2014

FICO Announces Earnings of $0.79 per Share for Fourth Quarter Fiscal 2013 Revenue of $190 million vs. $186 million in prior year

SAN JOSE, Calif., Oct. 30, 2013 /PRNewswire/ -- FICO (NYSE: FICO), a leading predictive analytics and decision management software company, today announced results for its fourth fiscal quarter ended September 30, 2013.

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

Fourth Quarter Fiscal 2013 GAAP Results
Net income for the quarter totaled $28.6 million, or $0.79 per share, versus $21.2 million, or $0.60 per share, reported in the prior year period.

Fourth Quarter Fiscal 2013 Non-GAAP Results
Non-GAAP Net Income for the quarter was $35.3 million vs. $29.7 million in the prior year period. Non-GAAP EPS for the quarter was $0.98 vs. $0.84 in the prior year period. Free cash flow for the quarter was $31.5 million vs. $16.8 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.

Fourth Quarter Fiscal 2013 GAAP Revenue
The company reported revenues of $190.3 million for the quarter as compared to $186.1 million reported in the prior year period, an increase of 2%. 

"Our fiscal 2013 results reflect the uncertainties our customers are facing in the slow-growth economy, yet it's important to recognize that despite those uncertainties, we're making tremendous progress toward our long-term growth goals," said Will Lansing, chief executive officer. "Analytics-driven business in the cloud is an idea whose time has come. And that's exactly what we're delivering to our customers, not only in banking and financial services, but increasingly in other industries where the leading players are grappling with challenges and opportunities associated with Big Data."

Revenues for the fourth 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 $119.2 million in the fourth quarter compared to $119.9 million in the prior year quarter, a decrease of 1%. This was due to declines in Customer Management and Marketing Solutions offset by a revenue increase in Mobility associated with the acquisition of Adeptra, Ltd.
  • 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 $46.1 million in the fourth quarter compared to $46.8 million in the prior year quarter, a decrease of 1%. The B2C revenue increased 27% and the B2B revenue decreased 8% from the prior year quarter.
  • Tools revenues, which include Blaze Advisor®, Xpress Optimization and related professional services, were $25.0 million in the fourth quarter compared to $19.4 million in the prior year quarter, an increase of 29%, due to increased license sales of Model Central Solution and Blaze.

Outlook 
The company is providing 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 fourth 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/investors. A replay of the webcast will be available through November 29, 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) is a leading predictive analytics software company. 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 and Form 10-Q for the quarter ended June 30, 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)










September 30,


September 30,


2013


2012

ASSETS:




Current assets:




     Cash and cash equivalents

$                 83,178


$                 71,609

     Marketable securities

-


22,008

     Accounts receivable, net

143,733


142,595

     Prepaid expenses and other current assets

22,277


23,113

          Total current assets

249,188


259,325





Marketable securities and investments

18,140


16,500

Property and equipment, net

45,155


41,080

Goodwill and intangible assets, net

831,292


809,803

Other assets

17,772


31,903


$            1,161,547


$            1,158,611





LIABILITIES AND STOCKHOLDERS' EQUITY:




Current liabilities:




     Accounts payable and other accrued liabilities

$                 54,418


$                 62,603

     Accrued compensation and employee benefits

39,281


50,043

     Deferred revenue

49,181


47,959

     Current maturities on long-term debt

23,000


49,000

          Total current liabilities

165,880


209,605





Senior notes

447,000


455,000

Other liabilities

17,990


19,600

          Total liabilities

630,870


684,205





Stockholders' equity

530,677


474,406


$            1,161,547


$            1,158,611

 

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME 

(In thousands, except per share data)

(Unaudited)


















Quarter Ended 


Year Ended


September 30,


September 30,


2013


2012


2013


2012









Revenues:








     Transactional and maintenance

$           128,545


$           123,441


$         514,304


$           466,175

     Professional services

36,442


33,824


135,194


124,971

     License

25,340


28,810


93,946


85,277

        Total revenues

190,327


186,075


743,444


676,423









Operating expenses:








     Cost of revenues

56,809


55,327


229,468


197,947

     Research & development

17,824


17,602


66,967


59,527

     Selling, general and administrative

62,427


65,040


268,395


238,522

     Amortization of intangible assets

3,082


2,059


13,535


6,944

     Restructuring and acquisition-related

-


5,125


3,486


5,125


140,142


145,153


581,851


508,065

Operating income

50,185


40,922


161,593


168,358

Other expense, net

(7,252)


(8,242)


(29,609)


(32,115)

Income from operations before income taxes

42,933


32,680


131,984


136,243

Provision for income taxes

14,376


11,434


41,889


44,239

Net income

$             28,557


$             21,246


$           90,095


$             92,004

























Basic earnings per share:

