Exhibit 99.1 Tier Technologies, Inc. 10780 Parkridge Blvd., Suite 400 Reston, VA 20191
CONTACT: Matt Brusch, Director of Communications mbrusch@tier.com (571) 382-1048
Tier Technologies Files Fiscal 2006 Second Quarter Form 10-Q
RESTON, Va., November 14, 2006 –Tier Technologies, Inc. (OTC: TIER), today announced that it has filed its Quarterly Report on Form 10-Q for the fiscal year 2006 second quarter ended March 31, 2006.
On December 14, 2005, Tier announced the delay in filing its fiscal year 2005 Form 10-K, and the expected restatement of its financial results for the fiscal years ended September 30, 2002, 2003 and 2004 and for the associated fiscal quarters as needed. Subsequently, Tier did not file timely reports on Form 10-Q for the quarters ended December 31, 2005, March 31, 2006 and June 30, 2006.
Tier filed its amended fiscal year 2004 Form 10-K/A on October 25, 2006, its fiscal year 2005 Form 10-K on October 27, 2006, and its fiscal year 2006 first quarter Form 10-Q/A on November 13, 2006.
Net revenues for the fiscal year 2006 second quarter were $37.5 million, an increase of 6% as compared to net revenues of $35.4 million for the restated fiscal year 2005 second quarter.
Net loss per diluted share was $(0.26) for the fiscal year 2006 second quarter, as compared to net income per diluted share of $0.09 for the restated fiscal year 2005 second quarter. Significant items contributing to the net loss in the fiscal year 2006 second quarter were recognition of a $2.8 million forward loss on a contract; $1.9 million in costs associated with Tier’s financial restatements and account reconciliation of a payment processing center; and $0.3 million of stock-based compensation expenses resulting from the implementation of SFAS 123R.
Cash, cash equivalents and investments on March 31, 2006 totaled $66.0 million, representing an increase of approximately $1.7 million as compared to $64.3 million on September 30, 2005. The Company has no short-term or long-term debt.
Tier anticipates completing and filing all outstanding SEC filings, including all fiscal year 2005 and all remaining 2006 Quarterly Reports on Form 10-Q over the next several weeks. Tier expects to timely file its fiscal year 2006 Form 10-K and will announce an investor conference call at that time to discuss its fiscal year 2006 and historical financial results.
At the appropriate time, Tier expects to file an application seeking to relist its common stock on the Nasdaq Stock Market.
About Tier
Tier Technologies, Inc. offers a diversified array of innovative business and financial transaction processing solutions. Headquartered in Reston, Virginia, Tier’s clients include more than 2,200 federal, state, and local governments, educational institutions, utilities and commercial clients in the U.S. and abroad. Tier provides information technology solutions and, through its Official Payments Corp. subsidiary, delivers payment processing solutions for a wide range of markets. From designing, installing and maintaining cutting-edge public sector software systems, to delivering fast, secure and convenient financial transaction processing solutions, Tier provides integrated information solutions that solve problems while balancing innovation with practicality. For more information, seewww.tier.com andwww.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 Securities Litigation Reform Act of 1995. 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: the impact of the Company’s restatement process on its financial results; uncertainties surrounding the restatement process, including the predictions for timing of filing; the impact of governmental investigations; risks that the Company’s independent auditors might have audit adjustments that result in additional delay; and risks that the Company’s inability to complete the restatement of its financial statements will impact operations. For a discussion of the factors which may cause our actual events or results to differ from those projected, please refer to the Company’s quarterly report on Form 10-Q for the quarter ended March 31, 2006 filed today with the SEC.
