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 25, 2006
(Date
of
earliest event reported)
_________________________
TRANSACTION
SYSTEMS ARCHITECTS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
0-25346
|
47-0772104
|
|
(State
or other jurisdiction
of
incorporation
|
(Commission
File
Number)
|
(I.R.S.
Employer
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)
_________________________
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition.
On
July
25, 2006, Transaction Systems Architects, Inc. issued a press release announcing
its financial results for the quarterly period ending June 30, 2006. A copy
of
this press release is attached hereto as Exhibit 99.1.
The
foregoing information (including the exhibit hereto) is being furnished under
“Item 2.02 - Results of Operations and Financial Condition” and “Item 7.01 -
Regulation FD Disclosure.” Such information (including the exhibit hereto) shall
not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, nor shall it be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended, except as shall be
expressly set forth by specific reference in such filing.
The
filing of this Report and the furnishing of this information pursuant to Items
2.02 and 7.01 do not mean that such information is material or that disclosure
of such information is required.
Item
7.01. Regulation FD Disclosure.
See
“Item
2.02 - Results of Operations and Financial Condition” above.
Item
9.01. Financial Statements and Exhibits.
Exhibit
99.1 -- Press Release dated July 25, 2006.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, 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
25, 2006
|
By:
|
/s/
David R. Bankhead
|
|
|
David
R. Bankhead
Senior
Vice President,
Chief
Financial Officer and
Treasurer
|
|||
EXHIBIT
INDEX
|
Exhibit
Number
|
Description
|
|
|
99.1
|
Press
Release dated July 25, 2006.
|
Exhibit
99.1
News
Release
TRANSACTION
SYSTEMS ARCHITECTS INC
224 SOUTH 108 AVENUEOMAHA,
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
Company
continues to execute on market performance, acquisitions and
globalization
|
Financial
Results
|
Guidance
|
|||||||
|
Q3
2006
|
Better
/ (Worse)
Q3
2005
|
Better
/ (Worse)
Q3
2005
|
YTD
2006
|
Better
/ (Worse)
YTD
2005
|
Better
/ (Worse)
YTD
2005
|
Current
Fiscal
Year
2006
|
New
Fiscal
Year
2006
|
|
|
Revenue
($
MM)
|
$84.8
|
$6.8
|
9%
|
$259.7
|
$25.4
|
11%
|
$348
to $360
|
Unchanged
|
|
EPS
(diluted)
|
$0.61
|
$0.35
|
135%
|
$1.40
|
$0.52
|
59%
|
$1.51
to $1.63
|
$1.78
to $1.90
|
(OMAHA,
Neb. — July 25, 2006)
— Transaction
Systems Architects, Inc. (Nasdaq:TSAI), today
announced revenue of $84.8 million for the quarter ended June 30, 2006, and
diluted earnings per share of $0.61. Diluted earnings per share were positively
impacted by the release of valuation allowances related to foreign tax credits
and were negatively impacted by dilution from the acquisition of eps Electronic
Payment Systems AG and other special and transitional costs.
“We
consistently executed on our long-term plans during the quarter as we completed
a strategic acquisition, continued to streamline our supply chain and furthered
our ability to globally deliver and support our software solutions,” said Philip
G. Heasley, TSA’s CEO. “These initiatives position us to successfully respond to
the trends impacting the world’s payment systems, including regulatory change,
transaction volume growth and the need for improved payments productivity.
“Refining
our global infrastructure is a critical component of driving growth for the
Company,” Heasley said. “Market dynamics and our own research suggest that the
greatest opportunities for growth exist largely in the international market.
As
a result, we are in the midst of several key initiatives designed to structure
our company to more efficiently address that demand. We believe these efforts
will help us maximize productivity as we seek new market opportunities and
continue providing world-class support for our mission-critical
solutions.
