Ibill - going down for the count?

[Mike AI]

http://finance.yahoo.com/q?s=icpt

http://biz.yahoo.com/djus/031030/1059001191_1.html

Dow Jones Business News
Intercept May be Taken Private; Slashes Year Outlook
Thursday October 30, 10:59 am ET


ATLANTA (Dow Jones)--InterCept Inc. (NasdaqNM:ICPT - News) , citing operational overruns and conversion delays in its financial institutions unit, slashed its full-year earnings forecast to well below Wall Street's consensus estimate.
In addition, Intercept Chairman and Chief Executive John W. Collins informed the board that he plans to submit an offer to take the company private, the provider of technologies, products and services said in a press release Thursday.

Shares of Intercept were trading recently at $8.65, down $3.01, or 25.8%, on heavy volume of 1.37 million shares. Average daily volume is 204,900 shares.

InterCept now expects 2003 earnings of 34 cents to 42 cents a share, excluding $3.8 million of nonrecurring items, a $780,000 assessment for noncompliance with association charge-back guidelines and $685,000 in severance payments related to the company's merchant processing unit.

The company also blamed customer attrition, contract settlement costs and bank assessment charges in its merchant processing division.

InterCept had previously forecast 2003 earnings of 63 cents to 68 cents a share excluding items, above the current Thomson First Call (News - Websites) consensus estimate of 62 cents a share.

On a bottom-line basis, InterCept now expects 2003 earnings of 17 cents to 25 cents a share, down from its prior view of 46 cents to 51 cents a share.

The company anticipates continued weakness in the merchant division, following the charges incurred in the third quarter, and expects that will hurt the fourth quarter.

In its financial institution unit, InterCept experienced greater-than-expected conversion costs in Sovereign Bank's item processing in the third quarter and anticipates additional conversion delays in the fourth quarter. InterCept continues to expect that the Sovereign operations will be fully converted before year-end, but the conversion costs and additional delays will have resulted in a shortfall of $600,000.

The company also experienced difficulties in combining two of its item- processing centers, which resulted in expense overruns and a loss of expected savings from the combination of these two centers. These issues caused a shortfall in earnings expectations of about $1.2 million in the third quarter, and the company expects an additional shortfall of $600,000 in the fourth quarter.

InterCept said the changes it's made, along with the completion of the Sovereign conversion, will result in improved financial performance in 2004.

InterCept said its board has established a committee of independent directors, consisting of Jon R. Burke, Boone A. Knox and John D. Schneider, to consider any proposal received from Chief Executive Collins. The committee is hiring its own legal counsel and financial adviser.

The company was to appoint Bob Finzi, a general partner of Sprout Group, as a director at the company's board meeting in late October, but in light of the latest developments, he has deferred any decision to become a board member. Finzi will continue to attend InterCept board meetings as an observer and may become a director at a later date.

A company spokeswoman wasn't immediately available to provide more details on the board size.

InterCept will release its third-quarter results Nov. 12.

Shares of InterCept traded recently at $8.99, down $2.67, or 22.9%, on Nasdaq volume of 2.2 million shares. Average daily volume is 204,900 shares.

Company Web site: http://www.intercept.net

-Jenny Park; Dow Jones Newswires; 201-938-5400

[grogan]

I'll probaby buy some stock for the bounce back 10-15% earning.

[DaveAFX]

Funny. I just came back from the bathroom to see your post about IBill. I was reading this while I was in there ( in Forbes )

http://www.forbes.com/forbes/2003/1110/056.html


Wages of Sin
Seth Lubove, 11.10.03


How escort services--often prostitution rings--depend on the kindness of some big credit card companies.
Arthur Vanmoor is no one's idea of a model citizen. He's currently residing in the Broward County, Fla. jail on charges (which he denies) of pimping, money laundering and immigration violations. The inventive Dutch native, who owns patents on a male chastity belt contraption, a cure for hangovers, a caulking gun and a sulfur-based treatment for male impotence, once ran what he boasted was the nation's largest female escort service, with $5 million in annual sales.

But none of those facts stopped Cardservice International from soliciting his soliciting business in 1996. Cardservice, which lines up banks to process credit cards for small companies, eventually ran as much as $50,000 a week for Vanmoor's $200-an-hour escort service, at rates as high as triple those for lower-risk businesses. Until two years ago, that is, when Cardservice abruptly canceled Vanmoor's business, citing too many complaints of unauthorized charges.

Vanmoor sued, claiming Cardservice, MasterCard International and the bank that processed his credit cards, Humboldt Bancorp of Roseville, Calif., illegally withheld $150,000 of his money. Despite having to testify on tape because he's in jail, and allegations that he was really running a prostitution ring, Vanmoor convinced a Los Angeles jury in August to award him his money, plus another $3 million in punitive damages. Humboldt plans to challenge the verdict.

The case did not bathe the credit card industry in good publicity. At the trial Cardservice admitted it was processing credit cards for 143 escort services. For Cardservice's parent company, $7.6 billion (2002 sales) First Data Corp., the revelations are doubly embarrassing. The company's First Financial Bank unit is already known as one of the nation's largest credit card processors for Internet porn, handling payments for big aggregators of porn-site payments such as InterCept's Internet Billing Co. unit and Paycom. The company refuses to comment on Vanmoor beyond a statement that it "processes for a variety of businesses" and ensures "our clients transact payments legitimately."

