Online Resources Closes Acquisition of Princeton eCom
Company Updates Guidance and Announces Date for Second Quarter 2006 Earnings Results
CHANTILLY, Va., July 5, 2006 – Online Resources Corporation (Nasdaq: ORCC), a leading provider of web-based financial services, today announced it has completed its acquisition of Princeton eCom Corporation on July 3, 2006, and has filed with the Securities & Exchange Commission.
As previously announced, the acquisition price was $180 million in cash, plus an earn-out up to $10 million. Related acquisition financing was also completed on July 3, 2006, consisting of $85 million in long-term debt and $75 million in convertible preferred stock.
“The combination with Princeton eCom clearly establishes Online Resources as a leader in electronic bill payments,” stated Matthew P. Lawlor, chairman and chief executive officer of the Company. “We welcome Princeton’s clients, partners and staff to Online Resources. We also thank Princeton’s shareholders, led by CCP Equity Partners, Lazard Technology Partners and Mellon Ventures, who facilitated a very smooth integration in the transition period before closing.”
Acquisition financing was provided by Tennenbaum Capital Partners, who will be represented on Online Resources’ Board of Directors by Steven C. Chang, a partner at Tennenbaum.
“We believe that earnings and revenue growth potential is excellent, given surging consumer billpay adoption and Online Resources’ strong competitive position,” stated Chang. “As a long-term investor, we are also attracted by the Company’s highly visible business model, its well diversified client base, and management’s track record of delivering on its promises.”
Revised 2006 Business Outlook
The Company commented on preliminary second quarter results and revised its guidance for full year 2006. These statements are forward-looking, and actual results may differ materially.
- The Company expects second quarter 2006 results to be at the high end of, or exceed, its core earnings guidance, and at the low end of its revenue guidance.
- With the acquisition of Princeton eCom and expected synergies, the Company is increasing its full year 2006 guidance as follows:
- Revenue is increased to $92.0-$95.0 million versus previous full year 2006 revenue guidance of $72.0-$75.0 million;
- Earnings before interest, taxes, depreciation and amortization (Ebitda) is increased to $21.5-$23.0 million, versus previous guidance of $17.9-$18.9 million. Treating the preferred stock as if it was fully converted to common, Ebitda per share is expected to be $0.67-$0.71 per share, versus previous guidance of $0.64-$0.68 per share.
The Company has previously stated that it expects core earnings to be diluted by $0.07-$0.10 per share as a result of the acquisition. The Company will update this and net income guidance after it completes its assessment of intangible assets resulting from the acquisition, accounting treatment of its convertible preferred stock, and any impact on its tax position. Management will provide additional post-acquisition guidance with its second quarter 2006 financial results on Monday, July 24, 2006.
Second Quarter 2006 Earnings Conference Call and Web Cast
Online Resources management will host a conference call to discuss second quarter 2006 earnings results on Monday, July 24, 2006 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 also 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 beginning at 8:00 p.m. ET on July 24th through midnight on July 31st. For the conference call playback, dial (800) 642-1687 for domestic participants and (706) 645-9291 for international participants and enter code 2160739. For web cast replay, go to the “Investors” section of www.orcc.com.
About Online Resources
Online Resources powers web-based financial services for over 3800 financial institutions, billers and credit service providers. Its proprietary suite of account presentation and payment services are branded to its clients, and augmented by marketing services to drive consumer and business end-user adoption. The Company serves over 8 million billable end-users and processes approximately $75 billion in bill payments annually. Founded in 1989, Online Resources (Nasdaq: ORCC; www.orcc.com) is recognized as one of the nation’s fastest growing companies.
About Tennenbaum Capital Partners
Tennenbaum Capital Partners is a Santa Monica, California-based private investment firm managing over $4 billion in private funds. The firm’s investment strategy is based on a long-term horizon and value-oriented approach. Tennenbaum’s core strengths include an in-depth knowledge of equity and debt financing vehicles in the public and private markets with a focus on complex investments such as acquisitions and special situations. For more information, please visit www.tennenbaumcapital.com.
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
703.653.2248
bhalloran@orcc.com
Investor Contact: Catherine Graham,
EVP & Chief Financial Officer
703.653.3155
cgraham@orcc.com
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