“The
acquisition of eps gives us a leading presence in the German market and expands
the portfolio of products that we can cross-sell to our global customers,”
Heasley continued. “Germany represents the world’s third largest market for
electronic payments. Our new footprint there gives us an excellent platform
to
satisfy the region’s need for payment solutions, especially with value-added
products like our fraud detection and smart card management software. In
addition, eps brings us an established presence in Romania, which plays an
important role in our globalization initiatives.
“During
the quarter we established a new subsidiary in Ireland to serve as the focal
point for our international product development efforts,” Heasley said. “This is
a strategy that other major software companies have successfully adopted to
optimize supply chain efficiencies and maximize shareholder return. The Irish
company will oversee remote software development operations in Romania and
elsewhere, providing us with low-cost centers of expertise and ensuring we
remain price-competitive in supporting a growing international customer base.
“We
gained further efficiencies by closing two offices in the U.S. and Europe that
housed a small number of employees not concentrated in a specialized area,”
Heasley said. “We will continue to work opportunities like this to ensure that
our organizational structure and our use of facilities around the world are
as
efficient as possible.
“Commencing
on or about the end of the fourth quarter, the Company will establish its
principal executive offices in New York City,” Heasley added. “This move will
bring us closer to key constituents. In addition, this month we strengthened
our
executive team with the appointment of Craig Maki as senior vice president
responsible for corporate development. Craig comes to us from the investment
banking firm Stephens Inc. and will play a key role in identifying future
strategic opportunities.
“In
summary, we had a solid quarter as we continue to execute our plans to grow
the
business. The Company continues to be well-positioned in the market as we engage
with major banks, retailers and processors in identifying solutions to complex,
multi-region and multi-year opportunities,” Heasley said.
Third-Quarter
Financial Highlights
Revenue
Revenue
was $84.8 million in the third quarter, a 9 percent increase over the same
period last year. Revenue comprised software license fees of $42.0 million,
maintenance fees of $26.0 million and services of $16.8 million. Monthly
recurring revenue was $47.1 million compared to $46.3 million during the same
period last year. Monthly recurring revenue consisted of monthly license fees
of
$17.7 million, maintenance fees of $26.0 million and services (facilities
management) fees of $3.4 million. Monthly recurring revenue comprised 56 percent
of total revenues in the quarter. International revenues were $55.5 million,
or
65 percent of total revenues.
Expenses
Operating
expenses were $69.2 million compared to $62.8 million in the same period last
year, an increase of 10 percent, and included approximately $1.5 million related
to equity-based compensation expense that has no comparable basis in the prior
year. The most recent quarter also included approximately $3.0 million of
expense related to the S2 operation, down from $3.6 million in the second
quarter of 2006 and in keeping with the Company’s plan to reduce these expenses
to approximately $2.5 million per quarter by year-end. The third quarter also
included approximately $1.0 million of expense related to operations of the
recently acquired eps business. In addition, the Company incurred special
expenses during the quarter of approximately $600,000 related to M&A
activity and approximately $700,000 related to globalization initiatives,
including the establishment of Irish and Romanian operations.
Operating
income
Operating
income was $15.5 million with an operating margin of 18.3 percent. This compared
to operating income of $15.2 million with an operating margin of 19.5 percent
for the third quarter of fiscal 2005.
Other
income
Other
income for the quarter was $1.4 million compared to $0.7 million for the same
period a year ago.
Taxes
The
tax
benefit of $6.4 million comprised a tax provision of approximately $6.0 million
offset by approximately $12.4 million representing the Company’s release of
valuation allowances related to foreign tax credits during Q3. Factors leading
to the release included the Company’s improved foreign earnings stream from
existing operations and from the acquisitions of S2 and eps, and the Company’s
use of material components of foreign tax credit carryovers in its 2005 federal
tax return filed during the quarter. The resulting release of $12.4 million
in
foreign tax credit allowances had a positive impact on net income during the
quarter and added $0.32 to diluted earnings per share. The Company continues
to
review its valuation allowances against deferred tax assets and from time to
time may adjust these accordingly.
