EFD, the company that delivers innovative enterprise payments and data & decisioning solutions, today reported that operating income in the first quarter of 2007 increased 10% to $17 million, or 12.4% of net revenues, as compared to $15 million, or 11% of net revenues, reported in the first quarter of 2006. First quarter net income was $11 million, or $0.22 per diluted share, compared to net income of $11 million, or $0.23 per diluted share, reported for the same quarter in 2006. Revenues in the first quarter declined 4% from the $140 million reported in the prior year quarter to $134 million due to previously disclosed contract roll-offs that occurred in mid-2006.
The Company also reported that, subsequent to quarter end, it has resolved the Indian Tax Dispute referenced in its prior public filings. This resolution is not expected to have a material impact on the Company’s effective tax rate or results of operations in 2007.
“During the quarter, we continued to see revenue growth in our EFT processing and software businesses and continued margin expansion on a consolidated basis. We also launched our Integrated Fraud Platform solution during the quarter and received a strong level of interest in the marketplace,” said Paul F. Walsh, Chairman and Chief Executive Officer. “We feel that our first quarter results reflect progress towards meeting our full year financial and operational objectives,” stated Walsh.
The Company also reported that it has recently been approached by certain strategic and financial parties who have expressed a desire to explore possible strategic alternatives. The Board of Directors has formed a Review Committee and directed Goldman, Sachs & Co. and BlackRock, Inc., its independent financial advisors, to assist it in exploring all of the Company’s strategic options, including potential merger opportunities. No decision with respect to any transaction has been made and there can be no assurance that a formal proposal or offer will be presented or, if any such proposal or offer is presented, that a transaction will be approved by the Board.
For the full year 2007, the Company expects total net revenues and diluted earnings per share to fall within its previously published ranges of $591 million to $613 million of total revenues, with diluted earnings per share between $1.30 and $1.42. The Company expects actual results to trend towards the lower end of these ranges.
As a matter of policy, the Company does not comment on or provide the public with updates as to the status of any informal expressions of interest or formal proposals or offers presented to the Company from time to time, or the course of discussions with any prospective counterparties, nor will it comment upon rumors with regard to either of the foregoing or make any further announcement regarding the Board’s or the Review Committee’s deliberations until such time, if ever, that it enters into a definitive agreement regarding a transaction or is otherwise required to make an announcement.
About EFD | eFunds Corporation
EFD is the payments solutions company. With the unique ability to take an integrated view of enterprise payments and data & decisioning, EFD provides financial services companies and other large enterprises with business insight to make better new account decisions, improve fraud detection and management and streamline payment processing. EFD’s flexible delivery model means solutions can be run in-house, outsourced or anything in between, helping customers achieve operational efficiency and low cost of ownership while building long-term customer value. From the point of account opening to the settlement of every transaction — debit, credit, or prepaid — EFD helps businesses win more of the right customers, serve them more efficiently and keep them. Additional information is available at http://www.eFunds.com.
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