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| Prior Reported EPS | Revised EPS | Change | |
| 2005 Q2 | $0.07 | $0.06 | -$0.01 |
| 2005 Q1 | $0.11 | $0.10 | -$0.01 |
| 2004 | $0.25 | $0.20 | $-0.05 |
| 2003 | $0.17 | $0.13 | -$0.04 |
Similarly, the Company’s 2005 guidance has been reduced by $0.01
per share for the third quarter and by $0.03 per share for the full year.
Unclaimed payments, which represent less than one-tenth of a percent of the Company’s total payments, are generally paper checks that remain uncashed by recipients. In 2003, after consultation with its financial institution clients, legal counsel and financial auditors, the Company adopted a policy under which it took those unclaimed payments that were aged and relatively small as an offset to its costs. In return, the Company remained perpetually liable in the event the check was ever presented. The impact of the policy was fully disclosed in the Company’s financial statements and with its clients.
After a recent review, the Company has decided to change its policy, amend its accounting treatment and restate its prior financial results to be consistent with the new policy. Under the revised policy, all unclaimed payments will either be returned to client financial institutions or contributed to the appropriate state escheat fund, and the Company will have no future liability for payment.
“The decision to make this change was a complex one,” stated
Matthew P. Lawlor, chairman and chief executive officer of the Company.
“When we developed our unclaimed payments policy about two years
ago, there were no clear precedents or applicable regulations governing
service providers. As the electronic payments industry has evolved, so
must our operating policies, and we believe this new policy is better
suited to today’s environment.”
The Company intends to file amended reports with the Securities and Exchange
Commission to reflect the restatements as soon as practicable. The Company
has also revised its earnings guidance for third quarter by $0.01 per
share and by $0.03 for the full year 2005. The Company further expects
the impact of the policy change on future years will decline due to its
rising electronic rate and other processing efficiencies. The revised guidance 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 Restated |
Prior 2005 Guidance | New 2005 Guidance | 2004 Restated | Prior 2005 Guidance | New 2005 Guidance | |
| Revenue | $11.0 | $15.0-15.5 | $15.0-15.5 | $42.3 | $60.0-61.0 | $60.0-61.0 |
| Gross Profit Margin | 62% | 60-61% | 59-60% | 59% | 60-61% | 59-60% |
| EBITDA1 | $2.7 | $3.6-4.1 | $3.4-3.9 | $7.6 | $14.4-15.3 | $13.6-14.5 |
| Per Share | $0.13 | $0.13-0.15 | $0.12-0.14 | $0.38 | $0.55-0.58 | $0.52-0.55 |
| Net Income | $1.8 | $2.4-2.8 | $2.2-2.6 | $4.0 | $9.4-10.3 | $8.6-9.5 |
| Per Share | $0.09 | $0.08-0.10 | $0.07-0.09 | $0.20 | $0.36-0.39 | $0.33-0.36 |
| Fully Diluted Shares | 20.0 | 27.8 | 27.8 | 20.1 | 26.4 | 26.4 |
| Supplemental Information - For Disclosure Purposes Only | ||||||
| Pro Forma Equity Compensation Expense | N/A | $0.4-0.5 | $0.4-0.5 | N/A | $2.2-2.5 | $2.2-2.5 |
| Per Share | N/A | $0.01-0.02 | $0.01-0.02 | N/A | $0.08-0.09 | $0.08-0.09 |
| Tax Equiavalent Net Income2 | $1.1 | $1.5-1.7 | $1.4-1.6 | $2.5 | $5.8-6.4 | $5.3-5.9 |
| Per Share2 | $0.06 | $0.05-0.06 | $0.05-0.06 | $0.12 | $0.22-0.24 | $0.20-0.22 |
| (1) | EBITDA is defined as earnings 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. |
About Online Resources
Online Resources powers Internet financial services for over 700 firms
nationwide. The Company's proprietary 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 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.
TThis 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
