PRESS RELEASE
FOR IMMEDIATE RELEASE
Fair, Isaac and Company, Inc.
120 North Redwood Drive
San Rafael, CA 94903-1996
415 472 2211 phone
415 492 9381 fax
[Fair, Isaac Logo]
NEWS FROM FAIR, ISAAC NYSE SYMBOL: FIC
FOR IMMEDIATE RELEASE Contact: Peter L. McCorkell
(415) 472-2211
Fair, Isaac Expects Higher Revenue But Flat Earnings
December 16, 1997
San Rafael, Calif.--Fair, Isaac and Company, Inc. (NYSE: FIC) today announced
that, while it expects healthy revenue growth in the quarter ending December 31,
1997, compared with the same period a year ago, the company anticipates that its
operating margin will be lower than in the December 1996 quarter. President and
CEO Larry E. Rosenberger said he believes the percentage growth in revenues for
the quarter, over the same period a year ago, will be in the "mid-twenties" but
that the company's operating expenses are growing even faster. As a result, the
company expects that operating income and earnings per share for the current
quarter will be approximately even with the same quarter a year ago.
Rosenberger noted, "A number of factors are putting pressure on our operating
margin right now. Our internal forecast had called for even higher revenue
growth early in the 1998 fiscal year, so we authorized hiring and other
expenditures accordingly. However, the continuing wave of bank mergers has
resulted in the cancellation of some orders and has delayed other projects. In
addition, the internal systems staffs of many of our clients are preoccupied by
`Year 2000' issues and are thus unable to provide the assistance we need to
complete--and sometimes to start--our work. Finally, we remain constrained by
staffing shortages in certain areas.
"On the expense side, some units are still finding it necessary to use expensive
contract labor to meet current demand from our clients while keeping the
development of new products on schedule. While we have made some progress in
recent months in recruiting additional permanent staff, it takes some time to
get newly hired employees to the point where they are fully productive. We have
also chosen to expend resources in pursuing new product and market development
opportunities which we believe have great future potential--but which are not
yet producing revenue."
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Mr. Rosenberger concluded by saying, "Fundamentally, the demand for Fair,
Isaac's products and services remains strong. The current margin squeeze is
mostly a case of 'growing pains', and we believe it will be temporary. Where we
can cut costs without sacrificing long-term growth and profitability we will do
so, but we are determined to manage the company for the long haul rather than
just quarter-to-quarter results."
Since 1956, Fair, Isaac has helped businesses maximize the value of data for
strategic decision making. The company pioneered the commercial development of
empirically derived predictive models for the credit industry and popularized
their use in lending decisions. Today, Fair, Isaac and its subsidiaries provide
data-driven decision control solutions to a variety of industries, worldwide,
including financial services, direct marketing, personal lines insurance,
retail, health care, and telecommunications. Primary areas of focus include
customer and operational data management and modeling, information analysis,
strategy design, and software. Headquartered in San Rafael, California, Fair,
Isaac employs over 1,200 people and has offices throughout the United States and
Europe as well as in Canada, Mexico, South Africa, and Japan. For the fiscal
year ended September 30, 1997, the Company reported net income of $20.7 million
($1.46 per share) on revenues of $199.0 million.
This press release contains certain forward-looking statements regarding events
and trends that may affect the Company's future results. Such statements are
subject to risks and uncertainties that could cause the Company's actual results
to differ materially. Such factors include, but are not limited to, the
Company's ability to recruit and maintain key technical and managerial
personnel, the maintenance of its existing relationships with key alliance
partners, its ability to continue to develop new and enhanced products and
services, competition, market demand and other factors described in the
Company's annual and quarterly reports to stockholders and its annual report on
Form 10-K and other reports filed with the Securities and Exchange Commission.
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