Corillian (NASDAQ:CORI), the top provider of online banking, payment and security solutions to the financial services industry, today reported financial results for the fourth quarter and year ended December 31, 2006.
Revenues for the fourth quarter were $16.5 million, compared to $15.6 million for the third quarter of 2006 and $13.8 million for the fourth quarter of 2005. Net income for the fourth quarter was $779,000, resulting in diluted earnings per share of $0.02, compared to net income of $590,000 for the third quarter of 2006, resulting in diluted earnings per share of $0.01. This compares to a net loss of $39,000 for the fourth quarter of 2005, resulting in diluted earnings per share of ($0.00).
Non-GAAP net income, as described below, for the fourth quarter was $2.1 million, resulting in non-GAAP diluted earnings per share of $0.05. This compares to non-GAAP net income of $1.5 million in the third quarter of 2006, resulting in non-GAAP diluted earnings per share of $0.03 and non-GAAP net income of $384,000 in the fourth quarter of 2005, resulting in non-GAAP diluted earnings per share of $0.01. A reconciliation of GAAP results to non-GAAP results is provided as part of this press release.
Revenues for 2006 were $61.0 million, compared to $49.2 million for 2005, an increase of 24 percent. Net loss for 2006 was $1.1 million, resulting in a diluted net loss per share of ($0.02). This compares to net income of $2.7 million in 2005, resulting in diluted earnings per share of $0.06. Non-GAAP net income for 2006 was $3.2 million, resulting in diluted earnings per share of $0.07. This compares to non-GAAP net income of $3.3 million in 2005, resulting in non-GAAP diluted earnings per share of $0.08.
"We're very pleased with our progress in 2006," said Alex Hart, president and CEO of Corillian. "Revenue was up 24 percent over 2005, the heavy investment cycle that had suppressed our earnings began to normalize during the second half of the year, and we ended the year with backlog at $53.2 million, an all-time high. I'm especially pleased that both current revenue and longer-term recurring revenue backlog increased during the second half of the year. The dual strategy of increasing the number of products and services we deliver to big banks and productizing our industry-leading solutions for smaller financial institutions is working well. We look forward to continued improvement this year and we're excited about the opportunities that lie ahead."
- Corillian signed two new consumer banking deals in the fourth quarter, including Bremer Bank, a $6.6 billion regional financial services company headquartered in St. Paul, Minn. Bremer will leverage Corillian Consumer Banking, Corillian Payments, Corillian Family Banking, Corillian Personal Money Manager and Corillian Intelligent Authentication(TM) to build on the bank's existing online banking and payment efforts.
- During the fourth quarter, Corillian announced the availability of Corillian Member Advantage, a rapidly-deployable ASP online banking solution for credit unions. Corillian Member Advantage provides credit unions of all sizes with a competitively priced online banking experience that offers more control and access to the features and best practices utilized by the largest banks in the country.
- Suncorp, a leading Australian diversified financial services organization offering banking, insurance and wealth management products, expanded its online banking relationship to include Corillian Business Banking, Personal Money Manager and Corillian Intelligent Authentication.
- During the fourth quarter, Corillian signed the first customer for its new end-to-end bill payment solution. This solution leverages the Corillian Payments Warehouse and the payment processing services of Corillian's bill payment processing partners.
- Corillian signed 10 new deals for its Corillian Intelligent Authentication product during the fourth quarter. Corillian signed 38 new customers for Corillian Intelligent Authentication in 2006, including 12 of the top 100 U.S. banks - one of the most successful new product launches in the history of the company. Corillian currently has approximately 50 leading financial institutions that have selected Corillian Intelligent Authentication as the solution of choice to deliver strong online authentication services to their online banking users.
- During the fourth quarter, Corillian launched TrueStamp, a new Web site verification technology embedded in Corillian Intelligent Authentication v2.1, the next version of the company's strong authentication solution. TrueStamp adds an additional component of security to a user's online banking experience by securely verifying the banking site to the user before they ever have to enter sensitive information such as a user name and password.
- In 2006, Corillian received certification under the new international security standard ISO:27001, which replaced the British Standard BS:7799 in October 2005. ISO:27001 is the most widely recognized international framework and standard for developing and certifying a company's security management system. Corillian is the first online banking company to receive the certification and was among a select group of only eight organizations in the U.S. to receive this international honor.
The company anticipates that first quarter 2007 revenues will be in the range of $14.5 to $16 million and GAAP EPS will range from a net loss of ($0.04) to ($0.01) per diluted share. Per share non-GAAP results are expected to range from a loss of ($0.02) to a profit of $0.01. Corillian expects lower profitability in the first quarter due primarily to seasonally higher payroll-related costs and a change in the mix of work related to subscription-based projects. Corillian expects continued improvement in profitability throughout 2007, consistent with our performance in 2006.
Reconciliation of GAAP results to non-GAAP Results
Corillian provides non-GAAP operating results as a supplement to its GAAP financial results. Management believes that non-GAAP results provide investors with a representation of Corillian's core operating performance that can be helpful in assessing future growth.
Corillian's non-GAAP results exclude the following charges and benefits from Corillian's statements of operations when applicable:
- Stock-based compensation
- Amortization of intangible assets
- Restructuring-related charges
- Merger-related charges
- Impairment charges
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