash receipt is transferred into the revenue account.  The amount prepaid is reflected in an invoice generated at the time of shipment.  If the order was paid in full, an invoice will not be generated.  Cash, checks, traveler’s checks, credit cards, gift certificates can all be processed by the system, with reference information such as credit card or check number.

Manufacturers can use the system to verify credit cards via a bank network.  Storefront supports card swipes and scanners, or the credit card number can be keyed into the computer manually.  The system also provides bank reconciliation capabilities and supports user tracking for non-mechanical cash drawers.

Storefront was developed by WrightTools for Fourth Shift MSS for OBJECTS. “One of the advantages of Fourth Shift software is its ability to be integrated with best of breed third party applications such as Storefront,” said Loyd Olson.  “The integration of complementary applications with MSS for OBJECTS provides our customers with a broad base of functionality that spans manufacturing, engineering, financial, sales, customer service, and distribution.”

Storefront is just one of several new applied solutions recently announced by Fourth Shift.  The new MSS for OBJECTS release features an enhanced Engineering module and the Net UI thin client interface.  Net UI provides high performance access to manufacturing data from anywhere via the Internet or voice grade dial up lines.

About Fourth Shift

Fourth Shift Corporation is a Minneapolis-based global application software company that develops software for manufacturing and distribution enterprises worldwide.  The Company’s software has been licensed by more than 3,000 customer sites in 60 countries including 150 of the Fortune 500 U.S. companies, and more than 50 of the Fortune Global 250 industrial companies. Fourth Shift maintains close strategic relationships with leading information technology vendors Micro Data Base Systems, Inc. (mdbs) and Microsoft.  Fourth Shift is also a Microsoft Solution Provider Partner.  The Company’s stock trades in the United States on the Nasdaq National Market under the symbol FSFT.

About WrightTools

WrightTools(TM) develops client server knowledge-based sales performance software.  The software is designed to support sales transactions.  It features quote management, configurator logic, decision maker, and Execview. The company software is used in a variety of industries in both nomadic and network-based versions.  It provides complete communications from the customer to the shop floor, sales support tools and comprehensive visibility for sales management.  WrightTools(TM) was founded in 1990 and is located in Bothell, Wash.

Details

New BannerDirect SE VP

BannerDirect of Greenwich, CT, announced today that Kelley Pinson has been named Vice President of the South Eastern Region, effective March 26. Ms. Pinson, in this newly created position, will be reporting to Susan Lasley, Senior Vice President, Director of Marketing. “Kelley’s twelve years of diverse experience in bank marketing give her the perfect background for this new position,” says Ms. Lasley.

Based in Atlanta, GA, Ms. Pinson will be responsible for all marketing, promotion and sales for financial institutions and opening up new industry categories in the communications, retail, and entertainment markets.

“BannerDirect is poised to expand its strategic marketing expertise in new and exciting categories,” said Christine Fontana, President. “Kelley will be a vital asset to our expansion.”

Kelley Pinson’s prior positions include Vice President of Cards Product Management and Vice President of Cards Marketing for Prudential Bank; Account Executive for VISA, USA, and Marketing Manager for NationsBank. She received her B.S. in Business Administration from the University of North Carolina at Chapel Hill. Ms. Pinson is married to Fred Pinson and currently resides in Acworth, GA.

BannerDirect is a full-service direct marketing agency for financial, entertainment, oil, and retail companies. The majority of its business has been to develop response marketing via direct mail, specifically for the credit card industry. This includes acquisition, activision, stimulation, retention and general communication programs: It specializes in bringing co-branded and affinity cards to the public, and in developing both business-to-consumer and business-to-business marketing plans. The company is currently in the process of expanding its base of clients in different industries. Its executive offices are in Greenwich, CT, and New York, NY. Production coordination and fulfillment are managed from BannerDirect’s Wilmington, NC office. Banner’s sales offices are in Milwaukee, WI; Houston, TX; Carson City, NV, and Atlanta, GA.

Details

CyberCash + ICVERIFY

CyberCash and ICVERIFY reached an agreement in principle this week to merge. ICVERIFY shareholders will receive $16 million in cash and 2.3 million shares of CyberCash common stock. The merger will bring together an electronic payment software company and a payment-related services company. Under terms of the preliminary agreement, ICVERIFY will become a wholly owned subsidiary of CyberCash. ICVERIFY’s CEO, Thomas Aden, will continue to head the payment card software company. ICVERIFY’s two founders, Steve Elefant and Eric Buchbinder, will become CyberCash executives. Elefant will become EVP and Buchbinder SVP of advanced technology. The merger is expected to be completed by June 30.

