The recent stock market sell off has had it's effect on CLCK. It now sells for $2 7/8's. I think it's undervalued. Why? Well it's a company with actual rapidly growing earnings? But it is selling well off the yearly highs. The biggest reason is that CLCK is no longer processing any cards for BestBank. It scared investors. The bank was closed but no business was lost. CLCK is currently processing those accounts for the FDIC while they make arrangements for them to be placed with another institution. Columbia Capital has made every effort to make this abundantly clear to investors. Columbia Capital Corp. Responds to Rumors, Announces No Drop in Credit Card Revenues Due to Failure of Bestbank:
biz.yahoo.com
So what does CLCK do?
Operating through a Texas based subsidiary, First Independent Computers, Inc., CLCK provides three interrelated financial services on an outsource basis. It links consumers and merchants with credit and debit card issuing institutions by: (1) capturing consumer transactions at point of sale, (2) providing credit to merchants as transactions are recorded, (3) posting transactions to card issuing institutions' accounts receivable and general ledger, (4) finally closing the loop by printing and mailing statements to initiating card holders.
Now this worked so well that CLCK was able to earn 3 cents in their first quarter and 5 cents in their second. Third quarter numbers will be reported in a couple weeks. I expect that we will see continued growth quarter over quarter.
Unfortunately because CLCK is now processing accounts for the FDIC instead of BestBank they are unable at the present time to add new accounts to this particular portfolio. That will change.
CLCK is doing lots more than processing accounts for the FDIC. Growth is about to come from a number of different areas. Ever heard of the Check Cashing Stores?
CLCK will be processing and services lots of new accounts soon. One of the programs they are working on is with Financial Management Services, an unaffiliated third party, for debit cards introduced through the national chain of check cashing retail outlets of the Check Cashing Store, Inc. This could be a huge program. This was an estimate from John Westergaard of how big:
A contract to process debit cards for a chain of 3500 check cashing stores could be very large. Assume, for the sake of analysis, that each store adds 10 debit card accounts a week, that would translate to 140,000 new processing accounts a month which would double the scale of CLCK's processing business in 5 months -- we estimate it presently at 600,000 accounts.
wbn.com:8080/CLCK/index.html
How about healthcare processing? CLCK is making moves to be a major player in this nascent market. The Millennium Healthcare Card Deal was described as potentially the largest contract that CLCK had ever signed:
Message 5639473
A while back CLCK moved into another area of healthcare processing with Platinum-ICS, Inc. (PICS) for the processing of its national heath card. Eventually this could result in hundreds of thousands of accounts that CLCK will be processing. Check out some information I got after this news was released:
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How about entitlement benefits? CLCK is looking to become a very big player in the field of Electronic Benefits Transfer:
CLCK is acquiring FiScrip in order to reap the full benefits of EBT:
biz.yahoo.com
FiScrip designs, programs and tests the software that is reloaded into ATM's and debit card point-of-sale machines. FiScrip is one of four companies certified by Deluxe Payment Systems, an unaffiliated third party, to process EBT transactions. EBT is a new process and method of distributing federal entitlements, initially including food stamps, welfare and social security payments to beneficiaries. In place of printing and issuing checks and other financial instruments, some beneficiaries of government entitlement programs receive a debit style card (a "QUEST Card") which operates in the same manner as an ATM or debit card. The beneficiary of the entitlement program uses this federally issued card to purchase items utilizing the EBT system. The federal government may eventually establish individual accounts which will be debited when a beneficiary makes a withdrawal or purchase.
The transactions based on this medium of exchange through FiScrip and the Company are estimated to produce a gross transaction fee of between $0.06 to $0.09, of which the Company will be paid a per transaction fee of $0.02 and a fee of $3.50 per monthly statement generated by the Company. The transaction fee is in addition to the merchant application and statement fees. However, no assurance can be given as to the volume of transactions that will be processed or rates at which such processing will take place. FiScrip is newly in operation in connection with the EBT business, with no more than 5,000 transactions in February, 1998 and 7,000 transactions in March, 1998. FiScrip anticipates a significant increase in the number of transaction, but no assurance to this effect can be given.
According to federal government surveys, it is anticipated that by the year 2000, 60% of the population of the United States will be receiving monthly income issued electronically and accessible through the use of a QUEST Card. However, no assurance to this effect can be given. The total dollar value of EBT transactions (food stamps, aid to families with dependent children and welfare) in 1998 is estimated by FiScrip to be $60 billion, with an average transaction size of approximately $23.00, or approximately 450 million transactions per
year. FiScrip's target market share of total dollar volume of EBT transactions is estimated to be $6 billion or 65 million transactions per year) by January 1, 2000. However, no assurance can be given that there will be this volume of transactions or that FiScrip will service such a volume of transactions.
The Social Security System will begin distributing benefits using EBT beginning on January 1, 1999 and expects to have completed full implementation of the distribution system for benefit distribution using EBT by January 2, 2002. The dollar value for all EBT transactions by the Social Security System is expected to reach $470 billion annually. However, no assurance to this effect can be given.
CLCK is also making another acquisition of an associated company which will tremendously add to future earnings. The acquisition of Berwyn will produce an additional $20 million in revenues for CLCK, annually:
Message 5086138
On Friday September 25th, Columbia Capital Corporation Signs Letter of Intent to Acquire Two Electronic Processing Subsidiaries of American Banknote Corporation:
Ken Klotz, president of Columbia, states, ''Columbia has successfully penetrated the healthcare and certain data processing and personalization businesses. With the culmination of this acquisition, product and service offerings by the combined companies will include medical and university smart card programs, frequent buyer and loyalty programs, terminal sales and support, as well as point-of-sale terminal card processing, utilizing the company's proprietary communications center and switching facilities as well as an expanded EBT program. As part of this transaction, we will also secure an independent service organization (ISO) portfolio of seven hundred merchant processing accounts. We believe that this acquisition makes good strategic sense in that it provides Columbia Capital Corporation with immediate and broad diversification of its products and
customer base.''
When the details of many of these deals finally become evident Columbia Capital will be incredibly diversified. Revenues and earnings in the months ahead should be growing substantially. Please check out all the news at Yahoo concerning CLCK:
biz.yahoo.com
InvestRight
Regards, Jeff
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