News

eStation signs agreements for Canadian mall placements

April 8, 2002

TORONTO -- eStation Network Services says it has signed definitive agreements with Canada's West Edmonton mall and the new Molson Centre to supply ATMs to their facilities.

In a news release, eStation President and Chief Financial Officer Peter Edwards called the two sites "great venues for eStation's platform for advertising and couponing," noting that both locations are characterized by high foot traffic.

eStation also confirmed that it is continuing discussions with prospective CEOs following the March resignation of Kim Oishi. An earlier news release indicated the company had agreed to terms with a new chairman and CEO who would join the company by April 2.

In the company's last financial statement, for the quarter ended Sept. 30, 2001, eStation reported revenue of $1.2 million and an operating loss of $288,277.

After adjustments for one-time charges of $260,464 associated with ATM network erestructuring and a credit of $75,000 from a service provider, the network generated an operating profit of $45,741 for the quarter. Revenue for the nine months ended Sept. 30 was $3.3 million, with an operating loss of $8.7 million.

The company had earned no revenues for the year-earlier quarter and nine-month period ending Sept. 30, 2000, when its primary business was software development for e-commerce kiosks.

The company attributed both the increase in revenues and operating loss in 2001 to the acquisition of E-Cash Services, which was completed in October of 2000. Following the acquisition, eStation says it focused on reducing operating costs per ATM and moving ATMs to better locations.

In late December of 2001, eStation entered into a transaction financing agreement with IBM Canada, under which IBM agreed to provide initial funding of up to $7 million by supplying eStation with installed ATM hardware, software and maintenance services for at least four years. Under the terms of the agreement, IBM will receive a share of the revenues generated by the ATMs. At the end of the four-year term, eStation will have the option to purchase the ATMs and continue the IBM maintenance services at market rates, extend the agreement with a reduced revenue share to IBM, or request the removal of the ATMs.

In late February, eStation announced it had closed a private placement of $1.2 million.