Exhibit 99.1
S1 Corporation Reports First Quarter 2004 Results;
Significant Distribution Agreements Reinforce Global Traction for S1 Enterprise
ATLANTA--(BUSINESS WIRE)--April 28, 2004--S1 Corporation (Nasdaq:
SONE), a leading global provider of integrated front-office
applications for financial institutions, today announced financial
results for its first quarter ended March 31, 2004.
-- Revenue for the quarter was $57.9 million, a sequential
increase of 11% over last quarter's revenue without Zurich
Insurance Company ("Zurich"). See segment tables attached.
-- Net income for the quarter was $0.4 million, or $0.01 per
share, compared to net loss of ($7.8) million, or ($0.11) per
share, for the quarter ended December 31, 2003 without Zurich.
See segment tables attached.
-- Revenue and earnings per share for the quarter exceeded the
Company's previous guidance and the Company raised revenue and
profit guidance for the remainder of 2004.
-- Second consecutive quarter of EPS profitability.
"In addition to the strong financial performance for the quarter,
I am pleased with the progress we made on our strategic Enterprise 3.0
initiatives. First, we signed multi-year global distribution
agreements with two of the industry's leading financial services
providers - Misys and EverSystems - which will rapidly expand our
global reach for S1 Enterprise products in Europe, Africa, Latin
America and Asia," said Jaime Ellertson, chief executive officer of S1
Corporation. "These new relationships further demonstrate to our
customers, partners and competitors the continued value that our
integrated multi-channel solutions can deliver. Our strong financial
performance in Q1, combined with successful customer implementations
on multiple Enterprise products and these new global distribution
agreements, establish S1 as the clear leader in the Enterprise
financial services market."
Operating Highlights
-- Signed 15 Enterprise deals, seven of which are new
relationships with financial institutions and eight are
substantial new application or service add-on contracts, with
an overall average sale price of approximately $700,000.
-- Obtained commitments from three leading financial institutions
to participate in the S1 Enterprise 3.0 Customer Value
Program, in which we will jointly work through the final
development stages of Enterprise 3.0 and establish
production-ready, multi-channel environments targeted for the
end of this year.
-- Signed multi-year distribution agreement for S1 Enterprise
solutions with Misys International Banking Systems, one of the
largest international financial services core processors with
1,200 banking customers, which will enable S1 to more than
triple its sales, marketing and implementation presence in
Europe, Middle East, Africa and Asia.
-- Signed multi-year distribution agreement with EverSystems,
Latin America's leading e-Banking solution and service
provider. EverSystems will be converting some of their
leading Internet and branch banking solutions to S1
Enterprise, and providing S1 with significantly greater sales,
marketing and implementation reach throughout Latin America.
-- Signed 83 new customers and added more than 200 cross-sales
this quarter, which highlights the value of S1's customer base
and feature-rich products that can be implemented either as a
standalone solution or an integrated suite.
-- Took an additional 12 customers live on the S1 Enterprise
Platform this quarter, demonstrating the progress being made
in the maturity of the product and processes surrounding S1
Enterprise.
Financial Guidance
S1 Corporation
Financial Guidance
For Q2 and Full Year 2004
(in millions, except per share data)
For the quarter ending
June 30, 2004 Full Year 2004
---------------------- ------------------
Lo Hi Lo Hi
---------------------- ------------------
FI Segment:
Revenue $48.0 $49.0 $196.0 $200.0
Direct Costs 21.0 22.0
Operating Expenses 23.0 24.0
Earnings per share $0.00 $0.02 $0.07 $0.09
Edify Segment:
Revenue $8.0 $9.0 $34.3 $35.8
Earnings per share $0.00 $0.01 $0.00 $0.02
Consolidated
Revenue 56.0 58.0 228.0 234.0
Earnings per share $0.00 $0.03 $0.07 $0.11
Shares:
Diluted 74.0 74.0 74.0 74.0
Conference Call Information
Company management will host a conference call to discuss first
quarter results on Wednesday, April 28, 2004 at 5:00 p.m. EDT.
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 May 5, 2004.
About S1
S1 Corporation (Nasdaq: SONE) is a leading global provider of
integrated front-office applications for more than 4,000 banks, credit
unions and insurance providers around the world. Comprised of
applications that address virtually every market segment and delivery
channel, S1 solutions help integrate and optimize an institution's
entire front office, resulting in increased operational efficiencies,
revenue opportunities and overall customer satisfaction. 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 within the
safe harbor provisions of the Private Securities Litigation Reform
Act. These statements include statements with respect to our financial
condition, results of operations and business. The words "believes,"
"expects," "may," "will," "should," "projects," "contemplates,"
"anticipates," "forecasts," "intends" or similar terminology identify
forward-looking statements. These statements are based on our beliefs
as well as assumptions made using information currently available to
us. Because these statements reflect our current views concerning
future events, they involve risks, uncertainties and assumptions.
Therefore, actual results may differ significantly from the results
discussed in the forward-looking statements. The risk factors included
in our reports filed with the Securities and Exchange Commission (and
available on our web site at www.s1.com or the SEC's web site at
www.sec.gov) provide examples of risks, uncertainties and events that
may cause our actual results to differ materially from the
expectations we describe in our forward-looking statements. Except as
provided by law, we undertake no obligation to update any
forward-looking statement.
