EXHIBIT 99
(FAIR ISAAC LOGO)
Contacts: INVESTORS & ANALYSTS:
Heidi Flannery
Fair Isaac Corporation
(800) 213-5542
investor@fairisaac.com
FAIR ISAAC REPORTS STRONG THIRD QUARTER RESULTS
79% Year-Over-Year Revenue Growth with HNC Revenues
SAN RAFAEL, Calif. -- July 23, 2003 -- Fair Isaac Corporation (NYSE:FIC), the
leader in customer analytics and decision technology, today announced financial
results for the third fiscal quarter ended June 30, 2003.
The company achieved third quarter revenues of $163.0 million versus $91.0
million reported in the third quarter of fiscal 2002, and in line with the
company's previous guidance. Revenues for the nine months ended June 30, 2003
totaled $468.3 million as compared to revenues of $263.1 million reported in the
same period last year. Net income for the third quarter of fiscal 2003 totaled
$30.0 million, or $0.60 per share on 53.0 million diluted shares outstanding(1),
compared with $14.4 million, or $0.41 per share on 35.2 million diluted shares
outstanding reported in the same quarter last year. Net income for the nine
months ended June 30, 2003 totaled $75.5 million, or $1.48 per share on 51.0
million diluted shares outstanding(1), compared with $42.1 million, or $1.17 per
share on 35.8 million diluted shares outstanding reported in the same period
last year.
Results for the nine months ended June 30, 2003 include $2.6 million in
merger-related charges, resulting from the HNC Software acquisition, which
resulted in a negative three-cent(2) impact to diluted earnings per share during
this period.
"I'm very pleased with our quarterly results as we were able to hit our revenue
and exceed our previous earnings guidance," said Tom Grudnowski, President and
CEO of Fair Isaac. "I think our ability to show very respectable growth in a
continued depressed IT spending environment is testament to the high ROI our
business analytics and tools provide our clients. Our customers are willing to
spend when they know they will have very compelling and demonstrable returns on
their investments."
The company will host a conference call today at 2:00 p.m. Pacific Time / 5:00
p.m. Eastern Time to discuss its third quarter results and provide guidance for
the remainder of fiscal 2003.
The call can be accessed live on the Investor Relations' section of the
company's Web site at www.fairisaac.com, and will be archived on the site
immediately following the call.
ABOUT FAIR ISAAC
Fair Isaac Corporation (NYSE:FIC) is the preeminent provider of creative
analytics that unlock value for people, businesses and industries. The company's
predictive modeling, decision analysis, intelligence management, decision
management systems and consulting services power more than 25 billion
mission-critical customer decisions a year. Founded in 1956, Fair Isaac helps
thousands of companies in over 60 countries acquire customers more efficiently,
increase customer value, reduce fraud and credit losses, lower operating
expenses and enter new markets more profitably. Most leading banks and credit
card issuers rely on Fair Isaac solutions, as do insurers, retailers,
telecommunications providers, healthcare organizations and government agencies.
Through the www.myfico.com Web site, consumers use the company's FICO(R) scores,
the standard measure of credit risk, to manage their financial health. As of
August 5, 2002, the business of HNC Software Inc., a leading provider of
high-end analytic and decision management software, is part of Fair Isaac. For
more information, visit www.fairisaac.com.
FORWARD-LOOKING STATEMENTS
Except for historical information contained herein, the statements contained in
this press release that relate to Fair Isaac, including statements regarding our
ability to build and maintain customer and other business relationships, are
forward-looking statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks and uncertainties that may cause actual results
to differ materially, including the company's ability to recruit and retain key
technical and managerial personnel, the maintenance of its existing
relationships and ability to create new relationships with customers and key
alliance partners, its ability to continue to develop new and enhanced products
and services, competition, regulatory changes applicable to the use of consumer
credit and other data, the possibility that the anticipated benefits of its
recent merger with HNC, including expected synergies, cannot be fully realized,
the possibility that costs or difficulties related to the integration of our
business and HNC's business will be greater than expected, and other risks
described from time to time in Fair Isaac's SEC reports, including its Annual
Report on Form 10-K for the year ended September 30, 2002. If any of these risks
or uncertainties materializes, Fair Isaac's results could differ materially from
Fair Isaac's expectations in these statements. Fair Isaac disclaims any intent
or obligation to update these forward-looking statements.
Fair Isaac, HNC and FICO are trademarks or registered trademarks of Fair Isaac
Corporation, in the United States and/or in other countries. Other product and
company names herein may be trademarks of their respective owners.
