Exhibit 99.1
S1 CORPORATION REPORTS FOURTH QUARTER AND FULL-YEAR 2005 RESULTS
ATLANTA, March 1 /PRNewswire-FirstCall/ -- S1 Corporation (Nasdaq: SONE), a
leading global provider of customer interaction financial and payments
solutions, today announced financial results for its fourth quarter and full
year ended December 31, 2005.
- Revenue for the fourth quarter ended December 31, 2005 was $46.0 million
as compared to $56.5 million for the same quarter in the previous year
and $48.1 million in the prior quarter ended September 30, 2005. Revenue
for the full year 2005 was $204.1 million compared to $206.4 million for
the full year 2004.
- Net loss from continuing operations for the fourth quarter ended December
31, 2005 was ($20.7) million, or ($0.29) per share, compared to income
from continuing operations of $0.04 per share for the same quarter the
previous year and ($0.13) loss per share in the prior quarter ended
September 30, 2005. Net loss for the fourth quarter ended December 31,
2005 includes restructuring costs of $10.8 million. Excluding these
restructuring costs, the Company's net loss for the fourth quarter would
have been $9.9 million, or ($0.14) per share*.
- Net loss for the full year 2005 was ($1.1) million, or ($0.02) per share
compared to the full year 2004 net income of $15.6 million, or $0.22 per
share. Net loss for the full year 2005 includes $15.0 million of
restructuring charges. Gain on disposal of discontinued operations of
$24.9 million and $8.6 million were included in the full year results of
2005 and 2004 respectively.
- The Company completed its plan of reorganization, aligning the business
closer with its customer needs and addressable markets.
- The Company sold its Edify business in the fourth quarter in an effort to
further focus on its core financial institutions business.
"As expected, the delay in the delivery of our newest Enterprise products
and the reorganization of our business impacted the fourth quarter results,"
said James "Chip" S. Mahan III, chief executive officer of S1 Corporation.
"However, we are making incremental progress under the new organization and
leadership team. This progress includes the initial delivery of our Enterprise
3.5 products into the Managed Introduction Program in Q1; new investment in the
community financial and Postilion products; and a shift in culture focused
around business units that can more effectively serve our customers."
S1 is dedicated to delivering integrated customer interaction solutions to
financial institutions and retailers to give them a single view of their
customers and a way to more efficiently run their business. This will be
accomplished through the delivery of multiple lines of products that are
designed to meet the unique needs of the various markets S1 serves, which
include global, national, and regional financial institutions; community banks;
credit unions; and retailers. S1 offers a broad range of customer interaction
software solutions, including branch automation, call center, Internet banking,
voice banking and ATM/POS.
Conference Call Information
Company management will host a conference call for interested parties to
discuss its fourth quarter results on Wednesday, March 1, 2006, at 5:00 p.m.
EST. A live webcast of the call will be available through the Company's website,
www.s1.com. The conference call will contain forward-looking statements and
other material information. A replay of the call will be available through March
8, 2006 on the Company's website.
*Reconciliation of GAAP Earnings
Loss from continuing operations as reported $ (20,673)
Restructuring costs 10,775
----------
Loss from continuing operations excluding
restructuring costs $ (9,898)
About S1
S1 Corporation (Nasdaq: SONE) is a leading global provider of integrated
customer interaction applications for thousands of 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.
