As posted by Arcane Lore in number 878
On Friday, CLCK filed its 10-Q for the quarter ended Sept. 30, 1998. Several excerpts relate to the Best Bank contract and are relevant to the discussion about the impact that loss of that business might have on CLCK. Two aspects may be of particular interest:
1. Of the 678,845 active credit card accounts serviced by CLCK as of Sept. 30, 1998, 643,768 or about 94.8% are derived from the agreement with Best Bank.
2. 84% of the revenue for the nine month period ending Sept. 30, 1997 was from the Best Bank agreement. If the 84% figure also applied to the three months ending on Sept. 30, 1998 (the actual percentage may be more or less than this) then the non Best Bank revenues during that period would be about $589,000. This is less than the corresponding revenues ($629,749) for the three month period ending Sept. 30, 1997. (Since the Best Bank master agreement began on Oct. 1, 1997, there presumably were no Best Bank revenues in that earlier period.)
Also from the 10Q
'Although the Company continues to generate revenues from the Master Agreement with BestBank, the closure of BestBank may have a material adverse effect on the Company's future operations due to the Company's current dependence on the revenues derived pursuant to the Master Agreement. The FDIC has placed the Portfolio up for public sale and expects to close the sale of these assets prior to December 31, 1998. No assurance can be given that the Portfolio will be sold, or if sold, that the buyer will continue to utilize the services of the Company for processing the Portfolio.'
Let me see if stupid me understands this. The FDIC sells the credit card accounts to another bank. This bank will have either an inhouse system or will have a processing contract with another company like First Data Corp. This bank will continue to process with CLCK. I don't think so. Pouf 95% of credit card accounts are no longer processed by CLCK. Where will earnings be when 5% of the credit card accounts have to support all the processing costs for the system. However if the acquiring bank moves its existing processing to CLCK and so enriches Baetz and Gallant then elephants will fly as well as pigs.
And as for the Platinum (PICS) and Millenium processing, these are just signed agreements, is there any revenue being generated? |
