Good TRKR overview from Ground Floor:
hirschorganization.com
Tracker Corporation of America wants to help you recover any property you may lose or have stolen. More important, it wants to help manufacturers and retailers keep track of inventory, simplify handling of merchandise, improve warranty services, and reduce loss due to fraud. The beautiful thing is that the company can do all these things with one system.
It?s sophisticated in design, but simple to use. The basis of it is bar coding?using patterns that encode far more information than the bar codes you see on cans and packages at the supermarket.
This part of the system comes from Symbol Technologies (NYSE?SBL), a highly successful leader in bar coding with sales that should climb over $1 billion this year. Tracker has an alliance with Symbol Technologies which among other things gives Tracker an exclusive in the area of personal property identification and recovery of lost or stolen items. Symbol will also offer a performance guaranty to approved Tracker customers and provide technical support.
This code can provide up to three trillion combinations, equaling three trillion numbers that can be used. This is the company?s inventory, which costs essentially nothing now that the technology is in place. Of course, there will be ongoing overhead in running the business. The game plan is to sell this inventory for up to $1.35 per number, depending on the services provided.
Sales will come from several sources. The technology has potential uses the company has not even gotten around to exploring yet. But the main thrust, and probably the biggest potential source of revenues, is in manufactured goods. The tracking system could be used to advantage with most hard goods (those of more than modest value) and perhaps some soft goods (like clothing) as well.
Here?s how the system works. When a product is made, a machine on the assembly line optically etches the bar code onto it. The equipment to do this is provided by Lumonics, the world leader in laser etching machinery. The same bar code is then read and printed on the outside of the box in which the item will be packaged. The code will show the date the product was made, the machine or assembly line that made it, and shipping date.
Subsequent scanning can record the date it arrived at a distribution point, date it arrived at a retail outlet and the date it was sold. If desired, the name of the purchaser can also be recorded, through a credit card scan or through his providing it. All this information is easily kept track of through a sophisticated data base maintained by Tracker Corp.
Manufacturers and retailers benefit first through more efficient quality control and inventory control. Sears Roebuck, with 432 stores, could know instantly how a particular item is selling, how many units are available in each store, and when new supplies for restocking will be available.
Both retailers and their suppliers will have much more demographic information about their customers, for use in marketing. Warranty service can be improved and warranty fraud eliminated. It will be clear exactly who bought the product and when the warranty expired. (At present, only 12% of North American customers fill out product warranty cards.)
Retail fraud could be sharply reduced. No more would someone be able to steal a product at one store and return it to another for a refund, or buy at Walmart and ask for a refund at a higher-priced department store. (This happens every day.)
In addition, either the retailer or manufacturer can offer additional services, such as returning items if lost or stolen and subsequently found. In today?s competitive retail environment, some may want to replace free (or at a discount) any item lost and not recovered.
Tracker already has a few commercial customers and is negotiating with a number of other potential users. Sony is testing the system on a few items. A deal with Sony to use Tracker on a significant number of its products would be a major coup. Such an event would bring other manufacturers (and certainly retailers) into the fold and rocket the stock price. We do not know how likely such a deal is.
Schwinn Cycling provides Tracker labels and three years of service with its bicycle locks. If a labeled bike is stolen and recovered, the owner can be notified through Tracker. Another current customer is Warrantech, which uses Tracker for inventory control.
The company is also developing programs to sell identification services to consumers, either directly or through institutions. Have you ever lost your keys? Lots of people do. Of course, you don?t want to have your name or address on the keys. A Tracker tag allows any finder to return the keys through the company (there?s a toll free number to call).
This applies to almost any valuable property. Having a permanent Tracker label or tag on it is both safer and more efficient than putting your name on the item. (A finder anywhere can call toll free.)
Tracker is endorsed by the International Association of Chiefs of Police. Under a new program, the system will be used to identify bicycles throughout the state of Florida. The Florida Police Chiefs Education and Research Foundation has entered a partnership with the company to install Tracker Systems in up to 1,000 Florida police departments and train personnel in their use.
The company expects ultimately to have more than two million bikes bearing Tracker labels in Florida. This should enable a lot more kids to get their bikes back and help police manage what is a significant problem?storing and disposing of lost and stolen bicycles.
Tracker Corporation is not exactly an accountant?s dream. The company has so far achieved minimal sales from the bar code identification business. Losses should diminish now that development work is largely finished, while sales build. The company has a loss carryforward of almost $18 million. This is mainly from earlier (now discontinued) operations and can be used to reduce future taxes.
Importantly, the company has recently obtained bridge financing that will allow it to redouble its marketing efforts. This is a speculation with major potential return. |
