Online Resources Posts Third Quarter Results

Earnings Per Share at High End of Expectations

Chantilly, Va., October 19, 2005

• Revenue for the third quarter of 2005 was $15.3 million, a 38 percent increase over third quarter 2004 revenue of $11.0 million.
  
  
• Earnings before interest, taxes, depreciation and amortization (EBITDA) was $3.5 million, a 34 percent increase compared to $2.6 million in the prior year. EBITDA per share was $0.13, unchanged from the prior year.
  
  
• Net income was $2.4 million, a 31 percent increase compared to $1.8 million in 2004. Net income per share was $0.09, unchanged from the prior year due to a 36 percent increase in fully diluted shares.
  

"In addition to our favorable year-over-year results, we returned to strong quarterly sequential growth and are back on the path of leveraging higher recurring revenue over relatively fixed costs," said Matthew P. Lawlor, chairman and chief executive officer of the Company. "We are particularly pleased with record sequential user additions, high client sales and rapid progress in bringing the unique capabilities of IDS into the mainstream of our Company."

Lawlor continued, "In the near-term, we will remain focused on our strategy to significantly grow bill payment adoption and to harvest the banking channel with new products that leverage our real-time payments infrastructure. At the same time, we are cultivating opportunities for our Card division’s new collections product, which is showing excellent promise in providing new cost savings for card issuers and other holders of debt."

The Company provided guidance for the fourth quarter and narrowed guidance for full year 2005. This guidance assumes no release of the Company’s tax loss valuation allowance, and is stated in millions except for per share data. These statements are forward-looking, and actual results may differ materially.

Notes:

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 $85 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 October 19 until midnight on Wednesday, October 26. For the conference call playback, dial (800) 642-1687 for domestic participants and (706) 645-9291 for international participants and enter code 1258868. For web cast replay, go to the "Investors" section of www.orcc.com.

About Online Resources

Online Resources powers Internet financial services for over 800 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