eFunds Announces Strong Growth in Revenues, Operating Margins and Net Income; - Continued Rationalization and Productivity Improvements -

Apr 27, 2001, 01:00 ET from eFunds Corporation

    SCOTTSDALE, Ariz., April 27 /PRNewswire/ -- eFunds Corporation
 (Nasdaq:   EFDS), a leading provider of electronic payment, risk management and
 information technology services, today announced financial results for the
 first quarter ended March 31, 2001.
 
     First Quarter Performance
     For the three-month period ended March 31, 2001, total revenues reached
 $124.5 million, a 24.2 percent increase over the $100.3 million reported for
 the first quarter of 2000.  Excluding special charges, operating income
 increased to $9.2 million for the first quarter of 2001 compared to operating
 income of $2.7 million for the comparable period in 2000.  Net income,
 excluding special charges, was $6.1 million, or $0.13 per share, for the first
 quarter of 2001, compared to net income of $1.2 million, or $0.03 per share in
 2000.  Including special charges of $3.2 million related to the Company's
 closure of its operations in Bothell, Washington, operating income was
 $6.0 million and net income was $4.1 million, or $0.09 per share, for the
 first quarter of 2001.
     Excluding the special charges related to the Bothell closure, EBITDA
 (earnings before interest, taxes, depreciation and amortization) reached
 $18.9 million compared to $9.3 million for the first quarter of 2000.
 Including special charges, EBITDA was $15.7 million for the first quarter of
 2001.
 
                             Excluding Special Charges(1)     As Reported
                                  Three       Three       Three        Three
                                 Months      Months       Months      Months
      (in thousands,              Ended       Ended       Ended        Ended
        except per              March 31,   March 31,   March 31,    March 31,
        share data)               2001        2000         2001        2000
 
      Revenue                   $124,498   $100,255     $124,498    $100,255
      Operating Income             9,240      2,741        6,040       2,741
      Net Income                   6,066      1,216        4,083       1,216
      Basic Earnings Per Share     $0.13      $0.03        $0.09       $0.03
      Diluted earnings Per Share   $0.13      $0.03        $0.09       $0.03
      EBITDA                      18,889      9,292       15,689       9,292
      Weighted Average Common
       and Common Share
       Equivalents:
      Basic                       45,506     40,000       45,506      40,000
      Diluted                     46,249     40,000       46,249      40,000
      (1) Special charges for the first quarter of 2001 consist of $3.2 million
          of costs related primarily to severance and outplacement expenses
          expected to be incurred in connection with the Company's closure of
          its operations in Bothell, Washington.
 
     "During the first quarter, eFunds continued to build momentum and secure
 its future by capitalizing on our strengths and focusing on improving our
 operating performance," said Gus Blanchard, Chairman and Chief Executive
 Officer.  "The Company continued its concerted efforts to win new business and
 made substantial progress on several fronts.  We signed a number of agreements
 that are expected to have a positive impact on our financial performance in
 2001 and beyond.  For example, we sold our Qualifile service to a top 10 bank
 and a large regional network purchased our DataNavigator offering.  We also
 have a growing stream of new products and services and enhanced versions of
 our legacy product offerings that we believe will allow us to carry the
 positive developments we saw in the first quarter through the balance of 2001
 and beyond.  We have a number of outstanding proposals related to new decision
 support and risk management products and our professional services offerings
 that give us a growing sense of excitement about our future.  At the same
 time, we are seeing growth in our transaction processing business and relative
 stability in our customer base.  For example, earlier this month, we announced
 a five-year contract extension to provide processing services for Primary
 Payment Systems, a subsidiary of STAR Systems, Inc., and we are working on a
 proposal regarding a broader, mutually beneficial operating relationship that
 we expect to make to Concord EFS in the near future."
     Mr. Blanchard added "As part of our plan to improve our operating margins
 and efficiency, we made a decision in the first quarter to close our Bothell,
 Washington facility and consolidate the functions performed there at other
 locations throughout our Company.  We expect that we can realize between $4 to
 $5 million in annual savings through this initiative, commencing in 2002."
 The Company incurred a $3.2 million pretax charge in the first quarter
 associated with this effort.
 
