EFD AB Svensk Exportkr Acclrtd Rtrn NT Lkd Tomsci

Net Revenue of $134 Million SCOTTSDALE, Ariz., May 9 /PRNewswire-FirstCall/ -- EFD (NYSE:EFD), the company that delivers innovative enterprise payments and data & decisioning solutions, today reported that operating income in the first quarter of 2007 increased 10% to $17 million, or 12.4% of net revenues, as compared to $15 million, or 11% of net revenues, reported in the first quarter of 2006. First quarter net income was $11 million, or $0.22 per diluted share, compared to net income of $11 million, or $0.23 per diluted share, reported for the same quarter in 2006. Revenues in the first quarter declined 4% from the $140 million reported in the prior year quarter to $134 million due to previously disclosed contract roll-offs that occurred in mid-2006. The Company also reported that, subsequent to quarter end, it has resolved the Indian Tax Dispute referenced in its prior public filings. This resolution is not expected to have a material impact on the Company's effective tax rate or results of operations in 2007. "During the quarter, we continued to see revenue growth in our EFT processing and software businesses and continued margin expansion on a consolidated basis. We also launched our Integrated Fraud Platform solution during the quarter and received a strong level of interest in the marketplace," said Paul F. Walsh, Chairman and Chief Executive Officer. "We feel that our first quarter results reflect progress towards meeting our full year financial and operational objectives," stated Walsh. The Company also reported that it has recently been approached by certain strategic and financial parties who have expressed a desire to explore possible strategic alternatives. The Board of Directors has formed a Review Committee and directed Goldman, Sachs & Co. and BlackRock, Inc., its independent financial advisors, to assist it in exploring all of the Company's strategic options, including potential merger opportunities. No decision with respect to any transaction has been made and there can be no assurance that a formal proposal or offer will be presented or, if any such proposal or offer is presented, that a transaction will be approved by the Board. For the full year 2007, the Company expects total net revenues and diluted earnings per share to fall within its previously published ranges of $591 million to $613 million of total revenues, with diluted earnings per share between $1.30 and $1.42. The Company expects actual results to trend towards the lower end of these ranges. As a matter of policy, the Company does not comment on or provide the public with updates as to the status of any informal expressions of interest or formal proposals or offers presented to the Company from time to time, or the course of discussions with any prospective counterparties, nor will it comment upon rumors with regard to either of the foregoing or make any further announcement regarding the Board's or the Review Committee's deliberations until such time, if ever, that it enters into a definitive agreement regarding a transaction or is otherwise required to make an announcement. Conference Call EFD|eFunds will hold a conference call today at 10:00 a.m. EDT to discuss the Company's quarterly financial performance and provide additional information regarding its rationale for exploring possible strategic alternatives. To listen to the conference call, dial 800-399-5351 (International callers dial 706-643-1939) and provide the operator with the Conference ID number 7265475. The call will also be broadcast on the Company's Web site at http://www.efunds.com/ under the "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. Please note that the Company will not be taking questions during the 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 23, 2007. You may access the replay by dialing 800-642-1687 (international callers dial 706-645-9291) and entering the Conference ID number 7265475. Additionally, a replay of the conference call will be available via the eFunds Web site at http://www.efunds.com/. About EFD | eFunds Corporation EFD is the payments solutions company. With the unique ability to take an integrated view of enterprise payments and data & decisioning, EFD provides financial services companies and other large enterprises with business insight to make better new account decisions, improve fraud detection and management and streamline payment processing. EFD's flexible delivery model means solutions can be run in-house, outsourced or anything in between, helping customers achieve operational efficiency and low cost of ownership while building long-term customer value. From the point of account opening to the settlement of every transaction -- debit, credit, or prepaid -- EFD helps businesses win more of the right customers, serve them more efficiently and keep them. Additional information is available at 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, 2006. EFD|EFUNDS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in thousands, except Three Months Ended March 31, per share amounts) 2007 2006 Net revenue $134,042 100.0% $139,738 100.0% Operating expenses Processing, communication and service costs 34,579 25.8% 35,293 25.3% Employee costs 57,607 43.0% 59,078 42.3% Depreciation and amortization 12,025 9.0% 11,778 8.4% Other operating costs 13,200 9.8% 18,420 13.2% Total operating expenses 117,411 87.6% 124,569 89.1% Income from operations 16,631 12.4% 15,169 10.9% Interest expense (1,431) -1.1% (1,576) -1.1% Other