Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact:
Daniel Briggs
Vice President Finance and Investor Relations
(212) 907-6134
The BISYS Group, Inc.
(NYSE: BSG)
www.bisys.com
BISYS(R) REPORTS FISCAL THIRD QUARTER RESULTS
-- Revenue Increases 11 Percent to Record $272 Million --
NEW YORK, N.Y. (April 22, 2004) -- BISYS, a leading provider of business process
outsourcing solutions for the financial services sector, today reported the
results of its fiscal third quarter ended March 31, 2004.
For the fiscal third quarter, BISYS reported net income of $3.2 million or $0.03
per diluted share, as compared to net income of $32.5 million or $0.27 per
diluted share for the same period in fiscal 2003. Revenue for the quarter was
$272.3 million, an increase of 11.2 percent from $244.8 million in the same
period last year.
Actual results for the third quarter of fiscal 2004 include an additional
provision in the Life Insurance division of $15.5 million or $0.13 per diluted
share net of tax for a change in estimated losses in the commissions receivable
portfolio and restructuring, impairment and other charges of $6.8 million or
$0.06 per diluted share net of tax, primarily for the integration,
consolidation, and reorganization of certain business operations, particularly
in the Company's European Fund Services division and the Insurance and Education
Services group. Included in the aforementioned $6.8 million charge is $3.1
million net of tax, for estimated additional contractual obligations in the Life
Insurance division. Excluding the additional loss provision and the
restructuring, impairment and other charges, pro forma net income was $25.5
million or $0.21 per diluted share for the third quarter of fiscal 2004.
According to Russ Fradin, BISYS' president and CEO, "During our fiscal third
quarter, we generated solid internal revenue growth of five percent compared to
the year ago period and strong cash flow. Our largest business group, Investment
Services, experienced strong revenue growth compared to the year ago period, and
improved operating earnings on a sequential basis compared to our second fiscal
quarter ended December 31, 2003. Our Information Services group grew both
revenue and operating earnings compared to the year ago period. While our
Insurance and Education Services group has underperformed, principally because
of the performance of our Life Insurance Services division, we are taking the
actions necessary to position the division for future growth, and we expect our
Life Insurance results to improve in fiscal year 2005. For the company in total,
we believe that our strong revenue growth and consistent cash flows demonstrate
the fundamental strength of our business, and that our sound strategic
positioning will provide opportunities for future growth."
BISYS reported net income of $28.0 million or $0.23 per diluted share for the
nine months ended March 31, 2004, as compared to net income of $78.0 million or
$0.64 per diluted share for the nine months ended March 31, 2003. BISYS' nine
months revenue increased to $773.0 million, up 9.6 percent over fiscal 2003 nine
months revenue of $705.2 million. Net cash provided by operating activities for
the nine months ended March 31, 2004 was $139 million, an increase of more than
18 percent from $119 million in the same period last year.
Actual results for the nine months ended March 31, 2004 include the additional
provision in the Life Insurance division of $15.5 million or $0.13 per diluted
share net of tax for a change in estimated losses in the commissions receivable
portfolio and restructuring, impairment, and other charges of $21.3 million or
$0.18 per diluted share net of tax. Actual results for the nine months ended
March 31, 2003 include restructuring charges of $7.5 million or $0.06 per
diluted share net of tax, related to the integration, consolidation, and
relocation of certain business operations, primarily as a result of acquisition
activity. Excluding the additional loss provision and the restructuring,
impairment, and other charges, pro forma net income for the nine months ended
March 31, 2004 was $64.8 million or $0.54 per diluted share, as compared to pro
forma net income of $85.6 million or $0.70 per diluted share for the same period
last year.
The Company has included the above pro forma information concerning the
additional loss provision and the restructuring, impairment, and other charges
to assist investors in analyzing BISYS' results of operations. The Company has
elected to provide this information to enable investors to perform meaningful
comparisons of past, present, and future operating results, and as a means to
emphasize the results of core, ongoing operations.
ABOUT BISYS
The BISYS Group, Inc. (NYSE: BSG), headquartered in New York City, provides
business process outsourcing solutions that enable investment firms, insurance
companies, and banks to capitalize on convergence by entering new segments of
the financial services industry. BISYS currently supports more than 22,000
domestic and international financial institutions and corporate clients through
three business units. Its INVESTMENT SERVICES group provides administration and
distribution services for approximately 380 clients, representing more than
2,200 mutual funds, hedge funds, private equity funds, and other alternative
investment products with approximately $750 billion in assets under
administration. BISYS' largest group also provides retirement services to more
than 18,000 companies in partnership with 40 of the nation's leading banks and
investment management companies, and offers analytical research and competitive
information through its Financial Research Corporation (FRC) subsidiary. Through
its INSURANCE AND EDUCATION SERVICES group, BISYS is the nation's largest
independent distributor of life insurance and the premier provider of the
support services required to sell traditional and variable life, long-term care,
disability, and annuity products. BISYS is also the nation's second largest
independent wholesale distributor of commercial property/casualty insurance.
