Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - OFFICIAL PAYMENTS HOLDINGS, INC. | form8k.htm |
| EX-99.2 - EARNINGS SCRIPT - OFFICIAL PAYMENTS HOLDINGS, INC. | exhibit99-2.htm |
| EX-99.3 - SLIDE PRESENTATION - OFFICIAL PAYMENTS HOLDINGS, INC. | exhibit99-3.htm |
 |
Exhibit
99.1
Tier
Technologies, Inc.
10780
Parkridge Blvd., Suite 400
Reston,
VA 20191
CONTACT:
Ronald
W. Johnston, Chief Financial Officer
rjohnston@tier.com
(571)
382-1000
|
Tier
Reports Fiscal 2010 First Quarter Results
RESTON, VA, February 9, 2010 –
Tier Technologies, Inc. (Nasdaq: TIER), a leading provider of electronic
payment solutions for the biller direct market, today announced
results for the quarter ended December 31, 2009 and provided updates on
continuing strategic growth initiatives.
Results
of Operations
First
Quarter Fiscal 2010 Results
For the
quarter ended December 31, 2009, Tier reported revenues from Continuing
Operations of $32.8 million, a 10.2% increase over the same quarter last
year. Net loss from Continuing Operations was $(0.7) million, or
$(0.04) per fully diluted share.
Continuing
Operations include Electronic Payment Solutions, or EPS, and certain wind-down
businesses. On a standalone basis, our EPS business reported
quarterly revenues of $31.9 million, or a 13.0% increase over the same
quarter last year. Our general, administrative, selling and marketing
expenses, which support our Continuing Operations, were $7.9 million,
consistent with the same quarter last year.
Management’s
Comments
Ronald
L. Rossetti, Chairman and Chief Executive Officer of Tier Technologies stated,
“I am pleased to report adjusted EBITDA from EPS Operations for the first
quarter of FY2010 of $0.8 million as compared with a loss in adjusted
EBITDA from EPS Operations of ($1.0) million in the first quarter of
FY2009.”
“Our
concentration today in our EPS “biller direct” business is to continue
increasing EPS Net Revenue growth over a fixed cost platform,” said
Rossetti. “What is very encouraging to me and should be to our
stockholders is that despite the fact that over 60% of our current EPS business
is tied directly to the collection of tax revenue, which depending on the taxing
authority has experienced 10-30% decreases in revenue, we were able to improve
our financial performance. In fact, we increased our EPS Net Revenue
in the quarter by 29%, or $2.2 million, and increased adjusted EBITDA from
EPS Operations by $1.8 million. Stated differently, we delivered
82% of our increase in EPS Net Revenues through to adjusted EBITDA from EPS
Operations. This improvement was the result of increasing our
profitability per transaction and driving substantial transaction growth, while
reducing overhead and holding platform costs relatively flat. For the
quarter ended December 31, 2009 our EPS transactions grew by 65% and our EPS
gross margin (gross sales less direct and other costs) increased by 270 basis
points, as compared with the prior year quarter.”
Tier
defines EPS Net Revenue as revenue less wind-down revenue, discount fees,
processing and interchange costs and adjusted EBITDA from EPS
Operations as net income
from our EPS business before interest expense net of interest income, income
taxes, depreciation and amortization and stock-based compensation in both equity
and cash.