During
the quarter the Company moved certain intellectual property rights to its Irish
subsidiary as part of its globalization initiatives. The Company expects that,
long term, these initiatives will result in future reductions in the Company’s
overall effective tax rate.
Net
income and diluted earnings per share
Net
income for the quarter was $23.3 million, or $0.61 per diluted share, compared
to $10.0 million, or $0.26 per diluted share, during the same period last year,
an increase of 133 percent and 135 percent, respectively. Diluted earnings
per
share were positively impacted by the release of valuation allowances related
to
foreign tax credits of $0.32, and were negatively impacted by $0.04 from the
acquisition of eps and other special and transitional costs and $0.03 from
equity-based compensation expense.
Cash
and stock activity
The
Company’s cash, cash equivalents and marketable securities as of June 30, 2006,
were $176.1 million compared to $189.7 million at the end of the second fiscal
quarter. The most recent quarter reflects payment of $16.1 million in connection
with the eps acquisition and approximately $10.8 million for repurchase of
the
Company’s stock, offset by $4.6 million in proceeds from employee stock option
exercises. Net operating cash flow for the third quarter was $4.5 million.
During
the quarter the Company repurchased 280,645 shares of its common stock. Through
June
30,
2006, the Company has repurchased a total of 2,235,731 shares for approximately
$57.8 million. During the quarter the Company issued 330,827 shares in
connection with the eps acquisition. Total shares outstanding were 37.7 million
as of June 30, 2006.
Backlog
Backlog
for the coming 12 months was $258.2 million as of June 30, 2006, as compared
to
$257.5 million for the quarter ended March 31, 2006. The monthly recurring
portion of backlog, which includes monthly license fees, maintenance fees and
facilities management fees, amounted to $191.6 million. The non-recurring
portion of backlog, which totaled $66.6 million, includes other software license
fees and services.
As
of
June 30, 2006, the Company’s estimated 60-month backlog was $1.092 billion. For
comparison purposes, as of March 31, 2006, the Company’s estimated 60-month
backlog was $1.050 billion.
Channel
highlights
The
Company added seven new customers during the quarter and sold 20 new
applications to existing customers. Another 12 customers licensed capacity
upgrades valued at $100,000 or more.
Americas
revenue of $47.0 million compared to $42.5 million for the third quarter of
fiscal 2005. The Americas revenue included U.S. revenue of $29.3 million and
non-U.S. revenue of $17.7 million compared to $31.6 million and $10.9 million,
respectively, for the same period last year. During the third quarter the
Company licensed its ACI Payments Manager software to a top five U.S. bank,
licensed the ACI Retail Commerce Server to a major retailer in Puerto Rico,
and
licensed major capacity upgrades to seven customers including a top 10 U.S.
bank. ABN AMRO in Brazil, a user of ACI’s fraud detection software, was recently
acknowledged with an industry award for having that country’s best fraud
detection operation.
Revenues
for the Europe/Middle East/Africa region were $29.7 million compared to $27.6
million for the same period last year. Key sales included the licensing of
BASE24-es for Enhanced Authorization at a top five bank in the Netherlands
and
at a top card processor in Italy, licensing of ACI Proactive Risk Manager at
banks in France and Bulgaria, the sale of ACI Smart Chip Manager at a major
Italian bank, and the licensing of a major capacity upgrade of ACI Communication
Services at a top five bank in the United Kingdom.
Asia/Pacific
revenues were $8.1 million compared to $7.9 million for the third quarter of
2005. Major sales in the region included the licensing of BASE24-es at the
largest bank in the Philippines and at a major bank in Malaysia, and a
significant capacity upgrade at a major bank in Thailand.