S1 Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
March 31, Dec. 31,
2004 2003
----------------------
Assets
Current assets:
Cash and cash equivalents $123,250 $150,064
Short term investments, held-to-maturity 21,992 14,126
Accounts receivable, net of allowances 45,873 37,188
Prepaid expenses 7,213 5,745
Other current assets 2,751 3,218
----------------------
Total current assets 201,079 210,341
Property and equipment, net 15,277 15,661
Intangible assets, net 13,619 14,073
Goodwill, net 93,309 93,462
Other assets 3,519 3,551
----------------------
Total assets $326,803 $337,088
----------------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $5,980 $6,166
Accrued salaries and benefits 8,030 11,500
Accrued other expenses and restructuring 21,085 27,437
Deferred revenues 41,361 38,536
Current portion of capital lease obligation 852 762
----------------------
Total current liabilities 77,308 84,401
Other liabilities 9,327 8,873
----------------------
Total liabilities 86,635 93,274
----------------------
Stockholders' equity:
Preferred stock 10,000 10,000
Common stock 731 730
Additional paid-in capital 1,908,188 1,907,920
Treasury stock (14,979) (10,438)
Accumulated deficit (1,661,273)(1,661,717)
Accumulated other comprehensive income:
Cumulative foreign currency translation
adjustment (2,499) (2,681)
----------------------
Total stockholders' equity 240,168 243,814
----------------------
Total liabilities and stockholders'
equity $326,803 $337,088
----------------------
S1 CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended
3/31/2004 3/31/2003
----------------------
Revenues:
Software licenses $11,628 $14,966
Support and maintenance 15,301 15,442
Professional services 20,067 23,278
Data center 9,926 11,761
Other 986 215
----------------------
Total revenues 57,908 65,662 (1)
----------------------
Direct costs:
Software licenses 1,365 844
Professional services, support and
maintenance 17,660 25,392
Data center 4,837 6,726 (1)
Other 919 156
----------------------
Total direct costs 24,781 33,118
----------------------
Gross margin 33,127 32,544
----------------------
Operating expenses:
Selling and marketing 8,345 11,530
Product development 13,664 12,305
General and administrative 6,713 9,227
Depreciation and amortization 2,710 5,735 (1)
Merger related and restructuring costs - 8,094
Amortization of acquisition intangibles 836 15,069
----------------------
Total operating expenses 32,268 61,960
----------------------
Operating income (loss) 859 (29,416)
Interest, investment and other income, net 47 246
Income tax expense (462) (119)
----------------------
Net income (loss) $444 $(29,289)
======================
Net income (loss) per share:
----------------------
Net income (loss) per common share - basic $0.01 $(0.42)
======================
Net income per common share - diluted $0.01 N/A
======================
Weighted average common shares outstanding -
basic 70,983,164 69,247,674
Weighted average common shares and
equivalents - diluted 74,143,891 N/A
Common shares outstanding at end of period 70,571,261 69,293,524
Gross margin percentages:
Software licenses 88% 94%
Professional services, support and maintenance 50% 34%
Data center 51% 43%
Other 7% 27%
----------------------
Total gross margin 57% 50%
----------------------
(1) Results for the quarter ended March 31, 2003 include $10.9 million
license and data center revenue and $1.0 million in data center
expenses and $0.4 million in depreciation expense associated with
the Zurich Insurance Company contract.
S1 Corporation
Statements of Operations by Segment
For the Quarter Ended March 31, 2004
(In thousands, except share and per share data)
(Unaudited)
Financial
Institutions Edify Eliminations Total
------------ ------- ------------ -----
Software licenses $8,630 $3,306 $(308) $11,628
Support and
maintenance 11,158 4,431 (288) 15,301
Professional
services 18,459 1,668 (60) 20,067
Data center 9,926 - 9,926
Other 986 - 986
---------------------------------- -----------
Total Revenue: 49,159 9,405 (656) 57,908
---------------------------------- -----------
Direct costs:
Software licenses 970 703 (308) 1,365
Professional
services, support
and maintenance 15,063 2,945 (348) 17,660
Data center 4,837 - 4,837
Other 919 - 919
---------------------------------- -----------
Total direct
costs 21,789 3,648 (656) 24,781
---------------------------------- -----------
Gross margin 27,370 5,757 - 33,127
---------------------------------- -----------
Operating expenses:
Selling and
marketing 5,540 2,805 8,345
Product development 12,108 1,556 13,664
General and
administrative 5,738 975 6,713
Depreciation and
amortization 2,494 216 2,710
Amortization and
impairment of
acquisition
intangibles 761 75 836
---------------------------------- -----------
Total
operating
expenses 26,641 5,627 - 32,268
---------------------------------- -----------
Operating income 729 130 - 859
Interest, investment and
other income (expense) 138 (91) 47
Income tax expense (441) (21) (462)
---------------------------------- -----------
Net income $426 $18 $- $444
================================== ===========
Net income - basic $0.01 $0.00 $0.01
======================= ===========
Net income - diluted $0.01 $0.00 $0.01
