Delivers $250 Million in Revenue and EPS of 4 Cents for Fiscal 1999
Company More Than Doubles Contracts with Billers During the Year, Bringing
Signed Total to 64 of Top Billers in the Nation; 29 Can Distribute Bills for
Payment on the Internet Today
ATLANTA, Aug. 10 /PRNewswire/ -- CheckFree Holdings Corporation
(Nasdaq: CKFR) today announced revenues of $70.8 million for the fourth
quarter ended June 30, 1999 compared to $63.5 million for the same quarter of
1998. Total revenues for the quarter increased 19 percent over the
comparative quarter of last year, adjusted for the effects of acquisitions and
divestitures. Revenues for the year ended June 30, 1999 were $250 million, up
21 percent over the prior year, adjusted for the effects of acquisitions and
divestitures.
Excluding a net gain on the disposition of assets and one-time charges
related to the Company's secondary stock offering which was withdrawn in June,
real estate transactions, and the service disruption the Company experienced
in April, CheckFree reported net income for the quarter of $2.8 million, or
5 cents per share, diluted, compared to 3 cents per share, diluted, for the
same period in fiscal 1998.
Excluding non-recurring gains and charges for fiscal 1999, the Company
reported a profit of $2 million, equating to 4 cents per share, compared with
a net loss of just over $2.8 million, representing a loss of 5 cents per
share, in fiscal 1998.
CheckFree Chairman and CEO Pete Kight said, "These results are directly on
our expectations. While our financial performance was solid, I am even more
pleased with how we extended our leadership in non-financial metrics, such as
subscribers, signed biller contracts, bills distributed on the Internet, live
distribution sites on the Internet, and improvements in electronic processing
efficiency."
Kight noted that after increasing subscribers by 6 percent in the fourth
quarter, the Company ended the year withnearly three million subscribers, up
from 2.4 million at the close of fiscal 1998. Kight also said that sequential
quarterly growth in Internet-based subscribers in the fourth quarter continued
to exceed 20 percent, as it did in the third quarter.
"Consumers want to get on the 'Net to access financial services, including
billing and payment," Kight said. "Financial institutions are listening. At
the close of 1998, four of our financial institution customers offered our
services over the Internet. Today, 34 -- including banks, credit unions,
brokerage firms and Intuit's Quicken.com Internet portal -- do. This year,
banks and other financial institutions have made strong progress in connecting
with consumers on the 'Net, and we expect this to continue in 2000."
Kight also noted that the Company continues to enjoy relationships with
more than 350 financial institutions, including nine of the top 10 and 23 of
the top 25. He also noted that major retail brokerage firms -- including
market heavyweights Schwab and Merrill Lynch -- are in market with Internet
services, and are offering their customers electronic billing and payment
solutions powered by CheckFree services.
During the quarter, the Company transitioned processing for 71 additional
financial institutions to its state-of-the-art electronic billing and payment
platform, Genesis. The Company began these migrations in September of 1998 to
improve quality and operating efficiencies, and to enable the Company to focus
development on a single platform. The Company is now processing transactions
for more than two million subscribers on Genesis, up from 5,000 at the
beginning of the year. All planned migrations will be completed by the end of
August, according to CheckFree President and Chief Operating Officer Pete
Sinisgalli.
"Consolidating most of our transaction processing on a single, state-of-
the-art platform has been one of our most important accomplishments this
year," Sinisgalli said."With an infrastructure built to support transactions
for 30 million households, Genesis is the largest electronic billing and
payment processing engine operating in the U.S. today, and is a tremendous
strategic advantage. Genesis represents years of experience and talent from
three pioneering electronic bill payment companies, and we are pleased with
its performance. We also are pleased to be completing the migration plan
months ahead of our December goal."
Sinisgalli noted that CheckFree processed more than 125 million
transactions in 1999, up from just under 100 million in 1998, and that the
Company exited the year with a processing run rate of more than 12 million
transactions per month.
Biller Momentum Continues
CheckFree signed contracts for electronic billing and payment services
with 43 billers during the year, two-and-one-half times as many as the Company
signed last year. CheckFree now has contracts with 64 of the nation's top
billers, and 29 of these enable their customers to receive and pay bills on
the Internet today. The Company said another 21 are in the process of
implementing solutions now.
