eFunds Corporation (NYSE:EFD), a leading provider of risk management, electronic payments, global outsourcing solutions and ATM management services, reported today its financial results for the three and nine months ended Sept. 30, 2004. Net income for the third quarter of 2004 was $10.7 million, or $0.22 per diluted share, compared with net income of $9.1 million, or $0.19 per diluted share, reported in the third quarter of 2003. Reported operating income increased to $15.2 million, or 10.9 percent of net revenue, as compared to operating income of $12.2 million, or 9.1 percent of net revenue, reported in the third quarter of 2003. Net revenue for the third quarter of 2004 increased 5.2 percent to $140.1 million, as compared to net revenue of $133.1 million recorded in the third quarter of 2003.
For the nine months ended Sept. 30, 2004, eFunds reported net income of $29.5 million, or $0.60 per diluted share, compared with net income of $18.8 million, or $0.40 per diluted share, reported in the first nine months of 2003. Reported operating income for the first nine months of 2004 was $42.1 million, or 10 percent of net revenue, as compared to $25.7 million, or 6.5 percent of net revenue, for the same period in the prior year. Net revenue increased 6.3 percent to $421.7 million, as compared to $396.6 million reported in the first nine months of 2003.
As of Sept. 30, 2004, the Company had $202.1 million in cash and cash equivalents. Capital expenditures for the first nine months of 2004 were approximately $21 million, compared with $15 million for the same period of 2003, primarily due to investments in the Company's disaster recovery and business continuity capabilities.
"We are pleased with our third quarter results, especially the year-to-date revenue growth achieved across all three of our primary operating segments," stated Paul F. Walsh, Chairman and Chief Executive Officer. "Our balance sheet remains exceptionally strong."
"Beyond this quarter's solid operating results, we are also very excited about the previously-announced transaction to sell our ATM portfolio to TRM Corporation. The consummation of this transaction will position us to focus on our higher-growth and higher-margin opportunities, while expanding our global footprint," added Walsh.
The Company expects its three core business segments -- Electronic Payments, Risk Management and Global Outsourcing -- will achieve full year net revenues of approximately $425 million to $435 million. Full year 2004 revenues for the ATM management segment will depend upon the consummation date of the ATM portfolio sale. This segment had revenues of $103 million for the nine-month period ended September 30, 2004. The Company expects full year diluted earnings per share to increase 25 to 30 percent in 2004 over the diluted earnings per share of $0.61 reported in 2003. The Company expects to generate operating cash flows in 2004 in line with the level achieved in 2003. Capital expenditures are expected to be approximately $30 million to $35 million for 2004.