MINNEAPOLIS — July 22, 2009 - FICO (NYSE:FIC), the leading provider of analytics and decision management technology today announced financial results for its third fiscal quarter ended June 30, 2009.
Third Quarter Fiscal 2009 Results
Income from continuing operations for the third quarter of fiscal 2009 totaled $18.1 million, or $0.37 per share, versus $18.8 million, or $0.38 per share, reported in the prior year period. Third quarter fiscal 2009 results from continuing operations included an after-tax charge of $3.9 million, or $0.08 per share, related to the sale of two telecom product lines, per the company’s previously-announced strategy. Third quarter fiscal 2008 results from continuing operations included an after-tax charge of $1.4 million, or $0.03 per diluted share, from various reengineering efforts.
Net income for the third quarter of fiscal 2009 totaled $18.1 million, or $0.37 per share, versus $26.5 million, or $0.54 per share, reported in the prior year period. The third quarter of fiscal 2008 included a $0.16 per share gain from discontinued operations.
“We have a strong balance sheet, and we remain focused on sales discipline, product innovation and maintaining significant cash flow through this challenging economic environment,” stated Mark Greene, chief executive officer. “As we refine our Decision Management strategy, we are pleased to have completed the last of our previously-identified product divestitures, and we continue to identify and pursue opportunities to expand our market position and grow our revenue over the longer term.”
Third Quarter Fiscal 2009 Revenue
The company reported third quarter revenues of $156.0 million in fiscal 2009 versus $183.3 million reported in the prior year period. Revenues for third quarter fiscal 2009 across each of the company’s four operating segments were as follows:
- Strategy Machine® Solutions revenues were $81.6 million in the third quarter compared to $94.8 million in the prior year quarter, or a decrease of 14%, primarily due to declines associated with collections and recovery solutions, consumer solutions, and fraud solutions, all of which were partially offset by a small increase in our precision marketing solutions.
- Scoring Solutions revenues were $34.6 million in the third quarter compared to $37.6 million in the prior year quarter, or a decrease of 8%, primarily due to a decrease in revenues derived from our credit bureau risk scores.
- Professional Services revenues were $27.5 million in the third quarter compared to $39.1 million in the prior year quarter, or a decrease of 30%, primarily due to the general decline in license sales, resulting in a corresponding decline in implementation services. This decline is also the result of a practice of discontinuing certain lower margin consulting service engagements that was started in early fiscal 2009.
- Analytic Software Tools revenues increased to $12.3 million in the third quarter compared to $11.8 million in the prior year quarter, or a 4% increase, primarily due to increases associated with the sale of both the Blaze Advisor™ product and our FICO Xpress Optimization product.
The bookings for the third quarter were $49.0 million compared to $64.2 million in the same period last year. The company defines a “new booking” as estimated future contractual revenues, including agreements with perpetual, multi-year and annual terms. Management regards the volume of new 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
Cash and cash equivalents, and investments were $382.6 million at June 30, 2009, as compared to $271.2 million at September 30, 2008. Significant changes in cash and cash equivalents from September 30, 2008 include cash provided by operations of $124.3 million and $2.8 million received from the exercise of stock options and stock issued under an employee stock purchase plan. Cash used during the year includes $11.3 million related to purchases of property and equipment and $2.9 million of dividends paid.
In light of the continuing uncertainty in the global financial markets and the continuing lack of visibility into our clients’ spending intentions, the company is not providing revenue or earnings per share guidance. However, it is updating its fiscal 2009 annual operating expense guidance from the $525.0 million previously provided to $505.0 million in Operating Expenses before Restructuring Activities, which reflects a reduction in expenses from both our re-engineering initiatives and from the sale of our telecom assets. The Operating Expenses before Restructuring Activities guidance of $505.0 million will equal the Total Operating Expenses reported on the Condensed Consolidated Statements of Income less the Restructuring and Loss on Sale of Product Line Assets incurred year-to-date and any similar charges recorded during the fourth quarter.
Non-GAAP Financial Measures
This news release includes the non-GAAP financial measure “Operating Expenses Before Restructuring Activities” which excludes the expense related to restructuring charges and Loss on Sale of Product Line Assets. The company excludes these amounts in order to facilitate the comparison of current guidance with previous guidance provided by the company, which did not include such expenses. Wherever this non-GAAP financial measure has been included in this news release, the company has reconciled it to GAAP. This non-GAAP financial measure is not prepared in accordance with accounting principles generally accepted in the United States of America and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.
Company to Host Conference Call
The 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 third quarter fiscal 2009 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 August 22, 2009.
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).
FICO (NYSE:FIC) transforms business by making every decision count. FICO’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 FICO to increase customer loyalty and profitability, cut fraud losses, manage credit risk, meet regulatory and competitive demands, and rapidly build market share. FICO also helps millions of individuals manage their credit health through the www.myFICO.com website.
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 plan, 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, 2008, and its last quarterly report on Form 10-Q for the period ended March 31, 2009. 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, Strategy Machine, and Blaze Advisor are all trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries.
Q3 2009 Financial tables in pdf format
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