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Net Revenue of $139.7 million SCOTTSDALE, Ariz., May 3 /PRNewswire-FirstCall/ -- eFunds Corporation (NYSE:EFD), the Company that delivers innovative payment processing and information intelligence solutions, today reported first quarter net revenue of $139.7 million. This amount represents a 22% improvement over the net revenues of $114.2 million reported during the first quarter of 2005. Reported operating income was $15.2 million, or 11% of net revenue, compared to $15.0 million, or 13% of net revenue reported in prior year quarter. The Company's operating income in the first quarter of 2006 reflects a $3 million operating loss by the Prepaid Solutions business that the Company acquired in July 2005 due to the seasonality of that business and infrastructure investments made in advance of integration activities associated with this business. First quarter net income was $10.7 million, or $0.23 per diluted share, compared to net income of $11.9 million, or $0.23 per diluted share, reported for the same quarter in 2005. The Company implemented SFAS 123R using the modified retrospective approach during the quarter. As such, compensation costs have been revised in the prior year quarter to reflect stock based compensation expense that historically would have been presented in proforma footnote disclosures in the Company's quarterly filings on Form 10-Q. "We are pleased with the first quarter financial results, which are consistent with our internal expectations," stated Paul Walsh, Chairman and CEO. "Our EFT Processing and Risk Management businesses delivered double digit revenue growth on a quarter over quarter basis. We are continuing our efforts to integrate our Prepaid Solutions business more fully into our other operations. Our efforts to more closely align our outsourcing capabilities with our core risk management and transaction processing businesses are also progressing," stated Walsh. Forward-looking Statements The Company re-affirmed its previously published guidance that 2006 diluted earnings per share will be between $1.15 - $1.25 and now anticipates that 2006 net revenues will trend toward the low end of its previously published range of 15 - 25 percent over 2005 net revenues. The foregoing expectations reflect the following assumptions: * An effective tax rate of approximately 35 percent for the balance of 2006; * Cash outlays for capital expenditures and product development activities will be somewhat higher than the $29.4 million seen in 2005. Conference Call eFunds will hold a one-hour conference call today at 10:00 a.m. EST to discuss the Company's quarterly and year-to-date financial performance. To listen to the conference call, dial 800-399-5351 (International callers dial 706-643-1939). The call will also be broadcast on the Company's Web site at http://www.efunds.com/ under the "Our Company/Investor Relations" tab. Interested parties are encouraged to click on the web cast link 10 to 15 minutes prior to the start of the conference call. Replay Information A replay of the conference call will be available beginning two hours after the call's completion and will play through 11:59 p.m. EDT on May 17, 2006. You may access the replay by dialing 800-642-1687 (International callers dial 706-645-9291) and entering the Conference ID number 8153325. Additionally, a replay of the conference call will be available via the eFunds Web site at http://www.efunds.com/. About eFunds With more than 30 years of payment processing and information intelligence expertise, eFunds delivers flexible, innovative solutions to the world's leading businesses. Leveraging mission-critical business insight, we enable financial services companies, retailers and government organizations to grow their businesses while reducing transaction and infrastructure costs, detecting potential fraud and building long-term customer value. Our flexible delivery model means solutions can be run in-house, outsourced or anything in between, helping customers balance the need for control with operational efficiency and low cost of ownership. From the point of account opening to the settlement of every transaction -- debit, credit, or prepaid -- eFunds helps businesses win more of the right customers, serve them more efficiently and keep them. http://www.efunds.com/ Statements made in this release concerning the Company's or management's intentions, expectations, or predictions about future results or events are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are necessarily subject to risks and uncertainties that could cause actual results to vary from stated expectations and such variations could be material and adverse. Factors that could result in such a variation include, but are not limited to, the inherent unreliability of earnings and revenue growth predictions due to numerous factors, including many beyond the Company's control, potential difficulties, delays and unanticipated expenses inherent in the development and marketing of new products and services, competitive factors, the unpredictability of merger and acquisition activity, and the numerous risks and potential additional costs, disruptions and delays associated with the establishment of new business initiatives. Additional information concerning these and other factors that could cause actual results to differ materially from the Company's current expectations is contained in the Company's