Carreker Corporation Reports Second Quarter Fiscal 2006 Results

DALLAS, Sept. 7 (AllPayNews) -- Carreker Corporation (Nasdaq: CANI - News), a leading provider of payments technology and consulting solutions for the financial services industry, today reported financial results for its second quarter ended July 31, 2006. The Company reported revenue of $28.8 million and net income of $961,000, or $.04 per diluted share for the second quarter of 2006 compared to revenue of $27.2 million and a net loss of $34,000, or $0.00 per share for the first quarter of 2006. During each of the three-month periods ended July 31, 2006 and April 30, 2006, the Company recorded amortization associated with certain acquisition- related intangible assets of approximately $1.4 million and $1.5 million, respectively. Additionally, the Company recorded equity-based compensation expense of approximately $627,000 and $622,000 during the three-month periods ended July 31, 2006 and April 30, 2006, respectively. Excluding the aforementioned non-cash expense items, non-GAAP net income for the three months ended July 31, 2006 was $3.0 million, or $0.12 per diluted share compared with non-GAAP net income of $2.1 million, or $0.09 per diluted share, for the three months ended April 30, 2006. "We are pleased with our second quarter progress relative to our 2006 goals and continue to remain confident in our outlook for the full year," said J.D. (Denny) Carreker, Chairman and Chief Executive Officer of Carreker Corporation. "The market acceptance rate for some of our new solutions has been very encouraging and we are further encouraged by a healthy demand for our consulting offerings. We had several notable wins during the second quarter including our first float outsourcing customer, two Check 21 related tier upgrades and key beta customers in our cash and logistics business. We are cautiously optimistic about the sales momentum being established within each of our primary business units." Business Outlook Carreker continues to anticipate revenue growth during the second half of the 2006 fiscal year relative to the first half of fiscal 2006. The Company expects that revenue and net income for the third quarter of fiscal 2006 will be roughly in line with the second quarter of 2006 and that it will achieve improved revenue and net income in fiscal 2006 as compared to fiscal 2005. The Company also believes that it is well positioned for improved profitability in fiscal 2007 as a result of anticipated revenue growth, improved operating leverage, and the decrease in scheduled amortization expense associated with certain acquisition-related intangible assets. Conference Call Carreker's management will host a conference call and live Web cast today, Thursday, September 7, 2006, at 11:00 a.m. Eastern Time to discuss the Company's financial results for the second quarter of fiscal year 2006. At that time, the Company will provide an overview of business conditions, industry trends and other points of interest. To join the conference call, Domestic participants dial 866-348-8664; International participants dial 706- 679-0430. All participants enter code 4937106. Additionally, a live Web cast of the conference call will be available through the investor relations section of the Company's Web site at http://ir.carreker.com. A replay of the call will be available from Thursday, September 7, 2006 at 2:00 p.m. Eastern Time to Thursday, September 14, 2006 at 11:59 p.m. Eastern Time. To access the replay, Domestic participants dial 800-642-1687; International participants dial 706-645-9291. All replay participants enter code 4937106. An archived version of the Web cast will be available through the investor relations section of the Company's Web site at http://ir.carreker.com. Non-GAAP Financial Measures Carreker has included supplemental non-GAAP financial measures as part of this earnings release. The non-GAAP financial measures exclude from GAAP net income both the amortization of acquisition-related intangibles and equity- based compensation expense. These adjustments to Carreker's GAAP results are made with the intent of providing useful information to management and investors regarding Carreker's underlying operational results and performance in the marketplace. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles ("GAAP") in the United States. A reconciliation of GAAP to non-GAAP results for the three month periods ended July 31, 2006 and April 30, 2006, respectively, is as follows: ($ in 000s, other than per share figures) Three Months Three Months ended ended July 31, April 30, 2006 2006 GAAP Net Income (Loss) $961 $(34) Stock Option Expense $340 $382 Restricted Stock Expense $287 $240 Amortization of Acquisition-related Intangible Assets $1,419 $1,505 Non-GAAP Net Income $3,007 $2,093 Diluted net income per share on a GAAP basis $0.04 $0.00 Stock Option Expense $0.01 $0.02 Restricted Stock Expense $0.01 $0.01 Amortization of Acquisition-related Intangible Assets $0.06 $0.06 Diluted net income per share on a Non-GAAP basis $0.12 $0.09 Forward Looking Statements Except for historical information, the statements in this release, including statements regarding future financial performance, constitute forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially, including but not limited to customer acceptance of new product introductions, the timing of revenue from contracted sales, the timing of expected sales of products, the results of our exploration of strategic alternatives and the volatility in the Company's common stock price, as well as the risks and uncertainties arising out of economic, competitive, governmental and technological factors affecting the Company's operations, markets, services, products, sales, potential sales and prices. For further information concerning certain of these risks and uncertainties, see under the caption "Risk Factors" in the Company's most recent Form 10-K for the year ended January 31, 2006 and subsequent quarterly reports on Form 10-Q. We assume no obligation to update or revise any forward- looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. About Carreker Corporation Carreker Corporation improves earnings for financial institutions around the world. The Company's integrated consulting and software solutions are designed to increase clients' revenues and reduce their expenses, while improving security and increasing the value of their customer relationships. Carreker provides products and services to more than 250 clients in the United States, Canada, the United Kingdom, Ireland, continental Europe, Australia, New Zealand, South Africa, South America, Mexico, and the Caribbean. Clients include the full range of community, regional and large banks, among them more than 75 of the largest 100 banks in the United States. Headquartered in Dallas, Texas since 1978, Carreker Corporation has offices in London and Sydney. For more information, visit www.carreker.com. Click here for financial tables