"To the best of our knowledge, our nearest competitor can manage the
distribution and payment of electronic bills for five billers. This gives us
a tremendous market lead that we plan to extend in 2000," Kight said.
Kight noted that during the year CheckFree signed contracts with billers
that increased the Company's ability to manage the distribution and payment of
bills for leading companies in the telecommunications industry from 56 percent
to 70 percent of bills, in major credit cards from 14 percent to 28 percent of
bills, in leading mortgage servicers from 8 percent to 22 percent of bills,
and in targeted utilities from 7 percent to 24 percent of bills.
Kight said the count of actual bills that CheckFree distributed for review
and payment over the Internet increased 44 percent in the quarter, to more
than 13,000 in the month ofJune. "This is just a fraction of the bills we
have under contract," Kight said. "Getting billers and distribution points
live in 2000 to continue this growth is a top priority."
Divisions Perform As Expected
CheckFree's Electronic Commerce division reported revenue of $46.5 million
for the quarter, representing 20 percent growth over the same quarter of
fiscal 1998. The division posted an operating profit of $1.3 million, after
adjusting for the financial impact of a service disruption the Company
experienced in April, compared to a loss of $500,000 for the same period last
year. The number of subscribers to CheckFree services grew 6 percent, bringing
the total to nearly 3 million.
CheckFree Investment Services reported revenue of $12.3 million for the
fourth quarter, a 31 percent increase over the same quarter last year, after
adjusting for the acquisition of Mobius Group. Revenue for the year was
$39.3 million, a nearly 26 percent increase over fiscal 1998, again adjusted
for the acquisition of Mobius Group. Operating income was $2.9 million for
the quarter and $8.1 million for the year, adjusted for the effects of writing
off in-process research and development related to the acquisition of Mobius
Group. These results represent increases of 42 percent and 30 percent
respectively over the fourth quarter and full year of fiscal 1998. During the
quarter the division grew the number of portfolios under its management to
715,000, up more than 13 percent for the quarter, and up more than 46 percent
for the year.
The Company's Software division reported revenue in the quarter of
$11.9 million, an increase of five percent over the $11.3 million generated by
these same businesses in the fourth quarter of fiscal 1998. For the year,
retained businesses in CheckFree's software division generated revenue of
$39.6 million, a six percent increase over the $37.4 million reported for
these same businesses last year. Operating income was $5.9 million forthe
quarter and $16.2 million for the year, representing increases of 44 percent
for the quarter and 52 percent for the year.
Sinisgalli said consolidated revenues for the first quarter of fiscal 2000
should be in the range of $65 to $70 million, with a loss per share of around
8 to 10 cents.
About CheckFree
CheckFree, the operating subsidiary of CheckFree Holdings Corp., is the
leading provider of financial electronic commerce services, software and
related products. CheckFree designs, develops and markets services that enable
three million consumers to receive and pay bills over the Internet or
electronically through a variety of bill aggregation points, including banks,
brokerage firms, portals and interactive content sites on the Internet, and
personal financial management (PFM) software. CheckFree's range of services
and products are focused on enabling customers to make electronic payments and
collections, automate paper-based recurring financial transactions and conduct
secure Internet transactions.
Fourth Quarter 1999 Highlights
* June 30, 1999 -- Navy Federal Credit Union, the world's largest
credit union, signs contract with CheckFree for electronic billing and
payment powered by CheckFree.
* June 15, 1999 -- CheckFree takes aim at 100 million Internet
consumers. Free introductory offer, growth in electronic billers,
customer care capabilities and payment offerings outlined.
* June 2, 1999 -- Hawaiian Electric to become first Hawaiian utility to
offer EBP through agreement with CheckFree.
* May 12, 1999 -- Pete Sinisgalli promoted to president and chief
operating officer of CheckFree. Sinisgalli served as executive vice
president and chief operating officer since October 1996.
* May 6, 1999 -- Home Account Network signs distribution agreement for
CheckFree E-Bill(SM), to be offered with Canopy Internet banking
software.
* May 4, 1999 -- Cox Communications, one of the nation's leading
communications companies, signs agreement with CheckFree for electronic
billing and payment.