Details

Sunoco ATMs

Sunoco announced Wednesday it will install ATMs in nearly all its 525 Sunoco APlus convenience stores and Sunoco Food Markets. The installation will cover Sun Company’s 17-state marketing territory. McLane FSP will manage the program under a five-year turnkey agreement. Sunoco selected the ‘NCR 5670’ color monitor ATM. The deployment is expected to be completed by mid-summer. The ATMs will process through the EPS/MAC Network.

Details

NDC Net Income Up 33%

National Data Corporation (NDC) today reported record earnings of $.45 per share versus $.35 in the quarter ended February 28. After the effect of pooling of interest accounting for the PHSS acquisition, earnings totaled $.43 per share compared with $.31 last year. Both sets of figures exclude non-recurring charges.

The $.45 per share was the result of a 29% increase in revenue from $111.4 to $143.8 million and a 52% growth in operating income from $17.0 to $25.9 million. Net income for the period was $13.8 versus $9.7 million, a 42% growth. Net income reflected higher tax rates.

For the nine months ended February 28, earnings per share were $1.23 compared to $.95 last year. Revenue grew from $313.9 to $383.0 million, up 22%. Operating income increased 44% from $45.4 to $65.5 million. And net income was $35.6 million, a 33% growth over last year’s $26.7 million.

After pooling of interests accounting for the late December acquisition of Physician Support Systems (Nasdaq: PHSS), earnings per share in the quarter grew to $.43 from $.31. This was based on a 25% revenue change in the period from $136.8 to $171.5 million. Operating income grew from $18.3 to $27.9 million, a 52% increase. Net income totaled $14.9 million, 47% above last year’s $10.2 million.

For the nine months, after the effect of pooling of interest accounting, earnings per share were $1.01 versus $.87 last year, on a 22% revenue increase from $380.3 to $463.8 million. Operating income advanced 32% from $48.9 million to $64.6 million. Net income for the comparable period was up 19% from $28.2 to $33.6 million.

These figures reflect adjustments for previously announced revenue recognition conformity changes. These have the effect of reducing FY 97 and year to date FY 98 revenue and EPS.

The company previously announced that it anticipated non-recurring charges in the quarter related to the Source Informatics and PHSS acquisitions. Those charges total $111.2 million net of tax considerations. Including those charges and pooling accounting for PHSS, a loss of $2.77 per share for the quarter and $2.34 year to date was reported.

“The growth in operating income was the 13th straight quarter of greater than 30% increase. It demonstrated our ability to operate effectively on three parallel fronts,” said Robert A. Yellowlees, chairman and chief executive officer. “First, sustained growth in period financial results. Second, aggressive repositioning of our business to take advantage of new opportunities in the market. Third, investments for the future. Investments in products and services as well as in distribution channel development. And, investments through acquisition to speed access to new, related markets.

“In January, we began the integration of two businesses acquired in the back half of December — Source Informatics and PHSS.

“The strategic fit that each adds to our Health Information Services business is significant. In the two and a half months that we have operated the businesses, we have already initiated a number of programs to address new opportunities and enhance operating efficiencies.

“We look forward to continuing our strong record of earnings and cash flow growth for our shareholders.”

National Data is a leading provider of health information services and payment systems solutions that add value to its customers’ operations.

When used in this report, press releases and elsewhere by management or the Company, from time to time, the words “believes,” “anticipates,” “expects” and similar expressions are intended to identify forward-looking statements concerning the Company’s operations, economic performance and financial condition, including in particular, the likelihood of the Company’s success in developing and expanding its business. These statements are based on a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company, and reflect future business decisions which are subject to change. A variety of factors could cause actual results to differ materially from those anticipated in the Company’s forward-looking statements, some of which include competition in the market for the Company’s services, continued expansion of the Company’s processing and payment systems markets, successfully completing and integrating acquisitions in existing and new markets and other risk factors that are discussed from time to time in the Company’s Securities and Exchange Commission (“SEC”) reports and other filings. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligations to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof, or thereof, as the case may be, or to reflect the occurrence of unanticipated events.