======================= ===========
Weighted average common
shares outstanding -
basic 70,983,164 70,983,164 70,983,164
Weighted average common
shares outstanding -
diluted 74,143,891 74,143,891 74,143,891
S1 Corporation
Statements of Operations by Segment
For the Quarter Ended December 31, 2003
(In thousands, except share and per share data)
(Unaudited)
Financial Institutions
----------------------------------
S1 Base
Business ZFS Subtotal
----------------------------------
Software licenses $6,027 $8,176 $14,203
Support and maintenance 11,474 11,474
Professional services 17,568 1,500 19,068
Data center 9,639 9,639
Other 293 293
----------------------------------
Total Revenue: 45,001 9,676 54,677
----------------------------------
Direct costs:
Software licenses 316 316
Professional services, support
and maintenance 17,169 17,169
Data center 4,495 4,495
Other 162 162
----------------------------------
Total direct costs 22,142 - 22,142
----------------------------------
Gross margin 22,859 9,676 32,535
----------------------------------
Operating expenses:
Selling and marketing 6,082 6,082
Product development 10,108 10,108
General and administrative 11,291 11,291
Depreciation and amortization 3,036 3,036
Merger related and
restructuring costs (706) (706)
Amortization and impairment of
acquisition intangibles 693 693
----------------------------------
Total operating expenses 30,504 - 30,504
----------------------------------
Operating income (loss) (7,645) 9,676 2,031
Interest, investment and other
income (expense) 266 266
Income tax (expense) (155) (155)
----------------------------------
Net income (loss) $(7,534) $9,676 $2,142
==================================
Net income (loss) - basic $(0.11) $0.14 $0.03
==================================
Net income - diluted $(0.11) $0.14 $0.03
==================================
Weighted average common shares
outstanding - Basic 70,997,254 70,997,254 70,997,254
Weighted average common shares
outstanding - Diluted 74,174,736 74,174,736 74,174,736
Edify Eliminations Total
------------------------------
Software licenses $2,288 $ (184) $16,307
Support and maintenance 4,422 (724) 15,172
Professional services 1,264 (16) 20,316
Data center - - 9,639
Other 6 - 299
------------------------------
Total Revenue: 7,980 (924) 61,733
------------------------------
Direct costs:
Software licenses 902 (184) 1,034
Professional services, support
and maintenance 3,052 (740) 19,481
Data center - - 4,495
Other 23 - 185
------------------------------
Total direct costs 3,977 (924) 25,195
------------------------------
Gross margin 4,003 - 36,538
------------------------------
Operating expenses:
Selling and marketing 2,055 8,137
Product development 1,251 11,359
General and administrative 889 12,180
Depreciation and amortization (104) 2,932
Merger related and restructuring
costs - (706)
Amortization and impairment of
acquisition intangibles 75 768
------------------------------
Total operating expenses 4,166 - 34,670
------------------------------
Operating income (loss) (163) - 1,868
Interest, investment and other
income (expense) (101) 165
Income tax (expense) 2 (153)
------------------------------
Net income (loss) $(262) $ - $1,880
==============================
Net income (loss) - basic $ 0.00 $0.03
======= ===========
Net income - diluted $(0.00) $0.03
======= ===========
Weighted average common shares
outstanding - Basic 70,997,254 70,997,254
Weighted average common shares
outstanding - Diluted 74,174,736 74,174,736
S1 Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31, March 31,
2004 2003
--------- ---------
Cash flows from operating activities:
Net income (loss) $444 $(29,289)
Adjustments to reconcile net income
(loss) to net cash used in operating
activities:
Depreciation and amortization and goodwill
impairment charge 3,547 20,804
Provision for doubtful accounts receivable
and billing adjustments 605 2,576
Changes working capital and other assets and
liabilities and other (16,858) (3,971)
--------- ---------
Net cash used in operating
activities (12,262) (9,880)
--------- ---------
Cash flows from investing activities:
(Purchases) maturities of short-term
investment securities, net (7,866) 10,339
Purchases of property and equipment and
purchased technology (2,093) (655)
--------- ---------
Net cash (used in) provided by
investing activities (9,959) 9,684
--------- ---------
Cash flows from financing activities:
Proceeds from sale of common stock under
employee stock purchase
and option plans 269 374
Payments on capital lease obligations (263) (1,939)
Repurchase of common stock held in treasury (4,541) (750)
--------- ---------
Net cash used in financing
activities (4,535) (2,315)
--------- ---------
Effect of exchange rate changes on cash and cash
equivalents (58) 441
--------- ---------
Net decrease in cash and cash equivalents (26,814) (2,070)
Cash and cash equivalents at beginning of period 150,064 127,842
--------- ---------
Cash and cash equivalents at end of period $123,250 $125,772
--------- ---------
CONTACT: S1 Corporation, Atlanta
Matthew Hale, 404-923-3500
matt.hale@s1.com
or
SHIFT Communications for S1 Corporation
Brian Gendron, 617-681-1226
bgendron@shiftcomm.com