UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: July 29, 2003
(Date of earliest event reported)
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TRANSACTION SYSTEMS ARCHITECTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-25346 47-0772104
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
224 South 108th Avenue,
Omaha, Nebraska 68154
(Address of principal executive offices, including zip code)
(402) 334-5101
(Registrant's telephone number, including area code)
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Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit
Number Description
99.1 Press Release, dated July 29, 2003.
Item 12. Results of Operations and Financial Condition.
On July 29, 2003, Transaction Systems Architects, Inc. issued a press
release announcing its results for the quarterly period ending June 30, 2003. A
copy of this press release is attached hereto as Exhibit 99.1.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
TRANSACTION SYSTEMS ARCHITECTS, INC.
Date: July 29, 2003 By: /s/ Gregory D. Derkacht
-------------------------------------
Gregory D. Derkacht
President and Chief Executive Officer
EXHIBIT INDEX
Exhibit
Number Description
99.1 Press Release, dated July 29, 2003.
Exhibit 99.1
News Release
TRANSACTION SYSTEMS ARCHITECTS INC
224 SOUTH 108 AVENUE
OMAHA, NEBRASKA 68154
402.334.5101
FAX 402.390.8077
For more information contact:
William J. Hoelting
Vice President, Investor Relations
402.390.8990
FOR IMMEDIATE RELEASE
Transaction Systems Architects Reports
Third Quarter Results
Highlights -
o Revenue of $73.8 million, an increase of 6.2 percent
o Operating income of $4.7 million; operating margin of 6.3 percent
o Twelve month revenue backlog of $225.9 million
o Operating cash flow of $11.5 million; cash balance of $100.9 million
(OMAHA, Neb.--July 29, 2003)--Transaction Systems Architects, Inc. (Nasdaq:
TSAI), a leading global provider of enterprise e-payments and e-commerce
software, announced today that revenue for the third quarter of fiscal 2003 was
$73.8 million, an increase of 6.2 percent over the third quarter of fiscal 2002.
Net loss for the quarter was $1.9 million, or $.05 per diluted share. The
operating results for the third quarter of fiscal 2003 reflect a goodwill
impairment charge of $9.3 million, which is not tax deductible, relating to the
2001 acquisition of MessagingDirect. MessagingDirect provides the Company's
secure document delivery technology.
For the third quarter of fiscal 2003, revenues were comprised of software
license fees of $40.7 million, maintenance fees of $20.7 million and services
fees of $12.4 million. The Company's recurring revenue was $43.7 million, or 59
percent of revenue, and non-recurring revenue was $30.1 million, or 41 percent
of revenue. Recurring revenue consists of monthly license fees of $21.8 million,
maintenance fees of $20.7 million and facilities management fees of $1.2
million. Operating income was $4.7 million with an operating margin of 6.3
percent. Operating cash flow was $11.5 million with a cash balance as of June
30, 2003 of $100.9 million.
The Company completed the third quarter of fiscal 2003 with $225.9 million in
backlog, consisting of $164.3 million in recurring revenue backlog and $61.6
million in non-recurring revenue backlog. The Company defines recurring revenue
backlog to be all monthly license fees, maintenance fees and facilities
management fees specified in executed contracts to the extent that the Company
believes that recognition of the related revenue will occur within one year. The
Company includes in its non-recurring revenue backlog all fees (other than
recurring fees) specified in executed contracts to the extent that the Company
believes that recognition of the related revenue will occur within one year.
During the quarter, the Company added 23 new customers and brought its worldwide
presence to 72 countries. For ACI Worldwide, the Company's largest business
unit, new customer activity for the quarter included the following: six
customers for BASE24(TM), three customers for ACI Proactive Risk Manager(TM),
two Winpay24(TM) accounts and one customer for Net 24(TM). In addition to the
new customers, ACI Worldwide licensed BASE24-es(TM) solutions to four existing
customers during the quarter including BB&T Corporation, the 11th largest
financial holding company in the U.S. Also, ACI Worldwide licensed capacity
upgrades to 14 customers during the quarter. Insession Technologies, the
Company's e-infrastructure business unit, added 11 new customers during the
quarter.
"In what continues to be a difficult environment, the Company generated revenue
growth of 6.2 percent and improved its cash position to over $100 million," said
Gregory D. Derkacht, President and CEO. "As we look forward, we will continue to
invest in initiatives that we believe are strategic to the future growth of TSA.
These key initiatives include our multi- platform solution - BASE24-es, our back
office suite - ACI Payments Manager, and our fraud detection solution - ACI
Proactive Risk Manager."
The Company will provide further details regarding its financial performance for
the third quarter of fiscal 2003 in its scheduled teleconference to be held
Tuesday, July 29, 2003 at 4:00 pm CDT. Interested persons may access a real-time
audio broadcast of the teleconference at: www.tsainc.com/ir/ir.asp. The web cast
will be archived for ten days after the teleconference at the same web address
listed above.
About Transaction Systems Architects, Inc.
The Company's software facilitates electronic payments by providing consumers
and companies access to their money. Its products are used to process
transactions involving credit cards, debit cards, secure electronic commerce,
mobile commerce, smart cards, secure electronic document delivery and payment,
checks, high-value money transfers, bulk payment clearing and settlement, and
enterprise e-infrastructure. The Company's solutions are used on more than 1,650
product systems in 72 countries on six continents.