     Segment Information
     Payment systems and services net revenue increased $25.3 million, or
 28.6 percent, to $113.8 million for the first quarter of 2001 from
 $88.5 million for the first quarter of 2000.  Gross margins as a percent of
 net revenue, decreased to 36.0 percent for the first quarter of 2001 from
 42.9 percent for the comparable period in 2000.  The decrease in gross margin
 was due to incremental costs associated with the ATM deployment and management
 agreement the Company entered into in late 2000.  Operating margins in this
 segment increased sharply over the previous year to over $6 million before
 special charges, reflecting the combined effect of cost improvements and the
 leveraging of existing infrastructure.
     Government Services revenues decreased $1.1 million to $10.7 million
 during the first quarter of 2001 from $11.8 million for the first quarter of
 2000.  The decrease was primarily due to the expiration of an electronic
 benefit transfer switching contract in the second quarter of 2000.  Although
 the Company anticipates that revenues in this segment may decline as contracts
 expire, it is pursuing the extension or renewal of those contracts that can be
 renegotiated on a profitable basis.  An example is the five-year renewal
 contract that was signed with the state of Minnesota in January of 2001.
 Operating income in the Government Services segment increased almost
 50 percent as a result of significant cost containment efforts.
 
     Product Group Detail
     Transaction processing revenues, which were approximately 44 percent of
 total first quarter revenues, increased 29.8 percent over the first quarter of
 2000.  The Company's ATM management and deployment agreement primarily drove
 this growth.  In addition, transaction volumes increased an average of
 approximately 25 percent over the previous year in all categories of ATM, POS,
 ACH and EBT processing.  The volume increase was, however, somewhat offset by
 the effect of pricing structures agreed to as part of the renewal of long-term
 agreements in prior periods.
     The Decision Support and Risk Management businesses, which comprised
 approximately 30 percent of first quarter revenue, grew approximately
 5.5 percent over the first quarter of last year.  Growth due to increased
 sales of new account opening products and royalties arising from an agreement
 signed in the second quarter of 2000 with an information solutions provider to
 allow it to use the Company's DebitBureau(TM) database was offset by a decline
 in the Company's check authorization business due to the loss of several
 customers in the retail sector, some due to closures such as Bradlee's and
 Montgomery Ward, and price reductions associated with the execution of longer
 term contracts.  The Company has begun to introduce new, higher value decision
 support and risk management products that it expects to play an increasing
 role in the growth of this sector in the future.
     Professional Services, which comprised approximately 26 percent of the
 Company's first quarter revenue, grew approximately 25 percent over last year.
 This increase was due to the Company's new call center in Mumbai, India, which
 commenced full operations in the beginning of 2001 as well as increased
 software development services.
 
     Operating Results
     Although gross margin as a percentage of revenue decreased to 36.0 percent
 during the first quarter of 2001, compared to 41.4 percent the prior year,
 this decrease was almost entirely due to the effect of the ATM deployment and
 management agreement.  Despite the decrease in gross margins, operating
 margins improved from 2.7 percent of revenue in the first quarter of 2000 to
 7.4 percent of revenue in the same period of 2001 (excluding special charges).
 Including special charges, operating margins in the first quarter of 2001 were
 4.9 percent of revenue.  The improvements in operating margin reflect the
 Company's continued focus on cost management and process improvements while
 maintaining significant revenue growth rates.
     Selling, general and administrative (SG&A) expense, excluding the
 $3.2 million charge for costs related to the closure of the Bothell
 operations, decreased to 28.6 percent of net revenue for the first quarter of
 2001.  At $35.6 million, SG&A was lower than the previous year (excluding the
 closure costs) due to reduced spending on promotional advertising and
 continued integration and consolidation efforts.  Although SG&A was relatively
 flat year over year on a reported basis, this expense category decreased to
 31.1 percent of net revenue in 2001 from 38.7 percent in 2000 as a result of
 these initiatives.
     At March 31, 2001, eFunds' cash and cash equivalents totaled $70.5 million
 and outstanding debt totaled $3.8 million.  Capital expenditures were $9.1 for
 the quarter ended March 31, 2001.  These investments in capital and software
 were made to support the growth and expansion of the business.  Total
 depreciation and amortization expense in the first quarter of 2001 was
 $9.8 million.
 
