Published:
S1 Corporation Reports Fourth Quarter and Full Year 2007 Results
NORCROSS, Ga., Feb. 26 /PRNewswire-FirstCall/ -- S1 Corporation
(Nasdaq: SONE), a leading global provider of customer interaction financial
and payment solutions, today announced financial results for the fourth
quarter and full year ended December 31, 2007.
-- GAAP earnings were $0.11 per share from continuing operations for the
fourth quarter of 2007 which was a $0.28 improvement over the $0.17
per share loss in the fourth quarter of 2006. These figures include
stock based compensation of $600,000 and $1.8 million in the fourth
quarter of 2007 and 2006, respectively. For the full year, GAAP
earnings were $0.32 per share from continuing operations in 2007
compared to a loss of $0.17 per share for 2006. These figures include
stock based compensation of $8.5 million and $5.5 million in 2007 and
2006, respectively.
-- Total revenue for the fourth quarter of 2007 increased six percent to
$53.4 million, with license revenue increasing 30 percent compared
with the fourth quarter of 2006. Total revenues for 2007 increased
seven percent to $204.9 million from $192.3 million in 2006. From
2006 to 2007, revenue from our largest customer declined $4.5
million while revenue from all other customers grew approximately 11.8
percent.
-- Net cash provided by operating activities increased to $32.3 million
in 2007 from $3.5 million in 2006.
-- EBITDA for the fourth quarter of 2007 was $9.5 million compared to a
negative $10.0 million in the fourth quarter of 2006. For the full
year 2007, EBITDA was $29.6 million compared to a negative $3.1
million for 2006. EBITDA includes stock based compensation expense,
and is described and reconciled to our GAAP income from continuing
operations below. (1)
-- Significant customer additions during 2007 included:
* Three of the top 15 banks in the United States
* One of the largest banks in southeast Asia
* One of the largest banks in the Middle East
* One of the largest merchant acquirers in the Middle East
* One of the largest fast food companies in the world
* One of the largest telecommunications companies in the world
* The largest ATM manufacturer in the world
-- The Company repurchased 2.0 million shares of its common stock for
$15.7 million during the fourth quarter of 2007, bringing
repurchases under the program from inception in May 2007 to 6.6
million shares for $50.3 million.
"We posted strong year-over-year growth in revenue and earnings and
achieved several significant milestones during 2007, including licensing S1
Enterprise to three top 15 U.S. banks, adding more than 20 new Postilion
customers, and increasing customer satisfaction across the company," said
Johann Dreyer, Chief Executive Officer of S1. "I am very pleased with our
performance in 2007. We have turned S1 into a profitable organization that is
well positioned for the future. As a result, we are targeting 2008 revenues of
$216 million to $220 million and GAAP earnings of $0.37 to $0.40 per share."
The Company's estimated range of GAAP EPS for 2008 includes approximately
$8 million of stock based compensation expense, and assumes no impact from
possible changes in the income tax valuation allowance during 2008.
(1) EBITDA Reconciliation
For the three months ended December 31, 2007
Enterprise Postilion Total
EBITDA $5,621 $3,862 $9,483
Depreciation (1,126) (715) (1,841)
Amortization (187) (884) (1,071)
------- ------- -------
Operating income $4,308 $2,263 $6,571
Interest and other expense, net (10)
Income tax expense (130)
-------
Income from continuing operations $6,431
=======
For the year ended December 31, 2007
Enterprise Postilion Total
EBITDA $16,024 $13,570 $29,594
Depreciation (4,503) (2,520) (7,023)
Amortization (723) (3,389) (4,112)
-------- ------- --------
Operating income $10,798 $7,661 $18,459
Interest and other income, net 2,500
Income tax expense (1,464)
--------
Income from continuing operations $19,495
========
See tables 4, 5 and 6 for reconciliations of EBITDA
This press release includes references to EBITDA, a non-GAAP financial
measure, the most directly comparable GAAP equivalent of which is income
(loss) from continuing operations. EBITDA excludes depreciation and
amortization, income taxes, and net interest income. A reconciliation of our
non-GAAP financial measure to the most directly comparable financial measure
is detailed in the Reconciliation of GAAP to non-GAAP financial measures
above. We believe that presentation of this non-GAAP financial measure
provides useful information to investors regarding our results of operations.
Stock based compensation costs are included in our reported EBITDA which are
presented in tables 4, 5 and 6.