NATIONAL DATA CORPORATION
CONDENSED STATEMENTS OF INCOME
(In Thousands Except Per-Share Data)
EXCLUDING PHSS AND NON-RECURRING CHARGES

Third Quarter Ended
2/28/98 2/28/97
Revenue:
Health Information Services $72,226 $46,741
Integrated Payment Systems 39,685 32,554
Global Payment Systems 38,670 38,184
Intercompany Revenue (6,798) (6,095)
Total 143,783 111,384

Cost of Service 67,930 52,113
Sales, General & Administrative Expense 49,942 42,263
Total 117,872 94,376

Operating Income 25,911 17,008

Interest and Other Income 316 772
Interest and Other Expense (3,401) (2,274)
Minority Interest (584) (348)
Total (3,669) (1,850)

Income Before Income Taxes 22,242 15,158
Provision for Income Taxes 8,452 5,466
Net Income $13,790 $ 9,692

Basic earnings per share: $ 0.47 $ 0.37
Diluted earnings per share: $ 0.45 $ 0.35

NATIONAL DATA CORPORATION
CONDENSED STATEMENTS OF INCOME
(In Thousands Except Per-Share Data)
EXCLUDING NON-RECURRING CHARGES
Third Quarter Ended
2/28/98 2/28/97
Revenue:
Health Information Services $99,989 $72,140
Integrated Payment Systems 39,685 32,554
Global Payment Systems 38,670 38,184
Intercompany Revenue (6,798) (6,095)
Total 171,546 136,783

Cost of Service 83,986 67,447
Sales, General & Administrative Expense 59,659 51,024
Total 143,645 118,471

Operating Income 27,901 18,312

Interest and Other Income 316 804
Interest and Other Expense (3,606) (2,803)
Minority Interest (584) (348)
Total (3,874) (2,347)

Income Before Income Taxes 24,027 15,965
Provision for Income Taxes 9,130 5,814
Net Income $14,897 $10,151

Basic earnings per share: $ 0.45 $ 0.33
Diluted earnings per share: $ 0.43 $ 0.31

NATIONAL DATA CORPORATION
CONDENSED STATEMENTS OF INCOME
(In Thousands Except Per-Share Data)
EXCLUDING PHSS AND NON-RECURRING CHARGES

Year-to-Date Ended
2/28/98 2/28/97
Revenue:
Health Information Services $167,001 $125,061
Integrated Payment Systems 117,257 96,212
Global Payment Systems 118,865 110,011
Intercompany Revenue (20,137) (17,341)
Total 382,986 313,943

Cost of Service 184,256 150,281
Sales, General & Administrative Expense 133,277 118,275
Total 317,533 268,556

Operating Income 65,453 45,387

Interest and Other Income 1,256 2,001
Interest and Other Expense (7,885) (4,610)
Minority Interest (1,892) (1,032)
Total (8,521) (3,641)

Income Before Income Taxes 56,932 41,746
Provision for Income Taxes 21,307 15,050
Net Income $35,625 $26,696

Basic earnings per share: $ 1.30 $ 1.02
Diluted earnings per share: $ 1.23 $ 0.95

NATIONAL DATA CORPORATION
CONDENSED STATEMENTS OF INCOME
(In Thousands Except Per-Share Data)
EXCLUDING NON-RECURRING CHARGES

Year-to-Date Ended
2/28/98 2/28/97
Revenue:
Health Information Services $247,791 $191,381
Integrated Payment Systems 117,257 96,212
Global Payment Systems 118,865 110,011
Intercompany Revenue (20,137) (17,341)
Total 463,776 380,263

Cost of Service 232,824 190,746
Sales, General & Administrative Expense 166,381 140,608
Total 399,205 331,354

Operating Income 64,571 48,909

Interest and Other Income 1,256 2,258
Interest and Other Expense (9,675) (5,685)
Minority Interest (1,892) (1,032)
Total (10,311) (4,459)

Income Before Income Taxes 54,260 44,450
Provision for Income Taxes 20,710 16,230
Net Income $33,550 $28,220

Basic earnings per share: $ 1.06 $ 0.92
Diluted earnings per share: $ 1.01 $ 0.87

NATIONAL DATA CORPORATION
CONDENSED BALANCE SHEETS
(In thousands)

February 28, 1997 May 31, 1997

ASSETS:
Cash $ 10,615 $ 19,595
Trade accounts receivable 139,754 109,033
Inventory 2,014 2,260
Other current assets 25,307 11,173
Total current assets 177,690 142,061

