Did you happen to notice this part of the financials:
Smart Cards & Terminals orders decreased 2% versus last year and increased 4% over
last quarter. Orders for cards were up significantly year over year, with strong bookings in
Europe for our recently introduced Cyberflex Simera(a) high-capacity, multiapplication
smart card. Financial banking card orders grew strongly due to groundbreaking orders.
Smart Cards & Terminals revenue was 5% below last year and 2% above last quarter,
mainly due to lower payphone sales in Europe. Smart cards revenue in the second quarter
was even with last year as an increase in Europe was offset by a decrease in North
America. Revenue in Asia was flat compared with last year as an increase in unit
volumes was offset by a decline in pricing.
Prepaid phone card sales grew in China, Mexico and South America. Smart card revenue
improvement in Europe was led by higher GSM-SIM (subscriber identity module) card
sales. Asian smart card volumes increased as several Chinese banks standardized on the
Qianflex(a) banking smart card. A major financial cards issuer in the US placed a
significant first order as part of a new branded smart card loyalty program. The program
takes advantage of the smart card's ability to deliver more information about cardholders'
transactions. A total of 1.5 million cards will be delivered in the initial rollout.
Compared with last year, Municipalities (Parking and Mass Transit) showed solid revenue
growth. The Municipalities business provides city councils and local governments
throughout the world with integrated smart card-based solutions for mass transit, parking
and telecommunications. During the quarter, projects were awarded by Belgium Railways
and the Parisian Regional Transport Authority. In addition, a new integrated fare ticketing
system was successfully installed in London.
Automated Test Equipment (ATE) orders were up 39% over the same period last year
and down 2% compared with last quarter. Orders for all major product lines grew
compared with year-ago levels. Several new products in each business segment were
Now read this:
In our continuing effort to keep our shareholders and prospective
investors informed of the
Company's activities, I thought it appropriate to provide you with an
update on the Company's
recent business activities.
Several months ago we were contacted by Schlumberger Systems, S.A.
regarding our
technology. Schlumberger Systemes, S.A. is the world's largest smart
card manufacturer and
clearly a dominating force in the entire market. Its power is so
pervasive that it can through its
decisions affect the entire smart card industry. Gemplus, also of
France, is the other major
industry giant. Nanopierce recently signed a Confidentiality and
Nondisclosure Agreement
with Schlumberger Systemes, S.A. and we are now in the process of
coordinating the
protocols on exchanging technical information relating to our
technology. In the words of their
representatives they are particularly interested in our technology,
again to solve the critical
problem plaguing the industry: how to securely and effectively
maintain the chip module to
antenna connection for contactless smart cards and smart labels. Based
upon our prior test
results we are confident that our technology will provide the solution
to this problem.
We intend to vigorously and enthusiastically work with Schlumberger
Systemes, S.A.
realizing that should we be fortunate enough to enter in to a
substantive business relationship
with it, it would have enormous impact upon the future prospects of
Nanopierce. Euan Baird,
Chairman and Chief Executive Officer of Schlumberger Systemes, S.A.
said, in the 1998
Annual Report of Schlumberger Systemes, S.A., "The newest market for
smart card
expansion, North America, shows promise: 13,000,000 smart cards
circulated in North
America in 1996 - a number which is expected to grow to 240,000,000 by
2001. After ten
years in the smart card industry, we have developed unmatched
technology and know-how.
Continuing strong growth will come from building on this leadership
position through internal
investments and acquisitions." Jacques Cosnefroy, President and Chief
Executive Officer of
the smart card division of Schlumberger Systemes, S.A. forecasts that
in the year 2000, 2.2
billion smart cards will be produced. In his words, "Through a series
of acquisitions and
creation of production centers, the group (the Schlumberger Group)
currently enjoys a
production capacity of 900,000,000 to 950,000,000 cards.
As you can see little Nanopierce has caught the attention of the giant
of the industry. We
intend to exploit this opportunity with every available resource.
You recently put out extensive information relating to Taiko Denki and
the connector industry. I
am pleased to report to you that our discussions with Taiko Denki are
progressing very
rapidly and productively. We are excited about the prospects presented
by this opportunity.
With the knowledge that we can meet or exceed the specifications,
which it provided to
Nanopierce, I believe that we may have the opportunity to penetrate to
the very heart of the
Japanese electronic industry. Sony is the largest customer of
connectors, manufactured by
Taiko Denki. I do not need to elaborate upon the significance to
Nanopierce if a substantive
business relationship is developed with Taiko Denki. The implications
should be obvious to
everyone.
Our working relationship with ORGA Kartensystemes continues to
develop. We value our
association with ORGA Kartensystemes, because it is providing the
Company with the
opportunity to apply our technology to other applications beyond dual
interface smart cards.
Dr. Herbert J. Neuhaus, has successfully applied our technology to a
very technically
challenging product designed and developed by ORGA Kartensysteme. What
is particularly
significant about this is that despite all its resources, ORGA
Kartensysteme was unable to
solve the problem, so it came to Nanopierce. The frequency of our
communications with
ORGA Kartensysteme and its top technical and scientific personnel,
evidences, in our
opinion, their increasing faith in our technology and respect for the
significant technical
capabilities and competency of Dr. Herbert J. Neuhaus. The Company is
very fortunate to
have him as an officer and director.
Our efforts with Meinen, Ziegel continue on an almost daily basis. It
is a key player in verifying
the application of our technology to various products. As you know, it
conducted the initial
tests, which conclusively established that our technology would exceed
by many times the
ISO Standards for smart cards. Its testing facilities are excellent
and the competencies of its
various personnel allow Nanopierce to have access to testing equipment
and personnel
which we otherwise could not afford. Meinen, Ziegel obviously has an
interest in assisting us,
because when the technology becomes accepted as the standard in the
industry, it will
design manufacture and sell new equipment to utilize the technology,
thereby simplifying the
equipment, reducing the cost of the equipment and increasing the
output of the equipment all
of which constitute significant competitive advantages over other
equipment manufacturers.
Cirexx Corporation is developing an aggressive marketing campaign to
promote our
technology as an integral part of its services and processes. It has
openly stated that it
intends to offer to its existing and prospective customer base our
technology as a solution to
the connection problems, which will almost certainly be faced by its
customers. We value our
relationship with Cirexx Corporation very highly and we intend to work
closely with it to the
mutual benefit of both companies.
We are a small company with a very big vision.
Sincerely,
NANOPIERCE TECHNOLOGIES, INC.
Paul H. Metzinger
President & Chief Executive Officer
And this stock friends NPCT is right now at 35 cents. Enough said. |