Investor Contact:
John Stone
Chief Financial Officer, S1 Corporation
404.923.3500
john.stone@s1.com
Press Contact:
Chris Watson
Vice President of Marketing, S1 Corporation
404.923.6775
Chris.watson@s1.com
S1 Corporation and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
December 31, December 31,
2005 2004
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 85,108 $ 43,223
Short term investments 44,170 65,248
Accounts receivable, net of allowances 48,659 61,216
Prepaid expenses 4,885 6,113
Other current assets 3,870 5,968
------------ ------------
Total current assets 186,692 181,768
Property and equipment, net 11,351 15,150
Intangible assets, net 18,375 22,766
Goodwill, net 125,808 117,699
Other assets 2,297 3,981
------------ ------------
Total assets $ 344,523 $ 341,364
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 5,292 $ 6,253
Accrued salaries and benefits 8,267 14,269
Accrued other expenses and restructuring 25,822 20,706
Accrued purchase price consideration 12,900 -
Deferred revenues 27,499 33,302
Current portion of capital lease
obligation 1,222 1,523
------------ ------------
Total current liabilities 81,002 76,053
Other liabilities 11,135 10,315
------------ ------------
Total liabilities 92,137 86,368
------------ ------------
Stockholders' equity:
Preferred stock 10,000 10,000
Common stock 744 742
Additional paid-in capital 1,915,617 1,913,913
Treasury stock (25,000) (21,593)
Accumulated deficit (1,647,204) (1,646,147)
Accumulated other comprehensive
income:
Cumulative foreign currency
translation adjustment (1,771) (1,919)
------------ ------------
Total stockholders' equity 252,386 254,996
------------ ------------
Total liabilities and
stockholders' equity $ 344,523 $ 341,364
============ ============
S1 CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended
------------------------------------------
12/31/2005 09/30/2005 12/31/2004
------------ ------------ ------------
Revenues:
Software licenses $ 7,881 $ 6,834 $ 13,681
Support and maintenance 12,240 12,788 11,909
Professional services 14,653 17,697 21,321
Data center 10,272 10,181 9,332
Other 910 648 291
------------ ------------ ------------
Total revenues 45,956 48,148 56,534
------------ ------------ ------------
Direct costs:
Software licenses 1,445 1,025 871
Professional services, support
and maintenance 19,435 18,234 17,950
Data center 5,199 4,740 4,613
Other 1,093 434 132
------------ ------------ ------------
Total direct costs 27,172 24,433 23,566
------------ ------------ ------------
Gross margin 18,784 23,715 32,968
------------ ------------ ------------
Operating expenses:
Selling and marketing 6,620 8,352 8,118
Product development 10,743 11,331 10,546
General and administrative 8,705 6,610 7,582
Restructuring costs 10,775 4,255 -
Depreciation and amortization 2,167 2,198 2,336
Amortization of acquisition
intangibles 307 358 266
------------ ------------ ------------
Total operating expenses 39,317 33,104 28,848
------------ ------------ ------------
Operating income (loss) (20,533) (9,389) 4,120
Interest, investment and other income,
net 231 781 (1,173)
Income tax expense (371) (151) (270)
------------ ------------ ------------
Income (loss) from continuing
operations $ (20,673) $ (8,759) $ 2,677
------------ ------------ ------------
Discontinued operations:
(Loss) income from operations of
discontinued operations (319) 1,263 51
Gain on disposal of discontinued
operations, net of tax 24,395 - 8,559
------------ ------------ ------------
Net income (loss) $ 3,403 $ (7,496) $ 11,287
============ ============ ============
Net income (loss) per share:
Basic:
Continuing operations $ (0.29) $ (0.13) $ 0.04
Discontinued operations 0.34 $ 0.02 0.12
------------ ------------ ------------
Net income (loss) $ 0.05 $ (0.11) $ 0.16
============ ============ ============
Diluted:
Continuing operations $ (0.29) $ (0.13) $ 0.04
Discontinued operations 0.34 0.02 0.12
------------ ------------ ------------
Net income (loss) $ 0.05 $ (0.11) $ 0.16
============ ============ ============
Weighted average common shares
outstanding - basic 70,351,999 70,303,365 70,375,301
Weighted average common shares and
equivalents - diluted n/a n/a 73,237,477
Common shares outstanding at end of