First Data isn't alone when it comes to finding itself in bed with escort services. Ebay's PayPal payment exchange service is also a favorite among Internet escort sites, despite the fact that PayPal prohibits its use for "adult" or "sexually oriented" goods. Jessica, of Southern Belle Escorts, a busty redhead who poses nude on her Web site advertising a $285 "one on one," will be happy to take your payment through PayPal.

[BradShaw]

Those Ibill fines are small change. I would imagine other processors got fines at least that big, and will either pass them on (some already have) or they will simply absorb the cost as the price to doing business.

[Squirt]

Thanks for this solid information David and Mike!

That was real good informative reading. Great insight!

[Dravyk]

Funny. I just came back from the bathroom to see your post about IBill. I was reading this while I was in there ( in Forbes )
What where you doing in Forbes' bathroom? :rolleyes:

[DaveAFX]

Dravyk,

They have such nice facilities, that I time my movements to when I will be in the neighborhood.

The smooth cool caress of the imported ceramic, holding the curve of my ass cheeks is divine. The stark echo of dripping water off the polished marble walls provides a comforting cadence to ease the flow. As I cast an empty stare into the mahogony stall door, I can feel all my troubles dissolve into the essence of lavendar wafting from the exotic popourri.
Finally, the strong, solid rush of the high-volume flush gives closure to my ordeal. I can now face the world, refreshed and rejuvineated. :D

[kath]

Originally posted by Dravyk@Oct 30 2003, 01:09 PM
Funny. I just came back from the bathroom to see your post about IBill. I was reading this while I was in there ( in Forbes )
What where you doing in Forbes' bathroom? :rolleyes:
Oh that Dravyk... he never misses a thing.

:awinky:

Seriously... good reading guys... thanks for posting. :okthumb:

[Carrie]

Originally posted by DaveAFX@Oct 30 2003, 04:20 PM
Dravyk,

They have such nice facilities, that I time my movements to when I will be in the neighborhood.

The smooth cool caress of the imported ceramic, holding the curve of my ass cheeks is divine. The stark echo of dripping water off the polished marble walls provides a comforting cadence to ease the flow. As I cast an empty stare into the mahogony stall door, I can feel all my troubles dissolve into the essence of lavendar wafting from the exotic popourri.
Finally, the strong, solid rush of the high-volume flush gives closure to my ordeal. I can now face the world, refreshed and rejuvineated. :D
Hell after reading that, *I* feel refreshed and rejuvinated!

[Squirt]

Originally posted by DaveAFX@Oct 30 2003, 01:20 PM
Dravyk,

They have such nice facilities, that I time my movements to when I will be in the neighborhood.

The smooth cool caress of the imported ceramic, holding the curve of my ass cheeks is divine. The stark echo of dripping water off the polished marble walls provides a comforting cadence to ease the flow. As I cast an empty stare into the mahogony stall door, I can feel all my troubles dissolve into the essence of lavendar wafting from the exotic popourri.
Finally, the strong, solid rush of the high-volume flush gives closure to my ordeal. I can now face the world, refreshed and rejuvineated. :D


:wankit:

[JR]

after all the turmoil and crap that has happened with this company and considering their rather dubious history, its kind of a dissapointment that they are still in business.

[Dravyk]

Nice one, Dave! Yeah, nothing like taking a dump and coming out of there feeling all minty fresh!!!

Btw, nice article finds there, guys!

I wrote IBill off my list a year and a half ago. Can't believe they're still here. ... Then again, it's not 2004 just yet.

[Hell Puppy]

IBill is the least of Intercept's problems.

Banking services are under intense price pressure, and this is the market these guys compete in. For instance one of their services is providing online images of cancelled checks for banks who aren't big enough to provide such a service inhouse. Their "niche" is the small community bank...which kind of puts them on the opposite end of the 90/10 rule.

I've seen their operation here in Atlanta. Architecturally it is a fucking mess. There's no way they can compete with the big fish in terms of pricing of the services they provide. And with the architecture they're running, their SLAs have to be shit.

It would take a major investment of time resources and money to bring them up to state of the art so they can really be competitive in their core industry.

I think they know that and saw IBill as perhaps a chance to diversify....I think all they did was diversify their pain.

[Opti]

He's currently residing in the Broward County, Fla. jail on charges (which he denies) of pimping, money laundering and immigration violations. The inventive Dutch native, who owns patents on a male chastity belt contraption, a cure for hangovers, a caulking gun and a sulfur-based treatment for male impotence, once ran what he boasted was the nation's largest female escort service, with $5 million in annual sales.

But none of those facts stopped Cardservice International from soliciting his soliciting business in 1996.


Did I miss something in the opening paragraph that would give them a proper reason not to process this guy's transactions? It scares me a little that the general public might be agreeing that this reporter's judgemental attitude could be even close to acceptable in a democratic country.

Anyone have a theory on what are the ramifications for adult processing if they do privatise Intercept? This might be good news for those using Ibill I would guessing?

[quiet]

good read, thanks.