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CEOCFO CEOCFO Monthly Analyst |
Capturing Time and
Technology Time
America, Inc.
Interview
conducted by: Thomas Bednarik
has served as President, Chief Executive Officer of the Company and as a Director since
February 2000. Mr. Bednarik brings more than 28 years of executive and sales management
experience in the information technology industry. He has served in various executive
management roles, including CEO, President, and Vice President, with firms such as Idea
Corporation, Decision Data, Alcatel Information Systems, and ITT Corporation. Ceocfointerviews:
I know it is a B-to-B business that you have, but my readers may not know everything. If you can, please explain what this company is
doing. Mr. Bednarik: Time
America is a software development company that provides proprietary time and attendance
software solutions. A sale may also include
various data collection devices and professional services, such as implementation and
training. The software that we develop is
generically called Time and Attendance Software or Workforce Management Software. Basically the software allows the user to gather
employee data such as when he or she clocks in or out, benefit accruals, electronic
timesheets, etc. Along with the software,
Time America sells data collection devices that take the place of mechanical time clocks.
The data collection devices include magnetic or barcode badge readers, biometric hand
readers, and Web-enabled devices. An
employees’ time can be recorded and provided to his or her supervisor for approval
and then inputted into a payroll system. Our
clients look at our product as the front end of a payroll system, where the time and
attendance data is gathered and applied against a rules engine in our software, which
gathers punches and applies logic based on specific company rules. For instance, if someone punches in early, the
rules engine would decide how to handle that time based on that particular company’s
policy. Once the data is run through the
program, it can be exported to a variety of payroll processors and Human Resources
packages. The purpose of our product offering
is to capture accurate time and attendance data and record it in a timely fashion. Ceocfointerviews:
That can save companies millions of dollars every year depending on how it’s
utilized. Mr.
Bednarik: It
can be a significant number, which is substantiated by the fact the average Return On
Investment for our solution is less than six months. Ceocfointerviews:
Are you targeting all size companies? Mr. Bednarik: With
the recent merger with Time America, we now offer products that address companies of all
sizes. Ceocfointerviews:
Are you doing this on a global basis? Mr. Bednarik: Time
America does sell products outside of the United States, however, because of localization
issues, the software is limited to only English speaking countries. Therefore, the majority of our business is coming
from the United States. Ceocfointerviews:
Can this be converted into other languages so you can increase your sales? Mr. Bednarik: Our
complete product line will be able to be converted to different languages within a couple
of years. Today, only one of our products,
our client-server solution, HourTrack, has the capability to be easily converted into a
different language. We really haven’t
focused on this area since we have such a large opportunity within the United States. Ceocfointerviews:
You mentioned that you develop the software and hardware.
Is this done within your own company or is this outsourced? Mr.
Bednarik: Time
America develops the time and
attendance software and then adds the data collection device, such as a badge reader or
biometric device. For the most part these
devices are manufactured by other companies, but in some cases, customized to our
specifications. However, we do write all the
application firmware that controls the data collection devices. Ceocfointerviews:
Obviously some companies have different needs and is basically "time"
orientated. How do you deal with the customer
to satisfy their needs? Mr. Bednarik: Our
standard products usually fulfill the needs of a typical client. But in many cases we may have to customize the
product. The customization may include unique
overtime rules or department configuration because of the organizational structure of a
company. It is very common that a customer
with more than 500 employees might require some amount of custom programming to
incorporate unique rules and features. Ceocfointerviews:
How often do you update the products? Mr.
Bednarik: Our
time and attendance software is updated on a continuous basis. New service releases are issued based on program
issues, i.e. bugs, and the addition of new software features, which is typically every
four weeks depending on the product. Ceocfointerviews:
Your customers obviously want the latest and the greatest.
Is this a long-term contract you have with your customers or as updates
become available you charge them then? Mr.
Bednarik: We
provide “bug fixes” at no charge on all of our products. We also include new feature enhancements at no
charge for those customers covered under a software maintenance agreement. Ceocfointerviews:
You mentioned that you have resellers selling the products for you. Do you do any of the selling yourself? Mr. Bednarik: We
have a reseller channel consisting of more than 100 resellers that sell the majority of
our products. The reseller channel has been
very successful and is a channel that we are continuing to grow. The two solutions we are selling direct include
the ASP product, NETtime, which is also sold through the reseller channel and our client
server product, HourTrack. Ceocfointerviews:
You are also providing services, sending your technical representative to the companies to
implement and train. Are you adequately
staffed to meet the needs of your customers? Mr. Bednarik: Yes
we have adequate staff to accommodate the sales volume we are producing. We have a pool of
training and implementation personnel in our professional services group. Once the sale is made we implement the solution,
which basically involves creating the database and installing the software. We then conduct the training. Both the implementation and training can be
conducted on-site or remotely. We have
designed our training curriculum for both an administrative level as well as an employee
level depending on the type of product sold and the desires of the client. Ceocfointerviews: How do you handle customer problems? Mr. Bednarik: We
have a technical support group that handles customer service issues for resellers and end
users. Our staff is available for general
customer support issues from 7 AM to 5 PM MST. We
do offer 24X7 support on a contractual basis. Ceocfointerviews:
What did the merger with Time America Inc. do for your company? Mr. Bednarik: The
major synergies for the merger of the two businesses are as follows: Time America created
a significant reseller channel, as previously mentioned.