     Forward Looking Statements
     The Company also reiterated its previously announced expectations for 2001
 and provided guidance for its second quarter:
     -  Revenues for 2001 are targeted to reflect year over year growth in the
        range of 25 to 30 percent;
     -  Operating income for 2001 is expected to be approximately 10 to
        12 percent of revenue (excluding special charges);
     -  Basic earnings per share for 2001 are targeted at $0.86 per share
        (excluding special charges);
     -  The effective tax rate for 2001 is expected to average approximately
        38 percent, which includes the negative impact of non-deductible
        goodwill amortization charges;
     -  Capital spending for 2001 is expected to be approximately $50 million
        reflecting product development and enhancement costs, customer service
        improvements and data center consolidation initiatives as well as
        infrastructure needs to support continued growth;
     -  Depreciation and amortization expense for 2001 is expected to be
        approximately 7 to 8 percent of total revenues;
     -  Because of the varying timing and types of contracts the Company is now
        signing, particularly in the business process outsourcing area, the
        Company is no longer giving specific guidance on its gross margin and
        SG&A expectations; and
     -  Second quarter revenues are expected to be approximately $130 million,
        with basic earnings per share approximating $0.18 per share.
 
     About eFunds
     eFunds delivers innovative, reliable and cost-effective technology
 solutions to meet its customers' payment and risk management, e-commerce and
 business process improvement needs.  eFunds provides its services to financial
 institutions, financial services companies, electronic funds networks,
 retailers, government agencies, e-commerce providers, and other companies
 around the world.  For more information, visit www.efunds.com.
     eFunds will hold a one-hour teleconference call today at 10:00 a.m.,
 Eastern Daylight Time.  To listen to the call, please dial 415-537-1926
 approximately fifteen minutes before the scheduled start time.  The call will
 also be available live over eFunds website (www.efunds.com).
 
     Statements made in this release concerning the Company's or management's
 intentions, expectations, or predictions about future results or events are
 "forward-looking statements" within the meaning of the Private Securities
 Litigation Reform Act of 1995.  Such statements are necessarily subject to
 risks and uncertainties that could cause actual results to vary from stated
 expectations, and such variations could be material and adverse.  Factors that
 could result in such a variation include, but are not limited to, the inherent
 unreliability of earnings and revenue growth predictions due to numerous
 factors, including many beyond the Company's control, potential difficulties,
 delays and unanticipated expenses inherent in the development and marketing of
 new products and services, competitive factors, and the numerous risks and
 potential additional costs, disruptions and delays associated with the
 establishment of new business ventures and e-Commerce business initiatives.
 Additional information concerning these and other factors that could cause
 actual results to differ materially from the Company's current expectations is
 contained in the prospectus included in the Company's Annual Report on Form
 10-K for the year ended December 31, 2000.
 
 
                               eFunds Corporation
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
 
     (in thousands,                           Quarters Ended
      except per                                 March 31,
      share amounts)                 2001                        2000
     Revenues             $ 124,498          100%    $ 100,255          100%
 
     Cost of sales,
      excluding loss
      contract and
      asset impairment
      charges                79,650          64.0       58,757          58.6
     Loss contract and
      asset impairment
      charges                    --            --           --            --
       Total cost of sales   79,650          64.0       58,757          58.6
 
     Gross margin            44,848          36.0       41,498          41.4
 
     Selling, general and
      administrative
      expenses, excluding
      special charges        35,608          28.6       38,757          38.7
     Special Charges          3,200           2.5           --            --
     Total selling, general
      and administrative
      expenses               38,808          31.1       38,757          38.7
 
     Income from
      operations              6,040           4.9        2,741           2.7
 
     Interest and other
      income (expense)          545           0.4         (788)         (0.8)
     Income before
      income taxes            6,585           5.3        1,953           1.9
     Provision for
      income taxes           (2,502)        (2.0)         (737)         (0.7)
     Net income               4,083           3.3        1,216           1.2
     Basic net income per
      share excluding
      special charges        $ 0.13                     $ 0.03
     Diluted net income
      per share excluding
      special charges        $ 0.13                     $ 0.03
     Basic net income
      per share              $ 0.09                     $ 0.03
     Diluted net income
      per share              $ 0.09                     $ 0.03
     Weighted average
      common and common
      share equivalents
       Basic                 45,506                     40,000
       Diluted               46,249                     40,000
 
 
                               eFunds Corporation
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
 
     (in millions)                          March 31, 2001   December 31, 2000
     Assets
       Cash/cash equivalents                      $ 70.5              $ 78.7
       Restricted cash and compensating balances    32.1                41.5
       Other current assets                         99.5                77.5
       Long-term investments                        18.2                18.5
       Property, plant and equipment -- net         76.5                77.4
       Intangibles -- net                           91.4                91.2
       Other                                         5.2                 3.3
     TOTAL ASSETS                                $ 393.4             $ 388.1
 
