It All Adds Up

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Addmaster Corp.’s major customers are banks, and across the United States they are either consolidating, failing or being bailed out by the federal government. But that didn’t stop this Monrovia maker of receipt printing machines from registering a nearly one-third jump in sales last year.

The company has thrived in part because of the consolidation in the banking industry. As Addmaster’s customers take over other banks or get taken over themselves they need to integrate their branch office technology. More often than not, the banks choose Addmaster’s teller receipt-printing machines as they are consolidating.

Addmaster, which posted $20 million in sales last year, is one of a small number of manufacturers of transaction receipt-printing machines used by bank tellers and other bank branch personnel. While much in banking has migrated online or is done strictly through computers, bank customers still need confirmation of their deposits, withdrawals and transfers at the teller window. (The company doesn’t make ATM printers.)

“Bank customers want high-quality receipts produced quickly and that’s what we provide,” said Vice President Hugh Clary, 48, who runs much of the company operations. His father, Jack Clary, 82, is chief executive.

Addmaster’s printers are small about the size of a hand-held printing calculator quiet and relatively inexpensive at about $450 to $500 per unit. The company’s biggest customer is San Francisco banking giant Wells Fargo & Co. Most clients, though, are small and midsized banks. Addmaster also has a few retail clients.

In addition, Addmaster has a subsidiary in a completely unrelated line of business: making and selling devices that provide secure power for key pieces of equipment, mostly for military clients. This subsidiary typically constitutes between 40 percent and 50 percent of Addmaster’s total sales.

The bank machine side of the business grew significantly last year. Some of the sales growth was due to a rebound from a weak prior year. (As Jack Clary put it: “We had our recession in 2007.”) But the company also benefited as some of its bank clients acquired other banks and used the opportunity to standardize all the teller equipment with Addmaster machines.

“When one bank acquires another bank, there are three options for the technology at the branches: buy an entirely new system, choose one bank’s system for the entire consolidated operations or integrate the two systems,” said David Furlonger, vice president of research with the Gartner Group, a Stamford, Conn., technology consulting company.

Addmaster wants to be the technology of choice for any company faced with upgrading their system during consolidations. It’s the acquiring bank’s technology that usually wins the day, and so far that’s been working to Addmaster’s advantage.

The Clary family’s roots in banking stretch back nearly 100 years, when Jack Clary’s father started out as a branch executive at the Bank of Italy, one of the predecessors of Bank of America. He saw the need for bank tellers formerly known as “clerks” to have adding machines at their desks. So he developed his own portable adding machine.


Military expansion

He left Bank of America in the 1930s and started his own business making and selling adding machines to the banking industry. But with the onset of World War II, the Clary family saw an opportunity and began supplying the military with gyroscopes and other technology. That marked the beginning of Clary Corp.

Jack Clary’s father broke away from Clary Corp. and eventually launched Addmaster in 1962, in a return to the adding machine business, with a focus on selling products to the banking industry. By the 1970s, the reins at Addmaster had passed to Jack Clary and the company soon moved into hand-held printing calculators, selling to banks and retailers.

But by the late 1980s, banks needed machines that tellers could use to give receipts while sending the transaction information to customers’ accounts in the bank’s computer system. Addmaster’s competitors at the time including NCR Corp., Sharp Corp. and IBM Corp. started selling so-called “impact printers” that used the same technology as electronic typewriters, with printer ribbons.

Addmaster leapfrogged the competition around 1990, introducing inkjet teller-receipt printers. They were quieter, smaller, less expensive and easier to maintain. That allowed Addmaster to thrive amid the wave of consolidation that swept the banking industry in the 1990s.

“The Addmaster products have made life a lot easier for us,” said Judy Magers, first vice president and business analyst with Renasant Bank of Tupelo, Miss., which chose the Addmaster machines in 2004 for its 60 branches. “Sticking in a replacement inkjet cartridge is a lot easier than those ribbons we had to deal with.”

Addmaster’s technology advantage over its competitors has narrowed as a handful of other manufacturers have jumped into this niche. Competitors include Pertech Resources Inc. of Riverton, Wyo. What’s more, a new technology has emerged that’s cheaper than inkjet validation printers: thermal imaging via heat transfer technology.

“Thermal head printers are gaining in popularity,” said Cornel McKay, vice president of implementation and integration services for Metavante Corp. of Milwaukee, which sells a variety of bank technology products, including Addmaster’s teller receipt printers. Addmaster has not jumped into the thermal imaging arena, choosing instead to upgrade its inkjet technology.

Of more immediate concern for Addmaster is staying ahead of the expected banking consolidation frenzy. Hugh Clary said the company’s most pressing short-term goal is to get its printers accepted at one or more of the nation’s biggest banks in addition to Wells Fargo, so that it doesn’t end up on the short end in mergers.

“We want to get into at least one more big bank with lots of branches,” Hugh Clary said.



Addmaster Corp.

Headquarters: Monrovia

Chief Executive: Jack Clary

Founded: 1962

Core Businesses: Makes printing transaction machines for financial services industry; also makes secure power devices, primarily for the military

Revenue: $20 million in 2008

Employees in 2009: About 100

Goals: Scoring another major bank as a customer in order to get machines into more branches

Driving Force: The need of customers to have a record of their transactions with tellers despite the growth of online banking

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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