- ------------------
1 The computation of diluted earnings per share for the quarter ended June 30,
2003 includes 2.7 million shares of common stock issuable upon conversion of our
convertible subordinated notes, along with a corresponding adjustment to net
income to add back related interest expense, net of tax, of approximately $1.6
million. The computation of diluted earnings per share for the nine months ended
June 30, 2003 excludes these shares, as they were antidilutive during this
period.
2 Calculated as $2.6 million in merger-related charges less $1.0 million income
tax benefit (by application of the company's 38.0 percent effective tax rate for
the nine month period), or $1.6 million, divided by 51.0 million diluted shares
outstanding for the nine month period.
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Quarters and Nine Months Ended June 30, 2003 and 2002
(In thousands, except per share data)
(unaudited)
Quarter Ended Nine Months Ended
June 30, June 30,
------------------------- -------------------------
2003 2002 2003 2002
--------- --------- --------- ---------
Revenues $ 163,000 $ 91,014 $ 468,330 $ 263,125
--------- --------- --------- ---------
Operating expenses:
Cost of revenues 62,209 40,724 186,904 116,853
Research and development 16,959 6,894 51,325 21,672
Selling, general and administrative 31,277 20,343 95,175 58,587
Amortization of intangibles 3,461 609 10,142 1,743
Restructuring and merger-related (36) -- 2,580 --
--------- --------- --------- ---------
Total operating expenses 113,870 68,570 346,126 198,855
--------- --------- --------- ---------
Operating income 49,130 22,444 122,204 64,270
Other (expense) income, net (690) 616 (482) 4,439
--------- --------- --------- ---------
Income before income taxes 48,440 23,060 121,722 68,709
Provision for income taxes 18,407 8,708 46,254 26,625
--------- --------- --------- ---------
Net income $ 30,033 $ 14,352 $ 75,468 $ 42,084
========= ========= ========= =========
Earnings per share:
Basic $ 0.63 $ 0.43 $ 1.56 $ 1.23
========= ========= ========= =========
Diluted $ 0.60 (a) $ 0.41 $ 1.48 $ 1.17
========= ========= ========= =========
Shares used in computing earnings per share:
Basic 47,488 33,629 48,524 34,113
========= ========= ========= =========
Diluted 52,957 (a) 35,233 50,968 35,832
========= ========= ========= =========
(a) The computation of diluted earnings per share for the quarter ended June
30, 2003 includes 2.7 million shares of common stock issuable upon
conversion of our convertible subordinated notes, along with a
corresponding adjustment to net income to add back related interest
expense, net of tax, of approximately $1.6 million. The computation of
diluted earnings per share for the nine months ended June 30, 2003
excludes these shares, as they were antidilutive during this period.
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2003 and September 30, 2002
(In thousands)
(Unaudited)
June 30, September 30,
2003 2002
---------- ----------
ASSETS:
Current assets:
Cash and investments $ 222,885 $ 281,211
Receivables, net 124,984 121,456
Other current assets 26,721 25,507
---------- ----------
Total current assets 374,590 428,174
Investments 152,184 150,202
Property and equipment, net 51,041 62,474
Goodwill and intangibles, net 511,758 520,114
Other noncurrent assets 54,477 51,549
---------- ----------
$1,144,050 $1,212,513
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and other accrued liabilities $ 41,812 $ 44,135
Accrued compensation and employee benefits 23,304 28,153
Deferred revenue 24,863 17,921
---------- ----------
Total current liabilities 89,979 90,209
Convertible subordinated notes 140,996 139,922
Other noncurrent liabilities 6,450 8,910
---------- ----------
Total liabilities 237,425 239,041
Stockholders' equity 906,625 973,472
---------- ----------
$1,144,050 $1,212,513
========== ==========
FAIR ISAAC CORPORATION
REVENUES BY SEGMENT
For the Quarters and Nine Months Ended June 30, 2003 and 2002
(In thousands)
(Unaudited)
Quarter Ended Nine Months Ended
June 30, June 30,
---------------------- ----------------------
2003 2002 2003 2002
-------- -------- -------- --------
Scoring solutions $ 34,547 $ 33,781 $101,507 $ 94,491
Strategy machine solutions 97,399 39,852 283,951 119,974
Professional services 21,852 13,909 62,333 40,747
Analytic software tools 9,202 3,472 20,539 7,913
-------- -------- -------- --------
Total revenues $163,000 $ 91,014 $468,330 $263,125
======== ======== ======== ========