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Metavante Q2 revenue rises

23 July 2009  |  1963 views  |  0 Source: Metavante

Metavante Technologies (NYSE:MV) today reported second quarter 2009 revenue of $440.3 million, up 4 percent compared to $424.8 million in the second quarter of 2008.

Segment operating income for the second quarter of 2009 was $140.4 million compared to $117.9 million in the second quarter of 2008. Segment operating margin for the second quarter of 2009 improved to 31.9 percent, an increase of 4.1 percentage points compared to the second quarter of 2008.

Net income for the second quarter of 2009 increased 41 percent to $51.9 million, or $0.43 per share, compared to net income of $36.9 million, or $0.31 per share, in the second quarter of 2008. Cash net income for the second quarter of 2009 increased 33 percent to $58.3 million, or $0.48 per share, compared to cash net income of $43.7 million, or $0.36 per share, in the second quarter of 2008.

Cash provided by operating activities for the first half of 2009 was $170.5 million compared to $148.3 million for the first half of 2008. Free cash flow for the first half of 2009 was $107.8 million compared to $82.5 million for the first half of 2008.

Commenting on the results, Frank R. Martire, chairman and chief executive officer, said, "The results for the second quarter again demonstrated the strength of our business model and our ability to execute in what continues to be a very challenging environment for both us and our clients. This quarter's performance also reflects our proactive efforts to manage our cost structure and deliver strong profitability."

Cash net income (including per share amounts) and free cash flow are non-GAAP financial measures. These measures should not be considered substitutes for GAAP financial measures. See the attachments to this release under "Non-GAAP Financial Measures" for an explanation of these measures and reconciliations to GAAP financial measures.

Financial Solutions Group (FSG)

FSG's second quarter 2009 revenue was $177.4 million, an increase of 8 percent compared to $164.2 million in the second quarter of 2008. Revenue growth in the second quarter of 2009 was driven by higher core processessing and eBanking revenue. Segment operating income for the second quarter of 2009 was $52.6 million compared to $38.6 million in the second quarter of 2008. The increase in segment operating income was due to the benefit of advantageous revenue mix and cost productivity. Segment operating margin was 29.6 percent in the second quarter of 2009 compared to 23.5 percent in the second quarter of 2008.

Payment Solutions Group (PSG)

PSG's second quarter 2009 revenue was $262.8 million, an increase of 1 percent compared to $260.6 million in the second quarter of 2008. Revenue growth in the second quarter of 2009 was driven by transaction-based businesses. Segment operating income for the second quarter of 2009 was $87.8 million compared to $79.3 million in the second quarter of 2008. The increase in segment operating income was due to cost productivity and the benefit of advantageous revenue mix. Segment operating margin was 33.4 percent in the second quarter of 2009 compared to 30.4 percent in the second quarter of 2008.

Corporate/Other

Corporate/other was $18.4 million in the second quarter of 2009 compared to $26.4 million in the second quarter of 2008. The second quarter of 2009 was lower due to a favorable ruling related to a contractual dispute with a former client and cost productivity.

Income Taxes

The effective tax rate in the second quarter of 2009 was 36.9 percent compared to 37.6 percent in the second quarter of 2008. The company continues to expect an effective tax rate of 37 percent for the full year 2009.

Outlook

Relative to the previous guidance and considering the performance in the first half of 2009, the company now expects organic revenue growth at the lower end of its previous guidance range of 3 percent to 4 percent. The company also expects diluted earnings per share growth to exceed the high end of its previous guidance range of 12 percent to 16 percent. This full year 2009 outlook applies to the company's performance as an independent company. The company does not intend to provide more specific guidance for 2009 due to its pending transaction with Fidelity National Information Services, Inc.

Transaction with Fidelity National Information Services, Inc. (FIS)

On April 1, 2009, FIS and Metavante announced that the boards of directors of both companies approved a definitive agreement under which FIS will acquire Metavante. The transaction is subject to approval by FIS and Metavante shareholders, receipt of regulatory approvals and the satisfaction of customary closing conditions. The meetings of Metavante and FIS shareholders to vote on the transaction are scheduled for September 4, 2009. FIS and Metavante expect to complete the transaction in the fourth quarter of 2009.

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