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Global Payment Technologies’ patented RGBI
technology which offers our customers a truly universal application, our extensive
database library and world-class customer service, is providing quality currency
validation solutions from Minnesota to Moscow
Technology
Automated Currency Acceptance
(GPTX-NASDAQ)
Global Payment Technologies, Inc.
425B Oser Avenue
Hauppauge, NY 11788
Phone: 631-231-1177
Thomas Oliveri
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
February 10, 2005
BIO:
Tom Oliveri is President and Chief Executive Officer of Global Payment Technologies, Inc.
(GPT), a worldwide leader in automated currency acceptance and validation. Mr. Oliveri,
who also is a member of GPT’s Board of Directors, joined the company in January 1999
and he has held several senior executive positions with GPT including Vice President &
Chief Operating Officer. Mr. Oliveri possesses over twenty-one years of diverse
manufacturing experience, including fifteen years in senior management positions
encompassing a variety of manufacturing venues from military electronics and aviation to
medical devices. Mr. Oliveri holds a Bachelor of Science degree from the State University
at Oswego and a Master of Science degree from the State University at Stony Brook. Mr.
Oliveri is a native New Yorker and lives on Long Island with his wife and three children.
Company Profile:
Global Payment Technologies, Inc. (GPTX) is a worldwide leader in the design,
manufacturing and marketing of currency validation systems, including paper currency
validators and related paper currency stackers. GPTX sells its products in the United
States and numerous international markets with its international sales representing
approximately 86% of net sales. Validators receive and authenticate paper currencies in a
variety of automated machines, including gaming and gaming related equipment, beverage and
vending machines and retail equipment that dispense products, services, coinage and other
currencies. Note stackers are sold with most validators and are designed to store
validated paper currency and, in some cases, record and store information on contents,
usually in secure removable cassettes. Sales to the gaming markets represented 79% of
fiscal 2004 sales with the remaining 21% derived from sales to the beverage, vending and
retail industries. The Company's principal products include three basic validator models,
GII, which was our main product for a number of years, Argus and Aurora, along with a
range of currency databases and note stacker configurations. In addition GPTX has
introduced several new products including Advantage, SA-4 and FL-4.
All GPT bank note validators use sophisticated optical and electronic sensors to obtain a
bank note's properties. The data from these sensors is analyzed to check a bank note's
legitimacy and denomination. Using powerful discrimination techniques, GPT's Currency
Validators can reject counterfeit bank notes while accepting over 98 percent of genuine
bank notes. GPT supplies Currency Validators for over 50 currencies worldwide. With
offices worldwide, GPT is committed to producing Currency Validators with the highest
levels of security and backed by first-rate technical support and customer service.
CEOCFOinterviews: Mr. Oliveri, how has Global Payment
Technologies changed under your leadership as CEO?
Mr. Oliveri: "We have focused on the core business; the
things that made us successful. We are concentrating on currency validators and
applications for all users, gaming, vending and retail. GPT had become preoccupied with
activities that, while they may have seemed attractive at the time, were a distraction for
a company of our size and this caused us to lose the focus and momentum in what we do
best, which is design and manufacture world class, currency validation equipment."
CEOCFOinterviews: What is currency validation equipment, who is
using it and why are they using it?
Mr. Oliveri: "A currency validator is an
electro-mechanical device that authenticates paper currency and/or coupons. It will accept
the currency/coupon into the unit and it will interpret it using very a sophisticated
electro-optical and software system. The unit will then authenticate the currency/coupon
and give the appropriate credit if it is genuine, or reject it if fraudulent. GPT
validators are in many different applications where people require the authentication of
currency, or for an attendant-free application, and can be found in all types of machines
from soft drink or food vendors, to outdoor applications such as cigarette vending
machines which are very common throughout most of Europe. In the gaming industry, you will
see our products in slot machines and payment stations, and we also see our products
utilized in a variety of kiosks and parking stations where you want an attendant free,
24/7 solution."
CEOCFOinterviews: So the machine knows that it is a ten-dollar bill
and not a one-dollar bill.
Mr. Oliveri: "Exactly!"
CEOCFOinterviews: Will you explain how the technology works and why
it is better than other competing technology?
