Online Resources Provides Analyst Day Highlights
CHANTILLY, Va., August 24, 2007 – Online Resources Corporation (Nasdaq: ORCC), a leading provider of web-based financial services, announced highlights of its Analyst Day event held yesterday in New York, NY. The Company updated analysts on progress toward its three key strategic goals for the next 18 months, including the integration of recently acquired Internet Transaction Solutions (ITS).
The Company’s three key strategic priorities are: 1) doubling banking billpay adoption by mid-2009,
2) leveraging its new product pipeline, and 3) integrating the former ITS with its eCommerce business. The Company believes these priorities position it for high revenue and earnings growth, while limiting risk to a manageable level. Highlights of the discussion are as follows:
- Recent major industry changes have significantly reduced the number of players in the financial technology space, providing the Company new opportunities to leverage its unique focus, with its advantages of both scale and flexibility.
- It is on track to achieve its 12 percent banking billpay adoption goal by moving the former Princeton eCom rate of 6 percent towards the current legacy Online Resources’ rate of 12 percent. The Company expects that the adoption curve will continue to rise steadily over the long term, though temporary adoption plateaus similar to those experienced in other financial technology products may be experienced.
- Recent increases in banking billpay adoption from former Princeton eCom clients are from large financial institution clients, rather than from partners who redistribute to small banks and credit unions. Approximately 8 percent of revenue derived from the Company’s banking business is derived from banks and credit unions with assets greater than $6 billion.
- The Company’s new product pipeline includes many opportunities to cross-sell products across markets. For example, the Company’s web-based collections tool, which was originally developed for card issuers, will soon be made available to the banking and biller markets.
- The Company estimates that the cumulative size of its new product portfolio is approximately $100 million in annual revenue five years in the future. However, management stated it is too early in the product lifecycle to set any expectations, and that it expects some new product failures to go along with some new product successes.
- With the integration of the former Princeton eCom completed earlier this year, focus has turned to achieving revenue synergies. In addition, the Company is moving rapidly to integrate ITS into its eCommerce business, with plans in progress to introduce the web-based collections tool to its new receivables management clients.
- The Company has signed a bill payment agreement with a major stored value company and expects to announce details in the near future. The strategic agreement does not represent material changes to the Company’s expectations for 2007.
- The Company reaffirmed that it would like to simplify and strengthen its balance sheet, through possible restructuring of its convertible preferred and possible additional equity. Management stated that its looks to a debt to total capital ratio in the range of 20-35 percent over time, and that it looks to have the balance sheet strength to do additional tuck-in acquisitions.
- The Company reaffirmed its expectation for continuing organic revenue growth of between 15-18 percent, with the opportunity to move higher beyond 2008 driven by new product deployment.
- The Company reaffirmed its expectation to exit 2008 with an Ebitda margin of at least 30 percent, moving to between 33-35 percent beyond that, based on contribution from new products.
Analyst Day presentation slides are available in the Investor section of the Company's web site at www.orcc.com.
About Online Resources
Online Resources powers web-based financial services for 2700 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 enduser
adoption. The Company serves more than 10 million end-users and processes $100 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.
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.
Media Contact: Beth Halloran
Mng. Dir., Corporate Communications
703.653.2248
bhalloran@orcc.com
Investor Contact: Catherine Graham,
EVP & Chief Financial Officer
703.653.3155
cgraham@orcc.com |
