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Revenue and Earnings Advance on Continued Strong User Growth
Chantilly, Va., July 20, 2005
Online Resources Corporation (Nasdaq: ORCC), a leading outsourcer of Internet
financial services, today reported financial and operating results for the
three months ended June 30, 2005.
- Revenue for the second quarter of 2005 was $14.3 million, a 42 percent
increase over second quarter 2004 revenue of $10.1 million. The acquisition
of Incurrent contributed approximately $1.9 million in revenue for the
quarter.
- Earnings before interest, taxes, depreciation and amortization (EBITDA)
was $3.1 million, a 45 percent increase over $2.1 million in the prior
year. EBITDA per share was $0.12 per share, a 9 percent increase compared
to $0.11 in the prior year.
- Net income was $1.8 million, a 48 percent increase over $1.2 million
in 2004. Net income per share was $0.07, a 17 percent increase compared
to $0.06 per share in 2004.
"We enjoyed strong user growth during the quarter and exceeded
guidance due to some unexpected non-recurring revenue," stated
Matthew P. Lawlor, chairman and chief executive of the Company. "The
quarter was further highlighted by ongoing success in sales with 32
client signings, as our unique combination of account presentment, payments
and consumer marketing capabilities appears to be striking a chord."
Lawlor continued, "Looking ahead, the Company is positioned
to return to more typical sequential growth rates, with the recent
large client acquisitions behind us and with a highly diversified
client base. During the second half of the year, we will maintain
focus on driving adoption and further integrating our recent acquisitions.
At the same time, we remain confident that we are establishing a sound
foundation for our strategic growth, including other potential acquisitions
and leveraging our real-time payments infrastructure."
The Company further noted that second quarter results do not recognize
any revenue or expenses from the June 27, 2005 acquisition of Integrated
Data Systems, as the results were deemed to be immaterial. The Company’s
balance sheet, however, is presented on a consolidated basis.
2005 Business Outlook
The Company provided new guidance for the third quarter 2005. To reflect
its year-to-date performance and the recent acquisition of Integrated
Data Systems, the Company updated full year 2005 guidance by increasing
revenue and EBITDA while maintaining its earnings per share guidance.
This guidance reflects increased share count and, supplementally, a higher
potential discretionary equity-based bonus compensation expense. It also
assumes no release of the Company's tax loss valuation allowance. The
information below is in millions except for per share data. These statements
are forward-looking, and actual results may differ materially.
| |
Third Quarter |
Full Year |
| |
2004 Actual |
2005 Guidance |
% Change |
2004 Actual |
2005 Guidance |
% Change |
| Revenue |
$11.0 |
$15.0-15.5 |
39% |
$42.3 |
$60.0-61.0 |
43% |
| Gross Profit Margin |
63% |
60-61% |
-4% |
60% |
60-61% |
1% |
| EBITDA1 |
$3.0 |
$3.6-4.1 |
28% |
$8.6 |
$14.4-15.3 |
73% |
| Per Share |
$0.15 |
$0.13-0.15 |
-7% |
$0.43 |
$0.55-0.58 |
31% |
| Net Income |
$2.1 |
$2.4-2.8 |
24% |
$5.0 |
$9.4-10.3 |
97% |
| Per Share |
$0.11 |
$0.08-0.10 |
-18% |
$0.25 |
$0.36-0.39 |
50% |
| Fully Diluted Shares |
20.0 |
27.8 |
39% |
20.1 |
26.4 |
31% |
| Supplemental Information - For
Disclosure Purposes Only |
| Pro Forma Equity Compensation Expense |
N/A |
$0.4-0.5 |
N/A |
N/A |
$2.2-2.5 |
N/A |
| Per Share |
N/A |
$0.01-0.02 |
N/A |
N/A |
$0.08-0.09 |
N/A |
| Tax Equiavalent Net Income2 |
$1.3 |
$1.5-1.7 |
23% |
$3.1 |
$5.8-6.4 |
97% |
| Per Share2 |
$0.07 |
$0.05-0.06 |
-21% |
$0.15 |
$0.22-0.24 |
53% |
Notes:
- EBITDA is defined as earnins before interest, taxes, depreciation
and amortization.
- Presents the Company’s net income and net income per share
expectations as if they were to be reported on a fully taxed basis,
at an estimated corporate tax rate of 38 percent. The Company has
approximately $90 million in tax loss carry-forwards and does not
expect to pay material cash taxes in the foreseeable future.
The Company's management will host a conference call to discuss the results
today at 5:00 p.m. ET. The conference call dial-in number is (800) 938-1087
for domestic participants and (706) 679-7266 for international participants.
Alternatively, a live web cast of the call will be available through the
"Investors" section of Online Resources' web site at www.orcc.com.
The call and web cast will be recorded and available for playback from
8:00 p.m. ET on July 20 until midnight on Wednesday, July 27. For the
conference call playback, dial (800) 642-1687 for domestic participants
and (706) 645-9291 for international participants and enter code 6977645.
For web cast replay, go to the "Investors" section of www.orcc.com.
About Online Resources
Online Resources powers Internet financial services for over 700 firms
nationwide. The Company's account presentation, payment, relationship
management and professional services are branded to its client banks,
credit unions, card issuers and payment acquirers. The Company serves
over three million consumer and business end-users and processes over
$12 billion in payments annually. Founded in 1989, Online Resources
(Nasdaq: ORCC, Website: www.orcc.com)
has been widely recognized as one of the nation’s fastest growing
technology firms.
This news release contains statements about future
events and expectations, which are "forward-looking statements."
Any statement in this release that is not a statement of historical
fact may be deemed to be a forward-looking statement. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause the Company's actual results, performance
or achievements to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Specifically factors that might cause such a difference
include, but are not limited to the Company's: history of losses;
dependence on the marketing efforts of third parties; potential fluctuations
in operating results; ability to make and successfully integrate acquisitions
of new businesses; potential need for additional capital; potential
inability to prevent systems failures and security breaches; potential
inability to expand services and related products in the event of
substantial increases in demand; competition; ability to attract and
retain skilled personnel; reliance on patents and other intellectual
property; exposure to the early stage of market adoption of the services
it offers; exposure to the consolidation of the banking and financial
services industry; and additional risks and uncertainties discussed
in filings made by the Company with the Securities and Exchange Commission,
including those risks and uncertainties contained under the heading
"Risk Factors" in the Company's Form 10-K, latest 10-Q,
and S-3 as filed with the Securities and Exchange Commission. These
factors should be considered in evaluating the forward-looking statements,
and undue reliance should not be placed on such statements.
Media Contact: Beth Halloran,
Director, Corporate Communications
Online Resources Corporation
703.653.2248
bhalloran@orcc.com
Investor Contact: Catherine Graham,
EVP & Chief Financial Officer
703.653.3155
cgraham@orcc.com
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