The
following table shows a reconciliation of revenue to EPS Net Revenue for the
three months ended December 31, 2009 and 2008 (in thousands):
|
Three
months ended
|
||||||||||||
|
December
31,
|
||||||||||||
|
2009
|
2008
|
Change
|
||||||||||
|
Revenue
|
$ | 32,768 | $ | 29,740 | $ | 3,679 | ||||||
|
Less
Wind-down Revenue
|
848 | 1,499 | (651 | ) | ||||||||
|
EPS
Gross Revenue
|
31,920 | 28,241 | 3,028 | |||||||||
|
Discount
Fees, Interchange & Processing Costs
|
22,348 | 20,835 | 1,513 | |||||||||
|
EPS
Net Revenue
|
$ | 9,572 | $ | 7,406 | $ | 2,166 | ||||||
|
Net
Revenue Percentage Increase
|
29.2 | % | ||||||||||
The
following table shows a reconciliation of net income/(loss) from
Continuing Operations to adjusted EBITDA from EPS Operations and
adjusted EBITDA from Continuing Operations for the three months ended
December 31, 2009 and 2008 (in thousands):
|
EPS
|
Wind-down
|
Continuing
Operations
|
||||||||||||||||||||||||||||||||||
|
Quarter
1
|
Quarter
1
|
Quarter
1
|
||||||||||||||||||||||||||||||||||
|
FY10
|
FY09
|
Change
|
FY10
|
FY09
|
Change
|
FY10
|
FY09
|
Change
|
||||||||||||||||||||||||||||
|
Net
Income/(Loss)
|
$ | (930 | ) | $ | (2,266 | ) | $ | 1,336 | $ | 209 | $ | 374 | $ | (166 | ) | $ | (721) | $ | (1,892 | ) | $ | 1,171 | ||||||||||||||
|
Adjustments:
|
||||||||||||||||||||||||||||||||||||
|
Depreciation/Amortization
|
1,335 | 979 | 356 | 273 | 504 | (231 | ) | 1,608 | 1,483 | 125 | ||||||||||||||||||||||||||
|
Stock/Cash
based Comp
|
507 | 468 | 39 | ― | ― | ― | 507 | 468 | 39 | |||||||||||||||||||||||||||
|
Taxes
|
― | 1 | (1 | ) | ― | ― | ― | ― | 1 | (1 | ) | |||||||||||||||||||||||||
|
Less:
|
||||||||||||||||||||||||||||||||||||
|
Interest
Income, net
|
139 | 192 | (53 | ) | ― | ― | ― | 139 | 192 | (53 | ) | |||||||||||||||||||||||||
|
Adjusted
EBITDA
|
$ | 773 | $ | (1,010 | ) | $ | 1,783 | $ | 482 | $ | 878 | $ | (396 | ) | $ | 1,255 | $ | (132 | ) | $ | 1,387 | |||||||||||||||
EPS
revenues, EPS Net Revenues, adjusted EBITDA from EPS Operations and adjusted
EBITDA from Continuing Operations are non-GAAP financial
measures. Tier’s management believes these measures are useful for
evaluating performance against peer companies within its industry, and provide
investors with additional transparency with respect to financial measures used
by management in its financial and operational
decision-making. Non-GAAP financial measures should not be considered
a substitute for the reported results prepared in accordance with US
GAAP. Tier’s definition used to calculate non-GAAP financial measures
may differ from those used by other companies.
Liquidity
As of
December 31, 2009, Tier had $57.7 million in cash and marketable
securities, and $7.4 million in restricted investments, for a total of
$65.1 million of cash. Tier currently holds $30.1 million
in auction rate securities as long-term investments. These
investments are revenue bonds and asset-backed notes issued by state
agencies. The investments are AAA-rated and collateralized with
student loans and guaranteed under the Federal Family Education Loan
Program. Tier has no short-term or long-term debt.
Conference
Call
Tier will
host a conference call Tuesday, February 9, 2010 at 5:00 p.m. Eastern Time to
discuss these results. To access the conference call, please dial
(888)335-3240 and
provide conference ID # 54925076. The conference call is also
available live via the Internet at www.tier.com. A
replay will be available at 5:00 p.m. Eastern Time on Wednesday, February 10,
2010 at www.tier.com or by
calling (800) 642-1687 and entering conference ID # 54925076. The
replay will be available until 11:45 p.m. Eastern Time on February 23,
2010.
About
Tier Technologies, Inc.
Tier
Technologies, Inc. is a leading provider of electronic payment solutions in the
biller direct market. Headquartered in Reston, Virginia, the company
provides over 3,900 electronic payment clients in all 50 states and the District
of Columbia with enhanced payment services that include multiple payment
choices, payment channels, and bill payment products and
services. Tier serves clients in multiple markets including federal,
state, and local governments, educational institutions, utilities and commercial
clients primarily through its wholly-owned subsidiary, Official Payments
Corporation. For more information, see www.tier.com and
www.officialpayments.com.
