(Minneapolis, Minnesota, USA) - Fair Isaac Corporation (NYSE:FIC), the leading provider of analytics and decision management technology, today announced the financial results for its fourth quarter and fiscal year ended September 30, 2008.
"Market conditions in the financial sector remain difficult and short term trends are challenging to predict," said Mark Greene, CEO of Fair Isaac. "But we are fortunate to have extraordinary people, a strong balance sheet, substantial cash flow, and unrivaled products. With proactive management, we believe we can emerge from this economic cycle stronger than we entered it."
Fourth Quarter Fiscal 2008 Results from Continuing Operations
The company reported fourth quarter revenues of $178.2 million in fiscal 2008 compared to $198.7 million reported in the prior year period. Income from continuing operations for the fourth quarter of fiscal 2008 totaled $23.8 million, or $0.49 per diluted share, compared to $32.5 million, or $0.59 per diluted share, reported in the prior year period.
Fourth quarter fiscal 2008 results included the following items: a $4.9 million tax benefit, or $0.10 per diluted share, arising from adjustments to income tax reserves that were established in prior years related to losses in foreign jurisdictions, and a $1.5 million after-tax restructuring cost, or $0.03 per diluted share.
Fourth quarter fiscal 2007 results included the following items: a $7.3 million tax benefit, or $0.13 per diluted share, arising from adjustments to income tax reserves resulting from the conclusion of a tax audit, and a $1.6 million after-tax restructuring cost, or $0.03 per diluted share.
Fourth Quarter Fiscal 2008 Revenues from Continuing Operations Highlights
Revenues for fourth quarter fiscal 2008 across each of the company's four operating segments were as follows:
- Strategy Machine® Solutions revenues were $94.5 million in the fourth quarter compared to $98.5 million in the prior year quarter, or a decrease of 4.1%, primarily due to declines associated with revenues derived from fraud and collections and recovery products. The declines were partially offset by an increase in revenues derived from a large license sale of our customer management product.
- Scoring Solutions revenues were $37.3 million in the fourth quarter compared to $45.9 million in the prior year quarter, or a decrease of 18.9%, due to a decrease in revenues from risk scoring services at the credit reporting agencies and from our PreScore Service.
- Professional Services revenues were $33.2 million in the fourth quarter compared to $36.6 million in the prior year quarter, or a decrease of 9.2%, primarily due to a decline associated with Analytic consulting services.
- Analytic Software Tools revenues were $13.2 million in the fourth quarter compared to $17.7 million in the prior year quarter, or a decrease of 25.2%, due to a decrease in revenues generated from sales of the Blaze Advisor® product. The declines were partially offset by an increase in revenues derived from the Xpress MP product.
Fiscal 2008 Full Year Results from Continuing Operations
The company reported full year revenues of $744.8 million in fiscal 2008 compared to $784.2 million reported in the prior year. Income from continuing operations for full year fiscal 2008 totaled $81.2 million, or $1.64 per diluted share, compared to $111.9 million, or $1.94 per diluted share, reported in the prior year.
Fiscal 2008 Full Year Revenues from Continuing Operations Highlights
Revenues for full year fiscal 2008 across each of the company's four operating segments were as follows:
- Strategy Machine Solutions revenues were $388.1 million compared to $404.9 million in the prior year, or a decrease of 4.1%, primarily due to the divestiture of the mortgage product line in the second quarter of fiscal 2007 and a decline associated with marketing solutions, fraud and analytics products, partially offset by an increase in revenues derived from customer management, and consumer products.
- Scoring Solutions revenues were $156.8 million compared to $180.4 million in the prior year, or a decrease of 13.1%, primarily due to a decrease in revenues derived from risk scoring services at the credit reporting agencies and from our PreScore Service.
- Professional Services revenues were $147.9 million compared to $147.5 million in the prior year, or essentially flat.
- Analytic Software Tools revenues increased to $52.0 million compared to $51.4 million in the prior year, or by 1.2%, due to an increase in revenues derived from the Xpress MP product.
Bookings Highlights from Continuing Operations
The bookings for the fourth quarter were $71.2 million compared to $93.3 million in the same period last year. Fiscal 2008 bookings were $327.3 million compared to $301.8 million for the prior year. The company defines "bookings" as estimated future contractual revenues, including agreements with perpetual, multi-year and annual terms. Management regards the volume of bookings achieved as one indicator of future revenues, but they are not comparable to, nor should they be substituted for, an analysis of the company's revenues.
Balance Sheet and Cash Flow Highlights
Cash and cash equivalents and investments were $271.2 million at September 30, 2008, as compared to $246.8 million at September 30, 2007. Significant changes in cash and cash equivalents from September 30, 2007, include cash provided by operations of $159.2 million, $19.8 million received from the exercise of stock options and stock issued under an employee stock purchase plan, net increase in borrowings of $10.0 million, and $15.6 million received on the sale of the Insurance Bill Review unit. Cash used during fiscal 2008 includes $116.6 million to repurchase common stock, $22.8 million related to purchases of property and equipment, and $33.3 million related to the acquisition of Dash Optimization Limited.
In light of the uncertain economic environment and limited visibility into clients' spending intentions, the company is not providing guidance at this time. It expects to deliver FY09 guidance by the first quarter earnings call in January 2009.
Company to Host Conference Call
The company will host a conference call today at 5:00 p.m. Eastern Time (4:00 p.m. Central Time/2:00 p.m. Pacific Time) to discuss its fourth quarter fiscal 2008 results. The call can be accessed live on the Investor Relations section of the company's website at www.fairisaac.com, and a replay will be available approximately two hours after the completion of the call through December 3, 2008.
About Fair Isaac
Fair Isaac Corporation (NYSE:FIC) transforms business by making every decision count. Fair Isaac's Decision Management solutions combine trusted advice, world-class analytics and innovative applications to give organizations the power to automate, improve and connect decisions across their business. Clients in 80 countries work with Fair Isaac to increase customer loyalty and profitability, cut fraud losses, manage credit risk, meet regulatory and competitive demands, and rapidly build market share. Fair Isaac also helps millions of individuals manage their credit health through the www.myFICO.com website. Learn more about Fair Isaac at www.fairisaac.com.
Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to Fair Isaac 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, its ability to recruit and retain key technical and managerial personnel, 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, competition, regulatory changes applicable to the use of consumer credit and other data, the possibility that the anticipated benefits of acquisitions, including expected synergies, will not be realized and other risks described from time to time in Fair Isaac's SEC reports, including its Annual Report on Form 10 K for the year ended September 30, 2007 as subsequently amended, and its last quarterly report on Form 10-Q for the period ended June 30, 2008. If any of these risks or uncertainties materializes, Fair Isaac's results could differ materially from its expectations. Fair Isaac disclaims any intent or obligation to update these forward-looking statements.
Fair Isaac, Strategy Machine, and Blaze Advisor are trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries.
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