TSA restructures, merges ACI, Insession and IntraNet

Source: Transaction System Architects

Transaction Systems Architects, Inc. (Nasdaq:TSAI), today announced a restructured, highly focused organization, combining its three business units into one operating unit under the ACI Worldwide name.

ACI Worldwide had been TSA's largest business unit, with nearly 78 percent of the Company's revenues over the past twelve months.

"In my seven months with the Company, we have been working hard with the Board of Directors to assess how we best organize to leverage the market opportunities in front of us," said Philip Heasley, Chief Executive Officer. "In examining the market, our opportunities and our organization, we felt that creating a single operating unit would give us the best opportunities for focus, operating efficiency and strategic acquisition integration."

"As the financial services market moves towards more convergence of electronic payments, TSA is uniquely positioned to serve that trend, with solutions for consumer payments, corporate payments and heterogeneous systems connectivity and management," added Heasley. "The assets of ACI Worldwide, IntraNet Worldwide and Insession Technologies represent market-leading solutions for supporting enterprise-level electronic payments needs. We believe this new organization will position us to better focus these assets to deliver end-to-end payments solutions to banks, retailers and payment processors."

ACI Worldwide will be the Company's market brand and global footprint. Staff from the IntraNet Worldwide and Insession Technologies units will be integrated into the new organization, to be organized into the following line and staff functions:

1. Line organizations

  • Product, to be headed by Mark Vipond. Mr. Vipond is a 20-year veteran with the Company, and served previously as President of ACI Worldwide.
  • Americas, to be headed by Anthony Parkinson. Mr. Parkinson is a 21-year veteran with the Company, and served previously as President of Insession Technologies.
  • Europe, Middle East and Africa (EMEA), to be headed by Richard Launder. Mr. Launder is a 12-year veteran with the Company, and continues in his role as EMEA channel head.
  • Asia/Pacific (A/P), to be headed by Donald McLarty. Mr. McLarty is a 12-year veteran with the Company, and continues in his role as A/P channel head.
  • A new "Software as a Service" group, with a new leader to be identified.

2. Staff organizations:

  • Technology Strategy, to be headed by Charles Linberg. Mr. Linberg is an 18-year veteran with the Company, and continues in his role as Chief Technology Officer.
  • Marketing and Business Development, to be headed by Jeffrey Hale. Mr. Hale is an 18-year veteran with the Company, and previously served as Chief Marketing Officer for ACI Worldwide.
  • Finance, to be headed by David Bankhead. Mr. Bankhead has been with the Company since 2003, and continues in his capacity as Chief Financial Officer.
  • Legal, to be headed by Dennis Byrnes. Mr. Byrnes has been with the Company since 2003, and continues in his capacity as General Counsel.
  • Administration, to be headed by David Morem. Mr. Morem joined the Company in 2005, previously serving in operational roles at GE, Bank One and US Bank.

Each organization will be tasked with supporting the complete range of the Company's products and services, either globally or in their geographic theater. The new "Software as a Service" group will be expected to develop new businesses and market-entry vehicles where the Company sells a service directly to end-user banks, retailers or processors. The Company's proven software assets and expertise are expected to give this new group the leverage necessary to develop new revenue sources and customers for ACI.

"We are integrating the three business units across key operating functions, including product, sales, marketing and support," said Heasley. "We believe the efficiencies we gain from these changes will position us to yield enhanced operating margins, better process standardization and allow for increased investment in solutions research and development. Specific areas in which we are currently seeking to invest include enterprise fraud detection, chip-based solutions and our new "Software as a Service" business. Enterprise payments convergence, risk management and deployment of new services are key priorities for our customers."

The Company currently expects annual pre-tax savings from this move to be in the range of $6.4 million to $6.7 million. During the fourth quarter of fiscal 2005, the Company currently expects one-time charges from this restructuring of approximately $1.2 million. During fiscal 2006, the Company expects to incur an additional $2.1 million to $2.8 million in one-time restructuring costs offset by first year savings of $5.8 million to $6.0 million.

In addition, the Company announced that Dennis Jorgensen, President of IntraNet Worldwide, will be retiring, coincident with the restructuring. "We will miss Dennis and want to thank him for his service to the company," said Heasley. "I leave the TSA corporate family with nothing but good memories," said Jorgensen. "I wish the company, along with its employees, customers and partners, the very best."

"In my brief tenure as CEO of TSA, I am even more firmly convinced that TSA offers a unique value proposition to the largest payment processing entities in the world," added Heasley. "We believe these organizational changes will better position us to take advantage of the market opportunity, and distance ourselves from other market alternatives."

TSA currently anticipates providing revenue and earnings guidance for fiscal 2006, including the estimated effects of these changes, during its fourth quarter earnings call on October 25, 2005.

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