IVI Checkmate (CMIV) Message Board

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Technology Stocks : IVI Checkmate (CMIV)

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To: hsg who wrote (3510)	4/26/2000 7:57:00 AM
From: hsg	of 3721

Re: Revy, Safeway, etc...Part 2 by: taurus_inv 4/26/00 1:17 am Msg: 1072 of 1072 2. Growth: Where is it? Every acquisition has been touted by management as being accretive to earnings. In a word, BULLSHIT. The Debitek acquisition for example...$4.95M paid for $5M in sales annually and losses in 96 & 97. The only profit was in Q1 1998 and we have no way of knowing if this stellar quarter was ever repeated. The only way this deal was accretive is if pie in the sky projections were used. Furthermore, the use of stock to make acquisitions at a time when interest rates were at historic lows had to be the most short-sighted strategy. Why? Well, despite these accretive (ya right) acquisitions, the share price has continued to fall, making any further acquistions by stock much more expensive...as any prospective target will demand a greater number of shares to account for the company's historically volatile share price. Questions - (a) is a share buy-back (even with borrowed $) an option (b) how will future growth and strategic acquisitions be financed if the share price continues to languish (c) are preferred shares an option? (d)The use of debt is also less atractive given the firm's lack of consistent earning power...how will the firm address the extreme volatility in its earnings? (see above comments on diversification for some clues). (e) What are the prospects for internal growth...what products/services will generate it in the firm's longer term? 3. Efficiency: What is the firm doing to increase margins? It has been noted on this message board that the firm has the following problems: - Increased sales of lower margin Ingenico products - Declining margins on its greatest source of revenue...check readers and older generation POS terminals - Wireless products and EnTouch 1000 products which are too expensive for their benefits to retailers to justify their cost...in other words, these high margin products just will not sell - Services - what are the margins on the services provided? How does the firm intend to address these margin related issues? The above comments are based on comments by others on this message board and my own understanding. If the facts are wrong, I invite the firm to correct them. Regardless, management has got to start generating EARNINGS! Record revenues are useless if the margins are 0%. If I wanted to invest in a company that sold products at break-even or at a loss I would have invested in amazon.com (and been handsomely rewarded had I done so - who says markets are rational?). Patiently awaiting enlightenment...

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