S1 Corporation Reports Fourth Quarter And Full Year 2010 Financial Results

Revenue Backlog in Payments and Banking: Large FI Segments Increased to $62.8 Million, a 60% Increase Compared to December 31, 2009

Sales Bookings in Payments and Banking: Large FI Segments Increased to $68.3 Million in Six Months Ended December 31, 2010, a 74% Increase Compared to Six Months Ended December 31, 2009

Generated $37.2 Million in Net Cash From Operations in 2010, a 132% Increase Compared to 2009

Fourth Quarter 2010 Revenue Reduced by $5.0 Million Due to Change in Scope of Custom Project

Introduces 2011 Guidance: Expects to Generate Revenue of $225 to $235 Million and Adjusted EBITDA of $22 to $27 Million

NORCROSS, Ga., March 10, 2011 (GLOBE NEWSWIRE) -- S1 Corporation (Nasdaq:SONE), a leading global provider of payments and financial services software solutions, today announced financial results for the fourth quarter and the full year ended December 31, 2010:

Financial Results and Operating Highlights

• Total revenue decreased 12% to $52.5 million in the fourth quarter of 2010 compared with $59.5 million in the fourth quarter of 2009. As discussed in further detail below, revenue in the fourth quarter was reduced by $5.0 million due to a change in the scope of the project with the international branch customer that is one of our Custom Projects. Total revenue for the year ended December 31, 2010 decreased 12% to $209.1 million from $238.9 million in the year ended December 31, 2009. The decrease in revenue was primarily attributed to a $13.2 million reduction in professional services revenue from State Farm, an $11.6 million reduction in professional services revenue from an international branch customer (collectively, the "Custom Projects"), and the impact of recognizing a lower percentage of software licenses upon delivery due to an increase in projects where revenue is recognized using the percentage of completion method.
• U.S. GAAP net loss was $4.3 million, or ($0.08) per share, in the fourth quarter of 2010 compared with U.S. GAAP net income of $9.9 million, or $0.18 per share (diluted), in the fourth quarter of 2009. U.S. GAAP net loss was $6.3 million, or ($0.12) per share, in the year ended December 31, 2010 compared with U.S. GAAP net income of $30.4 million, or $0.55 per share (diluted), in the year ended December 31, 2009. These figures include stock-based compensation expense of $2.3 million and $1.2 million in the fourth quarter of 2010 and 2009, respectively, and stock-based compensation expense of $3.7 million and $1.6 million in the year ended December 31, 2010 and 2009, respectively.
• Adjusted EBITDA was $0.8 million in the fourth quarter of 2010 compared with $12.5 million in the fourth quarter of 2009. Adjusted EBITDA in the year ended December 31, 2010 was $10.4 million compared with $46.4 million in the year ended December 31, 2009. Adjusted EBITDA does not include stock-based compensation expense and is described below and reconciled to the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP in Tables 4, 5, 6 and 7, provided below.
• Net cash provided by operating activities increased 132% to $37.2 million in the year ended December 31, 2010 compared with $16.0 million in the year ended December 31, 2009. The Company had cash and cash equivalents of $61.9 million as of December 31, 2010.
• Revenue backlog, which is discussed in further detail below, in the Company's Payments and Banking: Large FI segments increased to $62.8 million as of December 31, 2010, an 11% increase compared with $56.7 million as of September 30, 2010 and a 60% increase compared with $39.2 million as of December 31, 2009.
• The Company added 41 new customers in 2010.  
• Notable fourth quarter 2010 contract signings include:

• One of the 20 largest U.S. headquartered commercial bank holding companies for S1's payments solution;
• One of the top 20 banks in the world for S1's Corporate Banking and Trade Finance solutions;
• A top four bank in South Africa for S1's payments solution;
• A top supermarket chain in the United Kingdom for S1's payments solution;
• The leading independent global provider of fleet cards for S1's payments solution; and
• Two of the top five banks in the U.S. for S1's Trade Finance solution.

• In 2011, the Company expects to generate revenue of $225 to $235 million and Adjusted EBITDA of $22 to $27 million. 

Johann Dreyer, Chief Executive Officer, said, "Although our 2010 financial performance was impacted by the transition of our business model and a reduction in revenue from the Custom Projects, the fundamentals of our core businesses were strong as evidenced by the significant increases in revenue backlog, sales bookings, and cash flows.  We ended 2010 with another strong quarter of sales bookings and entered 2011 with a 60% increase in revenue backlog as compared to 2010. With the progress we made in the transition of our business model during 2010, and the greater visibility we have with the increase in revenue backlog, we have resumed providing annual financial guidance."