Online Resources Reports Third Quarter Profit and Strong Cash Flow
MCLEAN, Va., October 21, 2003
Online Resources Corporation (Nasdaq: ORCC), a leading outsourcer of Internet banking and payment services, today reported financial and operating results for the three months ending September 30, 2003.
- Revenue for the third quarter of 2003 was $9.3 million, up 14 percent from $8.2 million in the third quarter of 2002.
- Gross profit for the third quarter of 2003 was $5.2 million, up 14 percent from $4.6 million in the third quarter of 2002. Gross margin was unchanged at 57 percent.
- Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2003 was $1.4 million, up 28 percent from $1.1 million in third quarter 2002.
- Income from operations for the third quarter of 2003 was $0.6 million, compared to $0.4 million in the prior year.
- Net income for the third quarter 2003 was $364,000, or $0.02 per share. This compares to net income of $93,000, or $0.01 per share, in the third quarter of 2002.
"We are back on track after the transition of Cal Fed, with strong sequential revenue and net income growth," stated Matthew P. Lawlor, chairman and chief executive officer. "Our third quarter was highlighted by higher than expected payments, excellent cost control, and markedly increased free cash flow."
Lawlor added, "As the year-end approaches, we anticipate continued strengthening of our balance sheet from improved cash flow and the conversion of our debt to equity. We further expect to be well positioned going into 2004, with the launch of Money HQSM in the fourth quarter and strong momentum in our bill payment business. Strategically, we see some exciting possibilities to expand beyond bill payments into other applications of our patented real-time debit gateway."
2003 Business Outlook
The following statements are forward-looking, and actual results may differ materially. This guidance assumes no change in the method of accounting for equity compensation. For fourth quarter and full year 2003, the Company expects the following:
Fourth Quarter 2003
- The Company expects revenue to be between $9.3 million and $9.5 million.
- Gross profit margin is expected to be between 56 and 57 percent.
- The Company expects EBITDA to be between $1.4 million and $1.6 million
- Net income is expected to be between $0.01 and $0.02 per share. This assumes 18.8 million fully diluted shares outstanding and the acceleration of approximately $300,000 in unamortized deferred debt expense related to the expected conversion of 75 percent of the Company's convertible debt into common equity.
Full Year 2003
- The Company narrowed the low end of its revenue range for the 2003 year, and expects revenue to be between $38.0 million and $38.2 million.
- Gross profit margin expectation is raised slightly to between 58 and 59 percent.
- EBITDA expectation is narrowed to range between $7.1 million and $7.3 million for the 2003 year.
- The Company narrowed the top end of its net income expectation of $0.15 to $0.17 per share, assuming an average of 16.2 million fully diluted shares outstanding.
The Company's management will host a conference call to discuss its third quarter results on Tuesday, October 21, 2003 at 4:15 p.m. ET. The call is open to the public by dialing (877) 590-4770 for domestic participants and (706) 679-7688 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 October 21 until midnight on Tuesday, October 28 by dialing (800) 642-1687 for domestic participants and (706) 645-9291 for international participants and enter code 2854517. For web cast replay, go to the "Investors" section of www.orcc.com.
About Online Resources
Online Resources (Nasdaq: ORCC - www.orcc.com) is an outsourcer of Internet banking and payment services to over 500 financial institutions nationwide. In contrast to other providers, Online Resources owns, operates and drives critical banking, payments and marketing infrastructure that enable a superior customer experience and Internet channel success. The company's services, branded to our financial institution clients, power over 100 million transactions and $7 billion in consumer bill payments annually. Founded in 1989, Online Resources has been recognized as one of the nation's fastest growing technology companies.
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 and anticipation of future losses; the company's dependence on the marketing efforts of third parties; the potential fluctuations in the company's operating results; the company's potential need for additional capital; the company's potential inability to expand the company's services and related products in the event of substantial increases in demand for these services and related products; the company's competition; the company's ability to attract and retain skilled personnel; the company's reliance on the company's patents and other intellectual property; the early stage of market adoption of the services it offers; consolidation of the banking and financial services industry; and those 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
703.394.5248
bhalloran@orcc.com
Investor Contact: Catherine Graham,
EVP & Chief Financial Officer
703.394.5155
cgraham@orcc.com
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