"SEVU: Well, we brought on Mike Ditka as our spokesperson and we'll be doing direct-television consumer sales, and that's the old magic 800-number infomercial concept. We find whenever we present this concept, because of ease of use, I mean it is just as simple as Mike says it [is], so easy, "Anybody who can screw a light bulb in can have instant video in their home or office." One of the problems with video is all the wiring and drilling and holes, complications and the expense. The basic consumer system (SecureView) will sell for $399 on TV to the public at four easy payments of $99.95, so it lets the consumer get involved. We're building 100,000 units, actually K-Byte is, they are our manufacturer and we've contracted with [K-Byte] to build them. We have a considerable amount of units sold. We have a considerable amount of pending government contracts to fill. My background is pretty extensive with direct response marketing so we feel that selling 100,000 units in the balance of this year is a very conservative scenario."
seaview.com
CEOCast Interview, July 10, 2000
This is Michael Wachs with CEOCast. I'm here today with Rich McBride. Rich is President and Chief Executive Officer of SeaView Video Technology, Inc., a company that trades over-the-counter on the bulletin board (symbol: SEVU), and one that manufactures, distributes and sells marine and security related video camera equipment for recreational and commercial customers worldwide.
Rich, thanks for joining us on CEOCast today.
SEVU: (Rich McBride) Good to be here, Mike.
MW: Rich, the company continues to grow quite rapidly. Projections for sales of the SecureView camera show enormous growth. Perhaps you could begin with a brief overview of the company, and then we'll discuss how SecureView fuels the company.
SEVU: The company began when we developed a new technology for underwater video, and this led us to areas where we got into infrared and different modifications of existing technologies to improve visibility under the water. We now are the largest manufacturer in the world of underwater cameras. In fact, I think that division is close to $3 million in sales for this year already. In working with the camera technology and knowing that there would be a growth period and an educational period in developing the underwater products, we also looked into security products. There were basically three methods of security transmission. One, of course is, the standard cable-wired video, which we call CCTV, where you have a camera and a wire. The other area is wireless video. That's where you transmit essentially with a television frequency, or a 900 or 2.4 gigahertz frequency through the air. And then, of course, you have your computer video. The computer video tends to be a developing phase. We got involved, and created what we trademarked as the "IRFS" system, and it's an induction RF system. It's a one-of-a-kind.
We have some seventeen patents that tie it up and lock it up. What we are able to do is take high-resolution video and transmit it over electrical wires. The electrical wires can be 110 volt, 220 volt, DC voltage, no voltage. It really doesn't make any difference. And we don't use the current inside the wire and we get a high-resolution high-definition video signal. The unique connection we made in developing that particular technology is that we also then came up with the idea of putting a video camera in a light bulb. The great feature of that product is, of course, a connection via your electrical wiring directly back to your receiver point.
So we have two basic types of light bulbs. One is your standard outdoor floodlight-bulb replica, and then we have an inside smaller floodlight bulb. These bulbs contain infrared transmitters so they can see in darkness. They look just like a regular light bulb and they transmit the video that the camera picks up literally back to any TV, VCR, or computer in your home or office. This is done with almost zero distortion. Then in that technology you can access it via modem or the internet to check and see what's on the video.
MW: Rich, the company not only has interesting technology, but you've now gone into production with a 100,000 unit run scheduled for the SecureView camera system. What's the strategy there?
SEVU: Well, we brought on Mike Ditka as our spokesperson and we'll be doing direct-television consumer sales, and that's the old magic 800-number infomercial concept. We find whenever we present this concept, because of ease of use, I mean it is just as simple as Mike says it [is], so easy, "Anybody who can screw a light bulb in can have instant video in their home or office." One of the problems with video is all the wiring and drilling and holes, complications and the expense. The basic consumer system (SecureView) will sell for $399 on TV to the public at four easy payments of $99.95, so it lets the consumer get involved. We're building 100,000 units, actually K-Byte is, they are our manufacturer and we've contracted with [K-Byte] to build them. We have a considerable amount of units sold. We have a considerable amount of pending government contracts to fill. My background is pretty extensive with direct response marketing so we feel that selling 100,000 units in the balance of this year is a very conservative scenario.
MW: Rich, the company is teamed with Logis-Tech, who has already gone on record to say that they anticipate sales in the 10-million dollar range through 2001. That would tend to suggest that the first run of 100,000 is rather conservative. What's the strategy from a manufacturing perspective? Do you have the capacity to ramp-up if necessary?
