SAN JOSE, Calif., April 24, 2014 /PRNewswire/ -- FICO (NYSE:FICO),
a leading predictive analytics and decision management software
company, today announced results for its second fiscal quarter
ended March 31, 2014.
Second Quarter Fiscal 2014 GAAP Results
Net income for
the quarter totaled $20.8 million, or
$0.59 per share, versus $18.5 million, or $0.51 per share, reported in the prior year
period.
Second Quarter Fiscal 2014 Non-GAAP Results
Non-GAAP
Net Income for the quarter was $28.7
million vs. $25.4 million in
the prior year period. Non-GAAP EPS for the quarter was
$0.81 vs. $0.69 in the prior year period. Free cash flow
for the quarter was $43.9 million vs.
$31.4 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.
Second Quarter Fiscal 2014 GAAP Revenue
The company
reported revenues of $185.5 million
for the quarter as compared to $179.3
million reported in the prior year period, an increase of
3%.
"Our year-over-year revenues increased as we drove growth in our
Scores and Tools businesses," said Will
Lansing, chief executive officer. "Our Applications revenues
were flat, but the large bookings this quarter will increase our
backlog in that segment. At the same time, we are holding the line
on expenses and delivering increased cash flows."
Revenues for the second 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 $115.6
million in the second quarter compared to $117.2 million in the prior year quarter, a
decrease of 1%. This was due to declines in license revenue in
Banking Fraud.
- 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 $47.9 million in the second quarter compared to
$44.1 million in the prior year
quarter, an increase of 9%. The B2C revenue increased 11%
and the B2B revenue increased 8% from the prior year quarter,
mainly due to a true-up associated with an underpayment of
royalties over a multi-year period.
- Tools revenues, which include Blaze Advisor®,
Xpress Optimization, Models and related professional services, were
$22.0 million in the second quarter
compared to $18.0 million in the
prior year quarter, an increase of 22%, due to increased license
sales of Model Central and 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 today at 5:00 p.m. Eastern
Time (2:00 p.m. Pacific Time)
to report its second 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/en/about-us/investors/corporate-info/. A replay
of the webcast will be available through April 24, 2015.
The webcast will also be distributed through the Thomson
StreetEvents Network to both institutional and individual
investors. The webcast can be accessed 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 and
Form 10-Q for the quarter ended December 31,
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
September
30,
|
|
2014
|
|
2013
|
ASSETS:
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
108,176
|
|
$
83,178
|
Accounts receivable,
net
|
140,368
|
|
143,733
|
Prepaid expenses and other
current assets
|
21,082
|
|
22,277
|
Total current assets
|
269,626
|
|
249,188
|
|
|
|
|
Marketable securities
and investments
|
19,333
|
|
18,140
|
Property and
equipment, net
|
39,232
|
|
45,155
|
Goodwill and
intangible assets, net
|
830,539
|
|
831,292
|
Other
assets
|
18,523
|
|
17,772
|
|
$
1,177,253
|
|
$
1,161,547
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY:
