FICO Announces Earnings of $0.65 per Share for First Quarter Fiscal 2013 Revenue of $190 million vs. $170 million in prior year

SAN JOSE, Calif., Jan. 30, 2013 /PRNewswire/ -- FICO (NYSE: FICO), the leading provider of analytics and decision management technology, today announced financial results for its first fiscal quarter ended December 31, 2012.

(Logo: http://photos.prnewswire.com/prnh/20111010/CG83314LOGO)

First Quarter Fiscal 2013 GAAP Results
Net income for the quarter totaled $23.4 million, or $0.65 per share, versus $30.0 million, or $0.81 per share, reported in the prior year period. The current quarter results include $2.2 million, net of tax, or $0.06 per share, in restructuring and acquisition related costs.

First Quarter Fiscal 2013 Non-GAAP Results
Beginning in fiscal 2013, the company will report Non-GAAP results for net income, EPS and free cash flow.  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.

  • Non-GAAP Net Income for the quarter was $31.8 million vs. $34.5 million in the prior year period.
  • Non-GAAP EPS for the quarter was $0.88 vs. $0.94 in the prior year period.
  • Free cash flow for the quarter was $19.0 million vs. $32.7 million in the prior year period.

First Quarter Fiscal 2013 GAAP Revenue
The company reported revenues of $190.0 million for the quarter as compared to $170.3 million reported in the prior year period, an increase of 12%. 

"We had a strong start to fiscal 2013, with solid Q1 results driven by revenue growth across our entire portfolio," said Will Lansing, chief executive officer. "The investments we have made during the past nine months, including our acquisitions, are delivering results in line with our plans."

Revenues for the first quarter fiscal 2013 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 $124.7 million in the first quarter compared to $110.2 million in the prior year quarter, an increase of 13%. This was due primarily to revenue associated with last year's acquisition of Adeptra, Ltd. and increases in revenue from Customer Management and Marketing Solutions, partially offset by a decrease in Fraud Solutions.          
  • 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 $43.4 million in the first quarter compared to $42.5 million in the prior year quarter, an increase of 2%.
  • Tools revenues, which include Blaze Advisor®, Xpress Optimization and related professional services, were $21.9 million in the first quarter compared to $17.6 million in the prior year quarter, an increase of 24%, primarily due to an increase in Blaze license and professional services partially offset by a decrease in Xpress license sales during the quarter.

Outlook 
As a result of the recently announced acquisition of CR Software LLC, the company is increasing the previously issued revenue guidance for fiscal 2013, as follows:


New Fiscal 2013 GAAP
Guidance

Previous Fiscal 2013
GAAP Guidance

Revenue

$760 million -  $770 million

$740 million -  $750 million

GAAP Net Income

$100 million

$100 million

GAAP Earnings Per Share

$2.80

$2.80

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 first quarter fiscal 2013 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 February 28, 2013.

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).

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, 2012. 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, myFICO and Blaze Advisor are all trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries.

-Financial tables follow-

 

 

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2012 and September 30, 2012

(In thousands)

(Unaudited)














December 31,


September 30,


2012


2012

ASSETS:




Current assets:




     Cash and cash equivalents

$                 90,839


$                 71,609

     Marketable securities

-


22,008

     Accounts receivable, net

138,159


142,595

     Prepaid expenses and other current assets

22,376


23,113

          Total current assets

251,374


259,325





Marketable securities and investments

16,529


16,500

Property and equipment, net

45,788


41,080

Goodwill and intangible assets, net

835,263


809,803

Other assets

27,160


31,903


$            1,176,114


$            1,158,611





LIABILITIES AND STOCKHOLDERS' EQUITY:




Current liabilities:




     Accounts payable and other accrued liabilities

$                 62,378


$                 62,603

     Accrued compensation and employee benefits

30,170


50,043

     Deferred revenue

47,455


47,959

     Current maturities on long-term debt

49,000


49,000

          Total current liabilities

189,003


209,605





Senior notes

455,000


455,000

Other liabilities

23,383


19,600

          Total liabilities

667,386


684,205





Stockholders' equity

508,728


474,406


$            1,176,114


$            1,158,611

 

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME 

For the Quarters Ended December 31, 2012 and 2011

(In thousands, except per share data)

(Unaudited)










Quarter Ended 


December 31,


2012


2011





Revenues:




