CheckFree Reports First Quarter Results Revenue and earnings in-line with expectations
October 20, 1998 04:45 PM
ATLANTA, Oct. 20 /PRNewswire/ -- CheckFree Holdings Corporation CKFR today announced revenues of $56.8 million for the first quarter of fiscal 1999 ended September 30, 1998. Total revenues for the quarter increased 26 percent over the comparative quarter of last year, adjusted for acquisitions and divestitures.
Excluding non-recurring charges related to the software divestiture process and the gain on the sale of software businesses, the Company reported a net loss for the quarter of $2.7 million, or five cents per share, compared to a net loss of $3.3 million, or six cents per share, for the same period last year, adjusted for exclusivity amortization.
"Our first quarter performance from a revenue and earnings perspective was in line with the guidance we provided in August," said Pete Kight, CheckFree Chairman and CEO. "Subscriber growth in our electronic commerce division, which is one indication of consumer adoption rates of on-line bill payment, was at five percent, also about what we expected."
Momentum in Biller Contracts
During the quarter, CheckFree signed agreements with nine billers for CheckFree E-Bill, the company's electronic banking, presentment and payment services, as compared with twelve agreements signed in all of fiscal 1998. "The real news in the first quarter was the momentum we are gaining in signing contracts with billers for CheckFree E-Bill," said Kight. "We are very rapidly moving towards being able to provide four to six bills to an individual consumer -- the industry consensus for accelerated consumer adoption."
During the quarter several CheckFree bank partners launched their Internet-based bill payment solutions as scheduled. Today, four of the country's top banks -- Key Bank, First Union, Wachovia and Wells Fargo -- offer their customers solutions on the Web, and Chase expects to introduce its Internet product in November.
Strong Showing in Investment Services and Software Divisions
CheckFree Investment Services reported revenue of $8.5 million for the first quarter of fiscal 1999, a 29 percent increase over the same period of the prior year. Portfolios managed increased to 546,000 at the end of the first quarter, a 47 percent increase from Q1 1998. Retained business units in the Software division generated revenue of $8.4 million for the quarter.
Also during the quarter, CheckFree completed the divestiture of a number of its software businesses in accordance with a plan announced last April. In the past fourteen months the Company sold six businesses at an aggregate gain of $45 million.
Stock Repurchase Program
On October 9, CheckFree announced that its board of directors had expanded the Company's stock buy-back program to authorize the purchase of up to six million shares of Common Stock. Through that date the Company repurchased 4.7 million shares at an average price of $6.62 per share. Pete Sinisgalli, CheckFree's chief operating officer, said, "We have more than sufficient cash reserves, so when a discrepancy of this magnitude between the market's valuation and our assessment arose, we could not ignore the opportunity."
First Quarter 1999 Highlights
* October 13, 1998 -- Nicor Gas and CheckFree launch electronic billing
and payment option to more than 1.9 million northern Illinois
customers.
* 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 bill presentment
and payment through CheckFree E-Bill.
* September 9, 1998 -- CheckFree RECON Select and CheckFree A.R.M. 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 bill presentment 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 by CheckFree.
* 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 bill presentment 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.
About CheckFree
Founded in 1981, CheckFree Corporation, the operating subsidiary of CheckFree Holdings Corporation, is the leading provider of financial electronic commerce services, software and related products for more than 2.5 million consumers, 1,000 businesses and 850 financial institutions. CheckFree designs, develops and markets services that enable its customers to make electronic payments and collections, automate paper-based recurring financial transactions and conduct secure financial transactions on the Internet.
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. Those statements include, but may not be limited to, all statements regarding the intent, beliefs, expectations, projections, forecasts, and plans of the Company and its management. These forward-looking statements involve numerous risks and uncertainties, including without limitation: the timely development and implementation of Internet-based electronic banking, bill payment and presentment services by the Company's bank customers; increased numbers of bank customers who subscribe to such electronic banking services; the timely and effective implementation of bank marketing and advertising promotions to promote increased adoption of electronic banking services; timely implementation of existing bank processing agreements; the ability of the Company to sell its processing services to additional financial institutions; the acceptance of the Company's electronic banking and bill payment services by financial institutions and businesses and their customers; the impact of competitive services and products; the effect of any future acquisitions and divestitures; and the timely development and acceptance of new electronic commerce services and products, as well as 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, including the Report on Form 10-K for the year ended June 30, 1998. One or more of these factors have affected, and could in the future affect, the Company's businesses and financial results in future periods and could cause actual results to differ materially from plans and projections. Therefore, there can be no assurance that the forward-looking statements included in this press release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information 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 the management of the Company. The Company assumes no obligation to update any forward-looking statements.
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