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and other
accrued liabilities
|
$
50,866
|
|
$
54,418
|
Accrued compensation and
employee benefits
|
36,709
|
|
39,281
|
Deferred revenue
|
55,586
|
|
49,181
|
Current maturities on
debt
|
36,000
|
|
23,000
|
Total current liabilities
|
179,161
|
|
165,880
|
|
|
|
|
Senior
notes
|
447,000
|
|
447,000
|
Other
liabilities
|
17,511
|
|
17,990
|
Total liabilities
|
643,672
|
|
630,870
|
|
|
|
|
Stockholders'
equity
|
533,581
|
|
530,677
|
|
$
1,177,253
|
|
$
1,161,547
|
FAIR ISAAC
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
March
31,
|
|
March
31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
$
132,369
|
|
$
126,439
|
|
$
262,024
|
|
$
256,337
|
Professional
services
|
34,619
|
|
34,109
|
|
68,905
|
|
66,446
|
License
|
18,474
|
|
18,777
|
|
38,876
|
|
46,562
|
Total
revenues
|
185,462
|
|
179,325
|
|
369,805
|
|
369,345
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Cost of revenues
|
58,183
|
|
58,856
|
|
115,502
|
|
115,004
|
Research &
development
|
19,690
|
|
16,021
|
|
37,782
|
|
30,573
|
Selling, general and
administrative
|
65,944
|
|
67,638
|
|
132,933
|
|
137,303
|
Amortization of intangible
assets
|
2,908
|
|
3,604
|
|
5,921
|
|
6,976
|
Restructuring and
acquisition-related
|
-
|
|
-
|
|
3,660
|
|
3,289
|
|
146,725
|
|
146,119
|
|
295,798
|
|
293,145
|
Operating
income
|
38,737
|
|
33,206
|
|
74,007
|
|
76,200
|
Other expense,
net
|
(7,450)
|
|
(7,819)
|
|
(15,537)
|
|
(15,770)
|
Income before income
taxes
|
31,287
|
|
25,387
|
|
58,470
|
|
60,430
|
Provision for income
taxes
|
10,536
|
|
6,892
|
|
20,742
|
|
18,514
|
Net income
|
$
20,751
|
|
$
18,495
|
|
$
37,728
|
|
$
41,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share:
|
$
0.60
|
|
$
0.52
|
|
$
1.09
|
|
$
1.19
|
Diluted earnings per
share:
|
$
0.59
|
|
$
0.51
|
|
$
1.06
|
|
$
1.15
|
|
|
|
|
|
|
|
|
Shares used in
computing earnings per share:
|
|
|
|
|
|
|
|
Basic
|
34,500
|
|
35,664
|
|
34,705
|
|
35,350
|
Diluted
|
35,311
|
|
36,492
|
|
35,670
|
|
36,318
|
FAIR ISAAC
CORPORATION
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
March
31,
|
|
2014
|
|
2013
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
37,728
|
|
$
41,916
|
Adjustments to
reconcile net income to net cash provided by
|
|
|
|
operating
activities:
|
|
|
|
Depreciation and
amortization
|
16,012
|
|
16,433
|
Share-based
compensation
|
16,286
|
|
12,245
|
Changes in operating
assets and liabilities
|
9,921
|
|
3,954
|
Other, net
|
(4,860)
|
|
(5,594)
|
Net
cash provided by operating activities
|
75,087
|
|
68,954
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
Purchases of property
and equipment
|
(4,296)
|
|
(17,123)
|
Net activity from
marketable securities
|
-
|
|
22,000
|
Cash paid for
acquisitions, net of cash acquired
|
-
|
|
(28,438)
|
Other, net
|
-
|
|
50
|
Net
cash used in investing activities
|
(4,296)
|
|
(23,511)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from
revolving line of credit
|
23,000
|
|
-
|
Payments on revolving
line of credit and other short-term loans
|
(10,000)
|
|
(2,933)
|
Proceeds from
issuances of common stock
|
3,685
|
|
15,998
|
Repurchases of common
stock
|
(67,141)
|
|
-
|
Other, net
|
3,688
|
|
2,835
|
Net
cash provided by (used in) financing activities
