FICO (NYSE:FICO), the leading provider of analytics and decision management technology, today announced financial results for its second fiscal quarter ended March 31, 2011.

Second Quarter Fiscal 2011 ResultsNet income for the quarter totaled $7.7 million, or $0.19 per share. As previously announced, second quarter results included an $8.1 million after-tax restructuring charge for workforce and facility reductions, or $0.20 per diluted share. This compares with prior-year period net income of $13.0 million, or $0.28 per share.

Second Quarter Fiscal 2011 RevenueThe company reported quarterly revenues of $152.8 million versus $143.7 million reported in the prior year period, an increase of 6%.

“We delivered solid growth in our Applications and Tools portfolio, and our Scores business remains stable amid further signs of improvement in the economy,” said Mark Greene, chief executive officer. “We streamlined our cost structure while reallocating resources towards growth opportunities, product innovation and client service. We remain confident in the value and relevance of our solutions, the strength of our market position and our ability to deliver both revenue and earnings in line with guidance.”

Revenues for the second quarter of fiscal 2011 across each of the company’s three operating segments were as follows:
  • Applications revenues, which include the company’s preconfigured Decision Management applications and associated professional services, were $95.9 million in the second quarter compared to $86.9 million in the prior year quarter, an increase of 10%, primarily due to an increase in revenue from Fraud Management and Originations solutions.
  • Scores revenues, which include the company’s business-to-business (B2B) scoring solutions and associated professional services, and the myFICO® business-to-consumer (B2C) service, were $41.0 million in the second quarter compared to $42.5 million in the prior year quarter, a decrease of 4%, due to a decrease in business-to-consumer (B2C) service
  • Tools revenues, which include Blaze Advisor®, Xpress Optimization and related products and services, were $15.9 million in the second quarter compared to $14.3 million in the prior year quarter, an increase of 11%, primarily due to an increase in Decision Optimizer and Blaze Advisor license sales during the quarter.

BookingsBookings for the second quarter were $57.7 million compared to $54.3 million in the prior year period. Bookings represent contracts signed in the current reporting period that will generate new future revenue streams. Management regards the volume of bookings achieved, among other factors, as an important indicator of future revenues, but they are not comparable to, nor should they be substituted for, an analysis of the company’s revenues, and they are subject to a number of risks and uncertainties concerning timing and contingencies affecting product delivery and performance.

Balance Sheet and Cash FlowCash and cash equivalents, and investments were $274.4 million at March 31, 2011, as compared to $230.3 million at September 30, 2010. Significant changes in cash and cash equivalents from September 30, 2010 include $59.6 million of cash provided by operations, $6.9 million from issuances of common stock from share-based payment plans, $19.3 million related to the repurchase of common stock, $5.1 million related to the purchase of property and equipment, and $1.6 million of dividends paid.

OutlookThe company revises the previously issued guidance for fiscal 2011, which follows:
      New Fiscal 2011 Guidance     Old Fiscal 2011 Guidance
Revenue     $620 million - $625 million     $620 million - $625 million
GAAP Net Income     $68 million - $72 million     $70 million - $73 million
Non-GAAP Net Income, excluding        
restructuring charges of $8.7 $77 million - $81 million $76 million - $80 million
million            
GAAP Earnings Per Share
(assumes 39.9 million outstanding $1.71 - $1.81 $1.75 - $1.83
shares)            
Non-GAAP Earnings Per Share,
excluding restructuring charges of $1.93 - $2.03 $1.90 - $2.00
$0.21 (assumes 39.9 million
outstanding shares)            

Our guidance figures for non-GAAP net income and non-GAAP earnings per share have been adjusted to exclude the effects of restructuring charges for Fiscal 2011 related to workforce and facility reductions. We believe the presentation of guidance on these non-GAAP figures provides useful information to investors for comparing year-over-year performance and analyzing business trends of our financial condition and results of operations, particularly given that we revised our Fiscal 2011 guidance earlier this year partially as a result of the restructuring charges.

Company to Host Conference CallThe company will host a webcast today at 5:00 p.m. Eastern Time (4:00 p.m. Central Time/2:00 p.m. Pacific Time) to report its second quarter fiscal 2011 results and provide various strategic and operational updates. The call can be accessed at FICO's Web site at www.FICO.com (follow the instructions on the Investor Relations page). A replay of the webcast will be available through June 4, 2011 .

The webcast will also be distributed through the Thomson StreetEvents Network to both institutional and individual investors. Individual investors can listen to the call at www.fulldisclosure.com, Thomson/CCBN's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson's password-protected event management site, StreetEvents ( www.streetevents.com).

About FICOFICO (NYSE:FICO) delivers superior predictive analytics that drive smarter decisions. The company’s groundbreaking use of mathematics to predict consumer behavior has transformed entire industries and revolutionized the way risk is managed and products are marketed. FICO’s innovative solutions include the FICO ® Score — the standard measure of consumer credit risk in the United States — along with the industry-leading solutions for managing credit accounts, identifying and minimizing the impact of fraud, and customizing consumer offers with pinpoint accuracy. Most of the world’s top banks, as well as leading insurers, retailers, pharma businesses and government agencies rely on FICO solutions to accelerate growth, control risk, boost profits and meet regulatory and competitive demands. FICO also helps millions of individuals manage their personal credit health through www.myFICO.com. Learn more at www.fico.com. FICO: Make every decision count.