We believe that excluding depreciation and amortization provides
supplemental information and an alternative presentation useful to investors'
understanding of the Company's core operating results and trends. Not only are
depreciation and amortization expenses based on historical costs of assets
that may have little bearing on present or future replacement costs, but they
are also based on management estimates of remaining useful lives.
Although we believe, for the foregoing reasons, that our presentation of
non-GAAP financial measure provides useful supplemental information to
investors regarding our results of operations, our non-GAAP financial measure
should only be considered in addition to, and not as a substitute for or
superior to, our financial measures prepared in accordance with GAAP.
Use of non-GAAP financial measures is subject to inherent limitations
because they do not include all the expenses that must be included under GAAP
and because they involve the exercise of judgment of which charges should
properly be excluded from the non-GAAP financial measure. Management accounts
for these limitations by not relying exclusively on non-GAAP financial
measures, but only using such information to supplement GAAP financial
measures. We urge investors not to consider non-GAAP financial measures as a
substitute for, or superior to, any measure of financial performance prepared
in accordance with GAAP. Our non-GAAP financial measure may be different from
such measures used by other companies.
We define EBITDA as Income (loss) from continuing operations less net
interest income, plus income taxes, depreciation, and amortization of goodwill
and other purchased intangibles. EBITDA is not a measure of liquidity
calculated in accordance with accounting principles generally accepted in the
United States, and should be viewed as a supplement to -- not a substitute for
-- our results of operations presented on the basis of accounting principles
generally accepted in theUnited States. EBITDA does not purport to represent
cash flow provided by, or used in, operating activities as defined by
accounting principles generally accepted in theUnited States. Our statement
of cash flows presents our cash flow activity in accordance with accounting
principles generally accepted in theUnited States. Furthermore, EBITDA is not
necessarily comparable to similarly-titled measures reported by other
companies.
We believe EBITDA is used by and is useful to investors and other users of
our financial statements in evaluating our operating performance because it
provides them with an additional tool to compare business performance across
companies and across periods. We believe that EBITDA is widely used by
investors to measure a company's operating performance without regard to items
such as interest expense, taxes, depreciation and amortization, which can vary
substantially from company to company depending upon accounting methods and
book value of assets, capital structure and the method by which assets were
acquired.
Our management uses EBITDA as a measure of operating performance to assist
in comparing performance from period to period on a consistent basis; as a
measure for planning and forecasting overall expectations and for evaluating
actual results against such expectations; and in communications with the board
of directors, stockholders, analysts and investors concerning our financial
performance.
Conference Call Information
Company management will host a conference call for interested parties to
discuss its fourth quarter and full year results on Tuesday, February 26,
2008, at 5:00 p.m. EST. A webcast of the call will be available through the
Company's website, www.s1.com. The conference call will contain forward-
looking statements and other material information. A replay of the call will
be available for two weeks following the call on the Company's website.
About S1
S1 Corporation (Nasdaq: SONE) delivers customer interaction software for
financial and payment services and offers unique solution sets for financial
institutions, retailers, and processors under three brand names: Postilion, S1
Enterprise and FSB Solutions. Additional information about S1 solutions is
available at www.s1.com, www.postilion.com, www.S1enterprise.com, and
www.fsb-solutions.com.
Forward Looking Statements
This press release contains forward-looking statements within the safe
harbor provisions of the Private Securities Litigation Reform Act. These
statements include statements with respect to our financial condition, results
of operations and business. The words "believes," "expects," "may," "will,"
"should," "projects," "contemplates," "anticipates," "forecasts," "intends" or
similar terminology identify forward-looking statements. These statements are
based on our beliefs as well as assumptions made using information currently
available to us. Because these statements reflect our current views concerning
future events, they involve risks, uncertainties and assumptions. Therefore,
actual results may differ significantly from the results discussed in the
forward-looking statements. The risk factors included in our reports filed
with the Securities and Exchange Commission (and available on our web site at
www.s1.com or the SEC's web site at www.sec.gov) provide examples of risks,
uncertainties and events that may cause our actual results to differ
materially from the expectations we describe in our forward-looking
statements. Except as provided by law, we undertake no obligation to update
any forward-looking statement.
