Exhibit 99.1
S1 CORPORATION ACHIEVES GAAP PROFITABILITY
FOURTH QUARTER RESULTS DEMONSTRATE CONTINUED PROGRESS WITH ENTERPRISE
Atlanta, February 13, 2003 -- S1 Corporation (Nasdaq:SONE), a leading global
provider of Enterprise software solutions, today announced financial results for
its fourth quarter ended December 31, 2002.
- Revenue for the quarter ended December 31, 2002 was $63.9
million, a sequential increase of 9% over revenue for the
quarter ended September 30, 2002.
- The company achieved positive earnings per share for the first
time, reporting net earnings of $1.2 million, or $0.02 per
share, for the quarter ended December 31, 2002 compared to a
net loss of $5.2 million, or ($0.07) per share, for the
quarter ended September 30, 2002.
- Net income from continuing operations was $4.2 million, or
$0.06 per share, for the quarter ended December 31, 2002 as
compared with a loss of $3.5 million, or ($0.05) per share,
for the quarter ended September 30, 2002.
- Gross margin was 61% for the quarter ended December 31, 2002
versus 59% for the quarter ended September 30, 2002.
- Revenue and earnings per share from continuing operations for
the quarter ended December 31, 2002 were in line with the
company's previous guidance.
"Our fourth quarter results reflect solid revenue growth and strong performance
on the bottom line. We are especially pleased to announce the important
milestone of GAAP profitability achieved during the quarter, on target with our
originally communicated timetable," commented Jaime Ellertson, chief executive
officer of S1 Corporation. "We continue to make progress in the transition of
our business model and the execution of our Enterprise strategy. Twenty
financial institutions have now reached production with our Enterprise solution,
a key focus of our efforts this quarter. Our balance sheet continues to lead the
industry, with $143 million in cash and short term investments, and no debt."
For the year ended December 31, 2002, S1's revenue was $248.0 million, a 7%
increase over the $231.8 million reported for the year ended December 31, 2001.
Net loss per share for the year ended December 31, 2002, was ($0.24) per share,
compared to a net loss of ($3.74) per share for the year ended December 31,
2001. Net loss from continuing operations for the year ended December 31, 2002
was ($0.10) per share compared to a net loss from continuing operations of
($3.30) per share for the year ended December 31, 2001.
RECENT OPERATING HIGHLIGHTS
- Signed 87 new financial institution customers, three new S1
Enterprise customers and almost 200 cross-sales to the
company's existing customer base of approximately 4,000
financial institutions during Q4;
- Successfully completed deployment of S1 Enterprise Platform
solutions for both hosted and in-house solutions, bringing the
total of live financial institution deployments to twenty;
- Completed a $10 million share repurchase program, having
reacquired approximately 2 million shares over the life of the
program;
- Generated $8.7 million in cash flow from operations during the
fourth quarter for an ending cash and current investments
balance of $142.7 million;
- Announced the addition of Gregory J. Owens, chairman and chief
executive officer of Manugistics Group, Inc., to S1's Board of
Directors;
- Strengthened S1's senior management team with the addition of
Larry Diamond in the role of senior vice president, product
development;
- Signed a multi-year agreement with K2 Solutions, one of
Brazil's largest distributors and integrators in the financial
services market;
- Entered into a strategic relationship with EastPoint
Technologies under which EastPoint will integrate and resell
S1 Enterprise Solutions with EastPoint's core-processing
solution to community and regional banks;
- Launched two new products, S1 Trade Finance Purchase Order
Processing System (S1 POPS) and S1 Safeguard Suite; and
- Earned IBM's xSP Prime(TM) Hosting Partner approval, a
designation recognizing IBM Business Partners that meet or
exceed specific hosting requirements for security, systems
management and backup.
FINANCIAL GUIDANCE
S1 reaffirmed its revenue and EPS guidance for continuing operations for Q1 and
full year 2003.