     Liabilities and equity
       Current liabilities                       $ 100.2              $ 98.5
       Long-term debt                                1.6                 2.2
       Other long-term liabilities                   0.1                 0.1
       Shareholders' equity                        291.5               287.3
     TOTAL LIABILITIES AND EQUITY                $ 393.4             $ 388.1
 
 
                               eFunds Corporation
                              SUMMARY SEGMENT DATA
                                  (Unaudited)
 
      Segment information for the quarters ended March 31, 2001 and 2000 is as
      follows:
 
            March 31, 2001      Payment Systems    Government       Total
     (in thousands)               and Services      Services     Consolidated
     Total net revenues            $ 113,765        $ 10,733     $ 124,498
 
     Gross margin excluding
      special charges                 40,985           3,863        44,848
     Operating income excluding
      special charges                  6,226           3,014         9,240
     Special charges                   3,200              --         3,200
     Gross margin including
      special charges                 40,985           3,863        44,848
     Operating income including
      special charges                  3,026           3,014         6,040
     Depreciation and amortization     9,789              --         9,789
     Capital purchases                 9,077              --         9,077
 
            March 31, 2000      Payment Systems    Government       Total
     (in thousands)               and Services      Services     Consolidated
     Total net revenues             $ 88,465        $ 11,790     $ 100,255
 
     Gross margin excluding
      special charges                 37,915           3,583        41,498
     Operating income excluding
      special charges                    706           2,035         2,741
     Special charges                      --              --            --
     Gross margin including
      special charges                 37,915           3,583        41,498
     Operating income including
      special charges                    706           2,035         2,741
     Depreciation and amortization     6,539              --         6,539
     Capital Purchases                 8,797              --         8,797
 
 
                               eFunds Corporation
                                 OPERATING DATA
                                  (Unaudited)
 
                                      Three Months March 31,    Percent Change
     (in millions)                     2001           2000       Incr. (Decr.)
     Account verification inquiries      9.6             9.7         (1.0%)
 
     Transactions processed
       Electronic payments           1,723.0         1,360.1         26.7%
       Government services             107.7           103.9          3.7%
     Total transactions processed    1,830.7         1,464.0         25.0%
 
 
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SOURCE eFunds Corporation
    SCOTTSDALE, Ariz., April 27 /PRNewswire/ -- eFunds Corporation
 (Nasdaq:   EFDS), a leading provider of electronic payment, risk management and
 information technology services, today announced financial results for the
 first quarter ended March 31, 2001.
 
     First Quarter Performance
     For the three-month period ended March 31, 2001, total revenues reached
 $124.5 million, a 24.2 percent increase over the $100.3 million reported for
 the first quarter of 2000.  Excluding special charges, operating income
 increased to $9.2 million for the first quarter of 2001 compared to operating
 income of $2.7 million for the comparable period in 2000.  Net income,
 excluding special charges, was $6.1 million, or $0.13 per share, for the first
 quarter of 2001, compared to net income of $1.2 million, or $0.03 per share in
 2000.  Including special charges of $3.2 million related to the Company's
 closure of its operations in Bothell, Washington, operating income was
 $6.0 million and net income was $4.1 million, or $0.09 per share, for the
 first quarter of 2001.
     Excluding the special charges related to the Bothell closure, EBITDA
 (earnings before interest, taxes, depreciation and amortization) reached
 $18.9 million compared to $9.3 million for the first quarter of 2000.
 Including special charges, EBITDA was $15.7 million for the first quarter of
 2001.
 
                             Excluding Special Charges(1)     As Reported
                                  Three       Three       Three        Three
                                 Months      Months       Months      Months
      (in thousands,              Ended       Ended       Ended        Ended
        except per              March 31,   March 31,   March 31,    March 31,
        share data)               2001        2000         2001        2000
 
      Revenue                   $124,498   $100,255     $124,498    $100,255
      Operating Income             9,240      2,741        6,040       2,741
      Net Income                   6,066      1,216        4,083       1,216
      Basic Earnings Per Share     $0.13      $0.03        $0.09       $0.03
      Diluted earnings Per Share   $0.13      $0.03        $0.09       $0.03
      EBITDA                      18,889      9,292       15,689       9,292
      Weighted Average Common
       and Common Share
       Equivalents:
      Basic                       45,506     40,000       45,506      40,000
      Diluted                     46,249     40,000       46,249      40,000
      (1) Special charges for the first quarter of 2001 consist of $3.2 million
          of costs related primarily to severance and outplacement expenses
          expected to be incurred in connection with the Company's closure of
          its operations in Bothell, Washington.
 
