Corillian posts disappointing Q3 results

Source: Corillian

Corillian Corp. (NASDAQ: CORI), the top provider of online banking, bill payment and anti-fraud solutions to leading financial institutions, today reported financial results for the third quarter ended Sept. 30, 2005.

Revenues for the third quarter were $11.9 million, compared to $12.3 million for the second quarter of 2005. Net loss for the quarter was approximately $60,000, resulting in a net loss of ($0.00) per diluted share, compared to net income of $2.1 million and diluted earnings per diluted share of $0.05 in the second quarter of 2005. Net income before amortization of acquisition related intangible assets for the third quarter was $161,000, resulting in net income of $0.00 in diluted earnings per share, compared to Corillian's guidance of diluted earnings per share of $0.02 to $0.05 in the third quarter of 2005. A reconciliation of GAAP results to pro forma results is provided as part of this press release.

Cash and investment balances at the end of the third quarter were $27.3 million, compared to $39.4 million at December 31, 2004. This reduction is attributable to cash used to acquire InteliData Technologies Corporation and qbt Systems, Inc.

"Despite disappointing revenue and income results, we are pleased with the success we've seen in closing three new customer deals in the quarter, including a top 50 U.S. bank. The third quarter yielded more new deals than we have closed in any quarter since 2002," said Alex Hart, president and CEO of Corillian. "Our core revenue backlog grew by $800,000 in the third quarter, the first sequential increase in backlog since Dec. 2004. In addition, during the first few weeks of the fourth quarter, we added Bank Leumi, the second largest bank in Israel, and we are currently working on more than a dozen active deals, several of which are expected to close by year end."

In support of Corillian's expansion into broader markets, the company focused on expanding existing product lines, rolling-out new products and services, and improving overall sales capabilities during the third quarter. Additional focus has been placed on increasing the predictability of Corillian's business model through three areas:

  • Creating products, services and processes that enable the company to profitably serve smaller institutions and to reduce its dependence on a few large opportunities, providing access to a larger market.
  • Acquiring additional customer relationships through both improved sales efforts and strategic acquisitions, enabling Corillian to build on its strength of expanding customer relationships.
  • Increasing the percentage of recurring revenue through more aggressive sales of client hosting, the Corillian Fraud Detection Service (CFDS), Intelligent Authentication and other subscription-based services.

Recent Highlights

  • Corillian successfully completed the acquisitions of InteliData Technologies Corporation, a leading provider of online banking, bill payment and credit card services, and privately-held qbt Systems, Inc., a leading provider of real-time integration software.
  • Corillian signed three new customers during the third quarter, a top 50 U.S. bank, a top 50 U.S. credit union, and a $2 billion-asset community bank.
  • Five organizations signed up for the Corillian Fraud Detection System, including a top 50 Bank and a U.S. government agency.
  • Corillian announced the availability of Corillian Intelligent Authentication, a patent-pending security solution designed to prevent fraud and preserve consumer confidence in online banking, e-commerce and other Web sites demanding a higher level of security. Corillian Intelligent Authentication enables financial institutions to meet the new Federal Financial Institutions Examination Council's (FFIEC) guidance for delivering strong authentication solutions by year-end 2006.
  • Three smaller financial institutions subscribed to NCR's shared server solution for online banking and bill payment, powered by the Corillian Voyager platform.
  • Commerce Bancshares went live on the most recent release of Corillian Small Business Banking and International Bank of Commerce (IBC) went live on the latest release of Corillian Consumer Banking.
  • Corillian received certification under security standard BS:7799, the most widely-recognized framework and standard for developing and certifying a company's security management system.

    Financial Outlook
    Based on the current backlog of projects in implementation and deals in the sales pipeline, Corillian anticipates that fourth quarter 2005 revenues will be in the range of $12 to $15 million and EPS will range from a net loss of ($0.02) per diluted share to net income of $0.04 per diluted share. Per share pro forma results, excluding the amortization of intangible assets related to acquisitions, are expected to range from a loss of ($0.01) to a profit of $0.05. Corillian is providing this wide range of guidance in light of the company’s third quarter results and the continued opportunities available in the fourth quarter. Corillian has in its current backlog sufficient revenue opportunities to meet the low end of this guidance range in the fourth quarter.Download the document now 36.3 kb (Adobe Acrobat Document)

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