SEVU: Well, one of the things we did was--and it's the same thing we did with the underwater cameras--we put our primary investment other than obviously in patents and that end of it . . . we put our primary investment in building our own tooling. We own the tooling. We have probably quarter of a million dollars or more in tooling. When you own your own tools for making your own molds that helps extensively with long-term manufacturing. We're projecting to manufacture about 400,000 units next year, and that's conservative. In manufacturing you're always involved in the standard dilemmas of parts and things and we've been ordering parts from Motorola in million quantities. These are the types of things that you do. You have to put your investment in there to cover demand. One of the nice things [about] a new product, a new technology, is you have that supply and demand curve, as they call it. When you can control the supply and when you have proprietary patents you can also then control the pricing. So we are able to keep a price scenario that returns a maximum amount of net income back to the company. As in every product that we've developed, we make them consumer-friendly and inexpensive. When people see this system and they say "What's the price-tag?" and we say the base-system is $399, they most always make that "unbelievable!" acclaim, for what the system does.
MW: How will you use Logis-Tech to leverage your marketing?
SEVU: Logis-Tech, and we also use New Technology Management, and these are existing firms that have multi-million dollar on-going contracts with the government. We're working with the Border Patrol, the Port Authority and the Army Reserve and these people are constantly a supplier [to these agencies]. We are now under GSA lists for our underwater cameras, and that's the government services list. Any fire department or any federal or state or local government no longer has to get bids and such. They just put in an order and use our number. Our number is assigned to different products. So, we are smart enough to realize [rather than] for us to wait in the lobby of congress to get orders and things, we've aligned ourselves with progressive companies who can deliver instant orders. That's exactly what they've done.
MW: What about internationally? How will you go about leveraging the technology overseas?
SEVU: We have the key patents involved in SecureView, in what I like to call the "Induction RF System," have pretty much been filed in most major European countries. We're probably going to look at a distributor, and we may consider some licensing agreements for overseas. We do have the 220 volt PAL system and it's quite easy for us to make a camera that works in any environment. We also have produced the DC version of SecureView, which means that RVs, boats, trains . . . anywhere 12, 24 or 32 volts, you can just tap into any wire and transmit video. So we're looking at that, and we're just now getting the underwater cameras into international distribution. So we're smart enough to realize that you don't take on the whole world at one time. If you're protected with patents, then you know you have the comfort level to progress properly. Quality control is a major concern to me personally. In the marine electronics market we have about a 2% return rate, which is the lowest in the industry.
MW: Rich, you mentioned some marine electronics divisions. Second quarter sales are expected to be up 50%. How do you integrate that into the growth strategy?
SEVU: We always knew that underwater cameras, once the consumers got used to them, and boaters got used to them, and divers . . . that I always said when GPS came out, the Global Positioning system, those units were $2000. They came out approximately 15 years ago . . . now I probably have two or three GPS units and they're about $150. I think that GPS has probably almost a 60% penetration rate in the industry. So I think the underwater camera is going to be something, as prices have come down, that if you live near the water or have a boat, or dive, or have a pond, you know, whatever the variables are with water . . . it's just natural to want to see what goes on below the surface. We spend our time on boats and things and there's a whole world below the surface. I think that it's an education process. Actually I think the numbers are going to be close to a 200% increase or more from last year's sales in the marine division. And what we did in the marine division is, we let it go to retail; and we have some 800 retail stores selling the products. So you have two years of national magazine advertising and then we went to retail--now, our consumer can walk into a local store where he knows someone, and buy a camera and actually pick it up and see it and feel it. So, that's where we're getting that surge in orders from.
MW: Rich, reflective of the company's growth, you've recently applied for a listing on the AMEX. Why the decision to go to the AMEX and what will be the process to complete that?
SEVU: We are going through the normal process. In making a move like that there's a tremendous due diligence and work that's underway. We're pretty much completed with most of the questions we've been asked. The reason for the American Stock Exchange is we like the idea of a specialist. We think that's the avenue to go and we've been involved in conversing of course with Spear, Leeds and Kellogg . . . working with them and I'm real comfortable with the people at the American Stock Exchange. I think it's a good place for a bulletin-board company to jump to. And I think that if your company ever gets into the billion-dollar market cap, or grows or becomes mega-size, I guess you can then look at jumping over from the American to the NASDAQ big board. But I like the idea of the specialist and I like the idea that there is no naked shorting on the American Stock Exchange.
MW: I've been speaking today with Rich McBride. Rich is President and Chief Executive Officer of SeaView Video Technology, Inc., a company that is poised for big things as it projects gross sales fiscal year 2000 to be $ 46.5 million and a rapid revenue ramp-up of approximately $168 million to the top line for fiscal year 2001. Rich, thanks for joining CEOCast today.
SEVU: Thanks Mike, I appreciate it.
MW: This has been Michael Wachs for CEOCast. |