S1 Corporation
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
TABLE 1
Three Months Ended Twelve Months Ended
12/31/2006 12/31/2007 12/31/2006 12/31/2007
---------------------- ----------------------
Revenues:
Software licenses $ 6,868 $ 8,901 $ 29,788 $ 30,709
Support and maintenance 11,120 12,194 44,094 45,591
Professional services 20,371 19,215 70,297 79,754
Data center 11,743 12,719 46,856 47,796
Other 133 418 1,275 1,075
--------------------- ---------------------
Total revenues 50,235 53,447 192,310 204,925
--------------------- ---------------------
Operating expenses:
Cost of software licenses 1,368 989 4,588 3,796
Cost of professional
services, support and
maintenance 17,395 18,085 65,231 67,808
Cost of data center 5,466 6,466 22,354 24,988
Cost of other revenue 410 69 1,103 375
Selling and marketing 7,945 8,161 27,658 31,304
Product development 9,938 5,471 38,937 23,738
General and administrative 7,414 5,511 26,694 26,259
Merger related and
restructuring costs 11,203 - 12,485 -
Depreciation 2,043 1,841 7,840 7,023
Amortization of other
intangible assets 329 283 1,310 1,175
--------------------- ---------------------
Total operating expenses 63,511 46,876 208,200 186,466
--------------------- ---------------------
Operating (loss) income (13,276) 6,571 (15,890) 18,459
Interest and other income
(loss), net 1,403 (10) 4,929 2,500
Income tax expense (371) (130) (1,278) (1,464)
--------------------- ---------------------
(Loss) income from
continuing operations,
net of tax $(12,244) $ 6,431 $(12,239) $ 19,495
(Loss) income from
discontinued operations (644) - 30,141 -
--------------------- ---------------------
Net (loss) income $(12,888) $ 6,431 $17,902 $ 19,495
===================== =====================
Net (loss) income per
share:
Basic:
Continuing operations $ (0.17) $ 0.11 $ (0.17) $ 0.32
Discontinued operations (0.01) - 0.42 -
--------------------- ---------------------
Net (loss) income $ (0.18) $ 0.11 $ 0.25 $ 0.32
===================== =====================
Diluted:
Continuing operations $ (0.17) $ 0.11 $ (0.17) $ 0.32
Discontinued operations (0.01) - 0.42 -
--------------------- ---------------------
Net (loss) income $ (0.18) $ 0.11 $ 0.25 $ 0.32
===================== =====================
Weighted average common
shares outstanding -
basic 70,723,073 57,362,157 70,779,502 59,663,833
Weighted average common
shares outstanding -
diluted n/a 58,482,400 n/a 60,597,817
S1 Corporation
Consolidated Balance Sheets
(In thousands)
TABLE 2
December 31, December 31,
2006 2007
------------- -------------
Assets
Current assets:
Cash and cash equivalents $ 69,612 $ 45,011
Short-term investments 21,392 23,855
Accounts receivable, net 53,371 39,969
Prepaid expenses 4,036 3,354
Other current assets 2,308 6,389
------------ ------------
Total current assets 150,719 118,578
Property and equipment, net 12,137 20,906
Intangible assets, net 12,903 11,240
Goodwill, net 125,300 125,281
Other assets 6,746 5,839
------------ ------------
Total assets $ 307,805 $ 281,844
============ ============
Liabilities and
Stockholders' Equity
Current liabilities:
Accounts payable $ 3,750 $ 2,300
Accrued compensation and benefits 9,642 10,649
Accrued restructuring 9,092 3,043
Accrued other expenses 12,415 8,198
Deferred revenues 29,265 26,345
Current portion of debt obligation 3,328 3,725
------------ ------------
Total current liabilities 67,492 54,260
Other liabilities 16,084 17,679
------------ ------------
Total liabilities 83,576 71,939
------------ ------------
Stockholders' equity:
Preferred stock 10,000 10,000
Common stock 613 567
Additional paid-in capital 1,845,529 1,810,783
Accumulated deficit (1,629,302) (1,609,807)
Accumulated other comprehensive
income (2,611) (1,638)
------------ ------------
Total stockholders' equity 224,229 209,905
------------ ------------
Total liabilities and
stockholders' equity $ 307,805 $ 281,844
============ ============
Preferred shares issued and
outstanding 749,064 749,064
Common shares issued and outstanding 61,290,973 56,748,906
S1 Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
TABLE 3
Twelve Months Ended
December 31, December 31,
2006 2007