Annual Report on Form 10-K for the period ending December 31, 2005. EFUNDS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended March 31, (in thousands, except 2006 2005 per share amounts) (revised) Net revenue $139,738 100.0% $114,238 100.0% Operating expenses Processing, communication and service costs 35,293 25.2% 28,903 25.3% Employee costs 59,078 42.3% 51,012 44.6% Depreciation and amortization 11,778 8.4% 8,147 7.1% Other operating costs 18,420 13.2% 11,153 9.8% Total operating expenses 124,569 89.1% 99,215 86.8% Income from operations 15,169 10.9% 15,023 13.2% Interest expense (1,576) -1.1% (121) -0.2% Other income - net 807 0.5% 1,596 1.4% Income before income taxes 14,400 10.3% 16,498 14.4% Provision for income taxes (3,740) -2.7% (4,608) -4.0% Net income $10,660 7.6% $11,890 10.4% Shares outstanding Basic 46,145 49,302 Diluted 47,026 50,964 Earnings per share Basic $0.23 $0.24 Diluted $0.23 $0.23 EFUNDS CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) March 31, December 31, 2006 2005 (in thousands) (revised) Current assets: Cash and cash equivalents $89,072 $85,987 Restricted cash 27,068 28,183 Settlement assets 10,921 28,438 Accounts receivable - net 89,732 96,115 Other current assets 41,399 45,763 Total current assets 258,192 284,486 Property and equipment - net 62,057 63,721 Intangibles-net 408,001 398,337 Other non-current assets 18,344 17,638 Total assets $746,594 $764,182 Current liabilities: Accounts payable $21,260 $23,902 Settlement liabilities 11,293 28,519 Accrued liabilities 26,562 56,011 Acquisition holdbacks 30,083 25,052 Deferred revenue and gains 26,555 23,978 Long-term debt due within one year 4,935 5,030 Total current liabilities 120,688 162,492 Long-term deferred gains 25,247 27,637 Long-term debt 106,055 106,973 Other long-term liabilities 22,142 15,481 Total liabilities 274,132 312,583 Stockholders' equity: Common stock 511 505 Additional paid-in capital 508,649 498,939 Treasury stock at cost (100,000) (100,000) Retained earnings 61,804 51,144 Accumulated other comprehensive income 1,498 1,011 Stockholders' equity 472,462 451,599 Total liabilities and stockholders' equity $746,594 $764,182 EFUNDS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 2006 2005 (in thousands) (revised) Cash flows from operating activities: Net income $10,660 $11,890 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 4,380 3,576 Amortization 7,399 4,571 Stock-based compensation 2,594 2,194 Excess tax benefits from share-based compensation (912) (538) Deferred income taxes 10,828 4,722 Other - net 28 79 Changes in assets and liabilities Restricted cash (240) 73 Accounts receivable 6,082 1,111 Accounts payable (2,885) (3,877) Income taxes receivable/payable (17,096) (34,274) Other assets and liabilities (17,019) (9,582) Net cash provided by (used in) operating activities 3,819 (20,055) Cash flows from investing activities: Capital expenditures (8,481) (6,653) Acquisitions -- (18,863) Proceeds from dispositions 2,000 -- Purchases of short-term investments -- (22,100) Proceeds from sale of short-term investments -- 7,880 Other - net (815) (236) Net cash used in investing activities (7,296) (39,972) Cash flows from financing activities: Purchase of common stock -- (18,965) Issuance of common stock 6,637 4,842 Excess tax benefits from share-based compensation 912 538 Payments on long-term debt (1,010) (424) Other 23 -- Net cash provided by (used in) financing activities 6,562 (14,009) Net increase (decrease) in cash and cash equivalents 3,085 (74,036) Cash and cash equivalents at beginning of period 85,987 274,477 Cash and cash equivalents at end of period $89,072 $200,441 EFUNDS CORPORATION SEGMENT SUMMARY DATA (Unaudited) Three Months Ended March 31, Change 2006 2005 $ % (in thousands) (revised) Net revenue: Electronic payments $77,069 $50,771 26,298 52% Risk management 42,730 37,606 5,124 14% Global outsourcing 19,939 25,861 (5,922) -23% Total net revenue 139,738 114,238 25,500 22% Operating expenses: Processing, employee and other costs - Electronic payments 70,862 44,415 26,447 60% Risk management 22,668 22,353 315 1% Global outsourcing 16,841 17,719 (878) -5% Total processing, employee and other costs 110,371 84,487 25,884 31% Allocated overhead - Electronic payments 3,890 3,851 39 1% Risk management 2,690 2,728 (38) -1% Global outsourcing 2,256 2,654 (398) -15% Corporate 5,362 5,495 (133) -2% Total allocated overhead 14,198 14,728 (530) -4% Income (loss) from operations: Electronic payments 2,317 2,505 (188) -8% Risk management 17,372 12,525 4,847 39% Global outsourcing 842 5,488 (4,646) -85% Corporate (5,362) (5,495) 133 2% Total income from operations $15,169 $15,023 146 1% EFUNDS CORPORATION SUPPLEMENTAL REVENUE DATA (Unaudited) Three Months Ended March 31, % 2006 2005 Change (in millions) Electronic Payments EFT processing $36.3 $29.1 25% Prepaid solutions 21.8 -- * Government services (EBT) 10.2 13.3 -23% Software sales 8.8 8.4 5% $77.1 $50.8 52% Risk Management Financial Institution products $38.0 $32.7 16% Retail products 4.7 4.9 -4% $42.7 $37.6 14% Global Outsourcing BPO $15.7 $16.6 -5% IT services 4.2 9.3 -55% $19.9 $25.9 -23% * Represents an increase or decrease greater than 100%. DATASOURCE: eFunds Corporation CONTACT: Helen Johnson, Investor Relations, +1-480-629-7607, or George Gresham, Chief Financial Officer, +1-480-629-7662, both of eFunds Corporation Web site: http://www.efunds.com/

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