S1 Corporation (Nasdaq:SONE), a leading global provider of payments and financial services software solutions, today announced financial results for the fourth quarter and the full year ended December 31, 2009:
- Total revenue in the fourth quarter of 2009 increased one percent to $59.5 million from $58.6 million in the fourth quarter of 2008. Total revenue for the year ended December 31, 2009 increased five percent to $238.9 million from $228.4 million in 2008.
- GAAP earnings were $9.9 million or $0.18 per share (diluted) in the fourth quarter of 2009 compared to GAAP earnings of $5.3 million or $0.10 per share (diluted) in the fourth quarter of 2008. GAAP earnings were $30.4 million or $0.55 per share (diluted) for the year ended December 31, 2009, a $0.17 increase over GAAP earnings of $21.9 million or $0.38 per share (diluted) in 2008. These figures include stock-based compensation expense of $1.2 million and $3.5 million in the fourth quarters of 2009 and 2008, respectively, and $1.6 million and $8.1 million for the years ended December 31, 2009 and 2008, respectively.
- Adjusted EBITDA in the fourth quarter of 2009 was $12.5 million compared to $10.5 million in the fourth quarter of 2008. Adjusted EBITDA for the year ended December 31, 2009 was $46.4 million compared to $43.0 million in 2008. Adjusted EBITDA does not include stock-based compensation expense and is described below and reconciled to U.S. GAAP Net income in Tables 4, 5 and 6.
- Total revenue from international operations in the fourth quarter of 2009 increased eight percent to $16.8 million from $15.5 million in the fourth quarter of 2008. Total revenue from international operations for the year ended December 31, 2009 increased seven percent to $68.1 million from $63.8 million in 2008.
- Excluding the State Farm relationship, the Company's revenue and Adjusted EBITDA grew 8% and 21%, respectively, in 2009.
- Under a previously announced stock repurchase program, the Company repurchased 752 thousand shares of its common stock for $4.6 million during the fourth quarter of 2009, and 1.5 million shares for $9.6 million durruring the year ended December 31, 2009. As of December 31, 2009, the Company had $61.8 million in cash and cash equivalents.
- On March 4, 2010, the Company completed the acquisition of PM Systems Corporation (PMSC), a provider of internet banking, bill pay and security solutions for credit unions in the United States, for approximately $28.9 million in cash, net of cash acquired. PMSC currently serves approximately 900,000 Internet banking subscribers through its credit union clients representing approximately 4.4 million members. The acquisition was funded from the Company's available cash.
- The Company expects PMSC to generate revenue and Adjusted EBITDA of approximately $11.8 million and $3.5 million, respectively, during calendar year 2010. Net of transaction costs and other adjustments, the Company expects PMSC to generate revenue and Adjusted EBITDA of approximately $9.6 million and $2.4 million, respectively, for the Company during the remainder of 2010.
- In 2010, after giving effect to the PMSC acquisition, the Company expects to generate revenue of $248 to $254 million, Adjusted EBITDA of $43 to $47 million, and Cash earnings per share of $0.51 to $0.57. Excluding the State Farm relationship and excluding the acquisition of PMSC, at the mid-point of the Company's guidance, the Company expects revenue and Adjusted EBITDA to increase approximately 7% and 14%, respectively, in 2010 as compared to 2009.
"The Company performed well in 2009 in a difficult marketplace," commented Johann Dreyer, Chief Executive Officer of S1. "As we look ahead, we expect that market conditions will remain challenging in 2010. However, we continue to see excellent sales opportunities globally, particularly with our payments and cash management offerings. As our relationship with State Farm winds-down through the end of 2011, we will be focusing on replacing the professional services revenue generated from that engagement with software license, subscription and other recurring revenue. We will also continue to focus on making investments in product development and customer satisfaction initiatives to further position the Company for sustained growth and success."
"We are excited to welcome PMSC to the S1 family," Dreyer added. "PMSC has built an extremely impressive reputation for providing the highest quality products, services and customer support to credit unions in the U.S. With affordable, best-of-breed technology and a deep understanding of the opportunities and challenges credit unions are facing, PMSC will help S1 more effectively serve the unique needs of this marketplace. In addition, PMSC's recurring revenue model will be a nice addition to our financial profile."
Raymond James & Associates, Inc. served as the Company's financial advisor in connection with the rendering of a fairness opinion as to the acquisition of PMSC.