Q1 2003 FY 2003
------------------------------------
Revenue (in millions $57-$60 $248-$258
EPS from Continuing Operations ($0.02)-$0.01 $0.18-$0.23
Diluted Shares Outstanding 73 million 73 million
** Results from the company's Edify business unit are accounted for as
discontinued operations and are not included in the above guidance.
CONFERENCE CALL INFORMATION
Company management will host a conference call to discuss fourth quarter results
on Thursday, February 13, 2003 at 5:00 p.m. EST. Interested parties may access a
live webcast of the call through the company's corporate website, www.s1.com.
The conference call will contain forward-looking statements and other material
information. A replay of the webcast will be available until February 21, 2003.
ABOUT S1
S1 (Nasdaq: SONE) is a leading global provider to approximately 4,000 banks,
credit unions, insurance providers, and investment firms of enterprise software
solutions that create one view of customers across multiple channels,
applications and segments. S1's Enterprise software solutions uniquely combine
customer interaction and financial transaction capabilities, resulting in a more
compelling experience for the customers and a more profitable relationship for
the financial institution. S1 is the only provider with the proven experience,
breadth of products, and financial strength to empower financial services
companies' enterprise strategies. Additional information about S1 is available
at www.s1.com.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements relating to results of
operations; benefits of certain programs; product availability, features and
benefits; market penetration; and market strategies. Such statements are made
based on management's beliefs as well as assumptions made by, and information
currently available to, management pursuant to "safe-harbor" provisions of the
Private Securities Litigation Reform Act of 1995. While these statements reflect
our best judgement, they are subject to risks and uncertainties that could cause
a change in focus and direction. Actual results may differ materially. A
discussion of certain risk factors that may cause actual results to differ from
these forward-looking statements can be found in S1's Annual Report on Form 10-K
for the year ended December 31, 2001, on file with the SEC.
CONTACTS:
Nancy O'Donnell
VP of Investor Relations, S1 Corporation
404/923-6671
nancy.odonnell@s1.com
Sterling Hager, Inc. for S1 Corporation
Brian Gendron
617/926-6665 ext. 244
bgendron@sterlinghager.com
S1 CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
2002 2001
------------ ------------
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents $ 127,842 $ 119,632
Short term investments 14,843 28,818
Accounts receivable, net 42,970 56,502
Other current assets 13,211 7,902
Assets held for sale, net 33,728 --
----------- -----------
Total current assets 232,594 212,854
Property and equipment, net 29,512 41,253
Goodwill and other intangible assets, net 105,972 111,223
Other assets 8,890 6,707
----------- -----------
Total assets $ 376,968 $ 372,037
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued liabilities $ 41,673 $ 49,603
Deferred revenues 34,833 27,499
Current portion of capital lease obligation 1,563 5,925
Liabilities held for sale 12,952 --
----------- -----------
Total current liabilities 91,021 83,027
Other liabilities 5,874 14,392
----------- -----------
Total liabilities 96,895 97,419
----------- -----------
Stockholders' equity:
Preferred stock 18,328 241,975
Common stock 713 614
Additional paid-in capital 1,896,111 1,640,972
Treasury stock (9,250) --
Accumulated deficit (1,623,545) (1,607,148)
Other comprehensive loss (2,284) (1,795)
----------- -----------
Total stockholders' equity 280,073 274,618
----------- -----------
Total liabilities and stockholders' equity $ 376,968 $ 372,037
=========== ===========
S1 CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED YEAR TO DATE