This group complements its insurance distribution services with a comprehensive
compliance management solution that supports insurance and investment firms and
professionals with more than 215 certification and continuing education training
courses, and a sophisticated suite of products and services that automate the
entire licensing process. BISYS' INFORMATION SERVICES group supports
approximately 1,450 banks, insurance companies, and corporations with
industry-leading information processing and imaging solutions, turnkey asset
retention solutions, and specialized corporate banking solutions. Additional
information is available at www.bisys.com.
Except for the historical information contained herein, the matters discussed in
the press release 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 but not limited to
economic, competitive, governmental and technological factors affecting the
Company's operations, markets, services and related products, prices and other
factors discussed in the Company's periodic filings with the Securities and
Exchange Commission.
###
THE BISYS GROUP, INC.
SUMMARY CONSOLIDATED FINANCIAL DATA
(Unaudited)
(In thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
Statement of Operations Data: 2004 2003 2004 2003
--------- --------- --------- ---------
Revenues $ 272,295 $ 244,776 $ 773,008 $ 705,232
--------- --------- --------- ---------
Operating cost and expenses:
Service and operating * 197,582 141,076 518,785 412,751
Selling, general and administrative 48,673 43,892 144,199 131,071
Amortization of intangible assets 7,235 4,809 19,734 13,474
Restructuring, impairment and other charges 10,815 -- 25,590 12,079
--------- --------- --------- ---------
Total expenses 264,305 189,777 708,308 569,375
--------- --------- --------- ---------
Operating earnings 7,990 54,999 64,700 135,857
Interest income 391 270 998 1,178
Interest expense (4,741) (4,475) (14,140) (13,428)
--------- --------- --------- ---------
Income before income taxes 3,640 50,794 51,558 123,607
Income taxes 456 18,286 23,517 45,591
--------- --------- --------- ---------
Net income $ 3,184 $ 32,508 $ 28,041 $ 78,016
========= ========= ========= =========
Basic earnings per share $ 0.03 $ 0.27 $ 0.23 $ 0.65
Diluted earnings per share $ 0.03 $ 0.27 $ 0.23 $ 0.64
Weighted average shares outstanding 120,217 119,565 119,774 119,501
Weighted average equivalent shares outstanding 121,439 120,771 120,901 121,628
* Includes the impact of a change in estimated losses in the commissions
receivable portfolio in the Life Insurance division of $24,700 in 2004.
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
Pro forma: 2004 2003 2004 2003
---------- ---------- ---------- ----------
Reported net income $ 3,184 $ 32,508 $ 28,041 $ 78,016
Addback:
Additional provision for change in estimated losses, net
of tax 15,499 -- 15,499 --
Restructuring, impairment and other charges, net of tax 6,786 -- 21,269 7,549
Pro forma net income $ 25,469 $ 32,508 $ 64,809 $ 85,565
Diluted earnings per share:
Reported net income $ 0.03 $ 0.27 $ 0.23 $ 0.64
Addback:
Additional provision for change in estimated losses, net
of tax 0.13 -- 0.13 --
Restructuring, impairment and other charges, net of tax 0.06 -- 0.18 0.06
Pro forma net income $ 0.21 $ 0.27 $ 0.54 $ 0.70
THE BISYS GROUP, INC.
SUMMARY CONSOLIDATED FINANCIAL DATA
(Unaudited)
(In thousands)
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
Business Segment Data: 2004 2003 2004 2003
--------- --------- --------- ---------
Revenues:
Investment Services $ 148,295 $ 125,050 414,677 $ 367,847
Insurance and Education Services 67,421 63,761 192,985 178,290
Information Services 56,579 55,965 165,346 159,095
--------- --------- --------- ---------
Total $ 272,295 $ 244,776 $ 773,008 $ 705,232
========= ========= ========= =========
Operating earnings (loss)*:
Investment Services $ 18,034 $ 20,167 50,904 $ 54,123
Insurance and Education Services ** (10,781) 24,154 11,448 67,561
Information Services 16,900 15,779 44,626 42,009
Corporate (5,348) (5,101) (16,688) (15,757)
--------- --------- --------- ---------
Total $ 18,805 $ 54,999 $ 90,290 $ 147,936
========= ========= ========= =========
* Excludes the impact of restructuring, impairment and other charges.
** Includes the impact of a change in estimated losses in the commissions
receivable portfolio in the Life Insurance division of $24,700 in 2004.
MARCH 31, JUNE 30,
Balance Sheet Data: 2004 2003
---------- ----------
Cash and cash equivalents $ 88,962 $ 79,558
Restricted cash 61,995 26,603
Accounts receivable, net 99,202 96,237
Insurance premiums and commissions receivable, net 135,522 169,780
Total assets 1,630,806 1,526,893
Insurance premiums and commissions payable 107,656 79,398
Short-term borrowings 70,000 172,000
Long-term debt 400,000 300,000
Stockholders' equity 817,348 785,061
Other Financial Data: THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
2004 2003 2004 2003
-------- -------- -------- --------
Capital expenditures $ 10,961 $ 8,643 $ 27,763 $ 33,821
Net cash provided by operating activities $ 54,089 $ 56,290 $139,296 $118,512
Effective tax rate, excluding impact of restructuring,
impairment and other charges 31.02% 36.00% 36.08% 36.90%