Corillian Reports Third Quarter 2004 Results; Delivers Continued Profitability with Growth in Revenues and Record Earnings.PORTLAND Portland, town, England Portland, town (1991 pop. 12,945), Dorset, S England. It is on the Isle of Portland, a small rocky peninsula. Portland stone has been used in St. Paul's Cathedral and other important London buildings. Lobsters and crabs are harvested. , Ore. -- Corillian Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CORI), the top provider of online banking solutions to leading financial institutions, today reported financial results for the third quarter ended September September: see month. 30, 2004. Revenues for the third quarter were $13.5 million, compared to $11.6 million for the third quarter of 2003, an increase of 17 percent. Third quarter revenues include the recognition of a performance bonus in excess of $2 million that was related to a product development project with a large customer. Net income for the third quarter was $3.1 million, resulting in 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 $0.08, beating the consensus analyst estimate by $0.01. This represents an 86 percent increase from net income of $1.6 million in the third quarter of 2003, which resulted in diluted earnings per share of $0.04. Net income for the third quarter of 2004 includes a non-cash 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 of $491,000, approximately $0.01 per share, which resulted from an amendment to the lease for Corillian's headquarters in August 2004. Cash and investment balances at the end of the third quarter were $34.4 million, compared to $26.8 million at December December: see month. 31, 2003. "We had another strong quarter, hitting the top end of our revenue guidance and generating record earnings," said Alex (language) Alex - 1. A polymorphic language being developed by Stephen Crawley <sxc@itd.dtso.oz.au> of Defence Science & Tech Org, Australia. Alex has abstract data types, type inference and inheritance. 2. Recent Highlights --A top 50 financial institution decided to expand its relationship with Corillian by deploying Corillian Small Business Banking. --A top 100 financial institution chose to upgrade to the Corillian Voyager Voyager, airplane Voyager, the first airplane to circumnavigate the earth nonstop on a single load of fuel. Designed by Burt Rutan and flown by Dick Rutan and Jeana Yeager, Voyager took off from California on Dec. 3.1 platform and also licensed the Corillian Small Business Banking solution. --Five more smaller financial institutions subscribed Subscribed Newly issued securities that an investor has agree to, or stated his intent to, buy in a public offering prior to the issue date. When an investor uses rights, he expects to own the designated number of shares they have subscribed to once the offering is completed. to NCR's shared server solution for online banking and bill payment, powered by the Corillian Voyager platform. --Corillian launched Corillian Security Solutions, an innovative range of security products and services, at its first annual Security Summit. --Three financial institutions signed up for the Corillian Fraud Detection System. NCR (NCR Corporation, Dayton, OH, www.ncr.com) A technology company specializing in financial terminal transactions, retail systems and data warehousing. Until the late 1990s, NCR was heavily invested in the hardware side of the industry, known worldwide as a major manufacturer of computers also licensed the Corillian Fraud Detection System and will serve as a reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. for the solution. --Corillian appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. James James, person in the Bible James, in the Gospel of St. Luke, kinsman of St. Jude. The original does not specify the relationship. James, rivers, United States James. R. Stojak, a former Citigroup Citigroup U.S. holding company formed in 1998 from the merger of Citicorp (itself a holding company incorporated in 1967) and Travelers Group, Inc. The $70 billion merger included one of the largest U.S. investment banks, Salomon Smith Barney Inc. executive, to its board of directors. Financial Outlook Based on the current backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of projects in implementation, potential deals in our sales pipeline and anticipated sales of a large number of seat licenses, Corillian anticipates that fourth quarter 2004 revenues will be in the range of $13 to $14 million and that EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. will be in the range of $0.07 to $0.09 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Corillian will hold a conference call at 5:00 p.m. ET on October October: see month. 20, 2004 to discuss the quarterly results and business outlook. Investors and other interested parties can listen to the conference call over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at Corillian's corporate Web site at http://investor.corillian.com. About Corillian Corporation Corillian is the top provider of online banking solutions to leading financial institutions. Empowered with Corillian solutions, some of the world's most visionary 1. visionary - One who hacks vision, in the sense of an Artificial Intelligence researcher working on the problem of getting computers to "see" things using TV cameras. (There isn't any problem in sending information from a TV camera to a computer. financial institutions provide their customers with the tools to manage their finances more effectively. Corillian's solutions are unmatched in reliability and performance and successfully scale at some of the world's largest financial institutions. Corillian's proven solutions enable financial institutions to deliver innovative services enterprise-wide, across multiple delivery channels and multiple lines of business. The Corillian Voyager platform provides secure and scalable account access and transaction processing Updating the appropriate database records as soon as a transaction (order, payment, etc.) is entered into the computer. It may also imply that confirmations are sent at the same time. Transaction processing systems are the backbone of an organization because they update constantly. for a wide variety of applications built by Corillian's expert software developers, by Corillian-certified partners and by the in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. development organizations of some of the world's best financial institutions. For more information about Corillian Corporation, visit the company's Web site at http://www.corillian.com. Matters discussed in this release may include 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. that involve risks and uncertainties, and actual results may be materially different. For example, statements regarding Corillian's business outlook and prospects for success in the online financial software and services industry are forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. . Factors that could cause actual results to differ include the risk that Corillian is not able to fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. acceptance criteria criteria (krītēr´ē  ),n. on projects for its customers and fails to earn performance bonuses or receive milestone payments on such projects, that Corillian fails to sign new customers, that Corillian does not realize anticipated business from its sales pipeline, that Corillian's existing customers do not continue to demand seat licenses, new products or services from Corillian, that Corillian's customers experience performance problems or security breaches using Corillian's solutions, that Corillian's partners are not able to fulfill their contractual obligations to Corillian and such failure negatively impacts Corillian customers, that Corillian encounters significant problems in implementing its software for its customers or significant delays in developing software for its customers, that Corillian incurs significant legal expenses or losses in lawsuits and that financial institutions are affected by adverse government regulations or market conditions. Other risks include those stated in Corillian's reports and other documents filed from time to time with the Securities and Exchange Commission, including its report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended June June: see month. 30, 2004.