* April 14, 1999 -- Bank One becomes the first bank to offer fully
integrated electronic bill delivery through the Integrion Financial
Network, using CheckFree's growing network of billers.
* April 13, 1999 -- CheckFree announces EC Solutions, a new division that
will provide consulting and professional services to prospective and
existing clients, industry partners and other organizations.
Third Quarter 1999 Highlights
* March 22, 1999 -- PNC Bank, Integrion Financial Network and CheckFree
announce plans to pilot a fully integrated, Web-based electronic
banking, bill delivery and payment service for PNC Bank customers. PNC
Bank already uses CheckFree for its bill payment service via personal
financial management software and telephone bill payment.
* March 19, 1999 -- CheckFree rolls out the first large-scale system
support for the Open Financial Exchange (OFX) specification for
electronic banking and bill payment. CheckFree's electronic payments
engine now supports OFX for transactions processed on behalf of 400,000
users, making it the largest in-production OFX-compliant system in the
industry.
* March 17, 1999 -- CheckFree and Equifax E-Banking Solutions, one of
the largest providers of electronic banking software in the United
States, announce that they have signed a three-yea Under the agreement, Equifax E-Banking Solutions will resell CheckFree
E-Bill(SM) services to their customers, which include banks, credit
unions and savings institutions worldwide.
* March 16, 1999 -- CheckFree's Investment Services division reaches
600,000 portfolios on CheckFree APL and APL WRAP portfolio management
system. These portfolios total more than $400 billionin assets.
* March 15, 1999 -- Countrywide Securities Corporation selects CheckFree
RECON Trade(TM) to automate reconciliation deposits throughout the
company.
* March 8, 1999 -- CheckFree Holdings Corporation announces the
acquisition of Mobius Group, a leading provider of money manager
databases and financial planning software to the financial services
industry. The Mobius Group will allow CheckFree's Investment Services
division to offer the broadest suite of investment consulting services
and products in the industry today.
* March 4, 1999 -- billserv.com and CheckFree sign a service bureau
agreement whereby billserv.com will transmit billing information from
its base of biller customers to CheckFree, enabling CheckFree to
provide electronic billing and payment services to the growing number
of consumers who want to pay their bills electronically.
* March 3, 1999 -- CheckFree's Investment Services division announces
that it has successfully implemented the necessary code enhancements to
make both CheckFree APL and APL WRAP product lines "Y2K-ready."
CheckFree APL/APL WRAP is the leading portfolio accounting, performance
measurement, trading and reporting system in the industry.
* March 1, 1999 -- CheckFree and Nevada Power Company announce an
agreement for electronic billing and payment. The service will be
available to Nevada Power's more than 550,000 electricity and energy
services customers.
* Feb. 24, 1999 -- MCI WorldCom, one of the leading global
communications companies, launches its electronic billing and payment
service for residential customers -- backed by CheckFree's
infrastructure.
* Feb. 16, 1999 -- Illinois Power, an electric and gas utility serving
approximately 650,000 customers in Illinois, signs an agreement with
CheckFree to offer electronic billing and payment using CheckFree E-
Bill.
* Feb. 8, 1999 -- CheckFree announces the installation and successful
activation of a dedicated trading interface between its Investment
Services division and Interstate/Johnson Lane, a Charlotte-based
brokerage and investment-banking firm. This new trading interface
provides Interstate/Johnson Lane with true "interactive" trading
functionality, including the ability to electronically communicate
trading information directly to the trading floor for immediate
execution.
* Feb. 1, 1999 -- CheckFree names Mike Meriton as the new president of
Corporate Commerce Solutions, a unit of CheckFree's Software division.
* Jan. 26, 1999 -- CheckFree and Countrywide Home Loans, Inc., the
nation's largest independent mortgage lender with nearly 2 million
customers, sign an agreement for electronic billing and payment.
* Jan. 25, 1999 -- CheckFree's Investment Services division announces a
new agreement with Boston-based State Street Research & Management Co
to provide portfolio trading and accounting services.
* Jan. 11, 1999 -- NIIT joins CheckFree Biller Alliance Program to speed
time-to-market solution for billers that choose to house their own
internal server to link to CheckFree E-Bill version 2.0.