income - net 967 0.7% 807 0.6% Income before income taxes 16,167 12.1% 14,400 10.3% Provision for income taxes(1) (5,659) -4.2% (3,740) -2.7% Net income $10,508 7.8% $10,660 7.6% Shares outstanding Basic 47,205 46,145 Diluted 48,084 47,026 Earnings per share Basic $0.22 $0.23 Diluted $0.22 $0.23 (1) Our effective tax rate during the first three months of 2006 reflects a $1.3 million tax benefit associated with our prepaid solutions business. EFD|EFUNDS CORPORATION CONSOLIDATED BALANCE SHEET March 31, December 31, 2007 2006 (in thousands) Current assets: Cash and cash equivalents $120,898 $126,740 Short term investments 20,440 7,000 Restricted cash 4,216 3,730 Settlement assets 21,695 58,328 Accounts receivable - net 102,447 107,188 Deferred income taxes 11,991 12,781 Prepaid expenses and other current assets 25,023 26,115 Total current assets 306,710 341,882 Property and equipment - net 66,448 60,145 Intangibles-net 393,903 395,785 Other non-current assets 28,526 26,726 Total assets $795,587 $824,538 Current liabilities: Accounts payable $16,518 $24,021 Settlement liabilities 19,248 54,792 Accrued liabilities 39,486 50,577 Acquisition Holdbacks 6,080 6,053 Deferred revenue and gains 27,109 22,052 Long-term debt due within one year 4,071 4,438 Total current liabilities 112,512 161,933 Long-term deferred gains 15,689 18,078 Long-term debt 102,113 102,656 Other long-term liabilities 13,843 7,345 Total liabilities 244,157 290,012 Stockholders' equity: Common stock 519 517 Additional paid-in capital 530,229 524,980 Treasury stock at cost (100,000) (100,000) Retained earnings 116,199 105,690 Accumulated other comprehensive income 4,483 3,339 Stockholders' equity 551,430 534,526 Total liabilities and stockholders' equity $795,587 $824,538 EFD|EFUNDS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended March 31, 2007 2006 (in thousands) Cash flows from operating activities: Net income $10,508 $10,660 Adjustments to reconcile net income to net cash provided by operating activities Depreciation 4,139 4,380 Amortization 7,886 7,398 Stock-based compensation 2,040 2,594 Excess tax benefit from share-based compensation (165) (912) Deferred income taxes 4,866 10,828 Restructuring & other adjustments (2,022) -- Other - net 87 28 Changes in assets and liabilities Restricted cash (486) (240) Accounts receivable 4,741 6,082 Accounts payable (7,502) (2,885) Deferred revenue gains 2,667 138 Accrued compensation and employee benefits (1,841) (17,726) Income taxes receivable/payable (4,428) (17,096) Other assets and liabilities (4,321) 570 Net cash provided by operating activities 16,169 3,819 Cash flows from investing activities: Capital expenditures (10,681) (8,481) Purchases of short-term investments (24,715) Proceeds from sale of short-term investments 11,275 Proceeds from sale of NDVS 2,000 Other - net (27) (815) Net cash used in investing activities (24,148) (7,296) Cash flows from financing activities: Issuance of common stock 2,892 6,637 Excess tax benefit from share-based compensation 165 912 Payments on long-term debt (920) (1,010) Other 23 Net cash provided by financing activities 2,137 6,562 Net increase (decrease) in cash and cash equivalents (5,842) 3,085 Cash and cash equivalents at beginning of period 126,740 85,987 Cash and cash equivalents at end of period $120,898 $89,072 EFD|EFUNDS CORPORATION SEGMENT SUMMARY DATA (Unaudited) Three Months Ended March 31, Change 2007(2) 2006 $ % (in thousands) Net revenue: US Payments $67,660 $74,639 (6,979) -9% US Risk Management 47,132 49,886 (2,754) -6% International 19,250 15,213 4,037 27% Total net revenue 134,042 139,738 (5,696) -4% Operating expenses: Processing, employee and other costs - US Payments 54,702 65,251 (10,549) -16% US Risk Management 26,378 29,520 (3,142) -11% International 21,134 15,322 5,812 38% Total processing, employee and other costs 102,214 110,093 (7,879) -7% Allocated overhead - US Payments 4,008 3,927 81 2% US Risk Management 3,856 3,316 540 16% International 2,162 1,926 236 12% Corporate 5,171 5,307 (136) -3% Total allocated overhead 15,197 14,476 721 5% Income (loss) from operations: US Payments 8,950 5,461 3,489 64% US Risk Management 16,898 17,050 (152) -1% International (4,046) (2,035) (2,011) 99% Corporate (5,171) (5,307) 136 3% Total income from operations $16,631 $15,169 1,462 10% (2) Beginning January 1, 2007, the financial results related to international customers in the Prepaid Solutions business have been reported in the international segment level results above. 2006 results have not been reclassified to this new presentation. EFD|EFUNDS CORPORATION SUPPLEMENTAL REVENUE DATA Three Months Ended March 31, 2007(3) 2006 % Change (in millions) US Payments EFT processing $36.9 $34.9 6% Prepaid solutions 18.2 21.8 -17% Government 9.6 10.1 -5% Software sales and other services 2.9 7.8 -63% $67.6 $74.6 -9% US Risk Management Financial institution products $37.8 $38.0 -1% Retail products 4.1 4.6 -11% BPO 5.2 7.3 -29% $47.1 $49.9 -6% International Software sales $7.9 $6.1 30% BPO 7.1 7.8 -9% Prepaid solutions 2.4 -- * EFT processing 1.9 1.3 46% $19.3 $15.2 27% * Represents an increase or decrease greater than 100%. (3) Beginning January 1, 2007, the financial results related to international customers in the Prepaid Solutions business have been reported in the international segment level results above. 2006 results have not been reclassified to this new presentation. DATASOURCE: EFD CONTACT: Helen Johnson, SVP, Treasurer of EFD, +1-480-629-7607, Web site: http://www.efunds.com/

Copyright