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 Company Profile:
CYBRA Corporation is a leader in bar code and
RFID technology for IBM Power Systems and other major computing platforms.
An Avery Dennison, IBM, and Motorola/Symbol Partner, CYBRA is represented by
a network of value added resellers throughout the United States and is
represented internationally by sales and support offices.
MarkMagic™ Bar Code Labels, RFID Tags and Forms
Software is used by thousands of customers worldwide, and has been selected
as the bar code print engine of such leading software developers as
Manhattan Associates™, Infor™ and VAI™. MarkMagic helps customers easily
integrate barcode, RFID technology and electronic forms into their business
systems. EdgeMagic® is an integrated RFID control solution. EdgeMagic
helps customers build any type of RFID system, from complying with the full
range of RFID mandates to closed loop asset management RFID applications.
CYBRA software solutions run on all major computing platforms including IBM
Power Systems (System i, iSeries, AS/400, AIX) as well as Linux, Unix, and
Microsoft Windows.
 Harold
L. Brand
Co-Founder, Chairman, President and CEO
Harold Brand is a founder of
CYBRA and has been its President, Chairman of the Board and Chief Financial
Officer since 1985. He is responsible for managing the operation, monitoring
its performance, and planning and overseeing R&D projects. Mr. Brand
developed much of CYBRA's proprietary technology. Prior to founding CYBRA,
Mr. Brand was the Vice President of Personnel Systems at Manufacturers
Hanover Trust Company (currently JP Morgan Chase Bank), a New York City
money center bank, where he managed a multimillion dollar annual budget and
a staff of 25 professionals. A highly-rated speaker at IBM technical
conferences, Mr. Brand holds a Masters of Science degree in Computer Science
from Rutgers University in New Brunswick, New Jersey.
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Technology
Technical & System Software
(CYRP-OTC: BB)
CYBRA Corporation
One Executive Boulevard
Yonkers, NY 10701
Phone: 914-963-6600
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Interview conducted by:
Lynn Fosse, Senior Editor,
CEOCFOinterviews.com,
Published – October 22, 2010
CEOCFO: Mr. Brand, what was your vision when you started CYBRA
Corporation?
Mr. Brand: The company has been around
for 25 years. Initially when we founded it in 1985 we were a company that
saw a lot of potential in small developers of software, particularly a focus
on Israel and a high tech market that looked like it was going to explode,
which it ultimately did. We figured that we would help bring those products
to market in North America, give them the marketing expertise and the
polish, as well as the support that is required for a software product that
the original developers didn’t have the know-how and wherewithal to do. So,
that is how it started, products from Israel that we represented, marketed,
and did quite well. That is how the first five years unfolded.
CEOCFO: How about today?
Mr. Brand: What happened was that in
1990, we were asked by one of our customers to take a look at how they could
implement this whole new area of bar coding into their production line for
shipping apparel goods. It was an area that was starting to be required by
companies such as Walmart and Sears, and in particular clothing
manufacturers needed to comply with those new technology requirements. It
was a completely foreign area for us, so we studied it. We developed an
initial prototype technology. We did a market study and realized that there
was really a market for good software tools to help manufacturing and
distribution companies comply with the need for bar coding. So we developed
a suite of products and we ultimately ended up with thousands of customers
worldwide depending on our products daily to produce bar coded labels and
documents. Five years ago, we began supplementing our bar code offerings
with the new and exciting technology of Radio Frequency Identification
(RFID) technology. The combination of those two technologies – bar code and
RFID – comprises the area of Auto-Id or automatic identification of all
types of objects, and that is our vision today.
CEOCFO: Who is a typical customer?
Mr. Brand: Of the thousands of customers
we have, our largest market segment is apparel, which is no big surprise
because the apparel industry has been a very big adopter of bar coding and
now Radio Frequency Identification. For RFID, the spotlight is currently on
manufacturers that produce men’s undergarments and jeans, and footwear. They
need to place bar code and RFID tickets on their items. They are also
tagging cartons, pallets, shelves -- all kinds of places that bar codes and
Radio Frequency Identification can be effective. A typical customer would be
a mid to large size apparel manufacturer, supplying all the popular
retailers like a Walmart, a Dillard’s or a JCPenney.
CEOCFO: What exactly are you selling to
them?
Mr. Brand: Our unique selling
proposition is our award winning auto-id software, which lets customers get
the job done quickly, with minimal effort on their part. Over the years,
CYBRA has established itself as experts in this area, which is why many of
our customers come to us for all their auto-id needs. Therefore, in addition
to software, we often will sell the specialized printers that do the
printing of bar codes and RFID tags, the labels and ribbons that go on those
printers, the scanners for scanning barcodes and now the whole new area of
Radio Frequency Identification and the equipment associated with it such as
readers, antennas, sensors and wiring. Where a customer needs a
single-source supplier for all their bar code and RFID needs, CYBRA is
well-qualified to do that.
CEOCFO: Are they licensing the software,
is there ongoing service and support from you?
Mr. Brand: There is an initial licensing
of software where the customer invests in the product. Beyond that, there is
an annual ongoing support license that is over and above the initial
purchase license that gives customers unlimited support for any problems
they may run into. It also provides them with new versions of the software
as they are released. Over 90% of our customers opt to renew their annual
support year-to-year to make sure they are getting the latest updates, so
that if they have any kind of a problem they can depend on us.
