Was anyone else wondering just how this deal with PICS works for CLCK?
Well I got some details yesterday after doing a brief conference call with Mike Markow and Ken Klotz. I'm going to reprint the press release and highlight a few things for investors. Then I will try explain it all the best that I can for those who are interested:
Columbia Capital Signs Platinum-ICS
biz.yahoo.com
ABILENE, Texas, July 30 /PRNewswire/ -- Columbia Capital Corp. (OTC Bulletin board: CLCK - news) announced today that its wholly-owned subsidiary, First Independent Computers, Inc. (FICI) has signed an agreement with Platinum-ICS, Inc. (PICS) for the processing of its national heath card.
The opportunity here for CLCK is absolutely astounding
Platinum-ICS is an integrated communication technology and service company, which has recently signed its first health care industry processing, and receivables management contract with Presbyterian Hospital, Greenville, TX. PICS president, Ed Gerhardt said ''Our concept is a new process for handling receivables for healthcare providers. It is a process designed to reduce costs by spreading these costs among multiple providers who serve a common patient. Instead of multiple providers, each sending bills to patients for amounts due from them after insurance processing, now there will be one statement for all of the providers with an easy payment plan.'' This will significantly reduce billing and collection costs and will result in higher collection ratios.
This is the first contract. How many more contacts will there be in the future? Wait until I tell you what this contract offers to hospitals, providers(physicians), and patients.
According to Gerhardt, the agreement with FICI will give PICS the back room support to expand rapidly throughout Texas, then nationally. Providers pay fees similar to group purchasing arrangements and earn interest from performing accounts receivables. The results are that for the first time healthcare providers can utilize a better process for collecting amounts owed them at a cost that is significantly below what they have previously experienced. As the number of participating providers increase, the cost to each provider will decrease.
Expanding rapidly through Texas and then nationally? Is this just for real? Wait until I explain what PICS and CLCK are doing and then you decide.
''FICI has devoted a significant amount of time developing the custom software for this program,'' according to President, Ken Klotz, ''but with each participating provider processing all of its patient pay transactions through FICI, we anticipate that will represent a significant increase in revenue for CLCK.'' Gerhardt said that PICS is making plans to manage $1 billion in accounts receivables by the year 2001.
$1 billion in accounts receivable by the year 2000? What might that mean to CLCK? Let me see if I can make a guess at that after I do a little research on credit card processing and the average hospital bill for you.
Columbia Capital Corp. operates through its wholly-owned subsidiary, First Independent Computers, Inc., which is a multi-faceted information and transaction processing service organization. The services provided by the Company include credit and debit card processing, transaction processing for the health care industry, bank and financial services processing and document management and distribution services. The Company concentrates on a niche market, consisting of small to
medium-sized financial institutions, and health care providers that have not achieved the economies of scale to operate their own in-house programs and systems.
Forward-looking statements in this press release are necessarily subject to risks and uncertainties, which may affect the accuracy of such statements. Such risks may include any delays in the addition of business or loss of existing customers. For a full discussion of such risks, please refer to the Company's Form 10-KSB for the fiscal year ended December 31, 1997 and subsequent filings. The company undertakes no obligation to update such factors or to publicly announce the results of any revisions to the forward- looking statements contained herein.
SOURCE: Columbia Capital Corp.
Let me explain what PICS is doing here. They are offering a services to patients, hospitals, and providers(physicians) services that benefit each one of these groups.
What will PICS do for the patients? Well each patient is issued a medical credit card. The credit card can be used by those patients who qualify to help them pay off their insurance co-payment or in the case of those uninsured the entire balance after medical services are rendered.
What will PICS do for hospitals? Well, they will offer hospitals money for their accounts receivable right up front. The typical hospital has a great deal of trouble collecting their accounts receivables. PICS can act as a third party collection agency. PICS will be less worried about how it looks when they attempt to collect money than the typical religious associated hospital. They will therefore be able to do a much better job of making these collections. If the account is uncollectible after 90 or 120 days then it once again becomes the hospital's problem but it will be PICS's intention to get active payment from as many of the patients as they are able.
The service offered to an individual physician(provider) will be much the same as the hospital but on a more individual basis. Believe me it can be very difficult for a physician to collect money:
stark-stark.com
So what does CLCK get out of this, and in essence, what do we as CLCK shareholders have to look forward to?
CLCK will provide back room services to PICS. That means CLCK will handle the card processing, billing, statement production etc. Looking over the press release I began to wonder just how many accounts CLCK could be handling if CLCK was processing $1 billion dollars in accounts receivable by the year 2001. So I called a friend, and local hospital administrator, who told me the average account receivable ran about $2500 to $3000. PICS's average accounts receivable are probably pretty similar but for the sake of argument lets take the higher figure and try to figure out how many patients CLCK might be processing accounts for in the future. Ok that's $1,000,000,000 divided by $3,000 which gives us 333,333.33 accounts. Then I got to wondering just what might CLCK be paid to process these accounts? Well I checked the company's latest 10KSB for their monthly account charges:
sec.gov
In it I found that CLCK is paid on average the industry standard of approximately $2.00 per account per month for financial data processing and $3.00 per account per month for customer service.
Well I'll be honest I don't know exactly what that means? But it seems likely that Columbia Capital will be getting paid $5 a month for each account they process. Just for the sake of argument lets say I'm wrong and all they are paid is $3. Well by my calculations CLCK will receive nearly $1 million dollars a month in revenues in 2001 if they are indeed processing $1 billion in accounts receivable. Last quarter CLCK had revenues of $3,342,062. Add in another $1 million each month from what I consider to be very conservative estimate and you can see how the growth of PICS will eventually nearly double current revenues. That will mean a big increase in earnings.
CLCK is making tremendous progress in becoming a more diversified company. Their Y2K compliance is bringing in new accounts in the debit/credit card area . They are one of only a handful of EBT processors. Think about how much money CLCK will be making when social security beneficiaries as well as food stamp recipients receive their benefits in the form of an EBT debit card. Finally this contract with PICS and the Millennium Health Card contract give CLCK shareholders the brightest possible future to look forward to.
Regards, Jeff |
