New CEO of Hauppauge-based Global Payment Technologies Inc. works to

Long Island Business News, Jan 23, 2004 by Ken Schachter

When Thomas Oliveri was at Huntington Station's Walt Whitman High School, he used to work out with the teacher at a local kung fu academy. While others practiced their katas, the meticulous choreography required to advance in martial arts, Oliveri just went to spar.

Some seven years later, Oliveri still had not moved up a single notch in the official hierarchy.

I started as a white belt and ended as a white belt, he said with a note of defiance. But that's not to say he didn't absorb some lessons from the years of sparring, including some matches against black belts.

If you don't know your competition, he said, you're probably going to get your rear end kicked.

Less than a month into his tenure as the new chief executive officer of Hauppauge-based Global Payment Technologies Inc., a company that makes currency-acceptance devices for slot and vending machines, Oliveri is determined not only to know his competition but to beat it.

Oliveri, who has spent time hawking hot dogs from a roadside truck and scuba diving in search of swimming pool leaks, also knows that won't be easy. The Mineola native and lifelong Long Island resident is taking over a company that saw net sales fall 6 percent to $26.1 million for fiscal 2003 ended Sept. 30. The company's net loss for that period increased almost nine-fold from the previous year to $5.7 million.

At the same time, Oliveri noted, the company has cleaned up its balance sheet and deep-sixed a smart-card project that was sapping the company's resources. As of Sept. 30, total bank debt was $1.8 million, almost 50 percent lower than a year earlier, while a $345,000 amortization and write-down was recorded for the smart-card project.

We've done some tripping in the past, he said. At the end of the day, there were some decisions that shouldn't have been made.

In the process, Global Payment's stock has sagged from a 52-week high of $5.55 on Jan. 22, 2003 to a low of $2.95 on Sept. 17, before recovering to a recent $3.78.

Oliveri, who earned a bachelor's degree in industrial technology at Oswego State and a master's degree in environmental science at Stony Brook University, began his career at Global Payment on his 40th birthday on Jan. 11, 1999, as vice president of operations.

In April 2003, Stephen Katz resigned as chairman and chief executive, creating a vacuum at the top. Board member Martin Kern took over as interim CEO, sought to assess the operations and began casting for an executive to take over for the long haul. Shortly, Kern took note of Oliveri. He said, 'It seems like you run the place.' To which Oliveri replied: I try.

On May 29, 2003, Oliveri was named president of the 130-person company and on Jan. 15, four days after his 45th birthday, he was appointed CEO.

The company he now runs is scrambling to get out of the red and enter new markets with some new products and a revised game plan.

The company's flagship Argus currency validator accounts for about four-fifths of sales in the company's largest market, gaming. The Argus, typically priced from $500 to $700, can handle the paper currency of any nation and can be found in one-armed bandits in casinos outside the United States. The device scans the currency and stacks it in a locked cash box.

If that sounds like a simple task, consider that some slightly inebriated users pour beer into the devices and feed credit cards into them, while in countries like Nigeria, worn currency may take on a clay color that's difficult for the machine to discern.

Among Global Payment's top markets are Australia and South Africa, where it has more than 80 percent of the market.

Oliveri said the company has 60 percent of the market in Russia, where another product, Aurora, designed as currency validator for vending machines, has begun to be adapted as a lower priced slot- machine validator. The Aurora gained momentum in the vending-machine market last fall when German cigarette vendor, Tobaccoland Automaten GmbH & Co. adopted the device in a $10 million, four-year contract.

Advantage, yet another currency validator, is scheduled to be rolled out for the U.S. casino market within weeks.

Analyst Eugene Christiansen, a principal at Manhattan research firm Christiansen Capital Advisors LLC, said current trends point toward a bright future for bill-acceptance companies.

The slot machines and gaming device industry is rapidly converting to cashless operations, he said, noting that he expects the change will come soon and be irreversible.

Though Oliveri said the company continues to assess smart-card systems in which funds are debited from a microchip embedded in the card, he said he expects paper currency to stay in use in global markets for years.

Ironically, one of Global Payment's weakest markets is its home, which is dominated by Japan Cash Machines Co. Ltd., supplier to Reno- based IGT, one of the largest makers of slot machines.

Still, Oliveri is not conceding the IGT account and remains intent on cracking the U.S. market.

We may start with Native American gaming, he said, referring to the many casinos on reservations. There's a lot of ways to skin a cat.