CSM Systems Corp. (CKX)
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Systems carefully assesses companies' needs to design a system that will streamline their
processes, drive sales, maximize customer satisfaction, and perform to specification
BIO: The CSM Team
features a highly qualified, experienced, friendly and loyal technical staff with various
backgrounds and skills. Our technical team is led by our Chief Technical Officer (CTO)
Michael Peckham. The president of the company, John Putters, has built CSM from a basement
business into the success it is today. Mr. Putters handles management and sales for CSM.
CEOCFOinterviews: Mr. Putters, will you tell us about the background of CSM and where you are looking to go in the future?
Mr. Putters: CSM is a publicly traded company on the TSX Ventures Exchange in Canada. Our background is software development and primarily an open source technology in procurements, recruitments and software, which we have developed in the past. We are now moving toward deploying digital networking solutions that incorporates our software bundled with plasma lcd solutions.
CEOCFOinterviews: What was your vision when you started CSM and how has that changed?
Mr. Putters: I started the company in 1999 and it went public in December of 2000. Originally we were a dot.com company and built one of the first business and consumer dot.com shopping malls on the internet in 1999. We recognized that the projections in that space were a little bit inflated and we decided in 2001 to begin focusing on web based software solutions. We did that for a few years with relatively good success based on our open source platform. We are now bundling it with hardware solutions, digital display, and digital display networking solutions, which includes digital signage.
CEOCFOinterviews: Who is your typical customer and how do you reach out to them?
Mr. Putters: On the software side, our typical customer has been government and medium sized businesses. As we move into our new business focus with regard to the digital display unit, we are talking about home builders, auto dealers, public facilities and big box retailers. Right now, we are in contact with them through the internet or through trade shows or direct sales and marketing.
CEOCFOinterviews: How has the response been from your customers?
Mr. Putters: There is a lot of interest in digital display; it is a new area. It is partly because the software costs have come down to the point where it makes it seasonable for these kinds of organizations to start looking at these kinds of solutions. It is starting to gain a lot of attention in the media in terms of replacing traditional methods of marketing and displaying promotional information, which is typically paid for based type marketing. We are finding there is much interest in it.
CEOCFOinterviews: Will you explain to us what digital display is and how it is being deployed?
Mr. Putters: We have two models here; one is what we call digital signage. It is creating a network within a retail location where they can stream promotional information about their products or sales. The idea is to be able to deliver effective marketing in a visually enticing high definition medium. The other model that we are targeting is funneling that with interactivity. For example, if you go into a Ford dealership and are looking at a red Mustang in the showroom, but you want to know what the Mustang would look like in black with gray interior and certain options you will go to our digital sales assistant and configure this car in all the colors and options on the showroom floor. It is really designed to assist the sales person in making the sale by utilizing technology. At the end of the day, it is all about knowledge transfer. It is about giving the consumer enough information to make a buying decision when they are down at the retailer or dealership location. This is something that people are already doing because we know that most people spend a lot of time on big purchases and researching on the internet and going down to that location to make their buying decisions. We are giving them the power of that same information at the retail location, auto dealership or wherever these units will be placed.
CEOCFOinterviews: At what level do you sell this?
Mr. Putters: Right now, we are targeting the individual dealerships because this is a new product for us and we need to get it out there. We figured we would tackle it locally, then regionally, and then nationally. For example, the software enables Ford Canada to manage this entire network of units through a single web based interface. Ultimately it would make a lot of sense for Ford Canada to grasp onto that kind of thing because they can put them in all the dealerships, but control the content from one location. That goes the same for retailers. If you have a retailer that is across the country, and they want to be able to respond quickly to changing market conditions or have a big sale on a certain product, then they can feed this information through that web-based interface to all these displays in all their locations. It gives them the ability to control that content and feed it through the network instantly.
CEOCFOinterviews: What do you manufacture?
Mr. Putters: We build the software and the stands and brackets that are used with plasma and LCD units and then we resell brand name LCD or plasma displays that we bundle into the solution. We are trying to focus on the end-to-end solution, which would include the stand, bracket, monitor, server and the software all bundled together. There is a need for that out there now. There are companies out there that tend to focus on certain areas like the digital side of software. We are trying to take it to the next level.
CEOCFOinterviews: What is the revenue model?
Mr. Putters: The revenue model is two fold; one is that we will actually sell the unit outright with the licensing for the software and then the hardware fee. We actually go in and establish networks. For example, we would go to a shopping mall company and say, we will put the units in at no cost, to the retailers but we control the network and we sell content into it.
CEOCFOinterviews: Are you currently partnering with anyone?
Mr. Putters: Primarily we are doing this on our own now. We are looking at partnering with some content companies because we want to specialize in the software and hardware. We want to contract out the design elements. We have some alliances with the stands because the stands are quite good for the corporate market; they have mobility, which adds a lot to the functionality. If you have an office building with a number of board rooms, the ability to move the stand around becomes important. One of the companies that we are dealing with now is 3M Canada and we are selling them the stand that has a motor built into it that enables 3M to resell their interactive wall display. Now you can move the interactive display from office to office and it goes up and down and tilts.
CEOCFOinterviews: Will you tell us about the financial situation of the company?
Mr. Putters: We are at break even. It has been a long hard battle to reengineer the company from a dot.com company. We spent at least two years restructuring and reengineering the company. Now we are in a position where we are at a break even point and we are looking at growth from there.
CEOCFOinterviews: What sets you apart and why should people buy from you?
Mr. Putters: We believe that our strength is in the software, because the plasma or LCD screen is just a television or screen without something that goes into it. That is where we have a lot of experience, in developing solutions that will power these things and actually make them do something and at the end of the day, that is the most important thing. Most people do not even care about the brand name of the LCD or monitor. What they are focusing on is what they are seeing out there. That is why we have a real advantage over other companies; it is the back-ground in the software development that is able to make these things perform functions that provide value back to our customers.
CEOCFOinterviews: Why is it a good time for potential investors to be interested and what should they know that they might not realize when they first look at the company?
Mr. Putters: We believe that the digital world is going to explode. Previously some of the hardware costs have been such where it has been economically unfeasible for companies and governments to start looking at this kind of technology. In the last year alone the prices have fallen about 400% as demand grows. We believe that this type of technology is going to replace what we typically see in retail environments. For example, it is going to be more pervasive. We live in an information age and traditionally it has been based on capital television technology. With the digital displays, it opens the door for a whole realm of possibilities. That is what I think is exciting and enticing about the investment end of things. We are poised to capitalize on it because we have the background in the software end of things.
We believe that the digital world is going to explode. Previously some of the hardware costs have been such where it has been economically unfeasible for companies and governments to start looking at this kind of technology. In the last year alone the prices have fallen about 400% as demand grows. We believe that this type of technology is going to replace what we typically see in retail environments. For example, it is going to be more pervasive. We live in an information age and traditionally it has been based on capital television technology. With the digital displays, it opens the door for a whole realm of possibilities. That is what I think is exciting and enticing about the investment end of things. We are poised to capitalize on it because we have the background in the software end of things. - John Putters
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