CORILLIAN CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
For the Quarter Ended
------------ ------------
September September
30, 30,
2004 2003
------------ ------------
Revenues $13,517 $11,586
Cost of revenues 4,499 5,094
------------ ------------
Gross profit 9,018 6,492
------------ ------------
Operating expenses:
Sales and marketing 1,846 1,501
Research and development 1,641 1,390
General and administrative 1,826 1,654
Impairment charge 491 -
------------ ------------
Total operating expenses 5,804 4,545
------------ ------------
Income from operations 3,214 1,947
Other expense, net (122) (198)
------------ ------------
Income before income taxes 3,092 1,749
Income taxes 20 100
------------ ------------
Net income $ 3,072 $ 1,649
============ ============
Basic net income per share $ 0.08 $ 0.05
Diluted net income per share $ 0.08 $ 0.04
Shares used in computing basic net income
per share 37,947 36,451
Shares used in computing diluted net income
per share 40,429 38,356
CORILLIAN CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
-------------- -------------
Sept. 30, 2004 Dec. 31, 2003
-------------- -------------
ASSETS
Current assets:
Cash and investments $ 34,420 $ 26,844
Accounts receivable, net 6,366 6,103
Revenue in excess of billing 2,451 1,258
Other current assets 2,369 1,545
------------------ -----------------
Total current assets 45,606 35,750
Property and equipment, net 4,010 5,765
Other assets 747 1,303
------------------ -----------------
Total assets $ 50,363 $ 42,818
================== =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $ 3,485 $ 3,276
Deferred revenue 14,509 15,560
Current portion of long-
term debt and capital
lease obligations 792 1,529
Other current liabilities 1,444 968
------------------ -----------------
Total current liabilities 20,230 21,333
Long-term debt and capital lease
obligations, less current portion 694 1,075
Other long-term liabilities 659 856
------------------ -----------------
Total liabilities 21,583 23,264
------------------ -----------------
Shareholders' equity:
Common stock 129,424 127,414
Accumulated other comprehensive
income 60 48
Accumulated deficit (100,704) (107,908)
------------------ -----------------
Total shareholders' equity 28,780 19,554
------------------ -----------------
Total liabilities and
shareholders' equity $ 50,363 $ 42,818
================== =================
CORILLIAN CORPORATION
SUPPLEMENTAL INFORMATION
(unaudited)
License revenues for the third quarter of 2004 were $5.9 million,
or 44% of total revenues, as compared to $4.0 million in the third
quarter of 2003, comprising 34% of total revenues. License block sales
in the third quarter of 2004 were approximately $100,000, as compared
to approximately $800,000 in license block sales in the third quarter
of 2003.
Corillian's revenue backlog was $32.2 million as of September 30,
2004, compared to $37.2 million at the end of the fourth quarter of
2003. Revenue backlog represents contractual customer commitments,
including fees for licenses, professional services, maintenance,
hosting and subscriptions. Backlog is not necessarily indicative of
revenues to be recognized in any given future period. For example,
some of the fees reflected in backlog may be accounted for as funded
research and development, depending on the nature of the work to be
performed by Corillian. There are many factors that would impact
Corillian's filling of backlog, such as its progress in completing
projects for its customers, Corillian's customers' meeting anticipated
schedules for customer-dependent deliverables, and Corillian's
customers' satisfying their contractual obligations. Corillian
provides no assurances that any portion of its backlog will be filled
during any fiscal year or at all or that its backlog will be
recognized as revenues in any given period.
Total headcount as of September 30, 2004 was 219, compared with
218 as of September 30, 2003.
The actual total number of shares outstanding as of September 30,
2004 was 38.2 million shares.
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