eFunds Corporation (NYSE: EFD), a leading provider of risk management, electronic payments and related outsourcing solutions, today reported first quarter net revenue of $114.2 million.
This amount represents an 8% improvement over the net revenues of $105.7 million reported by the Company's core operating segments during the first quarter of 2004. Overall, revenues declined by 19% from the $140.9 million reported for the first quarter of 2004 as a result of the sale of the Company's ATM deployment business in November 2004.
Operating income increased to $16.8 million, or 15% of net revenue, as compared to operating income of $14.0 million, or 10% of net revenue, reported in the first quarter of 2004. First quarter net income was $13.2 million, or $0.26 per diluted share, compared to net income of $9.4 million, or $0.19 per diluted share, reported for the same quarter in 2004.
"During the quarter, we saw revenue growth in our EFT processing and business process outsourcing businesses and steady improvement in the performance of our risk management operations. Overall, we feel that our first quarter results reflect solid progress towards meeting our full year financial and operational objectives," said Paul F. Walsh, Chairman and Chief Executive Officer.
"We also executed against our stated strategy to deploy capital towards complimentary acquisitions and our share repurchase program," stated Walsh. "We acquired ClearCommerce Corporation, a provider of fraud prevention and payment processing solutions having particular application to card-not-present and online transactions. We executed an agreement to acquire India Switch Company, an India based provider of ATM management and processing services. This transaction, which is expected to close in the second quarter, will provide eFunds with a strong foothold into the emerging electronic payments market in India. Yesterday, we executed an agreement to acquire substantially all of the assets of National Check Protection Services, a provider of new account verification and employment screening services for financial services companies."
The Company also announced that it has completed its $100 million share repurchase program. The Company bought back approximately 4.6 million shares pursuant to this initiative.
Change to Reporting Segments
The Company's segment reporting was revised during the first quarter to reflect the modifications in the Company's cost allocation structure. Operating expenses have been reclassified based on an assessment of the Company's technology and overhead costs and the realignment of these costs with the segments that receive the primary benefit from the use of the related resources. Prior year segment data has been reclassified to reflect this new presentation, which is detailed in the accompanying schedules.
The Company expects full year net revenue for 2005 to increase approximately 8 to 12 percent on a combined organic and acquisitive basis over the $431 million baseline revenue achieved across the Company's three remaining segments following the sale of its ATM portfolio in November 2004. The Company expects net income to increase 17 to 22 percent in 2005 over net income of $40.8 million reported in 2004 and to generate operating cash flow in 2005 consistent with the level achieved in 2004, excluding the one-time payment of the tax liabilities associated with the ATM Portfolio sale.
The foregoing expectations reflect the following assumptions:An effective annualized tax rate of approximately 33 percent; andCash outlays for capital expenditures and product development of approximately $40 million.Download the document now 43.9 kb (Adobe Acrobat Document)