Mr. Oliveri: "To create a country data base, actual
currency is scanned and data points are collected. The currency scanned approximates the
full life cycle of that currency for each respective country, including brand new notes,
street quality notes, and old notes verging on obsolescence. This database then allows the
unit to discriminate a real note from a fake. The new series of GPT products are very
sophisticated and use our patented RGBI optical technology which allows the scanning of 56
channels of data. Each individual optical device has the ability to emit the four
different wavelengths we use in a single package verses the older technology that utilized
LED’s, (light emitting diodes) and required a specific component for a specific
country data base. In simple terms this means that where you once had to configure the
hardware for the various countries and currencies, changing the hardware to different
LED’s, now we configure our units for the many countries we support simply changing
the country software. Now we can take the same mechanical unit from South Africa to
Australia and the U.S, and all we have to do is change the software program. This new
technology not only provides real time solutions in an ever changing environment, but also
has allowed GPT to reduce our inventory levels to historic minimums."
CEOCFOinterviews: So that gives you an edge!
Mr. Oliveri: "A tremendous edge! It also gives our
customers an edge where they do not have to stock a variety of inventory on the shelf.
Some of the game producers sell games all over the world. If they had to stock inventory
for every specific country application, it would be daunting. Our RGBI technology provides
everyone in our chain the ultimate flexibility; ourselves, our customers and the casino
operators. This is a tremendous edge."
CEOCFOinterviews: Are you selling to the manufacturer of equipment
?
Mr. Oliveri: "GPT is a component for the gaming machine
and vending machine manufacturers, however we market to the ultimate end users; the
casinos, to create more of a push/pull strategy. Our ultimate customer in most cases
however is the manufacturer."
CEOCFOinterviews: In terms of the different segments of your
business, how does it break up percentage wise and how do you increase usage?
Mr. Oliveri: "Today, I would say we are 79% gaming and
21% vending in our market breakdown. We are looking to penetrate the vending market to a
much greater degree while also increasing our share of the gaming market. We are
witnessing explosive growth in Russia, in both gaming and vending with our Aurora product.
There is also a tremendous amount of opportunity within the amusement sector, which is a
market catering more to arcade style games. This is a tremendous market and one that
provides much opportunity for the future."
CEOCFOinterviews: How do you test your equipment and how do you
keep up with the quality?
Mr. Oliveri: "In the design stage, you go through a
series of design reviews. As the design takes shape and you have actual product, you take
these prototype units and put them through a series of tests designed to put the unit
through the most harsh, real life environment scenarios. We have a test lab here and an
environmental chamber that checks various degrees of humidity and temperature. GPT also
takes our units to an outside lab to perform various vibration and drop testing, to
simulate rough handling during shipping or the vibrations that eight weeks on the rough
seas might induce. We also do software testing with the various currencies to make sure
that the database is an accurate representation of what will be on the street. GPT
recently sent out a press release on the life test achievement of our Aurora product,
having completed at that time, 67 million full cycles of operation. Equating this
performance to real-life vending statistics, today 1 million cycles of operation in the
vending environment approximates 5 years of machine service, so you can see why we were so
proud of what is currently now at 68 million cycle life test performance, (and still
going)."
CEOCFOinterviews: Do you worry that plastic will take over currency
and lessen your market space?
Mr. Oliveri: "No, everything evolves and you have to be
mindful of what changes might occur in the future so that you don’t get caught asleep
at the wheel, however, cash is going to be around for the foreseeable future and I will
define the foreseeable future as a minimum of ten years. We are in many different
countries from Australia and South Africa, to South America, Malaysia and Russia and it is
primarily cash; everybody has cash in their pockets and cash is king. Some define cashless
solutions as using smart card technology where a bar-coded ticket is utilized to record
and maintain particular monetary values and GPT products have contained bar code readers
since our early G2 products some 10 years ago, so we are well positioned to bring this
competitive advantage to our customers. As smartcard application may become more
prevalent, we are mindful of this fact and looking for the appropriate avenue to proceed
with this technology."
CEOCFOinterviews: Will you tell us about the market in general for
currency acceptance machines and your position in that market?
Mr. Oliveri: "As in any industry, there is fierce
competition, it is a global economy with global competition, and we enjoy a position among
the top three. GPT is well respected not only for the quality products we produce and our
customer service, but also for our ability to configure custom designs to meet any
customer requirement. We are poised right now for good growth as evidenced by the rapid
expansion in Russia and our current positions in Australia, South Africa, South America
and Eastern Europe. GPT has recently released the Advantage product, which is more of a
domestic footprint, but also has universal application in Europe, Asia and Eastern Europe.