     "During the first quarter, eFunds continued to build momentum and secure
 its future by capitalizing on our strengths and focusing on improving our
 operating performance," said Gus Blanchard, Chairman and Chief Executive
 Officer.  "The Company continued its concerted efforts to win new business and
 made substantial progress on several fronts.  We signed a number of agreements
 that are expected to have a positive impact on our financial performance in
 2001 and beyond.  For example, we sold our Qualifile service to a top 10 bank
 and a large regional network purchased our DataNavigator offering.  We also
 have a growing stream of new products and services and enhanced versions of
 our legacy product offerings that we believe will allow us to carry the
 positive developments we saw in the first quarter through the balance of 2001
 and beyond.  We have a number of outstanding proposals related to new decision
 support and risk management products and our professional services offerings
 that give us a growing sense of excitement about our future.  At the same
 time, we are seeing growth in our transaction processing business and relative
 stability in our customer base.  For example, earlier this month, we announced
 a five-year contract extension to provide processing services for Primary
 Payment Systems, a subsidiary of STAR Systems, Inc., and we are working on a
 proposal regarding a broader, mutually beneficial operating relationship that
 we expect to make to Concord EFS in the near future."
     Mr. Blanchard added "As part of our plan to improve our operating margins
 and efficiency, we made a decision in the first quarter to close our Bothell,
 Washington facility and consolidate the functions performed there at other
 locations throughout our Company.  We expect that we can realize between $4 to
 $5 million in annual savings through this initiative, commencing in 2002."
 The Company incurred a $3.2 million pretax charge in the first quarter
 associated with this effort.
 
     Segment Information
     Payment systems and services net revenue increased $25.3 million, or
 28.6 percent, to $113.8 million for the first quarter of 2001 from
 $88.5 million for the first quarter of 2000.  Gross margins as a percent of
 net revenue, decreased to 36.0 percent for the first quarter of 2001 from
 42.9 percent for the comparable period in 2000.  The decrease in gross margin
 was due to incremental costs associated with the ATM deployment and management
 agreement the Company entered into in late 2000.  Operating margins in this
 segment increased sharply over the previous year to over $6 million before
 special charges, reflecting the combined effect of cost improvements and the
 leveraging of existing infrastructure.
     Government Services revenues decreased $1.1 million to $10.7 million
 during the first quarter of 2001 from $11.8 million for the first quarter of
 2000.  The decrease was primarily due to the expiration of an electronic
 benefit transfer switching contract in the second quarter of 2000.  Although
 the Company anticipates that revenues in this segment may decline as contracts
 expire, it is pursuing the extension or renewal of those contracts that can be
 renegotiated on a profitable basis.  An example is the five-year renewal
 contract that was signed with the state of Minnesota in January of 2001.
 Operating income in the Government Services segment increased almost
 50 percent as a result of significant cost containment efforts.
 
     Product Group Detail
     Transaction processing revenues, which were approximately 44 percent of
 total first quarter revenues, increased 29.8 percent over the first quarter of
 2000.  The Company's ATM management and deployment agreement primarily drove
 this growth.  In addition, transaction volumes increased an average of
 approximately 25 percent over the previous year in all categories of ATM, POS,
 ACH and EBT processing.  The volume increase was, however, somewhat offset by
 the effect of pricing structures agreed to as part of the renewal of long-term
 agreements in prior periods.
     The Decision Support and Risk Management businesses, which comprised
 approximately 30 percent of first quarter revenue, grew approximately
 5.5 percent over the first quarter of last year.  Growth due to increased
 sales of new account opening products and royalties arising from an agreement
 signed in the second quarter of 2000 with an information solutions provider to
 allow it to use the Company's DebitBureau(TM) database was offset by a decline
 in the Company's check authorization business due to the loss of several
 customers in the retail sector, some due to closures such as Bradlee's and
 Montgomery Ward, and price reductions associated with the execution of longer
 term contracts.  The Company has begun to introduce new, higher value decision
 support and risk management products that it expects to play an increasing
 role in the growth of this sector in the future.
     Professional Services, which comprised approximately 26 percent of the
 Company's first quarter revenue, grew approximately 25 percent over last year.
 This increase was due to the Company's new call center in Mumbai, India, which
 commenced full operations in the beginning of 2001 as well as increased
 software development services.
 
