S1 reports Q3 net income rise

Source: S1

S1 Corporation (Nasdaq:SONE), a leading global provider of payments and financial services software solutions, today announced financial results for the third quarter and nine months ended September 30, 2011:

Financial Results and Operating Highlights

-- Total revenue in the third quarter of 2011 increased 15% to $61.5 million from $53.7 million in the third quarter of 2010. Total revenue in the nine months ended September 30, 2011 increased 17% to $182.7 million from $156.6 million in the nine months ended September 30, 2010. This increase was due primarily to growth in Software licenses, Professional services, and Support and maintenance revenue in our Payments and Banking: Large FI segments and higher Hosting revenue in our Banking: Community FI segment.
-- U.S. GAAP net income was $8.0 million, or $0.14 per share (diluted), in the third quarter of 2011 compared with U.S. GAAP net income of $0.9 million, or $0.02 per share (diluted), in the third quarter of 2010. GAAP earnings were $10.2 million, or $0.18 per share (diluted), in the
nine months ended September 30, 2011 compared with U.S. GAAP net loss of $1.9 million, or ($0.04) per share (diluted), in the nine months ended September 30, 2010. These figures include the receipt of an $11.9 million fee associated with the termination of the merger agreement with Fundtech Ltd. ("Fundtech") in September 2011, expenses related to the ACI Worldwide, Inc. ("ACI") and Fundtech transactions of $3.0 million in the third quarter of 2011 and $4.8 million in the nine months ended September 30, 2011, and stock based compensation expense of $2.4 million and $0.2 million in the third quarter of 2011 and 2010, respectively, and $4.9 million and $1.4 million in the nine months ended September 30, 2011 and 2010, respectively.
-- Adjusted EBITDA was $5.9 million in the third quarter of 2011 compared with $3.6 million in the third quarter of 2010. Adjusted EBITDA in the nine months ended September 30, 2011 was $20.2 million compared with $9.6 million in the nine months ended September 30, 2010. Adjus0. Adjusted EBITDA does not include stock-based compensation expense or expenses
related to the ACI and Fundtech transactions and is described below and reconciled to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP in Tables 4, 5, 6 and 7, provided below.
-- Net cash provided by operating activities was $29.8 million in the nine months ended September 30, 2011 compared with $26.1 million in the nine months ended September 30, 2010. The Company had cash and cash equivalents of $88.1 million at September 30, 2011.
-- Revenue backlog, which is discussed in further detail below, in the Company's Payments and Banking: Large FI segments increased 15% to $65.2 million as of September 30, 2011 compared with $56.7 million as of September 30, 2010.
-- Sales bookings in the Company's Payments and Banking: Large FI segments were $54.6 million during the six months ended September 30, 2011, a 6% decrease from $58.0 million during the six months ended September 30, 2010.
-- On October 3, 2011, the Company entered into a Transaction Agreement with ACI and its wholly owned subsidiary, Antelope Investment Co. LLC, pursuant to which ACI will acquire the Company, subject to customary closing conditions.
-- The Company reaffirmed its full year 2011 financial guidance of $240 to $250 million in revenue and $27 to $31 million in Adjusted EBITDA.

"I am pleased with our performance in the third quarter," said Johann Dreyer, Chief Executive Officer, S1 Corporation. "Despite significant distractions during the quarter, we posted solid results and are reaffirming our full year 2011 financial guidance. Our employees have done an outstanding job of focusing on our customers during this time and I am very proud of them. We believe the proposed combination with ACI will create a leader in the global enterprise payments industry and we are working diligently to close the transaction with ACI as quickly as possible." 

Read the full statement here.

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