$                 0.81


$                 0.62


$               2.55


$                 2.64

Diluted earnings per share:

$                 0.79


$                 0.60


$               2.48


$                 2.55









Shares used in computing earnings per share:








     Basic

35,132


34,262


35,332


34,909

     Diluted

36,151


35,513


36,292


36,063

 

 

FAIR ISAAC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)










 Year Ended 


 September 30, 


2013


2012

Cash flows from operating activities:




Net income

$              90,095


$                 92,004

Adjustments to reconcile net income to net cash provided by 




  operating activities:




      Depreciation and amortization

33,214


21,549

      Share-based compensation

25,850


21,229

      Changes in operating assets and liabilities

(13,921)


3,923

      Other, net

882


(8,959)

         Net cash provided by operating activities

136,120


129,746





Cash flows from investing activities:




Purchases of property and equipment

(24,147)


(25,483)

Net activity from marketable securities

22,000


83,592

Cash paid for acquisitions, net of cash acquired

(32,874)


(123,631)

Other, net

50


(148)

         Net cash used in investing activities

(34,971)


(65,670)





Cash flows from financing activities:




Proceeds from revolving line of credit

30,000


-

Payments on revolving line of credit and other short-term loans

(18,676)


(5,466)

Payment on Senior Notes

(49,000)


(8,000)

Proceeds from issuances of common stock

30,256


70,793

Repurchases of common stock

(82,752)


(191,056)

Other, net

3,538


5,276

         Net cash used in financing activities

(86,634)


(128,453)





Effect of exchange rate changes on cash

(2,946)


234





Increase (decrease) in cash and cash equivalents

11,569


(64,143)

Cash and cash equivalents, beginning of period

71,609


135,752

Cash and cash equivalents, end of period

$              83,178


$                 71,609

 

 

FAIR ISAAC CORPORATION

REVENUE BY SEGMENT

(In thousands)

(Unaudited)























Quarter Ended 



Year Ended



September 30,



September 30,



2013


2012



2013


2012











Applications revenues:










     Transactional and maintenance


$   75,564


$   71,202



$ 306,738


$ 263,726

     Professional services


30,377


27,445



110,081


104,637

     License


13,238


21,285



59,265


56,241

          Total applications revenues


$ 119,179


$ 119,932



$ 476,084


$ 424,604











Scores revenues:










     Transactional and maintenance


$   44,723


$   44,991



$ 175,281


$ 172,218

     Professional services


679


1,073



4,012


2,382

     License


750


672



1,520


1,023

          Total scores revenues


$   46,152


$   46,736



$ 180,813


$ 175,623











Tools revenues:










     Transactional and maintenance


$     8,258


$     7,248



$   32,285


$   30,231

     Professional services


5,386


5,306



21,101


17,952

     License


11,352


6,853



33,161


28,013

          Total tools revenues


$   24,996


$   19,407



$   86,547


$   76,196











Total revenues:










     Transactional and maintenance


$ 128,545


$ 123,441



$ 514,304


$ 466,175

     Professional services


36,442


33,824



135,194


124,971

     License


25,340


28,810



93,946


85,277

          Total revenues


$ 190,327


$ 186,075



$ 743,444


$ 676,423

 

 

FAIR ISAAC CORPORATION

NON-GAAP RESULTS

(In thousands, except per share data)

(Unaudited)


















Quarter Ended 


Year Ended


September 30,


September 30,


2013


2012


2013


2012









GAAP net income

$   28,557


$ 21,246


$   90,095


$   92,004

  Amortization of intangible assets (net of tax)

2,076


1,344


9,221


4,608

  Restructuring and acquisition-related (net of tax)

-


3,345


2,346


3,345

  Stock-based compensation expense (net of tax)

4,684


3,762


17,605


14,074

  Adjustment to tax valuation allowance

-


-


2,474


-

       Non-GAAP net income

$   35,317


$ 29,697


$ 121,741


$ 114,031

















GAAP diluted earnings per share

$       0.79


$     0.60


$       2.48


$       2.55

  Amortization of intangible assets (net of tax)

0.06


0.04


0.25


0.13

  Restructuring and acquisition-related (net of tax)

-


0.09


0.06


0.09

  Stock-based compensation expense (net of tax)

0.13


0.11


0.49


0.39

  Adjustment to tax valuation allowance

-


-


0.07


-

       Non-GAAP diluted earnings per share

$       0.98


$     0.84


$       3.35


$       3.16









Free cash flow








  Net cash provided by operating activities

$   35,943


$ 23,338


$ 136,120


$ 129,746

  Capital expenditures

(3,712)


(5,867)


(24,146)


(25,483)

  Dividends paid

(701)


(692)


(2,824)


(2,804)

       Free cash flow

$   31,530


$ 16,779


$ 109,150


$ 101,459

 

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. 

SOURCE FICO



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