     Operating Results
     Although gross margin as a percentage of revenue decreased to 36.0 percent
 during the first quarter of 2001, compared to 41.4 percent the prior year,
 this decrease was almost entirely due to the effect of the ATM deployment and
 management agreement.  Despite the decrease in gross margins, operating
 margins improved from 2.7 percent of revenue in the first quarter of 2000 to
 7.4 percent of revenue in the same period of 2001 (excluding special charges).
 Including special charges, operating margins in the first quarter of 2001 were
 4.9 percent of revenue.  The improvements in operating margin reflect the
 Company's continued focus on cost management and process improvements while
 maintaining significant revenue growth rates.
     Selling, general and administrative (SG&A) expense, excluding the
 $3.2 million charge for costs related to the closure of the Bothell
 operations, decreased to 28.6 percent of net revenue for the first quarter of
 2001.  At $35.6 million, SG&A was lower than the previous year (excluding the
 closure costs) due to reduced spending on promotional advertising and
 continued integration and consolidation efforts.  Although SG&A was relatively
 flat year over year on a reported basis, this expense category decreased to
 31.1 percent of net revenue in 2001 from 38.7 percent in 2000 as a result of
 these initiatives.
     At March 31, 2001, eFunds' cash and cash equivalents totaled $70.5 million
 and outstanding debt totaled $3.8 million.  Capital expenditures were $9.1 for
 the quarter ended March 31, 2001.  These investments in capital and software
 were made to support the growth and expansion of the business.  Total
 depreciation and amortization expense in the first quarter of 2001 was
 $9.8 million.
 
     Forward Looking Statements
     The Company also reiterated its previously announced expectations for 2001
 and provided guidance for its second quarter:
     -  Revenues for 2001 are targeted to reflect year over year growth in the
        range of 25 to 30 percent;
     -  Operating income for 2001 is expected to be approximately 10 to
        12 percent of revenue (excluding special charges);
     -  Basic earnings per share for 2001 are targeted at $0.86 per share
        (excluding special charges);
     -  The effective tax rate for 2001 is expected to average approximately
        38 percent, which includes the negative impact of non-deductible
        goodwill amortization charges;
     -  Capital spending for 2001 is expected to be approximately $50 million
        reflecting product development and enhancement costs, customer service
        improvements and data center consolidation initiatives as well as
        infrastructure needs to support continued growth;
     -  Depreciation and amortization expense for 2001 is expected to be
        approximately 7 to 8 percent of total revenues;
     -  Because of the varying timing and types of contracts the Company is now
        signing, particularly in the business process outsourcing area, the
        Company is no longer giving specific guidance on its gross margin and
        SG&A expectations; and
     -  Second quarter revenues are expected to be approximately $130 million,
        with basic earnings per share approximating $0.18 per share.
 
     About eFunds
     eFunds delivers innovative, reliable and cost-effective technology
 solutions to meet its customers' payment and risk management, e-commerce and
 business process improvement needs.  eFunds provides its services to financial
 institutions, financial services companies, electronic funds networks,
 retailers, government agencies, e-commerce providers, and other companies
 around the world.  For more information, visit www.efunds.com.
     eFunds will hold a one-hour teleconference call today at 10:00 a.m.,
 Eastern Daylight Time.  To listen to the call, please dial 415-537-1926
 approximately fifteen minutes before the scheduled start time.  The call will
 also be available live over eFunds website (www.efunds.com).
 
     Statements made in this release concerning the Company's or management's
 intentions, expectations, or predictions about future results or events are
 "forward-looking statements" within the meaning of the Private Securities
 Litigation Reform Act of 1995.  Such statements are necessarily subject to
 risks and uncertainties that could cause actual results to vary from stated
 expectations, and such variations could be material and adverse.  Factors that
 could result in such a variation include, but are not limited to, the inherent
 unreliability of earnings and revenue growth predictions due to numerous
 factors, including many beyond the Company's control, potential difficulties,
 delays and unanticipated expenses inherent in the development and marketing of
 new products and services, competitive factors, and the numerous risks and
 potential additional costs, disruptions and delays associated with the
 establishment of new business ventures and e-Commerce business initiatives.
 Additional information concerning these and other factors that could cause
 actual results to differ materially from the Company's current expectations is
 contained in the prospectus included in the Company's Annual Report on Form
 10-K for the year ended December 31, 2000.
 
