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 2.8 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 distribution through internet portals (paragraph 8), the Intuit disagreement (paragraph 9), and fourth quarter expectations (paragraphs 16 to 18). These forward-looking statements involve numerous risks and uncertainties, including without limitation: the timely and successful development of electronic billing and payment services through internet portals; the ability of the Company to resolve the disagreement with Intuit or to prevail in the arbitration; 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 December 31, 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.
CHECKFREE HOLDINGS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited)
(In thousands, except per share data)
Three Months Ended Nine Months Ended
March 31, March 31,
1999 1998 1999 1998
Revenues:
Processing and servicing $ 51,893 $ 42,147 $145,468 $115,093
License fees 3,593 8,116 10,005 21,411
Maintenance fees 4,112 6,644 13,314 19,904
Other 3,362 4,843 10,592 13,945
Total Revenues 62,960 61,750 179,379 170,353
Expenses:
Cost of processing,
servicing and support 36,115 34,213 107,572 94,332
Research and development 4,382 9,360 16,539 26,157
Sales, marketing and
royalties 6,713 6,692 21,945 22,002
General and administrative 7,198 5,215 21,556 15,748
Depreciation and
amortization 6,002 6,264 18,001 19,380
In process research and
development 2,201 --- 2,201 719
Charge for stock warrants --- 32,409 --- 32,409
Exclusivity amortization --- --- --- 2,963
Total Expenses 62,611 94,153 187,814 213,710
Net gain on dispositions
of assets --- 3,080 3,914 28,449
Income (loss) from operations 349 (29,323) (4,521) (14,908)
Interest, net 479 752 1,698 1,866
Income (loss) before income
taxes 828 (28,571) (2,823) (13,042)
Income tax expense (benefit) 1,136 (11,031) (12,422) (3,581)
Net income (loss) $ (308) $(17,540) $ 9,599 $ (9,461)
Basic earnings (loss) per share:
Net income (loss) per
common share $ (0.01) $ (0.32) $ 0.18 $ (0.17)
Equivalent number of
shares 51,218 55,281 52,696 54,989
Diluted earnings (loss) per share:
Net income (loss) per
common share $ (0.01) $ (0.32) $ 0.17 $ (0.17)
Equivalent number of
shares 51,218 55,281 56,117 54,989
Supplemental reconciliation of net income (loss)
and income (loss) per share:
Income (loss) before income
taxes, as reported $ 828 $(28,571) $ (2,823) $(13,042)
One time items:
Exclusivity amortization --- --- --- 2,963
In process research and
development 2,201 --- 2,201 719
Losses and charges related
to divested products --- --- 1,622 ---
Charge for stock warrants --- 32,409 --- 32,409
Charges associated with
corporate entity structuring --- --- 624 ---
Charges associated with real
estate transactions 291 --- 935 ---
Net gain on dispositions
of assets --- (3,080) (3,914) (28,449)
Adjusted income (loss)
before income taxes 3,320 758 (1,355) (5,400)
Income tax expense (benefit):
Income tax expense (benefit)
as reported 1,136 (11,031) (12,422) (3,581)
Taxes associated with one
time items 109 11,732 11,914 2,570
Adjusted income taxes 1,245 701 (508) (1,011)
Net income (loss) excluding
exclusivity amortization, in
process research and
development, losses and charges
related to divested products,
charges associated with stock
warrants, corporate entity
structuring and real estate
transactions and net gain on
dispositions of assets $ 2,075 $ 57 $ (847) $ (4,389)
Diluted net income (loss)
per common share excluding
exclusivity amortization,
in process research and
development, losses and
charges related to divested
products, charges associated
with stock warrants, corporate
entity structuring and real
estate transactions, and net
gain on dispositions
of assets $ 0.04 $ 0.00 $ (0.02) $ (0.08)
Diluted shares
outstanding assuming
no anti-dilution 55,870 57,586 52,696 54,989
CHECKFREE HOLDINGS CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited)
(In thousands)
March 31, June 30,
1999 1998
Current assets:
Cash, cash equivalents, and investments $ 25,624 $ 61,068
Accounts receivable, net 45,695 32,960
Assets held for sale --- 15,881
Other current assets 32,011 26,791
Total current assets 103,330 136,700
Property and equipment, net 58,087 50,920
Capitalized software and intangible
assets, net 65,128 41,861
Deferred income taxes 17,505 12,889
Other 6,640 7,742
Total assets $250,690 $250,112
Current liabilities:
Accounts payable, accrued liabilities
and other $ 35,149 $ 40,081
Deferred revenues 23,708 19,710
Total current liabilities 58,857 59,791
Long-term obligations - less current portion 6,616 6,467
Net stockholders' equity 185,217 183,854
Total liabilities and stockholders'
equity $250,690 $250,112
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