(Financial tables follow)
1
TIER TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, 2006
September 30, 2005
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
20,833
$
27,843
Investments in marketable securities
45,200
36,493
Accounts receivable, net
14,413
19,449
Unbilled receivables
3,357
3,094
Prepaid expenses and other current assets
2,652
3,680
Total current assets
86,455
90,559
Property, equipment and software, net
13,591
13,501
Long-term accounts receivable
1,314
1,560
Goodwill
37,567
37,567
Other intangible assets, net
24,013
26,147
Restricted investments
5,076
3,335
Investment in unconsolidated affiliate
4,071
3,590
Other assets
2,681
483
Total assets
$
174,768
$
176,742
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
822
$
1,902
Income taxes payable
6,884
7,113
Accrued compensation liabilities
5,125
5,139
Accrued subcontractor expense
2,720
3,226
Other accrued liabilities
12,157
7,738
Deferred income
5,745
7,795
Other current liabilities
63
98
Total current liabilities
33,516
33,011
Other liabilities
2,059
2,192
Total liabilities
35,575
35,203
Shareholders’ equity:
Preferred stock, no par value, authorized shares: 4,579: no shares issued or outstanding
—
—
Common stock and paid-in capital–Shares authorized: 44,260; shares issued: 20,383 and 20,374; shares outstanding: 19,499 and 19,490
183,003
182,066
Treasury stock—at cost, 884 shares
(8,684
)
(8,684
)
Notes receivable from related parties
(4,132
)
(3,998
)
Accumulated other comprehensive loss
(68
)
(111
)
Accumulated deficit
(30,926
)
(27,734
)
Total shareholders’ equity
139,193
141,539
Total liabilities and shareholders’ equity
$
174,768
$
176,742
TIER TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended March 31,
Six months ended March 31,
2005
2005
(in thousands, except per share data)
2006
(As restated)
2006
(As restated)
Revenues
$
37,474
$
35,396
$
77,356
$
67,156
Costs and expenses:
Direct costs
30,696
22,888
58,592
44,810
General and administrative
8,859
6,639
15,782
13,181
Selling and marketing
2,740
2,689
5,320
5,357
Depreciation and amortization
1,325
1,568
2,644
3,116
Total costs and expenses
43,620
33,784
82,338
66,464
(Loss) income before other income (loss) and income taxes
(6,146
)
1,612
(4,982
)
692
Other income (loss):
Equity in net income (loss) of unconsolidated affiliate
462
(147
)
521
(242
)
Net interest income
683
379
1,274
674
Total other income
1,145
232
1,795
432
(Loss) income before income taxes
(5,001
)
1,844
(3,187
)
1,124
Income tax provision
—
39
5
39
Net (loss) income
$
(5,001
)
$
1,805
$
(3,192
)
$
1,085
Basic and diluted earnings (loss) per share
$
(0.26
)
$
0.09
$
(0.16
)
$
0.06
Weighted-average common shares used in computing:
Basic (loss) earnings per share
19,493
19,464
19,491
19,448
Diluted (loss) earnings per share
19,493
19,539
19,491
19,573
TIER TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six months ended March 31,
2005
(in thousands)
2006
(As restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income:
$
(3,192
)
$
1,085
Non-cash items included in net income:
Depreciation and amortization
4,478
4,105
Loss on retirement of equipment and software
28
(129
)
Provision for doubtful accounts
599
235
Equity in net (income) loss of unconsolidated affiliate
(521
)
242
Accrued forward loss on contract
2,791
—
Share based compensation
734
—
Net effect of changes in assets and liabilities:
Accounts receivable
4,420
(5,502
)
Prepaid expenses and other assets
(1,170
)
(402
)
Accounts payable and accrued liabilities
(144
)
2,343
Income taxes payable
(229
)
—
Deferred income
(2,050
)
318
Cash provided by operating activities
5,744
2,295
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of marketable securities
(42,100
)
(3,715
)
Sales and maturities of marketable securities
32,214
17,045
Purchases of restricted securities
(2,878
)
(787
)
Maturities of restricted investments
2,371
—
Purchase of equipment and software
(2,392
)
(6,764
)
Investment in subsidiaries and unconsolidated affiliate
—
(4,005
)
Other investing activities
(1
)
(215
)
Cash (used in) provided by investing activities
(12,786
)
1,559
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common stock
69
388
Capital lease obligations and other financing arrangements
(31
)
(44
)
Cash provided by financing activities
38
344
Effect of exchange rate changes on cash
(6
)
(47
)
Net (decrease) increase in cash and cash equivalents
(7,010
)
4,151
Cash and cash equivalents at beginning of period
27,843
28,495
Cash and cash equivalents at end of period
$
20,833
$
32,646
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest
$
8
$
14
Income taxes paid, net
$
188
$
126
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS:
Equipment acquired under capital lease obligations and other financing arrangements
$
14
$
40
2
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