------------- -------------
Cash flows from operating activities:
Net income $ 17,902 $ 19,495
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 13,061 11,135
Gain on disposal of discontinued
operations (32,153) -
Provision for doubtful accounts
receivable and billing adjustments 1,301 1,894
Stock based compensation expense 5,663 8,522
Loss on disposal of property
and equipment 906 -
Changes in assets and liabilities
(Increase) decrease in accounts
receivable (9,435) 11,509
Decrease (increase) in prepaid
expenses and other assets 710 (828)
Decrease in accounts payable (1,121) (1,449)
Decrease in accrued expenses
and other liabilities (1,298) (14,370)
Increase (decrease) in deferred
revenues 7,924 (3,600)
------------- -------------
Net cash provided by
operating activities 3,460 32,308
Net cash provided by (used in)
investing activities 31,626 (13,741)
Net cash used in financing
activities (50,671) (44,068)
Effect of exchange rate changes on
cash and cash equivalents 89 900
------------- -------------
Net decrease in cash and cash
equivalents (15,496) (24,601)
Cash and cash equivalents at
beginning of period 85,108 69,612
------------- -------------
Cash and cash equivalents at end of
period $ 69,612 $ 45,011
============= =============
S1 Corporation
Consolidated Statements of Operations
(In thousands)
(Unaudited)
TABLE 4
Three Months Ended Twelve Months Ended
12/31/2006 12/31/2007 12/31/2006 12/31/2007
--------------------- ---------------------
Revenues:
Software licenses $ 6,868 $ 8,901 $ 29,788 $ 30,709
Support and maintenance 11,120 12,194 44,094 45,591
Professional services 20,371 19,215 70,297 79,754
Data center 11,743 12,719 46,856 47,796
Other 133 418 1,275 1,075
--------------------- ---------------------
Total revenues 50,235 53,447 192,310 204,925
--------------------- ---------------------
Operating expenses:
Cost of software licenses 1,368 989 4,588 3,796
Cost of professional services,
support and maintenance * 17,395 18,085 65,231 67,808
Cost of data center * 5,466 6,466 22,354 24,988
Cost of other revenue 410 69 1,103 375
Selling and marketing * 7,945 8,161 27,658 31,304
Product development * 9,938 5,471 38,937 23,738
General and administrative * 7,414 5,511 26,694 26,259
Merger related and
restructuring costs * 11,203 - 12,485 -
Depreciation 2,043 1,841 7,840 7,023
Amortization of other
intangible assets 329 283 1,310 1,175
--------------------- ---------------------
Total operating expenses 63,511 46,876 208,200 186,466
--------------------- ---------------------
Operating (loss) income (13,276) 6,571 (15,890) 18,459
Interest and other income
(loss), net 1,403 (10) 4,929 2,500
Income tax expense (371) (130) (1,278) (1,464)
--------------------- ---------------------
(Loss) income from continuing
operations, net of tax $(12,244) $ 6,431 $(12,239) $ 19,495
(Loss) income from
discontinued operations * (644) - 30,141 -
--------------------- ---------------------
Net (loss) income $(12,888) $ 6,431 $17,902 $ 19,495
===================== =====================
Reconciliation to EBITDA:
(Loss) income from
continuing operations,
net of tax $(12,244) $ 6,431 $(12,239) $ 19,495
Interest income (expense),
net (1,403) 10 (4,929) (2,500)
Income tax expense 371 130 1,278 1,464
Depreciation 2,043 1,841 7,840 7,023
Amortization 1,233 1,071 4,932 4,112
--------------------- ---------------------
EBITDA $(10,000) $ 9,483 $ (3,118) $ 29,594
===================== =====================
* Includes stock based
compensation expense of:
Cost of professional
services, support
and maintenance $ 75 $ 56 $ 481 $ 514
Cost of data center 16 23 76 70
Selling and marketing 425 92 1,575 3,984
Product development 288 18 978 1,669
General and
administrative 457 431 1,874 2,285
Merger related and
restructuring costs 525 - 525 -
Discontinued operations (21) - 154 -
--------------------- ---------------------
$ 1,765 $ 620 $ 5,663 $ 8,522
===================== =====================
S1 Corporation
Enterprise Segment
Statements of Operations
(In thousands)
(Unaudited)
TABLE 5
Three Months Ended Twelve Months Ended
12/31/2006 12/31/2007 12/31/2006 12/31/2007
----------------------- -----------------------