We have started to see the benefits by way of orders for that new product in the past few
months. In addition to Advantage, GPT also has the new SA-4, a high-end gaming validator,
Aurora, serving both the vending and gaming industries, and the new FL-4, which will
target the low cost gaming market. GPT is also in the final phases of design review for a
low cost vending validator that will serve the vending amusement market. Given the suite
of products at our disposal, GPT is well positioned as we seek to regain our position of
dominance in the industry."
CEOCFOinterviews: Do you do the manufacturing yourself?
Mr. Oliveri: "We are more of an assembly house. Although
we have embarked on an aggressive partnering program, outsourcing select components and
products with well established relationships we have in Asia, and also in Russia where our
partner is participating in some of the assembly operation. Three years ago we did it all
in-house and it just doesn’t make sense anymore. There are many ways to add value and
many benefits of a good partnership are at the top of the list. To be truly a global
competitor and command premiere positions in the marketplace, you have to exercise all of
these opportunities and leverage them."
CEOCFOinterviews: How do you market your products?
Mr. Oliveri: "It is an interesting industry and
word-of-mouth travels fast. A lot of it is reputation. We enjoy the reputation for having
the best after-sales service in the industry. It is not just about making a sale and then
walking away, it is about questions your customers may have and their requests for custom
applications; they may say to us, we like this machine but we were thinking of it in this
application, can you do that? We have a reputation for configuring special units and
custom design projects for many of our customers, even where it doesn’t involve a
high volume of unit sales, and I think that is what really differentiates us from the
competition. We also go to trade shows and for the people who are not aware of GPT; we
make sure that they are fully aware when we leave. I think word-of-mouth and reputation is
a big part of it. We have a great reputation and some good allies that carry the
story."
CEOCFOinterviews: Will you tell us about the financial position of
Global today?
Mr. Oliveri: "It is probably one of the best positions
that we have had in a very long time. We have an excellent cash position presently at a
record high, combined with record low inventory level and a suite of five products that
will fit any customer’s application worldwide. There was a period when we were
struggling; our focus was a bit more diverse than was prudent, and it hurt us. Over the
last few years, we really fought back, increasing sales, new customers and new business. I
feel GPT is currently poised for good things and we have never been better."
CEOCFOinterviews: You mention a number of different machines. Are
there new applications that would enhance what you are doing without going astray, and
what is the research and development effort like?
Mr. Oliveri: "You are always looking for a better way.
The industry has gone full-circle and there was a period where it seemed the customer
wanted the bells and whistles. Today everybody is cost conscious; it is a tough economy
out there and money is tight and people are trying to watch the bottom line for their
customers and shareholders. We are doing the same thing; we have taken a look at our
products and the basic building blocks of our designs. We are looking at leveraging
relationships that can add value and reduce our operating costs, we continually review our
designs, value engineering them, looking at ways to improve the basic unit but deliver it
in a less expensive package. We are also looking at a new technology searching for a
better way to utilize optical components. Sales are the life-blood of the company, but
research and development is not too far behind it. You have to make sure that your
technology is good, and today, I would say ours is excellent. We are mindful of the fact
that technology and the clock keep moving and we really have to know what is out there so
that we can be in a position to offer it to our customers and maintain the GPT position of
offering the best product at the best value."
CEOCFOinterviews: Why should potential investors be interested and
what should they know that they might not realize when they first look at the company?
Mr. Oliveri: "This is a very interesting industry and
anyone who follows the gaming markets will see that this industry seems almost recession
proof. In good times and bad, people seem to be enjoying the gaming atmosphere; that is
one aspect to look at. A closer look at Global will reveal our great reputation and the
many things we have done and the progress we have made to strengthen our position in the
industry and within our own company. A closer look at GPT will show a company that has
made great strides in efficiency and new product development, and a company with many
long-standing relationships and many opportunities for future growth and success."
CEOCFOinterviews: Is reaching investors important for you?
Mr. Oliveri: "Maintaining a good level of communication
and keeping our shareholders informed on the company and on current events is very
important and relaying our story to potential new investors is also important. I think we
have a great story and are on the cusp of some very good opportunities and for the right
type of investor, we have a tremendous amount to offer."
CEOCFOinterviews: Would you like to close by telling us about your
upcoming trade shows?
Mr. Oliveri: "We are attending a few different trade
shows, the next one being the upcoming show being held in London, and we will probably
exhibit at between 10 and 15 additional trade shows throughout the year. GPT recently
attended the EELEX show held in Moscow and it was a huge success. The London ICE show runs
from January 25th through the 27th and I invite all who are in the UK to stop by and visit
us for a demonstration of our new products."
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