FICO Announces Earnings of $0.47 per Share for First Quarter Fiscal 2014 - Siouxland News - KMEG 14 and FOX 44

FICO Announces Earnings of $0.47 per Share for First Quarter Fiscal 2014

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SOURCE FICO

Revenue of $184 million vs. $190 million in prior year

SAN JOSE, Calif., Jan. 22, 2014 /PRNewswire/ -- FICO (NYSE: FICO), a leading predictive analytics and decision management software company, today announced results for its first fiscal quarter ended December 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20111010/CG83314LOGO)

First Quarter Fiscal 2014 GAAP Results
Net income for the quarter totaled $17.0 million, or $0.47 per share, versus $23.4 million, or $0.65 per share, reported in the prior year period.

First Quarter Fiscal 2014 Non-GAAP Results
Non-GAAP Net Income for the quarter was $26.2 million vs. $31.8 million in the prior year period. Non-GAAP EPS for the quarter was $0.73 vs. $0.88 in the prior year period. Free cash flow for the quarter was $25.5 million vs. $19.0 million in the prior year period. The Non-GAAP financial measures are described in the financial table captioned "Non-GAAP Results" and are reconciled to the corresponding GAAP results in the financial tables at the end of this release.

First Quarter Fiscal 2014 GAAP Revenue
The company reported revenues of $184.3 million for the quarter as compared to $190.0 million reported in the prior year period, a decrease of 3%. 

"Our first quarter results were in line with our expectations, and we remain confident in our strategic direction," said Will Lansing, chief executive officer. "We drove very solid growth in both our Scores and Tools segments, but we had a soft quarter in Applications license revenue against an exceptionally strong comparable quarter. So our core franchises are healthy, the roll-out of our cloud-based solutions is on track, we remain disciplined about controlling costs, and we are maintaining our sharp focus on cash flow."

Revenues for the first quarter fiscal 2014 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 $111.9 million in the first quarter compared to $124.7 million in the prior year quarter, a decrease of 10%. This was due to the early termination of a large Marketing Solutions customer in December 2012, and declines in Customer Management and Fraud Banking. A revenue increase in Mobility Solutions partially offset these declines.
  • 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 $47.2 million in the first quarter compared to $43.4 million in the prior year quarter, an increase of 9%. The B2C revenue increased 22% and the B2B revenue increased 5% from the prior year quarter.
  • Tools revenues, which include Blaze Advisor®, Xpress Optimization and related professional services, were $25.2 million in the first quarter compared to $21.9 million in the prior year quarter, an increase of 15%, due to increased license sales of our Optimization solutions.

Outlook
The company is reiterating its previously provided guidance for fiscal 2014, which follows:


Fiscal 2014 Guidance

Revenue

$763 million -  $773 million

GAAP Net Income

$91 million - $94 million

GAAP Earnings Per Share

$2.50-$2.60

Non-GAAP Net Income

$125-$128 million

Non-GAAP Earnings Per Share

$3.46-$3.56

The Non-GAAP financial measures are described in the financial table captioned "Non-GAAP Results".

Company to Host Conference Call
The company will host a webcast tomorrow at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time) to report its first quarter fiscal 2014 results and provide various strategic and operational updates. The call can be accessed at FICO's Web site at www.FICO.com/investors. A replay of the webcast will be available through February 23, 2014.

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 FICO
FICO (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 Information
Except 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 or in the markets we serve, 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, 2013. 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.

  

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)






December 31,


September 30,


2013


2013

ASSETS:




Current assets:




     Cash and cash equivalents

$             95,937


$              83,178

     Accounts receivable, net

141,112


143,733

     Prepaid expenses and other current assets

20,639


22,277

          Total current assets

257,688


249,188





Marketable securities and investments

18,709


18,140

Property and equipment, net

41,997


45,155

Goodwill and intangible assets, net

831,886


831,292

Other assets

15,996


17,772


$        1,166,276


$         1,161,547





LIABILITIES AND STOCKHOLDERS' EQUITY:




Current liabilities:




     Accounts payable and other accrued liabilities

$             53,795


$              54,418

     Accrued compensation and employee benefits

28,457


39,281

     Deferred revenue

48,388


49,181

     Current maturities on debt

31,000


23,000

          Total current liabilities

161,640


165,880





Senior notes

447,000


447,000

Other liabilities

18,213


17,990

          Total liabilities

626,853


630,870





Stockholders' equity

539,423


530,677


$        1,166,276


$         1,161,547

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME 

(In thousands, except per share data)

(Unaudited)







Quarter Ended 



December 31,



2013


2012







Revenues:





     Transactional and maintenance

$           129,655


$           129,898


     Professional services

34,286


32,337


     License

20,402


27,785


        Total revenues

184,343


190,020







Operating expenses:





     Cost of revenues

57,319


56,148


     Research & development

18,092


14,552


     Selling, general and administrative

66,989


69,665


     Amortization of intangible assets

3,013


3,372


     Restructuring and acquisition-related

3,660


3,289



149,073


147,026


Operating income

35,270


42,994


Other expense, net

(8,087)


(7,951)


Income before income taxes

27,183


35,043


Provision for income taxes

10,206


11,622


Net income

$             16,977


$             23,421

















Basic earnings per share:

$                 0.49


$                 0.67


Diluted earnings per share:

$                 0.47


$                 0.65







Shares used in computing earnings per share:





     Basic

34,699


35,043


     Diluted

35,820


36,151


 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)






 Quarter Ended 


 December 31, 


2013


2012

Cash flows from operating activities:




Net income

$   16,977


$   23,421

Adjustments to reconcile net income to net cash provided by 




  operating activities:




      Depreciation and amortization

8,167


7,973

      Share-based compensation

7,235


5,832

      Changes in operating assets and liabilities

(2,348)


(5,492)

      Other, net

(1,653)


(3,005)

         Net cash provided by operating activities

28,378


28,729





Cash flows from investing activities:




Purchases of property and equipment

(2,154)


(9,012)

Net activity from marketable securities

-


22,000

Cash paid for acquisitions, net of cash acquired

-


(27,605)

Other, net

-


50

         Net cash used in investing activities

(2,154)


(14,567)





Cash flows from financing activities:




Proceeds from revolving line of credit

8,000


-

Proceeds from issuances of common stock

2,011


6,189

Repurchases of common stock

(27,125)


-

Other, net

3,857


(695)

         Net cash provided by (used in) financing activities

(13,257)


5,494





Effect of exchange rate changes on cash

(208)


(426)





Increase in cash and cash equivalents

12,759


19,230

Cash and cash equivalents, beginning of period

83,178


71,609

Cash and cash equivalents, end of period

$   95,937


$   90,839

 

FAIR ISAAC CORPORATION

REVENUE BY SEGMENT

(In thousands)

(Unaudited)








Quarter Ended 



December 31,



2013


2012






Applications revenues:





     Transactional and maintenance


$         77,779


$         79,625

     Professional services


26,787


26,159

     License


7,350


18,923

          Total applications revenues


$       111,916


$       124,707






Scores revenues:





     Transactional and maintenance


$         43,318


$         42,437

     Professional services


589


903

     License


3,273


107

          Total scores revenues


$         47,180


$         43,447






Tools revenues:





     Transactional and maintenance


$           8,558


$           7,836

     Professional services


6,910


5,275

     License


9,779


8,755

          Total tools revenues


$         25,247


$         21,866






Total revenues:





     Transactional and maintenance


$       129,655


$       129,898

     Professional services


34,286


32,337

     License


20,402


27,785

          Total revenues


$       184,343


$       190,020

 

FAIR ISAAC CORPORATION

NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)










Quarter Ended 


December 31,


2013


2012





GAAP net income

$                    16,977


$                    23,421

Amortization of intangible assets (net of tax)

1,996


2,265

Restructuring and acquisition-related (net of tax)

2,424


2,209

Stock-based compensation expense (net of tax)

4,792


3,917

Non-GAAP net income

$                    26,189


$                    31,812









GAAP diluted earnings per share

$                        0.47


$                        0.65

Amortization of intangible assets (net of tax)

0.06


0.06

Restructuring and acquisition-related (net of tax)

0.07


0.06

Stock-based compensation expense (net of tax)

0.13


0.11

Non-GAAP diluted earnings per share

$                        0.73


$                        0.88





Free cash flow




Net cash provided by operating activities

$                    28,378


$                    28,729

Capital expenditures

(2,154)


(9,012)

Dividends paid

(693)


(702)

Free cash flow

$                    25,531


$                    19,015

 

About Non-GAAP Financial Measures

To supplement the consolidated GAAP financial statements, the company uses the following non-GAAP financial measures: non-GAAP net income, non-GAAP EPS, and free cash flow. Non-GAAP net income and non-GAAP EPS exclude the impact of amortization expense, share-based compensation expense, restructuring and acquisition-related, and adjustment to tax valuation allowance items. Free cash flow excludes capital expenditures and dividends paid.  The presentation of these financial measures is not intended to be considered  in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. 

Management uses these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of recurring business results including significant non-cash expenses.  We believe management and investors benefit from referring to these non-GAAP financial measures in assessing our performance when planning, forecasting and analyzing future periods.  These non-GAAP financial measures also facilitate management's internal comparisons to historical performance and liquidity as well as comparisons to our competitors' operating results.  We believe these non-GAAP financial measures are useful to investors because they allow for greater transparency with respect to key measures used by management in its financial and operating decision-making.

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