eFunds Corporation Reports First Quarter 2006 Results
Net Revenue of $139.7 million
Diluted Earnings per Share of $0.23
SCOTTSDALE, Ariz., May 3 /PRNewswire-FirstCall/ -- eFunds Corporation (NYSE: EFD - News), the Company that delivers innovative payment processing and information intelligence solutions, today reported first quarter net revenue of $139.7 million. This amount represents a 22% improvement over the net revenues of $114.2 million reported during the first quarter of 2005. Reported operating income was $15.2 million, or 11% of net revenue, compared to $15.0 million, or 13% of net revenue reported in prior year quarter. The Company's operating income in the first quarter of 2006 reflects a $3 million operating loss by the Prepaid Solutions business that the Company acquired in July 2005 due to the seasonality of that business and infrastructure investments made in advance of integration activities associated with this business. First quarter net income was $10.7 million, or $0.23 per diluted share, compared to net income of $11.9 million, or $0.23 per diluted share, reported for the same quarter in 2005.
The Company implemented SFAS 123R using the modified retrospective approach during the quarter. As such, compensation costs have been revised in the prior year quarter to reflect stock based compensation expense that historically would have been presented in proforma footnote disclosures in the Company's quarterly filings on Form 10-Q.
"We are pleased with the first quarter financial results, which are consistent with our internal expectations," stated Paul Walsh, Chairman and CEO. "Our EFT Processing and Risk Management businesses delivered double digit revenue growth on a quarter over quarter basis. We are continuing our efforts to integrate our Prepaid Solutions business more fully into our other operations. Our efforts to more closely align our outsourcing capabilities with our core risk management and transaction processing businesses are also progressing," stated Walsh.
The Company re-affirmed its previously published guidance that 2006 diluted earnings per share will be between $1.15 - $1.25 and now anticipates that 2006 net revenues will trend toward the low end of its previously published range of 15 - 25 percent over 2005 net revenues.
The foregoing expectations reflect the following assumptions:
* An effective tax rate of approximately 35 percent for the balance
* Cash outlays for capital expenditures and product development
activities will be somewhat higher than the $29.4 million seen in 2005.
eFunds will hold a one-hour conference call today at 10:00 a.m. EST to discuss the Company's quarterly and year-to-date financial performance. To listen to the conference call, dial 800-399-5351 (International callers dial 706-643-1939). The call will also be broadcast on the Company's Web site at www.efunds.com under the "Our Company/Investor Relations" tab. Interested parties are encouraged to click on the web cast link 10 to 15 minutes prior to the start of the conference call.
A replay of the conference call will be available beginning two hours after the call's completion and will play through 11:59 p.m. EDT on May 17, 2006. You may access the replay by dialing 800-642-1687 (International callers dial 706-645-9291) and entering the Conference ID number 8153325. Additionally, a replay of the conference call will be available via the eFunds Web site at www.efunds.com.
With more than 30 years of payment processing and information intelligence expertise, eFunds delivers flexible, innovative solutions to the world's leading businesses. Leveraging mission-critical business insight, we enable financial services companies, retailers and government organizations to grow their businesses while reducing transaction and infrastructure costs, detecting potential fraud and building long-term customer value. Our flexible delivery model means solutions can be run in-house, outsourced or anything in between, helping customers balance the need for control with operational efficiency and low cost of ownership. From the point of account opening to the settlement of every transaction -- debit, credit, or prepaid -- eFunds helps businesses win more of the right customers, serve them more efficiently and keep them. www.efunds.com
Statements made in this release concerning the Company's or management's intentions, expectations, or predictions about future results or events are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are necessarily subject to risks and uncertainties that could cause actual results to vary from stated expectations and such variations could be material and adverse. Factors that could result in such a variation include, but are not limited to, the inherent unreliability of earnings and revenue growth predictions due to numerous factors, including many beyond the Company's control, potential difficulties, delays and unanticipated expenses inherent in the development and marketing of new products and services, competitive factors, the unpredictability of merger and acquisition activity, and the numerous risks and potential additional costs, disruptions and delays associated with the establishment of new business initiatives. Additional information concerning these and other factors that could cause actual results to differ materially from the Company's current expectations is contained in the Company's Annual Report on Form 10-K for the period ending December 31, 2005.