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Technology Stocks : IVI Checkmate (CMIV) -- Ignore unavailable to you. Want to Upgrade?

To: Ian Murray who wrote (1928)	1/26/1999 10:04:00 PM
From: BLZBub	Read Replies (1) \| Respond to of 3721

It was an IVI POSpad I believe. The VAR who put together the Kiosk h/w and s/w for Famous Players was RDS Data out of Simcoe, Ontario. I went to the new Famous Players Coliseum in Calgary on the weekend and they have about 8 of the new Kiosks there. It looked to me like 80% of the patrons were paying that way. The machine took both Debit or Credit card, with no signature required on the latter.

To: Ian Murray who wrote (1928)	2/1/1999 6:18:00 PM
From: hsg	Read Replies (2) \| Respond to of 3721

check this out 10:48am EST 25-Jan-99 Morgan Keegan (Kasargod, Ram (901) 579-4246) CMIV IVI CHECKMATE VISITS OUR OFFICES - OUTLOOK IS IMPROVING Morgan Keegan & Company, Inc. Research Notes January 25, 1999 52 Wk Range $7-$3 IVI Checkmate Corp. Inst. Ownership (%) NA CMIV - $7 1/4 Mgt. Ownership (%) 20.8% Avg. Daily Vol. (000) 42.8 Market Cap. (Mil) $130~ Current Chg. From Dividend Yield (%) NIL Rating: M-S Book Value $3.10 EPS: 12/97A: $0.22 Price/Book 2.34x 12/98E: $0.35 '99 Cash Flow/Share $0.95 12/99E: $0.52 Price/Cash Flow 7.63x Does not include one time merger related expenses Rpt. Date Range Q4:98: $0.08** vs. $0.11 2/25 First Call: $0.10 vs. $0.11 $0.10-$0.10 Q1:99: $0.08 vs. $0.06 First Call: $0.10 vs. $0.06 $0.08-$0.11 Q2:99: $0.11 vs. $0.09 First Call: $0.12 vs. $0.09 $0.11-$0.12 Q3:99: $0.17 vs. $0.12 First Call: $0.17 vs. $0.12 $0.17-$0.17 IVI CHECKMATE VISITS OUR OFFICES - OUTLOOK IS IMPROVING IVI Checkmate's management team, including CEO Barry Thompson and CFO John Neubert, visited our Memphis offices on Thursday (1/21/99) to discuss the company's future outlook. We have noted that the POS terminal market is in a state of rapid consolidation (see industry note dated 1/18) as evidenced by recent acquisitions by Ingenico (which owns roughly 8% of CMIV) and Hypercom (HYC -$13 11/16), a major competitor to CMIV. The total installed base of POS terminals worldwide currently stands at 16.8 million, of which the US and Canada account for 8.1 million (48.2%). Based on Nilson Report figures, CMIV accounts for approximately 38% of the installed base in Canada and 6% in the US, placing it in third place behind market leader VeriFone (71% of US installed base) and Hypercom (12% of US installed base). The remainder of the US market is fragmented, with no other competitor having more than a 3% market share. At our offices, IVI Checkmate management presented its strategy for the future, which is centered around transitioning from selling hardware to providing integrated payment solutions. Key points in the company's strategic plan are outlined below. · Improve Software Capabilities - IVI Checkmate has made a number of acquisitions recently that have dramatically improved the company's software capabilities. These acquisitions include the 1996 acquisition of NTN, the 1997 acquisition of TRS, and the most recent acquisition of Plourde Computer Services in September of this year. Additionally, the company acquired Debitek Holdings in November of this year to boost its competencies in the smart card application interface (API) market. These acquisitions position CMIV to gradually transition from providing hardware to providing full solutions to its retail customer base. CMIV's strong balance sheet with no long term debt, combined with the cash flow characteristics of the underlying business, should enable the company to continue to make periodic acquisitions to further improve its software capabilities. · Transition From Point of Sale to Point of Service - Currently, IVI Checkmate generates 7% of its revenues from professional services, and its goal is to eventually ramp this up to 30%. The company intends to transition its product line to provide more functionality including eventually linking into a retailer's in house computing applications. Future services could include payment transaction routing, promotional and advertising capabilities at the POS, instant credit capabilities, as well as potentially many other value added services. This shift from providing POS hardware to integrated solutions, if successfully executed, should provide the company with a higher margin service offering and a base of recurring revenue. · Utilize Leading Edge En-Touch 1000 Terminal - IVI Checkmate management brought with them an En-Touch 1000 terminal, which the company views as their lead product in the near future. The terminal, which incorporates touch screen technology and signature capture capabilities, currently offers credit and debit features, and can be utilized to provide customized, value added services to the retail and hospitality industry with additional software upgrades. Industry trade journal, STORES, pointed out in its July 1998 issue that the En-Touch 1000 terminal is certainly at the leading edge of the POS market, and offers more functionality than similar terminals offered by competitors. Management indicated that the En-Touch 1000 is in the process of being commercially deployed, and is in the trial phase with major players in the retail industry. · Leverage Ingenico Relationship - Currently Ingenico, the second largest POS terminal provider in the world, owns approximately 8% of IVI Checkmate. Ingenico currently serves as a worldwide distributor of CMIV's products, and the two operate a joint venture in Latin America (50% owned by CMIV) to provide POS terminals to the Latin American market. Ingenico's recent acquisition of Bull's POS business, is an indication of Ingenico's strategy of building its global market share. We believe that IVI Checkmate's unique relationship with Ingenico in the Americas positions the company to benefit from Ingenico's intention to aggressively capture global market share. As a combined company, IVI Checkmate grew its revenues at a 21.1% rate in 1997, and we are estimating 20.1% top line growth in 1998. We are estimating EPS growth of 59.1% in 1998 not including merger related charges, and EPS growth of 48.6% in 1999. CMIV has exceeded our financial expectations in each of the two quarters reported since the combination of IVI and Checkmate in Q2:98, and the company plans to report its year end 1998 results on February 25th. Currently, the shares trade at 20.7x our 1998 EPS estimate and 13.9x our 1999 EPS estimate. This represents a discount to its growth rate and its best comparable, Hypercom, which currently trades at 17.9X consensus EPS estimates for its 1999 fiscal year ending June. We believe the shares are a value at these levels. We will maintain our rating at the current time until we get more visibility on the near term financial outlook. Following very disappointing financial performance in 1997, industry and financial trends are now headed in the right direction. We believe this should have a positive impact on stock valuation. Ramkrishna P. Kasargod, CFA / Hal L. Goetsch/ Tavis McCourt (901) 579-4246/ (901)-579-4560 / (901)-579-4545