Statements
made in this press release that are not historical facts are forward-looking
statements that are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These
forward-looking statements relate to future events or Tier’s future financial
and/or operating performance and generally can be identified as such because the
context of the statement includes words such as “may,” “will,” “intends,”
“plans,” “believes,” “anticipates,” “expects,” “estimates,” “shows,” “predicts,”
“potential,” “continue,” or “opportunity,” the negative of these words or words
of similar import. Tier undertakes no obligation to update any
such forward-looking statements. Each of these statements is made as
of the date hereof based only on current information and expectations that are
inherently subject to change and involve a number of risks and
uncertainties. Actual events or results may differ materially from
those projected in any of such statements due to various factors, including, but
not limited to: general
economic conditions, which affect Tier’s financial results in all our markets,
which we refer to as “verticals,” including our property tax vertical; the
timing and the cost of consolidating our payment processing platforms; our
ability to grow EPS Net Revenue while keeping costs relatively fixed; the
potential loss of funding by clients, including due to government budget
shortfalls or revisions to mandated statutes; the timing, initiation,
completion, renewal, extension or early termination of client projects; our
ability to realize revenues from our business development opportunities; the
impact of governmental investigations or litigation; and unanticipated claims as
a result of project performance, including due to the failure of software
providers or subcontractors to satisfactorily complete
engagements. For a discussion of these and other factors which may
cause our actual events or results to differ from those projected, please refer
to our quarterly report on Form 10-Q for our fiscal quarter ended December 31,
2009, filed with the SEC.
TIER
TECHNOLOGIES, INC.
|
(in
thousands)
|
December 31,
2009
|
September 30,
2009
|
||||||
|
(unaudited)
|
||||||||
|
ASSETS:
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 26,577 | $ | 21,969 | ||||
|
Investments
in marketable securities
|
1,000 | 4,499 | ||||||
|
Restricted
investments
|
1,361 | 1,361 | ||||||
|
Accounts
receivable, net
|
4,780 | 4,790 | ||||||
|
Settlements
receivable, net
|
7,994 | 6,272 | ||||||
|
Prepaid
expenses and other current assets
|
2,659 | 2,239 | ||||||
|
Total
current assets
|
44,371 | 41,130 | ||||||
|
Property,
equipment and software, net
|
8,470 | 7,990 | ||||||
|
Goodwill
|
17,345 | 17,329 | ||||||
|
Other
intangible assets, net
|
10,906 | 12,038 | ||||||
|
Investments
in marketable securities
|
30,081 | 31,169 | ||||||
|
Restricted
investments
|
6,000 | 6,000 | ||||||
|
Other
assets
|
709 | 571 | ||||||
|
Total
assets
|
$ | 117,882 | $ | 116,227 | ||||
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY:
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable
|
$ | 373 | $ | 84 | ||||
|
Settlements
payable
|
9,808 | 9,591 | ||||||
|
Accrued
compensation liabilities
|
2,037 | 3,213 | ||||||
|
Accrued
discount fees
|
9,697 | 5,343 | ||||||
|
Other
accrued liabilities
|
2,465 | 3,425 | ||||||
|
Deferred
income
|
778 | 861 | ||||||
|
Total
current liabilities
|
25,158 | 22,517 | ||||||
|
Other
liabilities
|
1,266 | 1,121 | ||||||
|
Total
liabilities
|
26,424 | 23,638 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Shareholders’
equity:
|
||||||||
|
Preferred
stock, no par value; authorized shares: 4,579;
no
shares issued and outstanding
|
— | — | ||||||
|
Common
stock and paid-in capital; shares authorized: 44,260;
shares
issued: 20,687 and 20,687; shares outstanding: 18,151 and
18,238
|
192,423 | 192,030 | ||||||
|
Treasury
stock—at cost, 2,536 and 2,449 shares
|
(21,020 | ) | (20,271 | ) | ||||
|
Accumulated
deficit
|
(79,945 | ) | (79,170 | ) | ||||
|
Total
shareholders’ equity
|
91,458 | 92,589 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 117,882 | $ | 116,227 | ||||
TIER
TECHNOLOGIES, INC.
