CheckFree Reports Second Quarter Results ending 12/31/98
-- Revenue and Earnings In-Line With Expectations -- -- Additional Investments Planned --
ATLANTA, Jan. 26 /PRNewswire/ -- CheckFree Holdings Corporation (Nasdaq: CKFR - news) today announced revenues of $59.6 million for the second quarter of fiscal 1999 ended December 31, 1998. Total revenues for the quarter increased 23 percent over the comparative quarter of last year, adjusted for acquisitions and divestitures.
Excluding non-recurring charges, the Company reported a net loss for the quarter of $193,000, or break-even on a per-share basis, compared to a net loss of $1.1 million, or two cents per share, for the same period last year, adjusted for one-time in-process research and development charges.
New subscribers to the Company's electronic billing and payment services showed a 5 percent growth over the prior quarter, equating to more than 2.6 million subscribers and more than 10 million transactions processed per month.
Company Extends Lead in Electronic Billing and Payment
The Company said that during the quarter it signed contracts for electronic billing and payment solutions with ten additional merchants, bringing to 41 the total of the nation's largest 150 billers that have signed contracts with CheckFree. Collectively, these contracts potentially represent nearly a half-billion bills each month.
Contracts signed during the second quarter include utilities Ameren and Southern Company -_ the largest producer of electricity in the United States -- and two of the nation's largest mortgage companies, HomeSide Lending and Countrywide Mortgage. In addition, the Company signed contracts with four financial institutions, extending its penetration in credit unions and smaller regional banks.
Additional Internet Distribution Investments Planned
CheckFree also announced that, as part of its strategy to broaden availability of electronic billing and payment on the Internet, it had entered into a material Internet distribution contract, the terms and conditions of which cannot be disclosed pursuant to the agreement. The Company estimates incurring incremental expenses of about $4 million, as well as up to $2 million in capital spending, in fiscal 1999 in support of the agreement. The Company does not expect any material revenues from the agreement in fiscal 1999.
Strategic Partnerships Formed
During the second quarter the Company also announced alliances with several companies that offer software or services that will help speed biller and financial service provider time-to-market, and established a Biller Alliance Program to identify and develop these relationships. Key additions to the program for the quarter include CheckFree integration with Oracle's iBill & Pay software, Mobius Corporation's DocumentDirect® archiving and retrieval solution, Bell & Howell's TransFormer(TM) billing system, and NIIT biller software and server solutions.
Divisions Perform As Expected
CheckFree's Electronic Commerce division reported revenue of $41.3 million for the quarter, 27% growth over the same quarter of fiscal 1998. The number of people subscribing to electronic services offered by the division reached 2.6 million, a 5% increase over the prior quarter.
CheckFree Investment Services reported revenue of $8.8 million for the second quarter of fiscal 1999, a 19 percent increase over the same quarter last year. The division grew the number of portfolios under its management to 573,000, up five percent over the previous quarter and 41 percent over the same quarter of fiscal 1998.
The Company's Software unit reported revenue in the quarter of $9.5 million, an improvement of eight percent over the $8.8 million generated by these same businesses in the second quarter of fiscal 1998. Market leaders such as Countrywide Mortgage, Fiduciary Trust, JP Morgan, and Pershing, a division of Donaldson, Lufkin, Jenrette, selected CheckFree's RECON Trade® securities reconciliation product during the quarter. In addition, the Company expanded its leadership in the Windows-based reconciliation software market by signing eight contracts for RECON-Plus for Windows®.
Second Quarter 1999 Highlights
* 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.
* 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, which was launched at the Retail Delivery Systems trade show in Las
Vegas.
* Dec. 2, 1998 - CheckFree announces next generation of CheckFree E-Bill
and RDS '98 that features "direct distribution" to ensure biller access
to its customers, three levels of 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 - Electronic Banking Association Web site is launched by
CheckFree to promote 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+ 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 Columbia.
* Nov. 3, 1998 - CheckFree and EDS sign 6-year agreement to include
CheckFree's electronic bill payment solution to 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 that will be
available in the fourth quarter of 1998.
* 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 for Windows 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.
About CheckFree
Founded in 1981, CheckFree (www.checkfree.com), the operating subsidiary of CheckFree Holdings Corporation, is the leading provider of financial electronic commerce services, software and related products for more than 2.6 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, and include statements regarding the recently signed agreement. These forward-looking statements involve numerous risks and uncertainties, including without limitation: the timely development and implementation of Internet-based electronic billing and payment services by the Company's bank customers; the increased numbers of bank customers who subscribe to such services; the timely and effective implementation of bank marketing and advertising promotions to promote increased adoption of electronic billing and payment 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, and Form 10Q for the quarter ended September 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. |
