Transaction Systems Architects, Inc., a leading global provider of enterprise e-payments and e-commerce software, announced that revenue for the fourth quarter of fiscal 2001 was $75 million. Pro forma earnings per diluted share were $.08. The company’s guidance for the quarter was revenue of $72 to $75 million and EPS of $.03 to $.08. Operating cash flow was $8.6 million and the cash balance for the company was $32 million.
“Our fourth quarter performance was solid given a difficult environment,” said Larry Fendley, interim CEO. “Even with the unfortunate events in early September, we were able to deliver revenue and earnings that met our expectations. We added 15 new customers in our ACI Worldwide subsidiary, including seven new customers for our eCourier secure document delivery and payment product. We added two new countries to our geo portfolio; we now have customers in 81 countries. We were able to continue our focused R&D efforts while still reducing our overall expense levels. One result of our performance is that our annualized revenue per employee increased to its highest level in two years.
“We had another strong quarter of operating cash flow,” added Fendley. “Our balance sheet continues to improve, as we have now raised our cash level to $32 million and we have reduced the balance of our operating line of credit from $15 million to $12 million. With our expense run-rate reduced and our strengthened balance sheet, we are well prepared to emerge from the current economic environment even stronger than before.
“During the fourth quarter, we noted several significant developments for the company,” added Fendley. “First, we began shipping release 6.0 of our market-leading BASE24 enterprise e-payments product. We continue to invest in this best-of-breed software, and we continue to add market share, with seven new BASE24 customers added during the quarter. New BASE24 customers included two of the largest e-payment processors in North America, both of whom purchased our software to help them manage increasing e-payment volumes, with stringent requirements for system reliability and scalability. “Second, we announced our Enterprise Payment System, to be shipped on the IBM z-series platform. We believe that this will extend the company into even more markets than before, and will effectively double the market opportunity for our more traditional e-payment solutions.
“Third, we continued our push into new markets for the company with our eCourier software. With seven new licenses for eCourier, across multiple geos and industries, we are beginning to extend the company into a completely new market sector, creating an incremental growth opportunity for TSA. “Our newly-named Intranet subsidiary, focused on the global corporate banking sector, licensed its Money Transfer System to Fortis Bank NV, a top 50 global bank in Belgium,” said Fendley. “Intranet continues to solidify its leadership position at the high end of the corporate banking e-payment software marketplace.”
Pro forma results are computed by excluding acquisition-related charges (amortization of goodwill and software). Pro forma results for the quarter exclude $6.3 million of software and goodwill amortization from the acquisitions of SDM International, Inc., Insession Inc., WorkPoint Systems, Inc. and MessagingDirect, Ltd.
The company completed the fourth quarter of fiscal 2001 with $183 million in backlog, consisting of $50 million in non-recurring revenue and $133 million in recurring revenue. Recurring revenues include all monthly license fees, maintenance fees and facilities management fees that the company expects to recognize over the next 12 months. Non-recurring revenues are composed of all other fees, including initial license fees, specified in software and services contracts the company expects to recognize in the next 12 months. “Looking forward to the first quarter of 2002, we expect revenue in the range of $70 million to $75 million, and pro forma EPS of $.06 to $.12,” said Fendley. “The December quarter has historically been our weakest quarter. We believe that our pipeline is strengthening, but that it is prudent to take a conservative outlook given market uncertainty. For fiscal 2002, we are expecting revenue between $300 million and $320 million, and pro forma EPS of $.50 to $.72. As we have noted, our work in improving the financial health of the company positions us to deliver much better earnings even if we experience modest revenue growth.”
About Transaction Systems Architects, Inc.
Transaction Systems Architects’ software facilitates electronic payments by providing consumers and companies access to their money. Its products are used to process transactions involving credit cards, debit cards, secure electronic commerce, mobile commerce, smart cards, secure electronic document delivery and payment, checks, high-value money transfers, bulk payment clearing and settlement, and enterprise e-infrastructure. Transaction Systems Architects’ solutions are used on more than 3,600 product systems in 81 countries on six continents.
