Carreker Antinori Inc., a provider of check processing software for 20 years, has agreed to buy a company that would strengthen a relatively new line of business: automated teller machine maintenance.
Dallas-based Carreker Antinori said Friday that it signed a letter of intent to buy Automated Integration Solutions Inc., a Toronto-based developer of ATM maintenance software. Terms of the deal were not disclosed.
Four-year-old Automated Integration Solutions sells Internet software that prompts networked ATM machines to inform the appropriate third-party service providers, such as armored car companies or maintenance crews, when a machine is low on cash or paper, or when there is a mechanical problem.
Carreker Antinori recently widened its approach to the payments business by developing cash forecasting software that enables banks to track cash demands for individual branches and ATMs.
The Automated Integration Solutions software would be combined with Carreker Antinori's ATM Cash Forecaster product, said Wyn Lewis, executive vice president at Carreker Antinori.
Carreker Antinori has sold its ATM Cash Forecaster software to four of the largest 10 banks in terms of assets, and it will be installed at 25,000 ATMs nationally by the end of the first quarter, Mr. Lewis said. He said the company expects to have the system installed at 20% to 30% of the 200,000 ATMs in the United States by the end of next year.
Carreker Antinori's Cash Forecaster takes advantage of a 1995 Federal Reserve private-letter ruling that permits banks to sweep excess checking balances into accounts that have no reserve balance requirements. The software helps banks manage surplus cash inventories, which are non-interest-earning assets.
Automated Integration Solutions owns a patent related to a process that integrates voice technology and software to enable computer systems to automatically dispatch servicing teams to ATMs. Automated Integration Solutions has sold its system to three large, undisclosed ATM network providers.
In addition to its cash forecasting software line, Carreker Antinori sells float and liquidity management software and is a major provider of electronic check presentment software. It also provides management and consulting services to the Electronic Check Clearing House Organization, a bank-controlled rulemaking body that is overseeing development of electronic check presentment standards.
During a recent conference call discussing Carreker Antinori's recent fiscal third-quarter results, J.D. "Denny" Carreker, chairman and chief executive officer, said the company has been able to offset a recent slowdown in software sales, caused by banks' preoccupation with the year-2000 conversion, by engaging in more consulting.
There will be an "increased demand" for Carreker Antinori's services, "driven by new banking law reforms and the emergence of our banking clients' logical role in the Internet economy," he said.
The company, whose fiscal third quarter ended Nov. 30, is profitable and has either met or exceeded expectations in each of its last seven quarters since going public, Mr. Carreker said.
Revenue for the most recent quarter increased 43.4%, to $20.9 million, compared with revenue of $14.5 million a year earlier. Net income increased 21.7%, to $2 million, compared with net income of $1.7 million.
Still, the stock price is a long way from the splashy debut it made during its initial public offering on May 20, 1998. The company's stock opened at $12.50 a share but has traded as low as $3.75. It was trading at $7 at midday on Friday.
The company still has a potential ace in the hole with its endeavors in electronic check presentment. Its software converts check information into electronic data that can be shipped ahead of the actual paper. Applying this fledgling yet promising technology may be moving up bankers' list of things to do in the next century.