Property, plant & equipment 68,411 58,960
Intangibles and goodwill 449,376 407,484
Other assets 25,865 17,385
Total assets $721,342 $625,890

LIABILITIES:
Current liabilities $125,571 $ 82,627
Line of credit payable 68,000 34,298
Long term debt 170,012 160,925
Other long term liabilities 4,701 3,653
Total liabilities 368,284 281,503
Minority interest 18,861 21,138
STOCKHOLDER’S EQUITY 334,197 323,249
Total liabilities and
stockholders’ equity $721,342 $625,890

NATIONAL DATA CORPORATION
CONDENSED STATEMENTS OF INCOME
(In thousands except per share data)

Third Quarter Ended February 1997
NDC PHSS Non-
Operations Operations Recurring Consolidated
Revenue:
Health Information
Services $ 46,741 $ 25,399 $ — $ 72,140
Integrated Payment
Systems 32,554 — — 32,554
Global Payment Systems 38,184 — — 38,184
Intercompany Revenue (6,095) — — (6,095)
Total 111,384 25,399 — 136,783

Cost of Service 52,113 15,334 — 67,447
Sales, General &
Administrative Expenses 42,263 8,761 — 51,024
Non-Recurring Charge — — 750 750
Total 94,376 24,095 750 119,221

Operating Income 17,008 1,304 (750) 17,562
Interest and Other Income 772 32 — 804
Interest and Other Expense (2,274) (529) — (2,803)
Minority Interest (348) — — (348)
Total (1,850) (497) 0 (2,347)

Income Before Income Taxes 15,158 807 (750) 15,215
Provision for Income Taxes 5,466 348 (324) 5,490
Net Income $ 9,692 $ 459 $ (426) $ 9,725
Basic Earnings Per Share $ 0.37 $ (0.04) $ (0.01) $ 0.32
Diluted Earnings Per Share$ 0.35 $ (0.04) $ (0.01) $ 0.30

Third Quarter Ended February 1998
NDC PHSS Non-
Operations Operations Recurring Consolidated
Revenue:
Health Information
Services $ 72,226 $ 27,763 $ — $ 99,989
Integrated Payment
Systems 39,685 — — 39,685
Global Payment Systems 38,670 — — 38,670
Intercompany Revenue (6,798) — — (6,798)
Total 143,783 27,763 — 171,546

Cost of Service 67,930 16,056 — 83,986
Sales, General &
Administrative Expenses 49,942 9,717 — 59,659
Non-Recurring Charge 0 0 120,163 120,163
Total 117,872 25,773 120,163 263,808

Operating Income 25,911 1,990 (120,163) (92,262)
Interest and Other Income 316 — — 316
Interest and Other Expense (3,401) (205) — (3,606)
Minority Interest (584) — — (584)
Total (3,669) (205) 0 (3,874)

Income Before Income Taxes 22,242 1,785 (120,163) (96,136)
Provision for Income Taxes 8,452 678 (8,954) 176
Net Income $13,790 $ 1,107 $(111,209) $(96,312)
Basic Earnings Per Share $ 0.47 $ (0.02) $ (3.34) $ (2.89)
Diluted Earnings Per Share$ 0.45 $ (0.02) $ (3.20) $ (2.77)

Nine Months Ended February 1997
NDC PHSS Non-
Operations Operations Recurring Consolidated
Revenue:
Health Information
Services $ 125,061 $ 66,320 $ — $ 191,381
Integrated Payment
Systems 96,212 — — 96,212
Global Payment Systems 110,011 — — 110,011
Intercompany Revenue (17,341) — — (17,341)
Total 313,943 66,320 — 380,263

Cost of Service 150,281 40,465 — 190,746
Sales, General &
Administrative Expenses 118,275 22,333 — 140,608
Non-Recurring Charge — — 9,503 9,503
Total 268,556 62,798 9,503 340,857

Operating Income 45,387 3,522 (9,503) 39,406
Interest and Other Income 2,001 257 — 2,258
Interest and Other Expense (4,610) (1,075) — (5,685)
Minority Interest (1,032) — — (1,032)
Total (3,641) (818) 0 (4,459)

Income Before Income Taxes 41,746 2,704 (9,503) 34,947
Provision for Income Taxes 15,050 1,180 (964) 15,266
Net Income $26,696 $ 1,524 $(8,539) $ 19,681
Basic Earnings Per Share $ 1.02 $ (0.10) $ (0.28) $ 0.64
Diluted Earnings Per Share$ 0.95 $ (0.08) $ (0.26) $ 0.61