TRANSACTION SYSTEMS ARCHITECTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited and in thousands)
September 30, September 30,
2001 2000
————– ————–
ASSETS
Current assets:
Cash and cash equivalents $ 32,252 $ 23,400
Marketable securities 2,650 8,106
Billed receivables, net 50,277 63,556
Accrued receivables 50,932 51,659
Prepaid income taxes 1,911 2,710
Deferred income taxes 8,700 11,208
Other 10,990 13,134
———– ————
Total current assets 157,712 173,773
Property and equipment, net 14,580 19,614
Software, net 27,954 26,757
Intangible assets, net 82,327 65,254
Long-term accrued receivables 24,916 27,018
Investments and notes receivable 1,309 6,146
Deferred income taxes 13,627 2,958
Other 5,028 8,632
———– ————
Total assets $ 327,453 $ 330,152
=========== ============
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt $ 12,559 $ 18,396
Accounts payable 13,542 16,023
Accrued employee compensation 9,030 7,472
Accrued liabilities 23,369 20,003
Deferred revenue 35,857 43,373
———– ————
Total current liabilities 94,357 105,267
Long-term debt 761 532
Long-term deferred revenue 12,610 13,993
Other 1,057 –
———– ————
Total liabilities 108,785 119,792
———– ————
Stockholders’ equity:
Class A Common Stock 184 165
Additional paid-in capital 222,501 170,946
Retained earnings 42,016 85,033
Treasury stock, at cost (35,258) (35,258)
Accumulated other comprehensive
income (10,775) (10,526)
———– ————
Total stockholders’ equity 218,668 210,360
———– ————
Total liabilities and
stockholders’ equity $ 327,453 $ 330,152
=========== ============
TRANSACTION SYSTEMS ARCHITECTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited and in thousands, except per share amounts)
Three Months Ended Year Ended
September 30, September 30,
————————————-
2001 2000 2001 2000
——– ——– ——— ———
Revenues:
Software license fees $44,454 $48,036 $173,796 $176,295
Maintenance fees 18,474 17,498 70,246 68,727
Services 12,074 16,623 55,759 58,543
——– ——– ——— ———
Total revenues 75,002 82,157 299,801 303,565
——– ——– ——— ———
Expenses:
Cost of software license fees 9,919 12,207 43,466 45,967
Cost of maintenance and services 16,457 18,673 73,490 70,681
Research and development 8,883 10,279 40,528 38,832
Selling and marketing 17,848 20,937 76,273 75,539
General and administrative 18,318 16,434 77,008 62,416
Amortization of goodwill and
purchased intangibles 3,860 2,418 13,933 8,388
——– ——– ——— ———
Total expenses 75,285 80,948 324,698 301,823
——– ——– ——— ———
Operating income (loss) (283) 1,209 (24,897) 1,742
——– ——– ——— ———
Other income (expense):
Interest income 1,132 832 4,397 3,481
Interest expense (287) (599) (2,004) (912)
Other 1,039 215 (22,307) (718)
——– ——– ——— ———
Total other income (expense) 1,884 448 (19,914) 1,851
——– ——– ——— ———
Income (loss) before income taxes 1,601 1,657 (44,811) 3,593
Income tax benefit (provision) (5,147) (729) 1,794 (1,482)
——– ——– ——— ———
Net income (loss) $(3,546) $ 928 $(43,017) $ 2,111
======== ======== ========= =========
Earnings per share information:
Weighted average shares
outstanding:
Basic 35,170 31,610 34,116 31,744
======== ======== ========= =========
Diluted 35,170 31,864 34,116 32,117
======== ======== ========= =========
Earnings per share:
Basic $ (0.10) $ 0.03 $ (1.26) $ 0.07
======== ======== ========= =========
Diluted $ (0.10) $ 0.03 $ (1.26) $ 0.07
======== ======== ========= =========
TRANSACTION SYSTEMS ARCHITECTS, INC.
Reconciliation of Actual Results to Pro Forma Results
For the Quarterly Period Ended September 30, 2001
(unaudited and in thousands, except per share amounts)
Three Months Ended
September 30, 2001
———————————
As
Reported Amortization Pro Forma
——– ———— ———
Revenues:
Software license fees $44,454 $ – $44,454
Maintenance fees 18,474 – 18,474
Services 12,074 – 12,074
——– ——– ——–
Total revenues 75,002 – 75,002
——– ——– ——–
Expenses:
Cost of software license fees 9,919 (2,461) 7,458
Cost of maintenance and services 16,457 – 16,457
Research and development 8,883 – 8,883
Selling and marketing 17,848 – 17,848
General and administrative 18,318 – 18,318
Amortization of goodwill and
purchased intangibles 3,860 (3,860) –
——– ——– ——–
Total expenses 75,285 (6,321) 68,964
——– ——– ——–
Operating income (loss) (283) 6,321 6,038
——– ——– ——–
Other income (expense):
Interest income 1,132 – 1,132
Interest expense (287) – (287)
Other 1,039 – 1,039
——– ——– ——–
Total other income (expense) 1,884 – 1,884
——– ——– ——–
Income (loss) before income taxes 1,601 $ 6,321 7,922
Income tax benefit (provision) (5,147) – (5,147)
——– ——– ——–
Net income (loss) $(3,546) $ 6,321 $ 2,775
======== ======== ========
Earnings per share information:
Weighted average shares outstanding:
Basic 35,170 35,170
======== ========
Diluted 35,170 35,373
======== ========
Earnings per share:
Basic $ (0.10) $ 0.08
======== ========
Diluted $ (0.10) $ 0.08
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