period 70,356,213 70,346,563 70,608,418
Gross margin percentages:
Software licenses 82% 85% 94%
Professional services, support and
maintenance 28% 40% 46%
Data center 49% 53% 51%
Other (20)% 33% 55%
------------ ------------ ------------
Total gross margin 41% 49% 58%
============ ============ ============
S1 CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Twelve Months Ended
---------------------------
12/31/2005 12/31/2004
------------ ------------
Revenues:
Software licenses $ 38,276 $ 37,151
Support and maintenance 51,513 45,880
Professional services 72,065 83,677
Data center 40,000 37,354
Other 2,214 2,291
------------ ------------
Total revenues 204,068 206,353
------------ ------------
Direct costs:
Software licenses 5,522 5,461
Professional services, support
and maintenance 72,749 63,410
Data center 19,227 18,465
Other 1,790 1,715
------------ ------------
Total direct costs 99,288 89,051
------------ ------------
Gross margin 104,780 117,302
------------ ------------
Operating expenses:
Selling and marketing 31,498 25,921
Product development 45,661 46,214
General and administrative 29,961 24,431
Restructuring costs 15,030 -
Depreciation and amortization 9,198 9,350
Amortization of acquisition
intangibles 1,322 878
------------ ------------
Total operating expenses 132,670 106,794
------------ ------------
Operating income (loss) (27,890) 10,508
Interest, investment and other
income, net 1,996 (1,577)
Income tax expense (1,473) (1,291)
------------ ------------
Income (loss) from continuing
operations $ (27,367) $ 7,640
------------ ------------
Discontinued operations:
(Loss) income from operations of
discontinued operations 1,460 (629)
Gain on disposal of discontinued
operations, net of tax 24,850 8,559
------------ ------------
Net income (loss) $ (1,057) $ 15,570
============ ============
Net income (loss) per share:
Basic:
Continuing operations $ (0.39) $ 0.11
Discontinued operations 0.37 0.11
------------ ------------
Net income (loss) $ (0.02) $ 0.22
============ ============
Diluted:
Continuing operations $ (0.39) $ 0.10
Discontinued operations 0.37 0.11
------------ ------------
Net income (loss) $ (0.02) $ 0.21
============ ============
Weighted average common shares
outstanding - basic 70,359,200 70,612,973
Weighted average common shares and
equivalents - diluted n/a 73,130,026
Common shares outstanding at end of
period 70,356,213 70,608,418
Gross margin percentages:
Software licenses 86% 85%
Professional services, support and
maintenance 41% 51%
Data center 52% 51%
Other 19% 25%
------------ ------------
Total gross margin 51% 57%
============ ============
S1 Corporation
Statements of Operations by Segment
For the Quarter Ended December 31,
2005 (In thousands, except share and
per share data)
(Unaudited)
Financial Risk &
Institutions Compliance Total
------------ ------------ ------------
Software licenses $ 5,267 $ 2,614 $ 7,881
Support and maintenance 10,353 1,887 12,240
Professional services 12,877 1,776 14,653
Data center 10,272 - 10,272
Other 906 4 910
------------ ------------ ------------
Total Revenue: 39,675 6,281 45,956
------------ ------------ ------------
Direct costs:
Software licenses 1,254 191 1,445
Professional services, support
and maintenance 17,015 2,420 19,435
Data center 5,199 - 5,199
Other 1,077 16 1,093
------------ ------------ ------------
Total direct costs 24,545 2,627 27,172
------------ ------------ ------------
Gross margin 15,130 3,654 18,784
------------ ------------ ------------
Operating expenses:
Selling and marketing 5,708 912 6,620
Product development 8,910 1,833 10,743
General and administrative 7,764 941 8,705
Depreciation and amortization 2,074 93 2,167
Restructuring costs 10,775 - 10,775
Amortization of other
intangibles 322 (15) 307
------------ ------------ ------------
Total operating expenses 35,553 3,764 39,317
------------ ------------ ------------
Operating loss (20,423) (110) (20,533)
Interest, investment and other income
(expense), net 271 (40) 231
Income tax benefit (expense) 130 (501) (371)
------------ ------------ ------------
Loss from continuing operations $ (20,022) $ (651) $ (20,673)
============ ============ ============
Loss from continuing operations -
basic $ (0.28) $ (0.01) $ (0.29)
============ ============ ============