Revenues:
Software licenses $ 1,577 $ 2,289 $ 9,408 $ 6,405
Support and maintenance 4,051 4,653 14,333 16,071
Professional services 16,076 15,255 54,865 63,740
Data center 5,619 7,383 21,131 25,478
Other 105 92 517 557
----------------------- -----------------------
Total revenues 27,428 29,672 100,254 112,251
----------------------- -----------------------
Operating expenses:
Cost of software licenses 354 292 1,491 1,269
Cost of professional
services, support
and maintenance * 11,566 11,157 42,876 41,743
Cost of data center * 2,820 3,862 11,806 14,514
Cost of other revenue 30 18 105 84
Selling and marketing * 3,355 3,308 12,626 13,122
Product development * 6,250 2,542 23,968 11,649
General and
administrative * 3,835 3,059 13,901 14,524
Merger related and
restructuring costs * 8,120 - 9,018 -
Depreciation 1,302 1,126 5,107 4,503
Amortization of other
intangible assets 47 - 180 45
----------------------- -----------------------
Total operating
expenses 37,679 25,364 121,078 101,453
----------------------- -----------------------
Operating (loss) income $ (10,251) $ 4,308 $ (20,824) $ 10,798
======================= =======================
Reconciliation to EBITDA:
Operating (loss) income $ (10,251) $ 4,308 $ (20,824) $ 10,798
Depreciation 1,302 1,126 5,107 4,503
Amortization 282 187 1,128 723
----------------------- -----------------------
EBITDA $ (8,667) $ 5,621 $ (14,589) $ 16,024
======================= =======================
* Includes stock based
compensation expense of:
Cost of professional
services, support
and maintenance $ 58 $ 34 $ 452 $ 429
Cost of data center 14 16 51 51
Selling and marketing 298 74 1,154 2,137
Product development 172 5 775 931
General and
administrative 170 234 965 1,240
Merger related and
restructuring costs 316 - 316 -
----------------------- -----------------------
$ 1,028 $ 363 $ 3,713 $ 4,788
======================= =======================
S1 Corporation
Postilion Segment
Statements of Operations
(In thousands)
(Unaudited)
TABLE 6
Three Months Ended Twelve Months Ended
12/31/2006 12/31/2007 12/31/2006 12/31/2007
----------------------- -----------------------
Revenues:
Software licenses $ 5,291 $ 6,612 $ 20,380 $ 24,304
Support and maintenance 7,069 7,541 29,761 29,520
Professional services 4,295 3,960 15,432 16,014
Data center 6,124 5,336 25,725 22,318
Other 28 326 758 518
----------------------- -----------------------
Total revenues 22,807 23,775 92,056 92,674
======================= =======================
Operating expenses:
Cost of software licenses 1,014 697 3,097 2,527
Cost of professional
services, support
and maintenance * 5,829 6,928 22,355 26,065
Cost of data center * 2,646 2,604 10,548 10,474
Cost of other revenue 380 51 998 291
Selling and marketing * 4,590 4,853 15,032 18,182
Product development * 3,688 2,929 14,969 12,089
General and
administrative * 3,579 2,452 12,793 11,735
Merger related and
restructuring costs* 3,083 - 3,467 -
Depreciation 741 715 2,733 2,520
Amortization of other
intangible assets 282 283 1,130 1,130
----------------------- -----------------------
Total operating
expenses 25,832 21,512 87,122 85,013
----------------------- -----------------------
Operating (loss) income $ (3,025) $ 2,263 $ 4,934 $ 7,661
======================= =======================
Reconciliation to EBITDA:
Operating (loss) income $ (3,025) $ 2,263 $ 4,934 $ 7,661
Depreciation 741 715 2,733 2,520
Amortization 951 884 3,804 3,389
----------------------- -----------------------
EBITDA $ (1,333) $ 3,862 $ 11,471 $ 13,570
======================= =======================
* Includes stock based
compensation expense of:
Cost of professional
services, support
and maintenance $ 17 $ 22 $ 29 $ 85
Cost of data center 2 7 25 19
Selling and marketing 127 18 421 1,847
Product development 116 13 203 738
General and
administrative 287 197 909 1,045
Merger related and
restructuring costs 209 - 209 -
----------------------- -----------------------
$ 758 $ 257 $ 1,796 $ 3,734
======================= =======================
SOURCE S1 Corporation
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
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