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Triton says sales are back on track

Triton's ATM sales in the first half of 2001 were up 21 percent over the same period last year, and the manufacturer says it expects to finish the year on a similarly strong note with the release of several new products.

December 11, 2001

The Year 2000 was not an especially memorable one for Triton Systems, which slipped from second place in the U.S. in terms of ATMs shipped to number four and inched up from the number five slot to number four in the world.

But Triton is putting 2000 behind with a stronger-than-expected sales pace this year. In fact, Executive Vice President of Sales and Marketing Brian Kett said that Triton sold more ATMs in the first six months of 2001 than in any comparable period in company history.

While Triton did not release its actual numbers, worldwide sales for the first half of 2001 were 21 percent higher than the same period last year, Kett said, including a 10 percent jump in the U.S.

According to the Nilson Report, Triton sold a total of 13,557 ATMs in 2000, 9,613 of them in the U.S. That was a 17 percent increase over 1999 sales worldwide, but only a 2 percent increase in the U.S.

In contrast, Tidel tallied a 56 percent sales increase in its U.S. sales in 2000 – although an overwhelming number of its machines were shipped to a single customer, the now-bankrupt Credit Card Center (CCC), and many were likely never installed. Cross Technologies also tallied a 40 percent increase over 1999 numbers in 2000. And both Diebold and NCR, not traditional players in the retail ATM space, posted double-digit gains in their cash dispenser sales.

The U.S. numbers for the first half of 2001 put Triton back on track, Kett said. "It's more where we've been traditionally," he said. "The North American domestic market is a strong core business for us, and we see it as being a core market for us for many years to come."

Triton has about 80 distributors in the U.S., including such large players as Hanco Systems, Access Cash International, International Merchant Services and XtraCash ATM.

Despite some industry pundits' prediction of a coming slowdown in ATM sales, Kett expects Triton's growth pattern to continue. "We see the ATM industry as a good, healthy industry that's still growing. We're happy that we're growing in line with how we see the industry," he said.

Triton expects its momentum to continue this year with the launch of several new products this fall, including the 9800, its first PC-based machine and highest-end model to date.

"What we're really doing is looking at feedback and being close to our distribution channels," Kett said. "We want to give them products that allow them to broaden the market segments they service and hopefully move into markets where historically they haven't been as strong but hope to be in the future."

Hansup Kwon, president of Cross Technologies, isn't as optimistic about the remaining months of 2001 or the coming year. "My expectation is that our growth will slow down," he said.

Kwon said all ATM manufacturers are feeling some negative aftereffects of CCC's bankruptcy. Many of his distributors, like others, are focused on converting former CCC accounts rather than selling new machines. Also, he said, distributors are finding it more difficult to obtain lease financing for their customers.

Despite Triton's increased unit sales, the manufacturer's profit margins apparently have declined. Although Triton did not release revenue figures, the second-quarter 2001 financial report for Dover Industries, Triton's owner, indicates a slowdown in earnings.

"Triton's earnings comparisons to the prior year were very unfavorable, and it is focused on several product, marketing and manufacturing improvements," according to the Dover report.

Kwon said slimmer profit margins are the norm in an industry in which competition is still largely based on price and the cost of major peripherals such as cash dispensers continues to fall. He compared the ATM industry to the PC industry, which is now in the midst of a much-publicized slowdown. "I think we're just beginning to see that kind of a shakeout in our industry," Kwon said.

Earlier this year, Triton introduced the Mako Low and the 9610, lower-priced versions of its Mako and 9600 lines. (see Have I got a deal for you...)

Laura Snyder, a Triton spokesperson, said that one reason Triton's bottom line has suffered is because of the large amount the company has spent on research and development in the past year.

"We're selling a lot of units but, at the same time, we've been putting a lot of dollars into new product development," she said. "We expect to begin seeing the benefits of that early next year, following the release of our new products."

Like other manufacturers, Triton also has been stepping up its activities in international markets, showing sales increases last year in Europe and Canada, according to Nilson.

"We think our ability to service the domestic market very well earns us a reputation that enables us to be successful internationally as well," Kett said.

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