eFunds Corporation Reports Second Quarter 2006 Results

Net Revenue of $132.4 million Diluted Earnings per Share of $0.21 SCOTTSDALE, Ariz., Aug. 9 (AllPayNews) -- eFunds Corporation (NYSE: EFD - News), the Company that delivers innovative payment processing and information intelligence solutions, today reported net revenue of $132 million for the quarter ended June 30, 2006. This amount represents an increase of 14% over net revenue of $116 million reported during the second quarter of 2005. Reported operating income was $15 million, or 12% of net revenue, compared to $19 million, or 16% of net revenue, reported in the prior year quarter. The Company's operating income in the second quarter of 2006 reflects a $6 million operating loss by the Prepaid Solutions business that it acquired in July 2005 while the prior year quarterly results include a $2 million benefit from a state business tax refund received during that quarter. Second quarter net income was $10 million, or $0.21 per diluted share, compared to net income of $13 million, or $0.27 per diluted share, reported in the second quarter of 2005. For the six months ended June 30, 2006, the Company reported net revenue of $272 million compared to net revenue of $231 million reported in the first half of 2005. Reported operating income for the first half of 2006 was $30 million, or 11% of net revenue, compared to operating income of $34 million, or 15% of net revenue, reported in same period in the prior year. Net income for the first half of 2006 was $20 million, or $0.43 per diluted share, as compared to net income of $25 million, or $0.51 per diluted share reported in same period of 2005. "During the quarter, our Prepaid Solutions business continued to attract and win new customers while we continued our efforts to integrate that business' operations within eFunds. Our prepaid business exhibits a high level of seasonality due to the impact of holiday gift card sales and we continue to anticipate that this business will make a positive contribution over the second half of the year. We expect that this business will be largely neutral to our consolidated operating income for the entirety of 2006," stated Paul Walsh, Chairman and CEO of eFunds. "Our EFT Processing business reported double digit revenue growth and we continued to capitalize on our international opportunities with new customer wins in Asia and Europe," stated Walsh. During the second quarter of 2006, the Company reclassified its segments to reflect the geographic location of its customers and the ongoing revisions to the Company's organizational structure as part of management's efforts to develop a more customer-focused organization. For customers based in the U.S., the business results have been further segmented into payment and risk management solutions. The Company's prior year results have been re-presented in the new format in the attached schedules. Forward-looking Statements The Company re-affirmed its previously published guidance that 2006 diluted earnings per share will be between $1.15 - $1.25 and reported that it now anticipates that 2006 net revenues will increase 11 - 15 percent over 2005 net revenues. The foregoing expectations reflect the following assumptions: * An effective tax rate of approximately 35% for the balance of 2006; * Cash outlays for capital expenditures and product development activities in 2006 will approximate $40 million, and * The aggregate revenues from the Company's prepaid business in the second half of 2006 should increase over the levels seen in the first six months of this year in a manner generally consistent with historical periods and the cost savings from integration activities related to this business should exceed $4 million over the balance of the year. Conference Call 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. Replay Information 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 Aug. 23, 2006. You may access the replay by dialing 800-642-1687 (international callers dial 706-645-9291) and entering the Conference ID number 3452602. Additionally, a replay of the conference call will be available via the eFunds Web site at www.efunds.com. About eFunds 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 and subsequent Reports on Form 10-Q. Click here for financial tables