 
                               eFunds Corporation
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
 
     (in thousands,                           Quarters Ended
      except per                                 March 31,
      share amounts)                 2001                        2000
     Revenues             $ 124,498          100%    $ 100,255          100%
 
     Cost of sales,
      excluding loss
      contract and
      asset impairment
      charges                79,650          64.0       58,757          58.6
     Loss contract and
      asset impairment
      charges                    --            --           --            --
       Total cost of sales   79,650          64.0       58,757          58.6
 
     Gross margin            44,848          36.0       41,498          41.4
 
     Selling, general and
      administrative
      expenses, excluding
      special charges        35,608          28.6       38,757          38.7
     Special Charges          3,200           2.5           --            --
     Total selling, general
      and administrative
      expenses               38,808          31.1       38,757          38.7
 
     Income from
      operations              6,040           4.9        2,741           2.7
 
     Interest and other
      income (expense)          545           0.4         (788)         (0.8)
     Income before
      income taxes            6,585           5.3        1,953           1.9
     Provision for
      income taxes           (2,502)        (2.0)         (737)         (0.7)
     Net income               4,083           3.3        1,216           1.2
     Basic net income per
      share excluding
      special charges        $ 0.13                     $ 0.03
     Diluted net income
      per share excluding
      special charges        $ 0.13                     $ 0.03
     Basic net income
      per share              $ 0.09                     $ 0.03
     Diluted net income
      per share              $ 0.09                     $ 0.03
     Weighted average
      common and common
      share equivalents
       Basic                 45,506                     40,000
       Diluted               46,249                     40,000
 
 
                               eFunds Corporation
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
 
     (in millions)                          March 31, 2001   December 31, 2000
     Assets
       Cash/cash equivalents                      $ 70.5              $ 78.7
       Restricted cash and compensating balances    32.1                41.5
       Other current assets                         99.5                77.5
       Long-term investments                        18.2                18.5
       Property, plant and equipment -- net         76.5                77.4
       Intangibles -- net                           91.4                91.2
       Other                                         5.2                 3.3
     TOTAL ASSETS                                $ 393.4             $ 388.1
 
     Liabilities and equity
       Current liabilities                       $ 100.2              $ 98.5
       Long-term debt                                1.6                 2.2
       Other long-term liabilities                   0.1                 0.1
       Shareholders' equity                        291.5               287.3
     TOTAL LIABILITIES AND EQUITY                $ 393.4             $ 388.1
 
 
                               eFunds Corporation
                              SUMMARY SEGMENT DATA
                                  (Unaudited)
 
      Segment information for the quarters ended March 31, 2001 and 2000 is as
      follows:
 
            March 31, 2001      Payment Systems    Government       Total
     (in thousands)               and Services      Services     Consolidated
     Total net revenues            $ 113,765        $ 10,733     $ 124,498
 
     Gross margin excluding
      special charges                 40,985           3,863        44,848
     Operating income excluding
      special charges                  6,226           3,014         9,240
     Special charges                   3,200              --         3,200
     Gross margin including
      special charges                 40,985           3,863        44,848
     Operating income including
      special charges                  3,026           3,014         6,040
     Depreciation and amortization     9,789              --         9,789
     Capital purchases                 9,077              --         9,077
 
            March 31, 2000      Payment Systems    Government       Total
     (in thousands)               and Services      Services     Consolidated
     Total net revenues             $ 88,465        $ 11,790     $ 100,255
 
     Gross margin excluding
      special charges                 37,915           3,583        41,498
     Operating income excluding
      special charges                    706           2,035         2,741
     Special charges                      --              --            --
     Gross margin including
      special charges                 37,915           3,583        41,498
     Operating income including
      special charges                    706           2,035         2,741
     Depreciation and amortization     6,539              --         6,539
     Capital Purchases                 8,797              --         8,797
 
 
                               eFunds Corporation
                                 OPERATING DATA
                                  (Unaudited)
 
                                      Three Months March 31,    Percent Change
     (in millions)                     2001           2000       Incr. (Decr.)
     Account verification inquiries      9.6             9.7         (1.0%)
 
     Transactions processed
       Electronic payments           1,723.0         1,360.1         26.7%
       Government services             107.7           103.9          3.7%
     Total transactions processed    1,830.7         1,464.0         25.0%
 
 
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 SOURCE  eFunds Corporation