|
Three
months ended
December
31,
|
||||||||
|
(in
thousands, except per share data)
|
2009
|
2008
|
||||||
|
Revenues
|
$ | 32,768 | $ | 29,740 | ||||
|
Costs
and expenses:
|
||||||||
|
Direct
costs
|
24,092 | 22,418 | ||||||
|
General
and administrative
|
6,327 | 6,630 | ||||||
|
Selling
and marketing
|
1,601 | 1,316 | ||||||
|
Depreciation
and amortization
|
1,608 | 1,459 | ||||||
|
Total
costs and expenses
|
33,628 | 31,823 | ||||||
|
Loss
from continuing operations before other income/(loss) and income
taxes
|
(860 | ) | (2,083 | ) | ||||
|
Other
income/(loss):
|
||||||||
|
Gain/(loss)
on investments
|
12 | (112 | ) | |||||
|
Interest
income, net
|
127 | 304 | ||||||
|
Total
other income
|
139 | 192 | ||||||
|
Loss
from continuing operations before income taxes
|
(721 | ) | (1,891 | ) | ||||
|
Income
tax provision
|
— | 1 | ||||||
|
Loss
from continuing operations
|
(721 | ) | (1,892 | ) | ||||
|
Loss
from discontinued operations, net
|
(54 | ) | (3,262 | ) | ||||
|
Net
loss
|
$ | (775 | ) | $ | (5,154 | ) | ||
|
Loss
per share—Basic and diluted:
|
||||||||
|
From
continuing operations
|
$ | (0.04 | ) | $ | (0.10 | ) | ||
|
From
discontinued operations
|
— | (0.16 | ) | |||||
|
Loss
per share—Basic and diluted
|
$ | (0.04 | ) | $ | (0.26 | ) | ||
|
Weighted
average common shares used in computing:
|
||||||||
|
Basic
and diluted loss per share
|
18,156 | 19,735 | ||||||
TIER
TECHNOLOGIES, INC.
|
Three
months ended
December
31,
|
||||||||
|
(in
thousands)
|
2009
|
2008
|
||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net loss
|
$ | (775 | ) | $ | (5,154 | ) | ||
|
Less:
Loss from discontinued operations, net
|
(54 | ) | (3,262 | ) | ||||
|
Loss
from continuing operations, net
|
(721 | ) | (1,892 | ) | ||||
|
Non-cash
items included in net loss:
|
||||||||
|
Depreciation
and amortization
|
1,608 | 1,483 | ||||||
|
Provision
for doubtful accounts
|
299 | 39 | ||||||
|
Deferred
rent
|
26 | — | ||||||
|
Share-based
compensation
|
507 | 468 | ||||||
|
(Gain)/loss
on trading securities
|
(12 | ) | 112 | |||||
|
Other
|
(4 | ) | 25 | |||||
|
Net
effect of changes in assets and liabilities:
|
||||||||
|
Accounts
and settlements receivable, net
|
(2,011 | ) | (1,727 | ) | ||||
|
Prepaid
expenses and other assets
|
(737 | ) | (602 | ) | ||||
|
Accounts
and settlements payable and accrued liabilities
|
2,737 | 1,308 | ||||||
|
Income
taxes receivable
|
(77 | ) | (61 | ) | ||||
|
Deferred
income
|
(83 | ) | — | |||||
|
Cash
provided by (used in) operating activities from continuing
operations
|
1,532 | (847 | ) | |||||
|
Cash
used in operating activities from discontinued operations
|
(54 | ) | (3,209 | ) | ||||
|
Cash
provided by (used in) operating activities
|
1,478 | (4,056 | ) | |||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Purchases
of available-for-sale securities
|
(1,000 | ) | (11,470 | ) | ||||
|
Maturities
of available-for-sale securities
|
4,499 | 2,401 | ||||||
|
Sales
of trading securities
|
1,100 | — | ||||||
|
Maturities
of restricted investments
|
— | 500 | ||||||
|
Purchase
of equipment and software
|
(956 | ) | (480 | ) | ||||
|
Additions
to goodwill—ChoicePay acquisition
|
(16 | ) | — | |||||
|
Collection
on note receivable
|
261 | — | ||||||
|
Proceeds
from sale of discontinued operations
|
— | 205 | ||||||
|
Cash
provided by (used in ) investing activities from continuing
operations
|
3,888 | (8,844 | ) | |||||
|
Cash
used in investing activities from discontinued operations
|
— | (437 | ) | |||||
|
Cash
provided by (used in) investing activities
|
3,888 | (9,281 | ) | |||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Purchase
of company stock
|
(749 | ) | — | |||||
|
Capital
lease obligations and other financing arrangements
|
(9 | ) | (5 | ) | ||||
|
Cash
used in financing activities
|
(758 | ) | (5 | ) | ||||
|
Net
increase (decrease) in cash and cash equivalents
|
4,608 | (13,342 | ) | |||||
|
Cash
and cash equivalents at beginning of period
|
21,969 | 47,735 | ||||||
|
Cash
and cash equivalents at end of period
|
$ | 26,577 | $ | 34,393 | ||||
TIER
TECHNOLOGIES, INC.