Statement Concerning Forward-Looking InformationExcept for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering initiative, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2010 and its last quarterly report on Form 10-Q for the period ended December 31, 2010. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.

FICO, myFICO and Blaze Advisor are all trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries.
FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Quarters and Six Months Ended March 31, 2011 and 2010
(In thousands, except per share data)
(Unaudited)
               
 
Quarter Ended Six Months Ended
March 31, March 31,
2011 2010 2011 2010
 
Revenues:
Transactional and maintenance $ 111,431 $ 113,701 $ 226,193 $ 228,807
Professional services 27,041 23,926 54,949 50,163
License   14,352     6,093     27,613     16,246  
Total revenues 152,824 143,720 308,755 295,216
 
Operating expenses:
Cost of revenues 48,506 44,641 94,309 87,160
Research and development 16,222 19,251 34,283 38,227
Selling, general and administrative 55,449 53,697 115,082 108,900
Amortization of intangible assets 1,933 3,070 3,862 6,235
Restructuring   11,522     -     12,391     -  
  133,632     120,659     259,927     240,522  
Operating income 19,192 23,061 48,828 54,694
Other expense, net   (8,158 )   (3,889 )   (16,371 )   (9,139 )
Income from operations before income taxes 11,034 19,172 32,457 45,555
Provision for income taxes   3,289     6,180     8,703     14,877  
Net income $ 7,745   $ 12,992   $ 23,754   $ 30,678  
 
 
Basic earnings per share $ 0.19   $ 0.28   $ 0.59   $ 0.65  
Diluted earnings per share $ 0.19   $ 0.28   $ 0.59   $ 0.65  
 
Shares used in computing earnings per share:
Basic   40,010     46,447     39,966     47,033  
Diluted   40,618     46,870     40,528     47,399  

FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2011 and September 30, 2010
(In thousands)
(Unaudited)
       
 

  March 31,  
September 30,
2011 2010
 
ASSETS:
Current assets:
Cash and cash equivalents $ 258,294 $ 146,199
Marketable securities - 68,615
Accounts receivable, net 106,893 113,187
Prepaid expenses and other current assets   15,898   19,174
Total current assets 381,085 347,175
 
Marketable securities and investments 16,122 15,441
Property and equipment, net 29,038 30,975
Goodwill and intangible assets, net 690,854 693,197
Other assets   35,327   36,928
Total assets $ 1,152,426 $ 1,123,716
 
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and other accrued liabilities $ 42,807 $ 37,497
Accrued compensation and employee benefits 24,004 33,697
Deferred revenue 51,020 42,953
Current maturities on long-term debt   8,000   8,000
Total current liabilities 125,831 122,147
 
Senior notes 512,000 512,000
Other liabilities   16,318   14,655
Total liabilities 654,149 648,802
 
Stockholders’ equity   498,277   474,914
$ 1,152,426 $ 1,123,716

FAIR ISAAC CORPORATION
REVENUE BY SEGMENT
For the Quarters and Six Months Ended March 31, 2011 and 2010
(In thousands)
(Unaudited)
               
 
Quarter Ended Six Months Ended
March 31, March 31,
2011 2010 2011 2010
 
Applications revenues:
Transactional and maintenance $ 64,102 $ 64,703 $ 130,699 $ 131,437
Professional services 23,486 19,621 48,235 41,083
License   8,348   2,572   14,638   7,248
Total applications revenues $ 95,936 $ 86,896 $ 193,572 $ 179,768
 
Scores revenues:
Transactional and maintenance $ 39,894 $ 41,885 $ 80,399 $ 83,028
Professional services 730 649 969 1,059
License   336   -   407   -
Total scores revenues $ 40,960 $ 42,534 $ 81,775 $ 84,087
 
Tools revenues:
Transactional and maintenance $ 7,435 $ 7,113 $ 15,095 $ 14,342
Professional services 2,825 3,656 5,745 8,021
License   5,668   3,521   12,568   8,998
Total tools revenues $ 15,928 $ 14,290 $ 33,408 $ 31,361
 
Total revenues:
Transactional and maintenance $ 111,431 $ 113,701 $ 226,193 $ 228,807
Professional services 27,041 23,926 54,949 50,163
License   14,352   6,093   27,613   16,246
Total revenues $ 152,824 $ 143,720 $ 308,755 $ 295,216

FAIR ISAAC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended March 31, 2011 and 2010
(In thousands)
(Unaudited)
       
 
Six Months Ended
March 31,
2011

2010
Cash flows from operating activities:
Net income $ 23,754 $ 30,678
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 12,770 16,128
Share-based compensation 8,205 9,382
Changes in operating assets and liabilities net of disposition effects 15,404 17,928
Other, net   (515 )   (4,151 )

Net cash provided by operating activities
  59,618     69,965  
 
Cash flows from investing activities:
Purchases of property and equipment (5,106 ) (8,010 )
Net activity from marketable securities 68,189 8,917
Other, net   75     540  

Net cash provided by investing activities
  63,158     1,447  
 
Cash flows from financing activities:
Proceeds from issuances of common stock 6,889 2,156
Repurchases of common stock (19,311 ) (57,530 )
Other, net   (472 )   (839 )
Net cash used in financing activities   (12,894 )   (56,213 )
 
Effect of exchange rate changes on cash   2,213     (2,446 )
 
Increase in cash and cash equivalents 112,095 12,753
Cash and cash equivalents, beginning of period   146,199     178,157  
Cash and cash equivalents, end of period $ 258,294   $ 190,910  

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