Throughout its thirteen years of operation Time America has retained a
number of resellers that are very loyal to the Time America brand due to the quality of
the product and superior technical support consistently received. Overall, the key strengths of Time America
included a very solid distribution channel and a comprehensive product line. Time America’s products are sold primarily to
companies in the small to mid-size markets, although the software is feature rich. Vitrix’s assets include a product line that
can accommodate a large number of employees. Furthermore,
Time America’s products are PC based, and Vitrix’s solutions include a
client/server product and an ASP solution. The
ASP product, NETtime, which is similar to the HourTrack product in means of capability, is
delivered via the Web in a hosted environment. NETtime
offers added convenience to customers by eliminating the need to install and maintain the
software – as it is 100% Web-based and housed in a world-class data center. So,
instead of buying the software, users pay a monthly rental fee. To summarize, we increased our market presence,
broadened our product line and strengthened our sales channels of distribution. Ceocfointerviews:
I know recently software manufacturers and software distributors have taken a major hit as
a result of the economy. Has this situation
affected this company in anyway? Mr. Bednarik: The
economic slowdown has affected our business. We
have seen a softness in overall sales based on the decline of the economy. For instance, when you compare fiscal fourth
quarter revenues for 2000 for both Vitrix and Time America to fiscal fourth quarter
revenues of 2001, which was the first quarter as combined entity, the amount of revenue
was 8% less during 2001. We know that certain
customers have deferred purchases until the economy improves. Regardless of the current economic conditions we
continue to improve our product line and focus on recruiting new resellers. Ceocfointerviews:
If you wanted to expand the company, do you have the cash flow or capital to do it at this
point? Mr.
Bednarik: It
would depend on the amount of expansion. When
we merged Vitrix and Time America, at the end of March, we raised some additional debt
financing. Ceocfointerviews:
In the new plan for your business, would you include another acquisition or another
partner? Mr. Bednarik: There
is always a possibility that the company’s future could include another acquisition
or additional partners. We are always looking
for opportunities that make sense for the company. Ceocfointerviews:
Do you feel Time America is fully digested into the company? Mr. Bednarik: Yes. The merger with Time America was easier since Time
America was located here in the Phoenix area. Since
Vitrix is located in Tempe, a suburb of Phoenix, we were able to consolidate the
businesses into the Tempe facility. We were
able to reduce some office expenses immediately along with some of the redundancies that
you normally get with the merging of two entities by moving the two companies under one
roof. We have products and sales channels
that compliment each other. I believe the
merger with Time America has been, from my perspective, a success. Ceocfointerviews: What would you say to a potential investor looking
at your company for the first time? Mr. Bednarik: Anyone interested in purchasing a company’s stock has to look at the company relative to future activity. Is it going to differentiate itself? Why would I want to invest in this company verses another company in this space? We convey to potential investors that Time America has a full array of products and services and complimentary channels of distribution. Our plans include focusing on recruiting new resellers for the majority of our product line, including our ASP product, NETtime. The NETtime product presents the company with a significant recurring revenue opportunity. Ceocfointerviews:
There has been some "thinning out" that I have noticed. There are companies that have fallen to the
wayside. You need to look a little bit harder
as to who will survive. Mr.
Bednarik: There
are several companies in our space that have ceased operations possibly due to economic
conditions. Time America has proven to be a
stable company through its thirteen years. Many companies that have failed lacked sufficient
funding within their early years of operation. Because
of our tenure and vast domain experience, I believe we have a definite advantage over most
companies within our industry. Ceocfointerviews:
Personally I think that every industry has a settling down period but companies should
still focus on the future. Mr. Bednarik: I agree. When things get tough, I believe you focus more on your day-to-day business but still need to strategically look down the road and plan for the future. For Time America to grow as a business we must be optimistic that the economy will improve and consistently look for other means to increase the amount of value we deliver to the customer.
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