Loss from continuing operations -
diluted $ (0.28) $ (0.01) $ (0.29)
============ ============ ============
Weighted average common shares
outstanding - basic 70,351,999 70,351,999 70,351,999
Weighted average common shares
outstanding - diluted n/a n/a n/a
S1 Corporation
Statements of Operations by Segment
For the Quarter Ended September 30,
2005 (In thousands, except share and
per share data)
(Unaudited)
Financial Risk &
Institutions Compliance Total
------------ ------------ ------------
Software licenses $ 4,440 $ 2,394 $ 6,834
Support and maintenance 10,953 1,835 12,788
Professional services 16,247 1,450 17,697
Data center 10,181 - 10,181
Other 627 21 648
------------ ------------ ------------
Total Revenue: 42,448 5,700 48,148
------------ ------------ ------------
Direct costs:
Software licenses 1,020 5 1,025
Professional services, support
and maintenance 15,806 2,428 18,234
Data center 4,740 - 4,740
Other 403 31 434
------------ ------------ ------------
Total direct costs 21,969 2,464 24,433
------------ ------------ ------------
Gross margin 20,479 3,236 23,715
------------ ------------ ------------
Operating expenses:
Selling and marketing 7,371 981 8,352
Product development 9,981 1,350 11,331
General and administrative 5,236 1,374 6,610
Restructuring costs 4,255 - 4,255
Depreciation and amortization 2,111 87 2,198
Amortization of other intangibles 333 25 358
------------ ------------ ------------
Total operating expenses 29,287 3,817 33,104
------------ ------------ ------------
Operating loss (8,808) (581) (9,389)
Interest, investment and other income,
net 780 1 781
Income tax expense (151) - (151)
------------ ------------ ------------
Loss from continuing operations $ (8,179) $ (580) $ (8,759)
============ ============ ============
Loss from continuing operations -
basic $ (0.12) $ (0.01) $ (0.13)
============ ============ ============
Loss from continuing operations -
diluted $ (0.12) $ (0.01) $ (0.13)
============ ============ ============
Weighted average common shares
outstanding - basic 70,303,365 70,303,365 70,303,365
Weighted average common shares
outstanding - diluted n/a n/a n/a
S1 Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Twelve Months Ended
----------------------------
December 31, December 31,
2005 2004
------------ ------------
Cash flows from operating activities:
Net income (loss) $ (1,057) $ 15,570
Adjustments to reconcile net
income (loss) to net cash used
in operating activities:
Depreciation and amortization
and goodwill impairment charge 14,711 14,010
Gain on disposal of
discontinued operations (24,850) (8,559)
Loss on disposal of property
and equipment 971 -
Provision for doubtful accounts
receivable and billing
adjustments 5,152 421
Equity in net loss of
affiliate - 1,500
Stock option compensation
expense 570 -
Changes in assets and
liabilities, excluding effects
of acquisition:
(Increase) decrease in
accounts receivable (660) (19,884)
(Increase) decrease in
prepaid expenses and
other assets 4,881 (1,314)
Decrease in accounts
payable (362) (457)
(Decrease) increase in
accrued expenses and
other liabilities (536) (10,141)
Accrual for additional
purchase price
consideration 12,900 -
Decrease in deferred revenue 944 (6,390)
------------ ------------
Net cash provided by
(used in) operating
activities 12,664 (15,244)
Net cash used in
investing activities 33,697 (12,534)
Net cash used in
financing activities (3,877) (6,239)
Effect of exchange rate changes on
cash and cash equivalents (599) 527
------------ ------------
Net (decrease) increase in cash and
cash equivalents 41,885 (33,490)
Cash and cash equivalents at
beginning of period 43,223 76,713
------------ ------------
Cash and cash equivalents at end of
period $ 85,108 $ 43,223
============ ============
Property and equipment acquired
through leases $ 527 $ 2,899
Maintenance agreement financed
through vendor 105 1,279
Liabilities assumed in acquisition 123 5,551
SOURCE S1 Corporation
-0- 03/01/2006
/CONTACT: Investors, John Stone, Chief Financial Officer, +1-404-923-3500,
or john.stone@s1.com, or Press, Chris Watson, Vice President of Marketing,
+1-404-923-6775, or Chris.watson@s1.com, both of S1 Corporation/
/First Call Analyst: /
/FCMN Contact: /
/Web site: http://www.s1.com/