The future is bright. The future is… FutureLogic

Acquiring FutureLogic makes sense in many, many ways – but it was relatively recently that the company took a 49% share in thermal printer company Nanoptix, so with that in mind why buy FutureLogic? Tom Nieman explained everything to Casino International.

Casino International: We were a little surprised when JCM bought FutureLogic, given your part-ownership of Nanoptix…
Tom Nieman: Currently, we  own 49% of Nanoptix, and we are on our way to buying them entirely.

CI: But the FutureLogic deal  has been done outright, straight away – is that correct? Is there not a lot of crossover between the two?
TN: Yes, JCM owns FutureLogic outright. 
Nanoptix is a smaller printer company with excellent engineering; the company needed assistance in marketing, sales and distribution, and that’s the role JCM has played. We were very pleased with their products and their engineering, and that relationship grew to the point where we made an investment in Nanoptix. 
In regards to the he FutureLogic acquisition, we had been close to them, in a period following our relationship with TransAct, where JCM didn’t have its own printer, We spent some time working with FutureLogic on some large corporate contracts, and it helped us get to know their products better. Acquiring them wasn’t the intent, we were just thinking, , let’s talk with this company. We came away thinking they had a solid management team, good company culture, are a market share leader, and we saw them as very similar and synergistic with JCM. After that brief period, we didn’t get together right away; you could say we dated a few times, but it didn’t work out! Then we began working with Nanoptix, thinking it made smart business sense to start with somebody that doesn’t have market share, that is eager to get into the business, and  has an outstanding product. And that’s what took us down the path with Nanoptix, which has been very successful. The ultimate would be to consolidate both of our efforts in the printer arena; obviously we have yet to see what will happen in our long-term future with Nanoptix, but right now we have both Nanoptix and FutureLogic products in our portfolio, and we think that it is the best of all worlds; we can answer any operator’s printing needs, both in gaming and outside of this industry. 
With FutureLogic, the products are a big part of the prize.

CI: You mentioned the previous relationship with TransAct – why did that not progress to this level?
TN: We represented them; originally, we had our own printer that competed in the market, the TSP 02, and it was a first-gen black-and-white workhorse. It did not progress feature-wise. As our competitors pushed features like colour printing, couponing, messaging, a variety of new features on the next generation of printers, we were posed with a difficult scenario – take our printer, tear it apart and build our next-gen version of it and try and compete with FutureLogic and TransAct, or do something else. At that point we were approached by TransAct for some assistance with OEMs and other business situations, and we agreed to work together and represent them. The relationship worked well, and we were successful in reigniting some relationships with customers they were out of. When it came to renewing the agreement, we simply couldn’t all agree how it would work going forward. So we walked away from that and started looking at printers… then we found Nanoptix. The company didn’t have the infrastructure the other ones did, but it did have the Paycheck 4. We have worked with them now for more than three years, and during that period we have moved from just representing them to buying equity in the company.
Some time in 2015 we will resolve how things will work with Nanoptix, and perhaps finalise a deal for the other half of the company, and the two entities together [Nanoptix and FutureLogic] we feel could be a substantial player in the market. FutureLogic is already a market leader, and we think it could become more so.
From a market share standpoint, if you just take North America, there are 1.2million electronic gaming machines. I can’t say that 100% of those devices have ticket printers, but it’s very close if it isn’t; of that, I would say two-thirds of that market has a FutureLogic device residing inside. 
Let me put it this way: in 2014, in all the business done, now that we own FutureLogic a JCM product was put in 100% of all new opening and all expansions. Those machines have a FutureLogic device, a Nanoptix printer, or a JCM bill validator. 

CI: Could the two printer brands operate different territories, perhaps?
TN: They both function today in gaming. FutureLogic has some business in other markets, including medical printing. With our relationship with Nanoptix we have taken them to additional industries beyond gaming, and we have them working in banking and financial services. The ability to cross over into different markets and diversify business and revenue is certainly there if you look at the totality of the two products. 

CI: With all the crossover between the two companies, notably in R&D, are there going to be job losses?
TN: Eventually, when you bring two companies together, there are some certain and obvious synergies that have to be taken. We are working through that process and carefully analyzing redundancies.  

CI: JCM has been crossing into a few different markets recently…
TN: We have. I would say we are now operating in five different business silos: Validation technology; printer technology; systems solutions [DNA, ICB, FutureLogic’s Table Xchange, PromoNet, Ticket2Go]; digital media [large-format display technology]; and customer support and service. 
The company is currently redefining itself; obviously we’re not making refrigerators or jet engines, but we are expanding within our skill set, our knowledge of gaming, and other markets. 
Transactions happen in a lot of places, and we want to be there.  We are all aware of the plastic world whether it’s credit, debit, smartcard, etc, and we have been working and looking at that – but we know there is a future beyond card and it is going to allow a consumer to make a transaction – and a transaction is not always, I give money and get this back. It is an exchange of two things, whether it is currency, credit card, an account on my smartphone, there are so many ways today to consider transactions. We are working to position the company so that when these things become more mainstream, JCM is best suitedto participate in that business.