Forward-Looking Statements
This press release contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. Generally,
forward-looking statements do not relate strictly to historical or current
facts, and include words or phrases such as "management anticipates," "the
Company believes," "the Company anticipates," "the Company expects," "the
Company plans," "the Company will," and words and phrases of similar impact, and
include but are not limited to statements regarding future operations, business
strategy and business environment. The forward-looking statements are made
pursuant to safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. Forward-looking statements included in this press release include
statements regarding (1) the Company's recurring and non-recurring backlog, and
(2) management of our business units in the future by, among other things,
focusing on key growth initiatives. Actual results could differ materially from
that contained in the forward-looking statements. Factors that could cause
actual results to differ include, but are not limited to, the following:
o The Company's calculation of backlog is based on customer
contracts that exist on the date of the calculation. A number
of factors may change after the date of calculation that could
result in actual revenues being less than the amounts
contained in backlog. The Company's customers may attempt
to renegotiate or terminate their contracts due to a number
of factors, including mergers, changes in their financial
condition, or general changes in economic conditions in the
customer's industry or geographic location, or the Company
may experience delays in the development of products or
services specified in customer contracts. Accordingly,
there can be no assurance that contracts included in
recurring or non-recurring revenue backlog will actually
generate the specified revenues or that the actual revenues
will be generated within the one-year period.
Any or all of the forward-looking statements may turn out to be wrong. They can
be affected by inaccurate assumptions or by known or unknown risks and
uncertainties. Many of these factors will be important in determining the
Company's actual future results. Consequently, no forward-looking statement can
be guaranteed. Actual future results may vary materially from those expressed or
implied in any forward-looking statements.
These cautionary statements and any other cautionary statements that may
accompany such forward-looking statements, whether written or oral, expressly
qualify all of the forward-looking statements. In addition, the Company
disclaims any obligation to update any forward-looking statements after the date
of this release unless applicable securities laws require it to do so.
For a detailed discussion of these and other risk factors, interested parties
should review the Company's filings with the Securities and Exchange Commission,
including the Company's Form 10-K filed on January 13, 2003, the Company's Form
10-Q filed on February 13, 2003 and the Company's Form 10-Q filed on May 15,
2003.
TRANSACTION SYSTEMS ARCHITECTS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, September 30,
2003 2002
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 100,893 $ 87,894
Marketable securities 2,807 3,757
Billed receivables, net 43,479 35,755
Accrued receivables 6,888 13,132
Deferred income taxes, net 9,657 17,554
Other 5,365 4,560
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Total current assets 169,089 162,652
Property and equipment, net 10,113 11,597
Software, net 2,684 5,609
Goodwill, net 46,457 55,947
Deferred income taxes, net 25,615 27,546
Other 2,391 3,168
---------- ----------
Total assets $ 256,349 $ 266,519
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of debt - financing agreements $ 16,721 $ 18,444
Accounts payable 6,946 7,348
Accrued employee compensation 8,680 7,583
Accrued liabilities 9,116 11,494
Income taxes payable 3,625 7,847
Deferred revenue 68,830 59,598
Other 756 872
---------- ----------
Total current liabilities 114,674 113,186
Debt - financing agreements 12,498 24,866
Deferred revenue 20,014 23,860
Other 1,472 1,749
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Total liabilities 148,658 163,661
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Stockholders' equity:
Class A Common Stock 183 183
Treasury stock, at cost (35,258) (35,258)
Additional paid-in capital 229,572 228,465
Accumulated deficit (78,715) (83,927)
Accumulated other comprehensive loss, net (8,091) (6,605)
---------- ----------
Total stockholders' equity 107,691 102,858
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Total liabilities and stockholders' equity $ 256,349 $ 266,519
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TRANSACTION SYSTEMS ARCHITECTS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share amounts)
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------- -------------------------
2003 2002 2003 2002
---------- ---------- ---------- ----------
Revenues:
Software license fees $ 40,717 $ 38,706 $ 110,214 $ 119,152
Maintenance fees 20,675 18,175 58,740 55,656
Services 12,382 12,572 36,559 39,119
---------- ---------- ---------- ----------
Total revenues 73,774 69,453 205,513 213,927
---------- ---------- ---------- ----------
Expenses:
Cost of software license fees 6,339 6,673 18,567 23,838
Cost of maintenance and services 15,082 14,953 45,583 47,366
Research and development 9,478 8,711 25,785 26,678
Selling and marketing 13,686 15,264 40,951 43,002
General and administrative 15,245 11,297 41,932 38,993
Impairment of goodwill 9,290 - 9,290 -
---------- ---------- ---------- ----------
Total expenses 69,120 56,898 182,108 179,877
---------- ---------- ---------- ----------
Operating income 4,654 12,555 23,405 34,050
---------- ---------- ---------- ----------
Other income (expense):
Interest income 281 404 876 1,044
Interest expense (682) (1,313) (2,425) (4,376)
Other, net 225 424 (835) 4,022
---------- ---------- ---------- ----------
Total other income (expense) (176) (485) (2,384) 690
---------- ---------- ---------- ----------
Income before income taxes 4,478 12,070 21,021 34,740
Income tax provision (6,331) (7,066) (15,809) (20,528)
---------- ---------- ---------- ----------
Net income (loss) $ (1,853) $ 5,004 $ 5,212 $ 14,212
========== ========== ========== ==========
Earnings (loss) per share information:
Weighted average shares outstanding:
Basic 35,571 35,355 35,489 35,303
========== ========== ========== ==========
Diluted 35,707 35,735 35,601 35,576
========== ========== ========== ==========
Earnings (loss) per share:
Basic $ (0.05) $ 0.14 $ 0.15 $ 0.40
========== ========== ========== ==========
Diluted $ (0.05) $ 0.14 $ 0.15 $ 0.40
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