Online Resources Corporation, a leading provider of online financial services, today reported financial and operating results for the three months and full year ended December 31, 2009. For the fourth quarter:
- Revenue was $38.2 million, compared to $37.2 million in the fourth quarter of 2008.
- Adjusted Ebitda, a non-GAAP measure that adjusts Ebitda for equity compensation expense and other expense was $10.2 million, compared to $9.6 million in the prior year period.
- Net loss available to common stockholders was $1.1 million, or $0.04 per share, compared to net income available to common stockholders of $1.3 million or $0.04 per diluted share in the fourth quarter of 2008.
- Core net income, a non-GAAP measure, was $1.8 million, or $0.06 per diluted share, compared to $2.0 million, or $0.07 per diluted share, in the same quarter of 2008.
Excluding a tax provision charge of $0.9 million related to equity compensation, as well as costs of $0.4 million related to the departure of the Company's former CEO (not including an equity compensation benefit of $0.2 million), adjusted Ebitda, net loss available to common stockholders per share and core net income per diluted share would have been $10.7 million, $0.00 and $0.10, respectively.
For the full year 2009, Online Resources reported revenue of $151.9 million, compared to $151.6 million in 2008; adjusted Ebitda of $37.7 million, compared to $32.7 million in 2008; net loss available to common stockholders of $0.14 per share, compared to $0.24 per share in 2008 and core net income of $0.29 per diluted share, compared to $0.24 per share in 2008.
"Despite a revenue environment that remained challenging, we closed the year with strong new client signings, particularly for our customizable Internet banking products. We also forged several new distribution partnerships that will give us broader access to the small financial institution market," said Raymond T. Crosier, the Company's president, chief operating officer and interim chief executive officer. "In addition, we achieved our goals for earnings and cash flow for the quarter and the year, which enabled us to sito significantly accelerate the pace of reducing our senior debt."
On December 1, 2009, the Company prepaid $15 million of the senior secured debt it incurred to finance the acquisition of Princeton eCom. Of the $85 million originally borrowed, $48.8 million now remains outstanding.
"During the current leadership transition, the Board is very pleased to have deep operating expertise within the Company that allows us to continue to drive the business and maintain our focus," said John Dorman, co-chairman of the Company's Board of Directors. "We are also working actively with management to thoroughly examine all aspects of the business for new ways to drive additional growth and profitability. Meanwhile, the Board has made excellent progress in identifying CEO candidates with proven track records of driving revenue and profitability and expects to be able bring this process to a conclusion quickly."
Outlook for First Quarter 2010
Online Resources provided the following guidance for the first quarter of 2010. These statements are forward-looking, and actual results may differ materially.
- Revenue for the first quarter is expected to be between $35.5 and $37.5 million.
- Adjusted Ebitda(1,2) for the quarter is expected to be between $7.4 and $8.7 million.
- Core net income(1,3,4,5) is expected to be between $0.04 and $0.06 per share.
The adjusted Ebitda and core net income guidance excludes any charges that may be incurred in the first quarter related to the departure of the Company's former CEO. This may include litigation costs as the parties were not able to reach a financial settlement.
(1) The Company uses non-GAAP (Generally Accepted Accounting Principles) financial measures, including adjusted Ebitda and core net income, to evaluate performance and establish goals. It believes that these measures are valuable to investors in assessing the Company's operating results when viewed in conjunction with GAAP results.
(2) Adjusted Ebitda is defined as earnings before interest, taxes, depreciation and amortization, preferred stock accretion, other (income) expense and equity compensation expense.
(3) Core net income is defined as net income available to common stockholders before, on a pre-tax basis, the amortization of acquisition-related intangible assets, equity compensation expense, income tax benefit from the release of valuation allowance, income (costs) related to the fair market valuation of certain derivatives and mark-to-market investments, preferred stock accretion related to the redemption premium and all other non-recurring charges. Some or all of these items may not be applicable in any given reporting period.
(4) Excludes estimates for amortization of acquisition-related intangible assets of $1.6 million, equity compensation expense of $1.0 million and preferred stock accretion related to the redemption premium of $0.4 million.
(5) Core net income per share calculated using estimated fully diluted shares outstanding of 32.5 million.
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