Carreker Corporation Reports Fourth Quarter and Fiscal 2003 Results.Business Editors DALLAS--(BUSINESS WIRE)--March 16, 2004 Carreker Corporation (Nasdaq:CANI CANI Constant And Never-ending Improvement ), a leading provider of payments technology and consulting solutions for the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry, today reports its fourth quarter and full year 2003 results. For the fiscal year-ended Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. Jan. 31, 2004, the Company reports revenues of $128.9 million, net income of $3.7 million and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.15.
($ in millions, except per share data)
Quarter Full Year
-------------------- ------------------
4Q 4Q
FY 2003 FY 2002 FY 2003 FY 2002
---------- --------- -------- ---------
Total revenue $33.1 $28.5 $128.9 $149.8
Operating income (loss) $1.1 $(53.0) $4.3 $(33.4)
Net income (loss) $1.4 $(52.2) $3.7 $(33.6)
Earnings (loss) per share,
basic $0.06 $(2.22) $0.16 $(1.45)
Earnings (loss) per share,
diluted $0.05 $(2.22) $0.15 $(1.45)
While full year 2003 revenue declined from its 2002 level, the Company was able to achieve $4.3 million in operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. . Though this figure compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. to the $(33.4) million operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. in 2002, it does so primarily as a result of a $46 million goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge recorded in 2002. Exclusive of the charge in the prior year, 2003 would have reflected an $8.3 million decrease in operating income. This decline primarily results from a revenue shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. in the Company's global payment technologies and consulting segments. The soft revenue in these segments is expected to continue into the first half of 2004 due to the impact of bank consolidations and the changing marketplace, resulting from Check 21 legislation. In response to the market demand resulting from Check 21 legislation, the Company is developing new products, which are expected for delivery in late 2004 and 2005. From a revenue and net income perspective, the Company's fiscal 2003 fourth quarter results exceeded both the fiscal 2003 third quarter results and the fourth quarter results from fiscal 2002. In particular, a strong performance by the Company's Revenue Enhancement revenue enhancement An increase in revenues, especially by way of increased taxes. Revenue enhancement includes reducing taxpayer deductions and eliminating tax credits. consulting group contributed to the fourth quarter revenue increase. Some of the noteworthy highlights from the fiscal 2003 fourth quarter follow: Fourth Quarter 2003 Highlights -- Increased total revenue of $33.1 million from $28.5 million in the prior year. -- Improved gross margin of 53% versus 37% in the prior year. -- Paid down $6.3 million of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . "We are pleased that our Q4 2003 revenue and net income exceeded both our Q3 2003 performance and our Q4 performance of 2002," said J.D. (Denny Denny may refer to:
1. and technology development partnerships." Carreker continued, "The market is taking note of our thought leadership and the groundwork we have laid for optimizing the impact of Check 21. American Bankers Association The American Bankers Association (ABA) is comprised of banks and other financial institutions. It seeks to promote the strength and profitability of the banking industry by Lobbying federal and state governments, building industry consensus on key issues, and providing products and and other industry groups are seeking our participation and counsel on their Check 21 initiatives and we have just published a case history on our image work for the Federal Reserve." "As we reflect on the past and look to the future, we consider 2003 as our year of strategic repositioning repositioning Laparoscopic surgery The changing of a Pt's position during a procedure to improve access or visualization of the operative field, which may be linked to complications, as it changes anatomic planes of operation. Cf Laparoscopic surgery. , 2004 as our year of strategic building out in preparation for 2005, our year for delivering," concluded Carreker. Conference Call Management has scheduled a conference call tomorrow, Wednesday Wednesday: see week. , March 17, 2004, at 11:00 a.m. Eastern Time. The conference call is intended to provide a forum for a discussion of the Company's fourth quarter and full year fiscal 2003 financial results, business conditions, industry trends and other points of interest to investors. To join the conference call, domestic participants dial 800-289-0494, international participants dial 913-981-5520. A replay of the call will be available on Wednesday, March 17 from 2:00 p.m. Eastern Time through Wednesday, March 24 at 11:45 p.m. Eastern Time. To access the replay, domestic participants dial 888-203-1112, international participants dial 719-457-0820. All replay participants enter the pass-code 742757. Webcast A live webcast of the conference call, as well as the archive webcast, will be available through the investor relations Investor relations The process by which the corporation communicates with its investors. (IR) section of the Company's website at http://ir.carreker.com. The webcast will also be distributed over Shareholder.com's Open Distribution Network. About Carreker Corporation Carreker Corporation improves earnings for financial institutions around the world. The Company's integrated consulting and software solutions are designed to increase clients' revenues and reduce their expenses, while improving security and increasing the value of their customer relationships. Carreker provides products and services to more than 250 clients in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , the United Kingdom, Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. , continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. , Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. , South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , Mexico Mexico, city, Mexico Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , and the Caribbean. Clients include the full range of community, regional and large banks, among them more than 75 of the largest 100 banks in the United States. Headquartered in Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , since 1978, Carreker Corporation has offices in London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. and Sydney Sydney, city, Australia Sydney, city (1991 pop. 3,097,956), capital of New South Wales, SE Australia, surrounding Port Jackson inlet on the Pacific Ocean. Sydney is Australia's largest city, chief port, and main cultural and industrial center. . For more information, visit www.carreker.com. Forward Looking Statements -- Except for historical information, the statements in this release, including statements regarding future financial performance, contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially, including but not limited to the volatility Volatility 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the in the Company's common stock price, as well as the risks and uncertainties arising out of economic, competitive, governmental and technological factors affecting the Company's operations, markets, services, products and prices. For further information concerning certain of these risks and uncertainties, see under the caption "Business - Risk Factors" in the Company's most recent Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended January January: see month. 31, 2003. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.