Nine Months Ended February 1998
NDC PHSS Non-
Operations Operations Recurring Consolidated
Revenue:
Health Information
Services $167,001 $ 80,790 $ — $247,791
Integrated Payment
Systems 117,257 — — 117,257
Global Payment Systems 118,865 — — 118,865
Intercompany Revenue (20,137) — — (20,137)
Total 382,986 80,790 — 463,776

Cost of Service 184,256 48,568 — 232,824
Sales, General &
Administrative Expenses 133,277 33,104 — 166,381
Non-Recurring Charge 0 0 120,163 120,163
Total 317,533 81,672 120,163 519,368

Operating Income 65,453 (882) (120,163) (55,592)
Interest and Other Income 1,256 — — 1,256
Interest and Other Expense (7,885) (1,790) 0 (10,311)
Minority Interest 56,932 (2,672) (120,163) (65,903)
Total (8,521) (1,790) 0 (10,311)

Income Before Income Taxes 56,932 (2,672) (120,163) (65,903)
Provision for Income Taxes 21,307 (597) (8,954) 11,756
Net Income $35,625 $(2,075) $(111,209) $(77,659)
Basic Earnings Per Share $ 1.30 $ (0.24) $ (3.51) $ (2.45)
Diluted Earnings Per Share$ 1.23 $ (0.22) $ (3.35) $ (2.34)

Details

AdvantEDGE Signs Mobil Oil Peru

AdvantEdge International Inc., announced Wednesday that its subsidiary, Push Electronic Development and Marketing Limited, has closed a trial agreement with Mobil Oil Peru, in which Mobil has decided to implement a trial of the FuelMaster wireless communications system (RFID) in several Mobil retail gasoline stations in Lima, Peru.

“This is a very significant agreement for AdvantEDGE,”  said David Shneer.  “It represents a key advance in the company’s strategy because

– by employing our FuelMaster technology in a “consumer / retail” application, Mobil Oil Peru will be able to offer its customers the benefits of an entirely automated refuelling procedure, eliminating the need for cash or credit cards;

– this is the second major oil company (after British Petroleum South Africa) to move forward with this consumer / retail application;

– this is the second agreement with Mobil Oil Peru, whose first implementation, at the Yanacocha mine, was not identified because of reasons of confidentiality at that time.”

Shneer added, “With respect to Mobil’s decision to conduct both the consumer trial and the Yanacocha commercial trial, we believe we are seeing a growing pattern of the FuelMaster automated refuelling system becoming the premier choice for the oil industry.”

The FuelMaster system utilizes sophisticated RFID technology to control and monitor the refuelling process. Oil companies and financial institutions can use this technology as a cashless electronic form of payment, as a loyalty program or as a means to lock in customer purchases and eliminate all unauthorized or fraudulent refuellings. Current FuelMaster customers include Shell USA, British Petroleum, Mobil Oil Peru, IBM Mexico, Total Petroleum (France), Flying J (USA) and Statoil (Sweden). FuelMaster can be utilized in both the “commercial” fleet vehicle market and the “consumer / retail” market.

AdvantEDGE’s wholly owned subsidiary, AdvantEDGE Products and Solutions Inc., holds exclusive distribution rights to sophisticated high-technology products and systems, developed by its subsidiaries, for monitoring of motor vehicle fleet operations. These include FuelMaster, a wireless communications system utilizing advanced radio frequency and smart-card technology to control the refuelling process.

Details

Classy Card

The world’s widest circulating classical-music magazine, BBC Music Magazine has joined up with First USA to offer the ‘Classical Performance VISA’ card. As part of the launch First USA is sponsoring a special 116-page supplement to the BBC magazine called ‘Classical Music America’. The supplement is a music lover’s guide to cities of North America. The new VISA card offers cardholders discounts on BBC merchandise and music offers as well as special discounts on BBC subscriptions. First USA is offering a 9.99% fixed APR and no-annual-fee. The card will be available as either a Classic or Platinum VISA.

