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Penny Stock Fortunes -- January 2007 The Behind-the-Scenes Tech Firm That’s Helping 34 Fortune 100 Companies Increase Profits I’m sure you have heard of Citibank, Wal-Mart and Sony before. After all, these are businesses that are leaders of their particular industries, with solid brands, name recognition and loyal customer bases. But what if I told you there was one company that helped all of these businesses make money and keep customers happy? This $248 million company has delivered more than 23,000 of its software systems worldwide. And its customers include 34 Fortune 100 companies. That’s 34 of the biggest, most powerful businesses in the market today. And what if I told you this stock is completely overlooked by Wall Street, even though more and more orders for its products keep piling up? Are you paying attention yet? Good. You might be surprised to learn you’ve dealt with this unfamiliar company before. In fact, I had a run-in with one of its services recently and didn’t even realize it. A few months ago, I opened my wallet to make a purchase when I saw that my credit card had finally broken. After about a year of use, the plastic had split right through the magnetic strip. So after paying the old-fashioned way, I made a quick call to the bank to get a new card mailed. I hardly ever have phone conversations with the credit card people. We just don’t have much to talk about. So when I called to ask for a new card, I expected to have to remember my maternal great-grandmother’s maiden name in order to confirm my identity. But after punching in my card number to speak to an operator and saying my name, she informed me that my voice had been verified and a new card would be in the mail. Little did I know I had had my first encounter with an Intervoice product. Intervoice (INTV:NASDAQ) makes software that automates and personalizes access to information. Its software includes useful features like automated password reset, survey automation and authenticator. This last one is a voice authentication system for access to confidential information, much like my credit card situation. Essentially, it offers an entire software suite for major corporate call centers around the world. Intervoice products help some of the biggest companies in the world provide better customer service. Simply put, a quality voice automation system takes the hassle out of customer calls. No more endless touchtone messages when you call Sears looking for the automotive department. You simply say the name of the department you want and your call is directed. Trust me, it’s a heck of a lot easier than sitting through another long list of menu options that don’t specify what your looking for. It saves time for the person calling, which in turn saves the company staff time on the phone and money. Why You Have the Opportunity to Buy Shares of Intervoice on the Cheap In September, Intervoice reassessed the status of a large project that was in process prior to the filing of the company’s quarterly report. Two changes came up after the reassessment:
Bob Ritchey, the company’s CEO, said he still believes the company’s long-term outlook remains favorable, and is expecting 2007 revenues in the $48–53 million range. As I mentioned above, the company’s backlog is growing. It seems that more and more companies are looking to implement Intervoice products. Further, the company’s work in progress inventory was up to $7.4 million, from $5.5 million the previous quarter. Business is growing. This is where the Street made its shortsighted mistake. And it’s the reason you have the opportunity to buy shares of Intervoice that are down more than 16% from just a few weeks ago. More recently, the acquisition of Nuasis has set Intervoice back. Intervoice acquired Nuasis — a California-based company that provides Internetenabled customer contact software — for $2.5 million in cash on Sept. 1. The Nuasis customer contact center applications include Web chat and e-mail response applications. Intervoice hired many Nuasis employees and continued to serve Nuasis’ customers after the acquisition. And while the added products Nuasis provides should ultimately compliment Intervoice’s own technology, it will take a little time to properly integrate the operations.
Profit Potential From a Company in Transition It is important to note that Intervoice not only makes money by selling its software solutions, but also by managing its systems for its clients. It records these charges as recurring services on its income statement. In its most recent quarter, Intervoice’s recurring services sales of over $26 million topped its $24 million in sales of its products. This means that for every new customer Intervoice gets, it brings with it the promise of continued business. This can do nothing but help the company’s bottom line. And Intervoice is a business in transition. It is a turnaround company that is in the process of increasing its voice automation and interactive voice response (IVR) sales while demand for its other services, such as message and payment solution sales, decreases. It used to rely heavily on bundled hardware and software solutions using internally developed components to address the customers’ total business needs. But this presented problems once the industry began to rely on standard programs. Since then, the company has moved from internally developed components to open, standard architecture such as VoiceXML and SALT standards. This year has also been a transition for Intervoice because it is implementing a new company-wide enterprise resource planning (ERP) system. It’s a restructuring of how efficiently the company runs. And the better a company runs, the more money it saves in administrative and operating costs. If the new ERP system goes as planned, investors can expect better integration of Nuasis and another acquisition, former competitor Edify Corp. Edify was purchased by the company in December 2005. Of course, a more efficient work process could lead to improved profit margins. And when Intervoice begins keeping more of the money it makes, a rise in share price is sure to follow. |
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