Source: Bisys
Today, BISYS, a leading provider of outsourcing solutions for the financial services sector, provided a business update.
Since its last update in February, BISYS has achieved important milestones, including the sale of the Information Services business on March 3, 2006 and the completion of a restatement of its consolidated financial statements with the filing of its Form 10-K for fiscal 2005. The Company is now focused on completing its outstanding fiscal 2006 quarterly financial reports, which it expects to complete by about the end of June. Because of the ongoing activities to complete these filings, BISYS has elected to not provide detailed financial results or guidance at this time.
The Company provided details of its restatement and remediation activities, with BISYS President and CEO, Russell Fradin noting, "We are pleased to have the restatement and divestiture completed, which allows us to focus as a team on improving and growing our businesses. We are working hard to make sure that the people, processes, and technology are properly aligned to provide accurate and timely financial reporting."
Mr. Fradin provided a business update, which highlighted continuing progress in the Life and Commercial Insurance businesses. The Alternative Investment Services business is also performing well, with strong revenue growth in the Hedge Fund and Private Equity administration businesses. Results for the Retirement Services business are expected to be on par with fiscal 2005. Results for the Fund Services business have been affected by large client losses with negative growth expected year over year in both revenues and operating margins.
The fiscal year is not over, but in comparing fiscal 2006 to fiscal 2005, the biggest expected GAAP change is that operating earnings for the Company as a whole will be lower due to the divestiture of the Information Services business, which is being treated as a discontinued operation. In continuing operations, the Company expects in fiscal 2006 that margins will be lower in the Investment Services business, higher in the Insurance Services business with the net of the two marginally down. Corporate and litigation costs in total will be lower due in large part to lower litigation expenses and an insurance recoverable, offset modestly by higher stock based compensation expenses. Overall, operating income from continuing operations is expected to be higher in fiscal 2006 than in fiscal 2005. Additional details will be provided in a future update.
The Company expects to improve performance in the Fund and Retirement Services businesses as it moves into fiscal 2007, and to continue to grow its Alternative Investment Services and Insurance Services businesses. Litigation and corporate expenses are expected to remain high until the SEC investigations and security litigation matters are resolved.