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Online Resources Posts Second Quarter 2004 Results
Earnings Expand Sharply, Surpassing Expectations
MCLEAN, Va., July 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 June 30, 2004.
Revenue for the second quarter of 2004 was $10.1 million, an increase of 20 percent over second quarter 2003 revenue of $8.4 million.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2004 increased to $2.1 million, an increase of 102 percent compared to $1.1 million in second quarter 2003.
Net income for the second quarter 2004 was $1.2 million, or $0.06 per share, compared to a loss of $148,000, or $(0.01) per share, in the prior year.
"Higher than expected earnings for the quarter were achieved by efficiencies in the fast growing payments side of our business," stated Matthew P. Lawlor, chairman and chief executive of the Company. "We continue to be encouraged by the strength of consumer adoption and expansion of our financial institution client base."
Compared to the first quarter of 2004, users expanded from 926,000 to 972,000, consumer adoption of Internet banking services increased from 18.5 percent to 19.3 percent, and payment services adoption increased from 5.7 percent to 6.2 percent. The Company expanded its distribution channel to 687 financial institutions with the addition of 17 net new clients.
Lawlor added, "We are operating in a zone of high earnings leverage, and expect continuing expansion of our net operating margin over the next several years. I am also pleased with progress on our strategic initiatives, particularly in laying the groundwork to extend our patented real-time payments capabilities for e-commerce applications."
2004 Business Outlook
The following statements are forward-looking and actual results may differ materially. The Company issued third quarter 2004 guidance for the first time. Based on changing cost and product mix expectations, the Company also adjusted full year 2004 guidance by increasing its midpoint earnings guidance by two cents per share and reducing its midpoint revenue guidance to the low end of its original 2004 guidance.
Third Quarter 2004
Revenue is expected to be between $10.8 million and $11.3 million.
Gross profit margin is expected to be between 60 percent and 62 percent.
EBITDA is expected to be between $2.3 million and $2.8 million.
Net income is expected to be between $0.07 and $0.09 per share based on a projected 20.2 million in fully diluted shares outstanding.
Full Year 2004
Revenue is expected to be between $41.5 million and $42.5 million.
Gross profit margin is expected to be between 59 and 61 percent.
EBITDA is expected to be between $8.0 million and $8.8 million.
Net income is expected to be between $0.20 to $0.24 per share based on a projected 20.2 million in fully diluted shares.
The Company's management will host a conference call to discuss its second quarter results today at 4:15 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 21st until midnight on Wednesday, July 28th. For the conference call playback, dial (800) 642-1687 for domestic participants and (706) 645-9291 for international participants and enter code 8397962. For web cast replay, go to the "Investors" section of www.orcc.com.
About Online Resources
Online Resources (Nasdaq: orcc, Website: www.orcc.com) is an outsourcer of proprietary Internet banking, payment and marketing services to over 675 financial institutions nationwide. The Company's services, branded to its banking and credit union clients, power over 100 million transactions and $10 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: Ron Bergamesca,
SVP, Marketing
703.394.4917
rbergamesca@orcc.com
Investor Contact: Catherine Graham,
EVP & Chief Financial Officer
703.394.5155
cgraham@orcc.com
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