Details

Wireless Acquirer

U.S. Wireless Data, Inc. announced this morning is has signed a merchant acquiring agreement with National Bank of Commerce. NBC will be the acquiring bank for credit card transactions placed through most of the merchant locations using U.S. Wireless’ ‘TRANZ Enabler’ technology. USW says the agreement will broaden its ability to reach new merchants especially those in the high volume hotel/lodging industries. The ‘TRANZ Enabler’ solution converts a merchant’s existing dial-up ‘TRANZ VeriFone’ credit-card terminal into a high-speed wireless terminal, reducing transaction time from 20 seconds to 5 seconds.

Details

Schlumberger Lands Major Swisscom Deal

Schlumberger is to provide Swisscom with Java SIM cards for its GSM mobile network service.  The new cards dramatically boost the potential for delivering value-added services to mobile phone subscribers, making it much easier to develop applications, and intrinsically simple to upgrade software in the field.  Several hundred thousand SIMs (Subscriber Identity Modules) have been ordered for delivery during 1998.

The Swiss operator will be the first in the world to roll-out Java-compatible SIMs.  Java capability extends the versatility of the Phase 2+ SIM Swisscom will supply for digital mobile phones, by allowing it to operate as a miniature computer and run a spectrum of additional applications.

This pioneering move will give Swisscom – already a leading exponent of value-added services for mobiles though its over-the-air service SICAP(tm) – a highly flexible platform for introducing new functions and tailoring its service package for individual users.  Thanks to the intrinsic security of smart cards the mobile phone could, for example, be used to make remote payments, to shop on the Internet, to read and send confidential messages, or access private servers and information databases – key functions that will underpin the emerging e-commerce industry.  Java programming capability will also make it intrinsically simple for Swisscom to offer custom services for groups of users, or business organisations.

Swisscom has ordered Activa(tm) Cyberflex Core(tm) cards from Schlumberger. These are the first cards in the world to offer GSM Phase 2+ SIM Application Toolkit capability, and compliance with the JavaCard 2.0 API. Demonstrated in October 1997, this card technology is currently on beta-test with many of the world’s foremost telecommunications corporations, in preparation for general release in 1998.  Swisscom and Schlumberger are currently working together to fine-tune existing SICAP (SIM Card Application Platform) services for use on the new Java platform, to ensure that the new product meets Swisscom’s objectives.

Many hundreds of organisations are currently developing smart card applications based on the first JavaCard implementation, Cyberflex(tm) from Schlumberger, but this is the first project to reach the stage of high volume orders in preparation for mass roll-out.

Almost every GSM/PCN operator is evaluating, or beginning to use, the autonomous capability of the latest Phase 2+ SIM smart card platforms to offer new applications such as remote banking.  The Java compatibility built into Schlumberger’s Activa Cyberflex Core accelerates this trend by providing a completely open and developer-friendly environment for this work.  Thanks to the interpreted nature of the Java language, applications can now be written and trialled in a matter of days, eliminating the mask creation cycle required for conventional smart card projects.  The technology effectively transforms smart cards into conventional computers, allowing them to run any Java Card-compliant application, and adapt to meet the individual needs of users.

“The ease of programming SIMs using Java will allow us to improve the capabilities of mobile terminals while at the same time simplifying life for users through interactive activation sequences” notes Rudolf Ritter, Head of New Business Development of Swisscom.  “Thanks to the support of our long-time supplier of SIMs, Schlumberger, this product extends the over-the-air capability we established with SICAP, giving us a flexible tool to support the productivity of our customers.”

“This order marks a giant leap forward for the smart card industry” notes Torsten Uhe, Sales Manager for Schlumberger’s operations in Germany and Switzerland. “The Java language, coupled with the flexible standard that governs SIMs, is giving network operators a platform for ‘mass customisation’ of communications services, and Swisscom’s pioneering project will influence the entire telecommunications world.”

Information on JavaCards and Activa can be found at[ www.cyberflex.austin.et.slb.com/][1] and [www.slb.com/et/sc_offer/activa.html][2]

[1]: http://www.cyberflex.austin.et.slb.com/
[2]: http://www.slb.com/et/sc_offer/activa.html

Details

PMT Record Earnings

PMT Services, Inc. announced record financial results for the second quarter and first six months of fiscal 1998. Consolidated results have been restated for certain pooling of interests transactions as if the acquired companies had always been a part of PMT.