|
(46,768)
|
|
15,900
|
|
|
|
|
Effect of exchange
rate changes on cash
|
975
|
|
(1,802)
|
|
|
|
|
Increase in cash and
cash equivalents
|
24,998
|
|
59,541
|
Cash and cash
equivalents, beginning of period
|
83,178
|
|
71,609
|
Cash and cash
equivalents, end of period
|
$
108,176
|
|
$
131,150
|
FAIR ISAAC
CORPORATION
|
REVENUE BY
SEGMENT
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
|
Six Months
Ended
|
|
|
March
31,
|
|
|
March
31,
|
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Applications
revenues:
|
|
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
|
$
76,898
|
|
$
76,012
|
|
|
$
154,677
|
|
$
155,637
|
Professional
services
|
|
28,373
|
|
27,315
|
|
|
55,160
|
|
53,474
|
License
|
|
10,339
|
|
13,888
|
|
|
17,689
|
|
32,811
|
Total applications revenues
|
|
$
115,610
|
|
$
117,215
|
|
|
$
227,526
|
|
$
241,922
|
|
|
|
|
|
|
|
|
|
|
Scores
revenues:
|
|
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
|
$
46,560
|
|
$
42,206
|
|
|
$
89,878
|
|
$
84,643
|
Professional
services
|
|
777
|
|
1,624
|
|
|
1,366
|
|
2,527
|
License
|
|
521
|
|
232
|
|
|
3,794
|
|
339
|
Total scores revenues
|
|
$
47,858
|
|
$
44,062
|
|
|
$
95,038
|
|
$
87,509
|
|
|
|
|
|
|
|
|
|
|
Tools
revenues:
|
|
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
|
$
8,911
|
|
$
8,221
|
|
|
$
17,469
|
|
$
16,057
|
Professional
services
|
|
5,469
|
|
5,170
|
|
|
12,379
|
|
10,445
|
License
|
|
7,614
|
|
4,657
|
|
|
17,393
|
|
13,412
|
Total tools revenues
|
|
$
21,994
|
|
$
18,048
|
|
|
$
47,241
|
|
$
39,914
|
|
|
|
|
|
|
|
|
|
|
Total
revenues:
|
|
|
|
|
|
|
|
|
|
Transactional and
maintenance
|
|
$
132,369
|
|
$
126,439
|
|
|
$
262,024
|
|
$
256,337
|
Professional
services
|
|
34,619
|
|
34,109
|
|
|
68,905
|
|
66,446
|
License
|
|
18,474
|
|
18,777
|
|
|
38,876
|
|
46,562
|
Total revenues
|
|
$
185,462
|
|
$
179,325
|
|
|
$
369,805
|
|
$
369,345
|
FAIR ISAAC
CORPORATION
|
NON-GAAP
RESULTS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
March
31,
|
|
March
31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
20,751
|
|
$
18,495
|
|
$
37,728
|
|
$
41,916
|
Amortization of
intangible assets (net of tax)
|
1,930
|
|
2,467
|
|
3,926
|
|
4,732
|
Restructuring and
acquisition-related (net of tax)
|
-
|
|
-
|
|
2,424
|
|
2,209
|
Stock-based
compensation expense (net of tax)
|
6,008
|
|
4,389
|
|
10,800
|
|
8,306
|
Non-GAAP net
income
|
$
28,689
|
|
$
25,351
|
|
$
54,878
|
|
$
57,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
per share
|
$
0.59
|
|
$
0.51
|
|
$
1.06
|
|
$
1.15
|
Amortization of
intangible assets (net of tax)
|
0.05
|
|
0.07
|
|
0.11
|
|
0.13
|
Restructuring and
acquisition-related (net of tax)
|
-
|
|
-
|
|
0.07
|
|
0.06
|
Stock-based
compensation expense (net of tax)
|
0.17
|
|
0.12
|
|
0.30
|
|
0.23
|
Non-GAAP diluted
earnings per share
|
$
0.81
|
|
$
0.69
|
|
$
1.54
|
|
$
1.57
|
|
|
|
|
|
|
|
|
Free cash
flow
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
46,710
|
|
$
40,224
|
|
$
75,088
|
|
$
68,953
|
Capital
expenditures
|
(2,143)
|
|
(8,110)
|
|
(4,297)
|
|
(17,122)
|
Dividends
paid
|
(696)
|
|
(715)
|
|
(1,389)
|
|
(1,417)
|
Free cash
flow
|
$
43,871
|
|
$
31,399
|
|
$
69,402
|
|
$
50,414
|
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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SOURCE FICO