     Transactional and maintenance

129,898


114,183

     Professional services

32,337


28,693

     License

27,785


27,473

        Total revenues

190,020


170,349





Operating expenses:




     Cost of revenues

56,148


45,974

     Research & development

14,552


13,049

     Selling, general and administrative

69,665


57,324

     Amortization of intangible assets

3,372


1,930

     Restructuring and acquisition-related

3,289


-


147,026


118,277

Operating income

42,994


52,072

Other expense, net

(7,951)


(8,447)

Income from operations before income taxes

35,043


43,625

Provision for income taxes

11,622


13,628

Net income

23,421


29,997













Basic earnings per share:

0.67


0.83

Diluted earnings per share:

0.65


0.81





Shares used in computing earnings per share:




     Basic

35,043


36,034

     Diluted

36,151


36,887





 

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Quarters Ended December 31, 2012 and 2011

(In thousands)

(Unaudited)














 Quarter Ended 


 December 31, 


2012


2011

Cash flows from operating activities:




Net income

$                 23,421


$                 29,997

Adjustments to reconcile net income to net cash provided by 




  operating activities:




      Depreciation and amortization

7,973


5,528

      Share-based compensation

5,832


4,757

      Changes in operating assets and liabilities

(5,492)


670

      Other, net

(3,005)


197

         Net cash provided by operating activities

28,729


41,149





Cash flows from investing activities:




Purchases of property and equipment

(9,012)


(7,757)

Net activity from marketable securities

22,000


49,473

Cash paid for acquisitions, net of cash acquired

(27,605)


-

Other, net

50


-

         Net cash provided by (used in) investing activities

(14,567)


41,716





Cash flows from financing activities:




Proceeds from issuances of common stock

6,189


15,023

Repurchases of common stock

-


(57,685)

Other, net

(695)


954

         Net cash provided by (used in) financing activities

5,494


(41,708)





Effect of exchange rate changes on cash

(426)


(1,534)





Increase in cash and cash equivalents

19,230


39,623

Cash and cash equivalents, beginning of period

71,609


135,752

Cash and cash equivalents, end of period

$                 90,839


$               175,375





 

 

FAIR ISAAC CORPORATION

REVENUE BY SEGMENT

For the Quarters Ended December 31, 2012 and 2011

(In thousands)

(Unaudited)













Quarter Ended 



December 31,



2012


2011






Applications revenues:





     Transactional and maintenance


$   79,625


$   64,272

     Professional services


26,159


24,327

     License


18,923


21,617

          Total applications revenues


$ 124,707


$ 110,216






Scores revenues:





     Transactional and maintenance


$   42,437


$   42,197

     Professional services


903


288

     License


107


57

          Total scores revenues


$   43,447


$   42,542






Tools revenues:





     Transactional and maintenance


$     7,836


$     7,714

     Professional services


5,275


4,078

     License


8,755


5,799

          Total tools revenues


$   21,866


$   17,591






Total revenues:





     Transactional and maintenance


$ 129,898


$ 114,183

     Professional services


32,337


28,693

     License


27,785


27,473

          Total revenues


$ 190,020


$ 170,349

 

 


FAIR ISAAC CORPORATION

NON-GAAP RESULTS

For the Quarters Ended December 31, 2012 and 2011

(In thousands, except per share data)

(Unaudited)










Quarter Ended 


December 31,


2012


2011





GAAP net income

$            23,421


$ 29,997

Amortization of intangible assets (net of tax)

2,265


1,308

Restructuring and acquisition-related (net of tax)

2,209


-

Stock-based compensation expense (net of tax)

3,917


3,224

Non-GAAP net income

$            31,812


$ 34,529









GAAP diluted earnings per share

$                0.65


$     0.81

Amortization of intangible assets (net of tax)

0.06


0.04

Restructuring and acquisition-related (net of tax)

0.06


-

Stock-based compensation expense (net of tax)

0.11


0.09

Non-GAAP diluted earnings per share

$                0.88


$     0.94





Free cash flow




Net cash provided by operating activities

$            28,729


$ 41,149

Capital expenditures

(9,012)


(7,757)

Dividends paid

(702)


(717)

Free cash flow

$            19,015


$ 32,675

 

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, and restructuring and acquisition-related 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. 

SOURCE FICO



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