CARREKER CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
ASSETS
January 31,
-------------------
2004 2003
--------- ---------
Current assets
Cash and cash equivalents $28,605 $26,986
Accounts receivable, net of allowance of $1,512
and $1,761 at January 31, 2004 and January 31,
2003, respectively 21,751 22,759
Prepaid expenses and other current assets 3,331 3,380
--------- ---------
Total current assets 53,687 53,125
Property and equipment, net of accumulated
depreciation of $17,140 and $14,704 at January
31, 2004 and January 31, 2003, respectively 6,690 8,975
Capitalized software costs, net of accumulated
amortization of $11,050 and $10,025 at January
31, 2004 and January 31, 2003, respectively 2,028 2,010
Acquired developed technology, net of accumulated
amortization of $11,153 and $6,867 at January 31,
2004 and January 31, 2003, respectively 14,547 17,333
Goodwill, net of accumulated amortization of
$3,405 at January 31, 2004 and January 31, 2003 21,193 21,193
Customer relationships, net of accumulated
amortization of $3,733 and $2,333 at January 31,
2004 and January 31, 2003, respectively 4,667 6,067
Deferred loan costs, net of accumulated
amortization of $1,028 and $676 at January 31,
2004 and January 31, 2003, respectively 680 576
Other assets 873 829
--------- ---------
Total assets $104,365 $110,108
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $913 $725
Accrued compensation and benefits 9,219 7,603
Other accrued expenses 4,621 6,030
Income tax payable 80 --
Deferred revenue 25,231 17,600
Accrued merger and restructuring costs 1,898 3,735
--------- ---------
Total current liabilities 41,962 35,693
Long-term debt 6,250 25,000
Deferred revenue -- 817
Other long-term liabilities 49 --
--------- ---------
Total liabilities 48,261 61,510
Minority interest (214) --
Contingencies
Stockholders' equity
Preferred stock, $.01 par value: 2,000 shares
authorized; no shares issued or outstanding -- --
Common stock, $.01 par value: 100,000 shares
authorized; 24,357 and 23,574 shares issued at
January 31, 2004 and January 31, 2003,
respectively 244 236
Additional paid-in capital 108,757 105,263
Accumulated deficit (52,680) (56,386)
Less treasury stock, at cost: 1 and 27 common
shares at January 31, 2004 and January 31,
2003, respectively (3) (515)
--------- ---------
Total stockholders' equity 56,318 48,598
--------- ---------
Total liabilities and stockholders' equity $104,365 $110,108
========= =========
CARREKER CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
Three Months
Ended Year Ended
January 31, January 31,
----------------- ------------------
2004 2003 2004 2003
-------- -------- -------- ---------
Revenues:
Consulting fees $12,715 $8,527 $34,064 $39,204
Software license fees 5,410 5,516 27,365 37,946
Software maintenance fees 10,358 8,477 45,122 41,858
Software implementation fees 3,718 4,829 18,103 24,310
Out-of-pocket expense
reimbursements 887 1,102 4,254 6,458
-------- -------- -------- ---------
Total revenues 33,088 28,451 128,908 149,776
Cost of revenues:
Consulting fees 5,277 5,444 20,470 25,067
Software license fees 2,357 2,076 8,020 7,701
Write-off of capitalized
software costs and prepaid
software royalties -- 954 -- 954
Software maintenance fees 3,408 3,043 13,051 10,773
Software implementation fees 3,451 5,016 17,715 19,496
Out-of-pocket expenses 922 1,390 4,335 7,248
-------- -------- -------- ---------
Total cost of revenues 15,415 17,923 63,591 71,239
-------- -------- -------- ---------
Gross profit 17,673 10,528 65,317 78,537
Operating costs and expenses:
Selling, general and
administrative 13,634 12,349 50,568 50,326
Research and development 1,936 1,920 7,191 11,307
Amortization of goodwill and
intangible assets 350 350 1,400 1,400
Goodwill impairment -- 46,000 -- 46,000
Merger, restructuring and other
charges 668 2,945 1,901 2,945
-------- -------- -------- ---------
Total operating costs and
expenses 16,588 63,564 61,060 111,978
-------- -------- -------- ---------
Income (loss) from operations 1,085 (53,036) 4,257 (33,441)
Other income (expense):
Interest income 44 83 266 414
Interest expense (227) (497) (1,218) (2,583)
Other income (expense) 330 414 601 505
-------- --------- ------- ---------
Total other income (expense) 147 -- (351) (1,664)
-------- --------- ------- ---------
Income (loss) before provision
(benefit) for income taxes 1,232 (53,036) 3,906 (35,105)
Provision (benefit) for income
taxes (173) (809) 200 (1,475)
-------- --------- ------- ---------
Net income (loss) $1,405 $(52,227) $3,706 $(33,630)
======== ========= ======= =========
Basic earnings (loss) per share $0.06 $(2.22) $0.16 $(1.45)
======== ========= ======= =========
Diluted earnings (loss) per share $0.05 $(2.22) $0.15 $(1.45)
======== ========= ======= =========
Shares used in computing basic
earnings (loss) per share 24,036 23,547 23,736 23,198
======== ========= ======= =========
Shares used in computing diluted
earnings (loss) per share 25,979 23,547 24,384 23,198
======== ========= ======= =========
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