A Shareholder's Christmas List for Tidel Technologies
1. Recapitalize the company. Hire a “high-quality” Investment Banker to secure $10 to $20 million in debt financing. This will take the company to the next level. Tidel needs the cash to fill the pipeline with the new product – Chameleon. We also need the working capital for marketing. If Tidel does not do this, then we should negotiate the best deal possible with Fujitsu and hand them the keys to the business.
2. Reposition the company as a high-technology business. The company currently has the reputation of being a machine assembly company. The company should position itself as a leading technology company that combines electronic commerce, multimedia and the internet. Tidel should also move away from comparing themselves with Diebold and NCR. Tidel needs to define a new industry where they are the leader. This will help when Leonard Carr goes on road shows and the first question he is asked is how can such a small company compete with Diebold and NCR. A technology company will be awarded a much higher P/E than a manufacturing company.
3. Move into other markets with the Chameleon. This company needs to move aggressively into Casinos, airports, malls, etc. with the Chameleon product. This will include changing marketing collaterals, educating the direct sales force, and seeking alternative sales channels through strategic alliances. Tidel can triple the sales potential by entering these markets. Tidel can also have a “first movers advantage” if the organization is timely in these new markets.
4. Invest in a massive product marketing campaign – Hire a world class marketing communications firm (this should not be confused with the current Investor Relations firm). With the new recapitalization, this company needs to improve its image in the marketplace with potential customers.
5. Become more shareholder focused – Maximize shareholder value. This company has performed very poorly in supporting current shareholders. Lack of information/press releases, too internally focused, lack of concern of the share price throughout the organization – engineers more concerned about a better mouse trap versus any thoughts on the share price. We need to have much more information flow via positive press releases and quarterly conference calls.
6. Align management compensation/bonus based on stock performance. The current President, Mark Levenick, was paid $193,962 in base salary and $97,500 in bonus (total of $291,462) last year with 100,000 options. This person basically acts as a Plant Manager – we need to review management compensation. Total paid in salary and bonuses for the top 3 managers in 1997 was $660,792 or 31% of 1997 net income or $0.05 EPS. Bonuses need to be based on share price appreciation.
7. Upgrade the Investor Relations Firm. I have had calls from shareholders indicating the current IR company is not responsive. What have they done so far? Any new analysts? Any new market makers? Share price increase?
8. Initiate an insider buying program with the senior management. James Rash should coordinate a program where all the senior management purchases stock on the same day. Each manager should purchase an amount they can support -- $1,000, $5,000, etc. This program of insider buying would be viewed as a bullish sign by investors.
9. Web page with an investor section. The prior web page excluded an investor section – What message does this send to the current or future investors?
10. Infusion of strong new management and board members with industry experience. Tidel lacks industry experience in its management and Board of Directors ranks.
RAP |
