Online Resources Corporation (Nasdaq: ORCC), a leading provider of online financial services, today announced that John Dorman, co-chairman of the company's Board of Directors, has been named interim chief executive officer.
He succeeds president and chief operating officer Raymond T. Crosier, who had been serving as interim chief executive officer while the company conducts a search for a permanent CEO. Mr. Crosier has resigned from the company, effective immediately, to pursue other interests.
Mr. Dorman will continue to serve as Co-Chairman of the Board along with independent director Barry D. Wessler, and will also continue to lead the Board's Governance Committee and the Board's search for a permanent CEO.
"Ray Crosier accomplished a great deal during his tenure at Online Resources, and I would like to thank him for his contributions to the company over the past 14 years and wish him well for the future," said Mr. Dorman. "We are pleased to be moving toward the completion of our search for a permanent CEO, having met in recent weeks with a list of strong candidates with established track records of driving revenue and profitability, and we look forward to welcoming a new CEO with the experience and expertise to position the business for long-term success."
Organizational Changes
Online Resources also announced that it has completed the following organizational changes:
* The company's community bank and credit union division and large bank and partnership bill pay division have been merged into a new Banking Services group consisting of sales, client services, marketing, product and professional services functions. Banking Services will be headed by Ronald J. Bergamesca, Executive Vice President.
* The company's eCommerce Services group will focus exclusively on sales, client services, marketing and product functions and will continue to be led by Robert R. Craig, Executive Vice President.
* The Technology and Operations functions for Banking and eCommerce each have been centralized into new enterprise-wide organizations, led by Mark Solan, Senior Vice President, and Sheila Narayan, Executive Vice President, respectively.
* The Corporate Systems Operations group, headed by William J. Michael, Senior Vice President, will continue as an enterprise-wide data center and telecommunications group.
Online Resources expects to incur expenses of approximately $1.3 million in the second quarter related to the restructuring. While the company expects these charges to be offset by compensation and other cost savings during the remainder of 2010, the cost savings are being reinvested in expansion of sales and client services staffing, enhanced implementation capabilities and key product development efforts.
"We believe these organizational changes, which are designed to increase our focus on generating new sales, retaining and better serving existing clients, optimizing partner relationships and delivering operational excellence, are important steps in helping to position Online Resources for growth," said Mr. Dorman. "I would like to thank the entire Online Resources team for their efforts as we continue to identify and implement new ways to grow revenue and earnings while delivering on the day-to-day business of helping our clients grow and succeed."
Updated Outlook for First Quarter 2010
Due to higher-than-forecasted seasonal increases in eCommerce transactions and payment amounts, Online Resources expects to report first quarter 2010 revenue, adjusted Ebitda and core net income results that are at or above the high end of the guidance ranges the company previously provided. The higher-than-expected earnings measures were achieved despite the company's decision to move to paying annual incentive compensation in cash, rather than in equity as has been its practice and was contemplated when first quarter guidance was given. This change resulted in lowering adjusted Ebitda by approximately $600,000 and core net income by approximately $350,000, compared to expected results if this compensation had continued to be paid in equity.
The factors mentioned above relate to seasonal patterns that are specific to and typical in the company's first quarter, but the magnitude of which are unpredictable. The company does not expect subsequent quarters to outperform its previously held expectations.