Revenues for the second quarter, which ended January 31, 1998, increased 32.4% to $99,813,000 from $75,411,000 for the second quarter of fiscal 1997. Fully taxed net income before nonrecurring expenses was $6,593,000, up 38.8% from $4,751,000. Fully taxed earnings per diluted share before nonrecurring expenses increased 27.3% for the quarter to $0.14 from $0.11 for the second quarter of the prior fiscal year. These results exclude nonrecurring merger related expenses and include a normalized tax rate of 38% to reflect fully taxed results of merged entities as if they had historically been C Corporations instead of Sub-Chapter S Corporations.

Revenues for the first six months of fiscal 1998 increased 25.2% to $193,325,000 from $154,401,000 for the first half of fiscal 1997. Fully taxed net income before nonrecurring expenses for the latest six month period rose 32.8% to $12,438,000, or $0.26 per diluted share, from $9,369,000, or $0.21 per diluted share, for the first six months of fiscal 1997. These results reflect the same adjustments discussed above.

“PMT’s record results for the second quarter continued to demonstrate significant operating and earnings momentum,” remarked Mr. Roberts. “We attribute these results to the ongoing expansion of our merchant account portfolio through both acquisitions and accelerating internal growth. In addition, the growth of the portfolio created further economies of scale, which, combined with revenue enhancement programs and better vendor pricing, produced an increase in the operating profit margin to 10.0% of revenues for the quarter from less than 9.0% for the second quarter of fiscal 1997.

“Through the first half of fiscal 1998, we completed three acquisitions, bringing more than $3 billion in annualized charge volume to the Company. Subsequent to the end of the second quarter, we announced a fourth acquisition, with approximately $200 million in annualized charge volume. In addition to expanding the merchant account portfolio, we entered all four of these transactions with a specific goal of increasing our capability to generate internal growth by acquiring seasoned, quality field sales forces. The success of this strategy can be measured by the increase over the past 21 months in the average number of accounts being produced by our sales channels to approximately 3,500 per month currently from approximately 600 per month previously.

“We remain confident of the Company’s ability to produce further profitable growth through our dual strategies of acquisition and internal growth. We continue to lead the consolidation of our markets and our internal merchant account production continues to increase. As a leader in a growing and highly fragmented market, we are optimistic about the Company’s prospects.”

PMT Services, Inc. is an independent service organization which markets and services electronic credit card authorization and payment systems to small retail and professional businesses located throughout the United States. PMT’s account portfolio has grown through the internal development of accounts using telemarketing and a field sales force as well as through the purchase of account portfolios. PMT is one of the largest independent service organizations in the country.

Investors are cautioned that this release contains forward-looking statements, such as those relating to PMT’s ability to produce continued profitable growth and the continued consolidation of the electronic transaction processing industry, that are based upon current expectations and involve a number of risks and uncertainties. Actual operations and results may differ materially from those expressed in the forward-looking statements made by the Company. The factors that could cause actual results to vary include PMT’s ability to retain and expand its field sales force; the ongoing performance of the field sales and telemarketing personnel; the actual production of new accounts by alliance partners; the Company’s ability to integrate acquisitions successfully with its processing systems and products and to account for acquisitions as poolings of interests; the availability of attractive acquisition targets; the availability of capital, attrition of merchants from acquired portfolios; and other trends or uncertainties as noted in PMT’s periodic filings with the SEC.

                          PMT SERVICES, INC.
                    Unaudited Financial Highlights
                (in thousands, except per share data)

                         Three Months Ended        Six Months Ended
                             January 31,              January 31,      
                          1998        1997         1998        1997 
Revenues               $ 99,813    $ 75,411      $193,325    $154,401
Net income(1)          $  6,280    $  3,635      $ 12,045    $  8,201
Earnings per share(1)
  Basic                $   0.13    $   0.08      $   0.26    $   0.19
  Diluted              $   0.13    $   0.08      $   0.25    $   0.18
Weighted average shares
outstanding
  Basic                  47,188      43,164        46,488      43,122
  Diluted                48,170      44,397        47,533      44,393

     (1) Includes nonrecurring expenses related to merger transactions
and excludes adjustments necessary to reflect the fully taxed results
of acquisitions as if they had historically been C Corporations
instead of Sub-Chapter S Corporations. Pro forma results excluding
nonrecurring expenses and reflecting a full tax rate (38%) are shown
below

                          Three Months Ended     Six Months Ended
                              January 31,           January 31,   
    Pro Forma Results      1998       1997       1998       1997 
    Net income            $ 6,593    $ 4,751    $12,438    $ 9,369
    Diluted earnings
     per share            $  0.14    $  0.11    $  0.26    $  0.21

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