12/31/2002 12/31/2001 12/31/2002 12/31/2001
----------- ----------- ----------- -----------
REVENUES:
Software licenses $ 16,405 $ 15,433 $ 66,895 $ 42,243
Support and maintenance 11,574 9,637 43,761 29,216
Professional services 26,026 27,095 95,487 106,341
Data center 9,604 15,401 40,560 52,915
Other 280 53 1,274 1,050
----------- ----------- ----------- -----------
Total revenues (1) 63,889 67,619 247,977 231,765
----------- ----------- ----------- -----------
DIRECT COSTS:
Software licenses 322 58 437 532
Professional services, support and maintenance 18,483 18,637 74,785 81,763
Data center 5,591 6,478 22,100 26,013
Other 304 60 1,267 751
----------- ----------- ----------- -----------
Total direct costs 24,700 25,233 98,589 109,059
----------- ----------- ----------- -----------
Gross margin 39,189 42,386 149,388 122,706
----------- ----------- ----------- -----------
OPERATING EXPENSES:
Selling and marketing 8,917 7,831 38,078 27,838
Product development 8,462 10,038 39,377 40,767
General and administrative 10,328 11,593 43,179 44,007
Depreciation and amortization 5,206 6,645 21,404 26,880
Merger related and restructuring costs (339) 49 1,683 9,260
Acquired in-process research and development -- -- 350 --
Amortization of acquisition intangibles 3,489 14,846 15,943 60,587
----------- ----------- ----------- -----------
Total operating expenses 36,063 51,002 160,014 209,339
----------- ----------- ----------- -----------
Operating income (loss) 3,126 (8,616) (10,626) (86,633)
Interest, investment and other income, net 344 656 1,444 3,146
Loss on sale of subsidiaries -- -- -- (53,186)
Equity in net loss of affiliate -- (41,252) -- (61,900)
Income tax benefit 743 368 2,653 3,387
----------- ----------- ----------- -----------
Income (loss) from continuing operations 4,213 (48,844) (6,529) (195,186)
Loss from discontinued operations, net of tax (3,057) (7,433) (9,868) (26,357)
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 1,156 $(56,277) $ (16,397) $(221,543)
=========== =========== =========== ===========
EARNINGS (LOSS) PER SHARE:
BASIC
Continuing operations $ 0.06 $ (0.80) $ (0.10) $ (3.30)
Discontinued operations (0.04) (0.12) (0.14) (0.44)
----------- ----------- ----------- -----------
NET INCOME (LOSS) PER COMMON SHARE - BASIC $ 0.02 $ (0.92) $ (0.24) $ (3.74)
=========== =========== =========== ===========
DILUTED
Continuing operations $ 0.06
Discontinued operations (0.04)
-----------
NET INCOME (LOSS) PER COMMON SHARE - DILUTED $ 0.02
===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
BASIC 69,515,196 60,881,230 67,724,593 59,242,105
WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS
DILUTED 72,229,070
COMMON SHARES OUTSTANDING AT END OF PERIOD 69,353,601 61,444,554 69,353,601 61,444,554
GROSS MARGIN PERCENTAGES:
Software licenses 98% 100% 99% 99%
Professional services, support and maintenance 51% 49% 46% 40%
Data center 42% 58% 46% 51%
Other (9%) (13%) 1% 28%
----------- ----------- ----------- -----------
Total gross margin 61% 63% 60% 53%
=========== =========== =========== ===========
S1 CORPORATION AND SUBSIDIARIES
FINANCIAL SEGMENT REVENUE SCHEDULE
(IN THOUSANDS)
QUARTER ENDED 12/31/02 FULL YEAR 2002
------------------------------------- ---------------------------------------
POINT POINT
ENTERPRISE SOLUTION TOTAL ENTERPRISE SOLUTION TOTAL
---------- -------- ------- ---------- -------- --------
Software licenses $ 1,350 $15,055 $16,405 $ 8,530 $ 58,365 $ 66,895
Support and maintenance 609 10,965 11,574 1,691 42,070 43,761
Professional services 9,750 16,276 26,026 19,323 76,164 95,487
Data center 239 9,365 9,604 429 40,131 40,560
Other -- 280 280 -- 1,274 1,274
------- ------- ------- ------- -------- --------
Total revenue (1) $11,948 $51,941 $63,889 $29,973 $218,004 $247,977
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(1) Total revenues for the year ended December 31, 2002 have been corrected
for an addition error in the press release.