Consolidated
Statement of Operations—Continuing Operations
|
(in
thousands)
|
EPS
|
Wind-
down
|
Total
|
|||||||||
|
Three
months ended December 31, 2009:
|
||||||||||||
|
Revenues
|
$ | 31,920 | $ | 848 | $ | 32,768 | ||||||
|
Costs
and expenses:
|
||||||||||||
|
Direct
costs
|
23,832 | 260 | 24,092 | |||||||||
|
General
and administrative
|
6,221 | 106 | 6,327 | |||||||||
|
Selling
and marketing
|
1,601 | — | 1,601 | |||||||||
|
Depreciation
and amortization
|
1,335 | 273 | 1,608 | |||||||||
|
Total
costs and expenses
|
32,989 | 639 | 33,628 | |||||||||
|
(Loss)/income
from continuing operations before other income and income
taxes
|
(1,069 | ) | 209 | (860 | ) | |||||||
|
Other
income/(expense):
|
||||||||||||
|
Interest
income
|
127 | — | 127 | |||||||||
|
Gain
on investments
|
12 | — | 12 | |||||||||
|
Total
other income
|
139 | — | 139 | |||||||||
|
(Loss)/income
from continuing operations before taxes
|
(930 | ) | 209 | (721 | ) | |||||||
|
Income
tax provision
|
— | — | — | |||||||||
|
(Loss)/income
from continuing operations
|
$ | (930 | ) | $ | 209 | $ | (721 | ) | ||||
|
(in
thousands)
|
EPS
|
Wind-
down
|
Total
|
|||||||||
|
Three
months ended December 31, 2008:
|
||||||||||||
|
Revenues
|
$ | 28,241 | $ | 1,499 | $ | 29,740 | ||||||
|
Costs
and expenses:
|
||||||||||||
|
Direct
costs
|
21,838 | 580 | 22,418 | |||||||||
|
General
and administrative
|
6,568 | 62 | 6,630 | |||||||||
|
Selling
and marketing
|
1,313 | 3 | 1,316 | |||||||||
|
Depreciation
and amortization
|
979 | 480 | 1,459 | |||||||||
|
Total
costs and expenses
|
30,698 | 1,125 | 31,823 | |||||||||
|
(Loss)/income
from continuing operations before other income/(loss) and income
taxes
|
(2,457 | ) | 374 | (2,083 | ) | |||||||
|
Other
income/(loss):
|
||||||||||||
|
Interest
income, net
|
304 | — | 304 | |||||||||
|
Loss
on investment
|
(112 | ) | — | (112 | ) | |||||||
|
Total
other income
|
192 | — | 192 | |||||||||
|
(Loss)/income
from continuing operations before taxes
|
(2,265 | ) | 374 | (1,891 | ) | |||||||
|
Income
tax provision
|
1 | — | 1 | |||||||||
|
(Loss)/income
from continuing operations
|
$ | (2,266 | ) | $ | 374 | $ | (1,892 | ) | ||||