EFunds Corporation (NYSE: EFD), a leading provider of electronic payments, risk management and related outsourcing solutions, today reported its financial results for the fourth quarter and full-year ended December 31, 2005.
For the fourth quarter of 2005, the Company reported net revenue of $138.0 million, an increase of approximately 6% over the net revenue of $130.5 million reported by the Company during the fourth quarter of 2004. Operating income increased 23% to $20.2 million, or 15% of net revenue, compared to $16.4 million, or 13% of net revenue, reported in the equivalent quarter of 2004. The Company reported diluted earnings per share for the fourth quarter of 2005 of $0.27 compared to $0.22 per diluted share reported in the fourth quarter of 2004.
For the year ended December 31, 2005, the Company reported net revenue of $501.7 million, down 9% compared to the $552.1 million of net revenue reported in 2004. The decline in revenues in 2005 is reflective of the disposition of the Company's ATM deployment business in late 2004. This decline was partially offset by acquisitions completed by the Company in 2005 and organic growth in its continuing businesses. Reported operating income for the year ended December 31, 2005 was $75.2 million, or 15% of net revenue, as compared to $58.5 million, or 11% of net revenue, for the prior year. Diluted earnings per share increased 41% to $1.17 per diluted share, compared with $0.83 per diluted share reported by the Company in 2004.
"2005 was a year of significant transformation for eFunds," stated Paul Walsh, Chairman and Chief Executive Officer. "After divesting our low-growth, low-margin ATM business in late 2004, we acquired the leading prepaid solutions provider in July 2005. As a result, we have improved the earnings and growth profile of our Company and we look forward to continuing this trend in 2006. Our goal for the next phase of our Company's development is to achieve sustainable double-digit revenue growth and 20% operating margins. We believe we are well positioned to achieve these targets following a very successful year in 2005," Walsh said.
Forward Looking Statements
The Company reported that it expects full-year net revenue for 2006 to increase approximately 15 - 25 percent over full-year 2005 net revenue. Diluted earnings per share are expected to be between $1.15 and $1.25 for 2006 after giving effect to the adoption of SFAS 123R, which requires the expensing of stock options beginning January 1, 2006. Excluding the impact of SFAS 123R, the Company's outlook equates to $1.26 - $1.36 per diluted share in 2006.
The foregoing expectations reflect the following assumptions:
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- An effective tax rate of approximately 34 percent for 2006
- Cash outlays for capital expenditures and product development activities will be somewhat higher than the amounts disbursed in 2005