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Online Resources Posts Second Quarter 2011 Results

Stocks in this article: ORCC

Online Resources Corporation (NASDAQ: ORCC), a leading provider of online financial services, today reported financial and operating results for the three months ended June 30, 2011.

  • Revenue was $38.3 million, compared to $36.4 million in the second quarter of 2010.
  • Net loss available to common stockholders was $2.3 million, or $0.07 per share, compared to a loss of $1.3 million, or $0.04 per share, in the second quarter of 2010.
  • Ebitda, a non-GAAP measure, was a $3.9 million, compared to $6.0 million in the same quarter of 2010.
  • Adjusted Ebitda, a non-GAAP measure that adjusts Ebitda for equity compensation expense and other expenses, was $6.8 million, compared to $7.9 million in the prior year period.
  • Core net income, a non-GAAP measure, was $1.1 million, or $0.03 per diluted share, compared to $1.7 million, or $0.06 per diluted share, in the same quarter of 2010.

“We exceeded revenue and earnings expectations in the second quarter, growing our top line by five percent over the same quarter last year,” said Joseph L. Cowan, president and chief executive officer of Online Resources. “Our positive performance was the result of higher than anticipated eCommerce payment transactions, where we benefited from stronger than expected same-store transaction growth.”

“The Company continues to make excellent progress on its strategic growth plan to leverage technology, maximize operational efficiencies and invest in product, sales and marketing. During the quarter we hired additional staff in our India development center, and refined both our product roadmaps and plans to reposition the company in our target markets,” said Cowan.

Outlook for Third Quarter 2011

Online Resources provided the following guidance for the third quarter of 2011. These statements are forward-looking, and actual results may differ materially.

  • Revenue for the quarter is expected to be between $35.4 and $37.4 million.
  • Ebitda 1,2 for the quarter is expected to be between $2.7 and $4.2 million
  • Adjusted Ebitda 1,2,5 for the quarter is expected to be between $4.8 and $6.1 million.
  • Core net loss 1,3,4,5,6 is expected to be between $(0.02) and $0.00 per share.
(1)   The Company uses non-GAAP (Generally Accepted Accounting Principles) financial measures, including Ebitda, adjusted Ebitda and core net income, to evaluate performance and establish goals. It believes that these measures are valuable to investors in assessing the Company’s operating results when viewed in conjunction with GAAP results.
(2) Ebitda is defined as net income before interest, taxes, depreciation and amortization expense. We expanded our definition of Adjusted Ebitda in the first quarter of 2011. Adjusted Ebitda is now defined as net income before interest, taxes, depreciation and amortization, equity compensation expense, reserve for potential legal liability, strategic alternatives process costs, transition costs (including severance, retention, advisory and ORCC India start up costs) and other expense. Some or all of these items may not be applicable in any given reporting period.
(3) Core net loss is defined as net income available to common stockholders before, on a pre-tax basis unless otherwise noted, the amortization of acquisition-related intangible assets, equity compensation expense, income tax benefit or expense from the change in valuation allowance, income (costs) related to the fair market valuation of certain derivatives and mark-to-market investments, preferred stock accretion related to the redemption premium, reserve for potential legal liability, net of tax, strategic process costs, net of tax, transition costs (including severance, retention, advisory and ORCC India start up costs), net of tax, and all other non-recurring charges. Some or all of these items may not be applicable in any given reporting period.
(4) Excludes estimates for amortization of acquisition-related intangible assets of $1.1 million, equity compensation expense of $0.6 million and preferred stock accretion related to the redemption premium of $0.4 million.
(5) Adjusted Ebitda and core net loss exclude $1.3 million in transition costs. These costs are tax-effected in the calculation of core net loss.
(6) Core net loss per share calculated using estimated shares outstanding of 32.0 million.

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