Online Resources Posts Second Quarter 2005 Results

Revenue and Earnings Advance on Continued Strong User Growth

Chantilly, Va., July 20, 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.

Notes:

1. EBITDA is defined as earnins before interest, taxes, depreciation and amortization.
2. 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.

• Quarterly Operating Data
• Consolidated Statements of Operations
• Consolidated Balance Sheets
• View a PDF Version

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