Financial Highlights

• Revenues of $78.0 million versus $72.5 million, an 8 percent increase compared to the third quarter of fiscal 2004
• Recurring revenues of $46.3 million, or 59 percent of total revenues, compared to $45.5 million, or 63 percent of total revenues, for the third quarter of fiscal 2004
• Operating income of $15.2 million versus $13.0 million, a 17 percent increase compared to the third quarter of fiscal 2004
• Operating cash flow of $18.0 million versus $23.1 million, a 22 percent decrease compared to the third quarter of fiscal 2004
• Diluted earnings per share of $.26 versus $.49 in the third quarter of fiscal 2004, which included a net one-time tax benefit of $.28 per share
• Twelve-month revenue backlog of $223.3 million versus $232.8 million, a 4 percent decrease compared to the third quarter of fiscal 2004
• Company repurchased 959,746 shares for approximately $21.2 million during the third quarter of fiscal 2005
• Company raises revenue and diluted earnings per share guidance for fiscal 2005

Results for the quarter include revenues of $78.0 million, operating income of $15.2 million, net income of $10.0 million, diluted earnings per share of $.26, and operating cash flow of $18.0 million.

During the quarter, ACI Worldwide added six customers. Highlights include the signing of Smart Chip Manager (SCM) for a national identity program in a Middle Eastern country; the addition of four ACI Proactive Risk Manager (PRM) customers in the U.S., Latin America and Spain, bringing the Company's PRM customer count to over 90; the licensing of 14 capacity upgrades which included three top 500 financial institutions and a major international payments network; and new applications with seven existing customers including BASE24-es to a top 20 financial institution for a pan-European ATM deployment solution.

"We are pleased with our strong financial performance during the quarter," said Philip G. Heasley, CEO. "These results, combined with new customer signings and our planned acquisition of S2 Systems, provide for continued profitable growth for TSA. We're also celebrating ACI Worldwide's 30-year anniversary this year, and we are pleased to recognize more than 30 of our customers who have been with us for 20 or more years. Our success has been made possible by these longstanding customer relationships."

Third Quarter Results

The Company signed ten new customers during the third quarter. ACI Worldwide added six customers. Highlights include the signing of Smart Chip Manager (SCM) for a national identity program in a Middle Eastern country; the addition of four ACI Proactive Risk Managerl (PRM) customers in the U.S., Latin America and Spain, bringing the Company's PRM customer count to over 90; the licensing of 14 capacity upgrades which included three top 500 financial institutions and a major international payments network; and new applications with seven existing customers including BASE24-esg to a top 20 financial institution for a pan-European ATM deployment solution.

Insession Technologies added three customers. Highlights include the signing of additional applications with seven customers and a term extension for its ICEI solution with a top 20 U.S. financial institution; the signing of a new customer for its transactional data management software solution through its distributor relationship with GoldenGate Software, Inc., and the signing of two new customers for its management tool for NonStop SQL/MP databases through its distributor relationship with Merlon Software Company.

IntraNet Worldwide added one customer, licensing its money transfer solution to a top 20 U.S. financial institution. IntraNet also licensed two capacity upgrades and entered into 13 service contracts with existing customers.

Revenues detail for the quarter is as follows: the America's revenues were $42.5 million, as compared to $40.2 million for the third quarter of fiscal 2004. The America's revenues consisted of U.S. revenues of $31.6 million and America's international revenues of $10.9 million, as compared to $30.1 million and $10.1 million, respectively, for the same period last year. Revenues for the Europe/Middle East/Africa region were $27.6 million, as compared to $23.0 million for the third quarter of fiscal 2004. Asia-Pacific's revenues were $7.9 million, as compared to $9.4 million for the third quarter of 2004. Total international revenues were $46.4 million, or 60 percent of total revenues, as compared to $42.4 million, or 58 percent of total revenues, for the third quarter of fiscal 2004.

Revenues were comprised of software license fees of $37.7 million, maintenance fees of $24.9 million, and services of $15.4 million. Monthly license fees of $18.5 million, maintenance fees of $24.9 million and $2.9 million of services (facilities management fees) represent recurring revenue.

Operating income was $15.2 million, with an operating margin of 19.5 percent. This compared to operating income of $13.0 million, with an operating margin of 17.9 percent, for the same period last year. Net income was $10.0 million, or $.26 per diluted share, compared to $18.7 million, or $.49 per diluted share in the third quarter of fiscal 2004, which included a net one-time tax benefit of $10.6 million, or $.28 per diluted share.

Operating cash flow was $18.0 million compared to operating cash flow of $23.1 million in the third quarter of fiscal 2004. During the quarter, the Company repurchased 959,746 shares of its common stock for approximately $21.2 million. Through June 30, 2005 the Company has repurchased a total of 1,310,810 shares for approximately $29.3 million. Total shares outstanding were 37.2 million as of June 30, 2005. The Company’s cash, cash equivalents and marketable securities as of June 30, 2005 were $189.1 million.

Year-to-Date Results

Year-to-date revenues through June 30, 2005 totaled $234.2 million, as compared to $223.1 million for the same nine-month period in fiscal 2004, an increase of 5 percent. Operating income was $53.3 million as compared to $42.5 million for the same period last year, an increase of 25 percent. Net income was $34.1 million, or $.88 per diluted share, compared to $36.7 million, or $.97 per diluted share, which included a net one-time tax benefit of $10.6 million, or $.28 per diluted share. Operating cash flow was $48.5 million, as compared to $44.7 million for the same period last year, an increase of 9 percent.

As of June 30, 2005, the Company's backlog was $223.3 million, as compared to $232.8 million last year. The recurring portion of backlog, which includes monthly license fees, maintenance fees and facilities management fees, amounted to $160.3 million. The non-recurring portion of backlog, which totaled $63.0 million, includes other software license fees and services.

The Company announced on June 29, 2005 its planned acquisition of S2 Systems, a global provider of electronic payments and network connectivity software. S2 will be integrated into TSA's existing businesses, and is expected to be accretive to TSA’s financial performance in fiscal 2006. "We look forward to closing the planned acquisition of S2 which will increase our global customer base as well as add to our team of talented employees," said Heasley. "We believe we are well positioned as the gold standard for single-message format payments and we expect to build on our market-leading franchise."

The Company has raised its revenue estimate for fiscal 2005 from a range of $296 million to $312 million to a range of $306 million to $314 million. The Company has raised its diluted EPS estimate from a range of $.97 to $1.12 to a range of $1.06 to $1.15.Download the document now 222 kb (Adobe Acrobat Document)