Second Quarter 1999 Highlights
* Dec. 28, 1998 -- Ameren Corp. selects CheckFree to provide electronic
billing, distribution and payment option for its 1.8 million customers
in Missouri and Illinois.
* Dec. 14, 1998 -- CheckFree and Southern Company, the largest producer
of electricity in the United States, sign agreement to provide
CheckFree E-Bill to its customers.
* Dec. 9, 1998 -- Data warehousing agreement is signed between
CheckFree and Business Technology Alliance to provide Investment
Services clients using CheckFree APL and APL WRAP the ability to store,
integrate and present mission-critical data for internal and customer
reports.
* Dec. 7, 1998 -- CheckFree licenses bill creation Internet billing
solution from BlueGill Technologies. Through the software/server
solution, billers have an expanded choice of providers to convert
existing print files to create electronic bills with enhanced marketing
opportunities.
* Dec. 2, 1998 -- Oracle partners with CheckFree for electronic billing
and payment, which will be fully integrated with Oracle's Internet Bill
& Pay.
* Dec. 2, 1998 -- CheckFree announces next generation of CheckFree E-
Bill and "direct distribution" model to combine biller control,
consumer ease-of-use, and quality service through enhanced security and
complete event tracking and authentication.
* Nov.18, 1998 -- HomeSide Lending launches E-Bill Payment Services to
its 1.4 million customers through agreement with CheckFree.
* Nov. 12, 1998 -- edocs completes BillDirect software integration with
CheckFree E-Bill delivery and payment systems. BillDirect provides
billers with a scalable Internet billing server, enrollment processing
and bill creation.
* Nov. 11, 1998 -- CheckFree Investment Services signs agreement with
Vestek Systems Inc. to provide online performance attribution via an
integrated data transfer of historical portfolio information from
CheckFree APL and APL WRAP clients to the Vestek Portfolio Analyzer.
* Nov. 11, 1998 -- CheckFree launches Electronic Banking Association Web
site to educate consumers on electronic banking, billing and payment
via the Internet.
* Nov. 10, 1998 -- CheckFree Biller Alliance Program is launched to help
billers deliver reliable, quick-to-market electronic billing and
payment solutions to their customers.
* Nov. 10, 1998 -- CheckFree and Mobius Systems, Inc. announce agreement
to integrate and jointly market a bundled offering that includes
Mobius' DocumentDirect archiving and retrieval and CheckFree E-Bill
presentment, distribution and payment solution.
* Nov. 10, 1998 -- Malaysia Electronic Payment Systems selects CheckFree
PEP+(TM) for real-time Automated Clearing House (ACH) transaction
processing for the country of Malaysia. CheckFree currently provides
clearing and settlement systems for Australia, Chile, Panama, Guatemala
and Colombia.
* Nov. 3, 1998 -- CheckFree and EDS sign 6-year agreement to include
CheckFree's electronic bill payment solution with services EDS provides
to its financial institution clients.
* Nov. 2, 1998 -- CheckFree Investment Services expands strategic
relationship with Schwab Institutional. The upgraded software
interface will enhance the user's ability to import account files
containing balance, position and trade information from Schwab into
CheckFree and will be available to download even faster from the
Internet via the Schwablink Web site.
* Oct. 28, 1998 -- Bell & Howell and CheckFree team to integrate paper
and electronic billing systems into a seamless solutions.
* Oct. 27, 1998 -- Dain Rauscher Inc. signs 3-year extension with
CheckFree to provide sophisticated portfolio administration, trading
measurement and reporting functionality to Dain Rauscher's Private
Client Group.
* Oct. 14, 1998 -- CheckFree RECON-Plus(TM) for Windows(R) is selected by
Cargill, an international agricultural, food, financial services and
industrial company, to provide daily account reconciliation for
Cargill's disbursement accounts.
* Oct. 13, 1998 -- Nicor Gas and CheckFree launch electronic billing and
payment option to more than 1.9 million northern Illinois customers.
* Oct. 1, 1998 -- First Union launches first fully integrated online
banking, billing and payment Web site, Cyberbanking BillPay, founded on
CheckFree services. BellSouth and Florida Power & Light join the
launch as highlights of the bills currently available through the First
Union site.
