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Online Resources Posts Strong First Quarter 2004
Consumer Adoption And New Clients Up Sharply
MCLEAN, Va., April 21, 2004
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 March 31, 2004.
Revenue for the first quarter of 2004 was $9.8 million. This compares to $11.0 million in the first quarter of 2003, or $8.8 million excluding a large one-time termination fee reported that quarter.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the first quarter of 2004 was $1.4 million. This compares to $3.2 million in first quarter 2003, or $1.0 million excluding the one-time fee.
Net income for the first quarter 2004 was $419,000, or $0.02 per share. This compares to first quarter 2003 net income of $2,123,000, or $0.15 per share, and breakeven after adjusting for the one-time fee.
"Financial performance was at the high end of both consensus analyst expectations and our guidance," stated Matthew P. Lawlor, chairman and chief executive officer. "The results were fueled by strong operating fundamentals across the board."
Consumer adoption of Internet banking services increased to 18.5 percent versus 16.8 percent in the fourth quarter of 2003. Payment services adoption increased to 5.7 percent versus 5.1 percent in the fourth quarter of 2003, including a 71 percent year-over-year increase in bill payment transactions. The Company also expanded its distribution channel to 670 financial institutions with the addition of 49 new clients.
Lawlor added, "We look forward to strong earnings improvement for the balance of 2004. The year-over-year and quarterly sequential impact of two large clients who were acquired is now largely behind us. Our remaining client base is well diversified and we are at a high point of potential earnings leverage, as recurring user fees are expanded over our relatively fixed cost base. Strategically, we are cautiously optimistic about early consumer receptivity to Money HQ and e-commerce interest in our patented real-time payment capabilities."
2004 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 second quarter and full year 2004, the Company expects the following:
Second Quarter 2004
Revenue between $10.2 million and $10.4 million.
Gross profit margin between 56 percent and 58 percent.
Earnings before interest, taxes, depreciation and amortization (EBITDA) between $1.6 million and $1.9 million.
Net income between $0.03 and $0.05 per share calculated on basic and fully diluted share counts of 18.0 million shares and 20.2 million shares, respectively.
Full Year 2004
Revenue remains between $42.0 million and $44.0 million.
Gross profit margin remains between 57 and 59 percent.
EBITDA remains between $7.3 million and $8.0 million.
Net income remains between $0.18 and $0.22 per share based on a projected 20.2 million fully diluted shares outstanding.
The Company's management will host a conference call to discuss its first quarter results today at 4:15 p.m. ET. The conference call dial-in number is (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 April 21 until midnight on Wednesday, April 28. For the conference call playback, dial (800) 642-1687 for domestic participants and (706) 645-9291 for international participants and enter code 6227569. 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 650 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 industry-leading services power over 100 million transactions and $9 billion in consumer bill payments annually. Founded in 1989, Online Resources has been widely 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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