CEOCFO: Are most of your customers
upgrading from an old type of system that they have, and are there many
people still not using these tools today that need to be introduced to them
like the RFID?
Mr. Brand: Yes! To most customers, RFID
is brand new and is poised to take the industry by storm. Many of our
customers are looking at it, but not a lot of them have implemented it yet.
RFID is still in a very early adoption stage. That is because the whole
RFID industry was really kicked off back in 2003 by Walmart when it
announced that they expected to require their suppliers to start shipping
their goods with RFID tags within the next few years. At the same time, the
FDA said the same thing and the Department of Defense said the same thing,
so back in 2003 the whole industry began to march forward. Then when they
actually got to what was supposed to be the starting line in 2005, the FDA
balked and Walmart balked. It certainly did not take off as everyone had
anticipated. In Walmart’s case, in particular, it really went to sleep for a
number of years and it only woke up quite frankly about two months ago when
it finally came out in the open and revealed that they had begun what they
said they were going to do five years earlier. It actually has just begun in
earnest starting with suppliers of men’s accessories. Jeans, underwear,
socks, are the first product categories. Walmart’s current mandate for item
tagging is a major departure from what was originally planned. While the
initial requirement was for RFID tagging of pallets and later cartons,
Walmart has gone way beyond that. They are now requiring that each item
contain an RFID tag on it. We are even talking about socks, which only cost
a few dollars. And yet, customers are now complying with the cost and effort
burdens of RFID tagging because Walmart has demonstrated how this benefits
the supplier as well as Walmart. So, over a very short period, a period of
just a few months, RFID has become a very dynamic market. Fortunately, CYBRA
has invested over the past few years exactly for the demands of this market.
CYBRA went public and raised $4 million through private investors to build
the R&D, anticipating that Walmart would eventually wake up. We made a
substantial bet on RFID ultimately really taking off and we are in an
excellent position today because it has taken off in a way that exceeded our
expectations. Right behind Walmart are all the other major retailers such as
JCPenney and Dillard’s who have been watching from the sidelines. These
retailers are now starting to tell their suppliers they want item level RFID
tagging, just like Walmart. So, we are at a very exciting time right now.
They call it the “hockey stick” curve. After proceeding along the down side
of the “hockey stick” the industry is now at the point on the curve at which
you start accelerating quickly. That is where we are right now. Many of
CYBRA’s customers and prospects that have expressed interest in RFID
technology over past few years have been waiting for the signal from Walmart
to make their move. Nevertheless, they have made it clear that when that
signal comes that CYBRA’s products are ideally suited to meet their needs.
This is because our product suite is uniquely designed to allow customers to
do what they need to do for Walmart, as well as for their own asset
management applications, at a very competitive price, with a lot less pain
than other offerings. We are fortunate to be able to do that because of our
pedigree of twenty years of helping thousands of customers implement bar
code technology. With RFID, we applied the same philosophy of providing the
user with a simple interface, while masking the complexity of the technology
under the covers.
CEOCFO: CYBRA is ready with the
technology; are you ready to ramp up your staff for the anticipated upswing?
Mr. Brand: Absolutely! We will be ramping up our R&D; in fact, we
just hired new programmers this past week. We are also boosting our
marketing and sales resources. That is where we are going to be looking to
focus on acquiring new customers, getting out in front of the message and
making sure that the market understands what we have to offer and why we are
the logical choice.
CEOCFO: What is the competitive
landscape for you?
Mr. Brand: The competitive landscape is
actually very good. There aren’t that many offerings because back in 2003
software companies developed products that were rushed to market too
quickly. Many of those offerings were mothballed during the long wait for
the market to catch up. In a way, we were somewhat fortunate that we did not
jump in right away and waited until 2006 to start developing our technology.
There are a handful of competitors and some are pretty formidable companies,
but we believe that we have a very competitive product and we welcome the
competition.
CEOCFO: What is the financial picture
for CYBRA today?
Mr. Brand: On a cash, non-GAAP, basis we
are doing well. Our balance sheet reflects a restructuring of the debt we
incurred during 2006 and 2007. That debt fueled the major R&D efforts that
resulted in the building of our strategic RFID product suite. We had a very
good 2nd Quarter where we made money and we expect to be
profitable for the year. We believe that we are poised for significant
growth and that 2011 will be a banner year for CYBRA.
CEOCFO: Do you do much investor
outreach?
Mr. Brand: We engaged an investor
relations company and they have done quite a bit of good work. We now have
more investor prospects following the Company than ever before. We are
keenly aware that investor outreach is a process that you have to work at
consistently and that it takes time to pick up steam.
CEOCFO: In closing, why should potential
investors pay attention to CYBRA Corporation?
Mr. Brand: Clearly, the big exciting news is the Walmart RFID item
level initiative. Walmart has opened up a wealth of opportunity for us and
we are in excellent position to help customers meet their Walmart mandates,
while simultaneously benefitting from RFID technology in their own
companies. Therefore, I believe that we are on the cusp of significant
growth. With the current RFID action in apparel, we have our pedigree in
apparel; we have as customers some of the top apparel companies in the
United States. Beyond that, we are at the final stage of a two-year planning
process to apply CYBRA technology to the tracking and monitoring of shipping
containers in a joint venture with the Chinese government. China trade is a
hot sector and we have established an excellent relationship with the China
government’s Ministry of Transportation.
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