First Quarter 1999 Highlights
* September 29, 1998 -- CheckFree and the New Zealand Post sign agreement
to provide Internet billing and payment services for the country of New
Zealand.
* September 28, 1998 -- AIB Govett Inc. selects CheckFree's APL WRAP
services to provide portfolio accounting services for AIB Govett's
growing "private client" and high-net work investment advisory accounts
programs.
* September 22, 1998 -- Washington Water Power signs agreement with
CheckFree for Web-based electronic billing and payment through
CheckFree E-Bill.
* September 14, 1998 -- CheckFree announces new TCP/IP communication
interface between CheckFree's Investment Services Division and The
Depository Trust Corporation -- the world's largest securities
depository.
* September 9, 1998 -- PNC Bank announces electronic billing and payment
through CheckFree E-Bill.
* September 9, 1998 -- CheckFree RECON Select(TM) and CheckFree
A.R.M.(TM) are introduced at New York Cash Exchange.
* September 8, 1998 -- CheckFree introduces client/server-based Windows
version of CheckFree APL -- the industry leading portfolio management
system.
* September 1, 1998 -- Southern California Edison selects CheckFree E-
Bill to provide electronic billing and payment option to its 4.2
million customers.
* August 31, 1998 -- National Association of Unclaimed Property
Administrators introduces SCOUT (State Clearinghouse of Unclaimed
Treasures) Web site -- central database for states to list unclaimed
property records to be developed and operated byCheckFree.
* August 17, 1998 -- American Payment Systems selects CheckFree RECON-
Plus for Windows client/server solution to automate its more than
100,000 daily transactions.
* August 10, 1998 -- Public Service Company of New Mexico selects
CheckFree E-Bill for electronic billing and payment.
* July 28,1998 -- CheckFree announces agreement to provide NationsBank
with expanded ACH system support. NationsBank is the fifth largest
originator of ACH transactions.
* July 15, 1998 -- ABN AMRO North America selects CheckFree's RECON-Plus
for Windows to Reconcile 150,000+ Accounts.
* July 1, 1998 -- CheckFree announces London Bridge Software Holding
plc to acquire CheckFree Mortgage Products division.
This press release contains statements that are not purely historical, and
as such are forward-looking statements under the Federal Securities laws.
These include statements regarding management's intentions, plans, beliefs,
expectations or projections of the future, and include statements in this
document regarding the expected increased use of Internet based billing and
payment services (paragraph 6), and the Company's expected revenues and loss
for the first quarter of fiscal 2000 (paragraph 18). These forward looking
statements involve risks and uncertainties, including without limitation,
whether consumers will sign up for and use these services when and as
expected, whether the Company's customers, particularly financial institutions
and Internet portals, timely announce, actively offer and aggressively market
such services to their clients and users, whether the Company's business and
market assumptions supporting its current revenue and earnings projections
will prove to be accurate, the various risks inherent in the Company's
business, and other risks and uncertainties detailed from time to time in the
Company's periodic reports filed with the Securities and Exchange Commission.
These include Form 10-K for the year ended June 30, 1998, filed September 25,
1998, and Form S-3/A filed June 15, 1999. One or more of these factors have
affected, and could in the future affect, the Company's business and financial
results in future periods, and could cause actual results to differ materially
from plans and projections. There can be no assurance that the forward-
looking statements made today will prove to be accurate, and issuance of such
forward-looking statements should not be regarded as a representation by the
Company, or any other person, that the objectives and plans of the Company
will be achieved. All forward-looking statements made in this press release
are based on information presently available to management, and the Company
assumes no obligation to update any forward-looking statements.
CHECKFREE HOLDINGS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Twelve Months Ended
June 30, June 30,
1999 1998 1999 1998
Revenues:
Processing and
servicing $55,591 $44,162 $201,059 $159,255
License fees 5,970 7,541 15,975 28,952
Maintenance fees 4,432 5,944 17,746 25,848
Other 4,759 5,864 15,351 19,809
Total Revenues 70,752 63,511 250,131 233,864
Expenses:
Cost of processing,
servicing and
support 39,132 35,592 146,704 129,924
Research and
development 4,546 10,108 21,085 36,265
Sales, marketing and
royalties 10,409 6,83732,354 28,839
General and
administrative 9,910 4,929 31,466 20,677
Depreciation and
amortization 6,629 5,619 24,630 24,999
In process research
and development --- --- 2,201 719
Charge for stock
warrants --- 418 --- 32,827
Exclusivity
amortization --- --- --- 2,963
Total Expenses 70,626 63,503 258,440 277,213
Net gain on
dispositions of
assets 662 7,724 4,576 36,173
Income (loss) from
operations 788 7,732 (3,733) (7,176)
Interest, net 483 966 2,181 2,832
Income (loss) before
income taxes 1,271 8,698 (1,552) (4,344)
Income tax expense
(benefit) 413 2,940 (12,009) (641)
Net Income (loss) $858 $5,758 $10,457 $(3,703)
Basic earnings (loss)
per share:
Net income (loss) per
common share $ 0.02 $ 0.10 $ 0.20 $(0.07)
Equivalent number of
shares 51,695 55,376 52,444 55,087
Diluted earnings (loss)
per share:
Net income (loss) per
common share $ 0.02 $ 0.10 $ 0.18 $(0.07)
Equivalent number of
shares 56,839 57,735 56,529 55,087
Supplemental
reconciliation of
net income (loss)
and income (loss)
per share:
Income (loss) before
income taxes, as
reported $1,271 $8,698 $(1,552) $(4,344)
One time items:
Net gain on
dispositions
of assets (662) (7,724) (4,576)(36,173)
Charges associated
with service disruption 2,681 2,681
Charges associated with
recalled secondary
offering 890 --- 890 ---
Charges associated with
corporate entity
structuring --- --- 624 ---
Charges associated with
real estate transactions 397 --- 1,332 ---
Charges for stock warrants --- 418 --- 32,827
In process research
and development --- --- 2,201 719
Losses and charges
related to divested
products --- 1,494 1,622 1,494
Exclusivity amortization --- --- --- 2,963
Adjusted income (loss)
before income taxes 4,577 2,886 3,222 (2,514)
Income tax expense
(benefit):
Income tax expense
(benefit) as reported 413 2,940 (12,009) (641)
Taxes associated with
one time items 1,323 (1,594) 13,237 976
Adjusted income taxes 1,736 1,346 1,228 335
Net income (loss)
excluding net gain on
dispositions of assets,
charges associated with
service disruption,
recalled secondary
offering, corporate entity
structuring, real estate
transactions and stock
warrants, in process
research and development,
losses and charges related
to divested products and
exclusivity
amortization. $2,841 $1,540 $1,994 $(2,849)
Diluted net income
(loss) per common share
excluding net gain on
dispositions of assets,
charges associated with
service disruption,
recalled secondary
offering, corporate
entity structuring,
real estate transactions
and stock warrants, in
process research and
development, losses
and charges related
to divested products
and exclusivity
amortization. $ 0.05 $ 0.03 $ 0.04 $(0.05)
Diluted shares
outstanding assuming
no anti-dilution 56,839 57,735 56,529 55,087
CHECKFREE HOLDINGS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited)
(In thousands)
June 30, June 30,
1999 1998
Current assets:
Cash, cash equivalents, and investments $24,587 $61,068
Accounts receivable, net 45,660 32,960
Assets held for sale --- 15,881
Other current assets 14,313 26,791
Total current assets 84,560 136,700
Property and equipment, net 69,823 50,920
Capitalized software and intangible
assets, net 65,934 41,861
Deferred income taxes 21,920 12,889
Other 10,524 7,742
Total assets $ 252,761 $250,112
Current liabilities:
Accounts payable, accrued liabilities
and other $41,781 $40,081
Deferred revenues 20,195 19,710
Total current liabilities 61,976 59,791
Long-term obligations - less current portion 3,882 6,467
Net stockholders' equity 186,903 183,854
Total liabilities and stockholders'
equity $ 252,761 $250,112
SOURCE CheckFree Holdings Corporation
-0- 08/10/99
/CONTACT: media, Laurinda Wilson, 678-375-1608, lwilson@checkfree.com ,
or |