Annual
Guidance
The
Company’s revenue guidance for 2006 remains at a range of $348 million to $360
million. The Company has revised its diluted earnings per share estimate for
fiscal 2006 from a range of $1.51 to $1.63 to a range of $1.78 to $1.90. The
revised earnings per share estimate takes into account the addition of $0.32
from the release of valuation allowances related to foreign tax credits, offset
by $0.04 related to the eps acquisition and other M&A activity and $0.01
related to globalization initiatives in the third and fourth
quarters.
The
Company’s long-term objectives continue to be double-digit annual revenue growth
and 12 to 15 percent annual growth in diluted earnings per share.
TSA
will
hold a conference call at 5 p.m. EDT today (4 p.m. CDT) to discuss results
of
the quarter. Interested persons may access a real-time audio broadcast of the
teleconference at www.tsainc.com/investors.
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 in more than 1,990 product
systems in 83 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 may include
words or phrases such as the Company “believes,” “will”, “expects,” “looks
forward to,” and words and phrases of similar impact, and include but are not
limited to statements regarding future operations, business strategy and
business environment and specifically include amounts estimated in the 12-month
and 60-month backlogs, the Company’s revenue and earnings guidance, and the
Company’s long-term revenue and earnings growth objectives.
The
forward-looking statements are made pursuant to safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
in
this press release include, but are not limited to, statements regarding
the:
| · |
Company’s
12-month and 60-month backlog
estimates
|
| · |
Company’s
calculation of recurring and non-recurring
backlog
|
| · |
Company's
revenues and EPS estimates for fiscal
2006
|
| · |
Company’s
long-term objectives of double-digit annual revenue growth and 12
to 15%
annual growth in diluted earnings per
share
|
| · |
Company’s
belief that refining its global infrastructure will be a critical
component of driving growth for the Company and that these efforts
will
help the Company maximize productivity as it seeks new market
opportunities and continue providing world-class support for its
mission-critical solutions
|
| · |
Company’s
belief that the acquisition of eps Electronic Payment Systems AG
gives it
an excellent platform to satisfy the region’s need for payment
solutions
|
| · |
Company’s
belief that establishing a new subsidiary in Ireland and the remote
software development operations in Romania and elsewhere will provide
the
Company with low-cost centers of expertise and ensure that the Company
remains price-competitive in supporting a growing international customer
base
|
| · |
Company’s
belief that it continues to be well-positioned in the market as it
engages
with major banks, retailer and processors in identifying solutions
to
complex, multi-region and multi-year
opportunities
|
| · |
Company’s
belief that it may, from time to time, adjust valuation allowances
against
deferred tax assets
|
| · |
Company’s
belief that the Company’s estimated tax rate could change based on
continuing tax optimization efforts
|
Any
or
all of the forward-looking statements may turn out to be wrong. They can be
affected by the judgments and estimates underlying such 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.
In
addition, the Company disclaims any obligation to update any forward-looking
statements after the date of this release.
All
of
the foregoing forward-looking statements are expressly qualified by the risk
factors discussed in the Company’s filings with the Securities and Exchange
Commission. For a detailed discussion of these risk factors, parties that are
relying on the forward-looking statements should review the Company's filings
with the Securities and Exchange Commission, including the Company's Form 10-K
filed on December 14, 2005, the Company’s Form 10-Q filed on February 9,
2006, the
Company’s Form 10-Q filed on May 10, 2006 and
specifically the section entitled “Factors That May Affect the Company's Future
Results or the Market Price of the Company's Common Stock.”
The
risks
identified in the Company’s filings with the Securities and Exchange Commission
include:
| · |
Risks
inherent in making an estimate of the Company's 12-month and 60-month
backlog which involve substantial judgment and
estimates
|
| · |
Risks
associated with tax positions taken by the Company which require
substantial judgment and with which taxing authorities may not agree
|
| · |
Risks
associated with the class action lawsuit against the Company and
certain
former officers of the Company relating to its restatement of prior
consolidated financial results, including the adequacy of insurance
coverage and the possibility of additional
litigation
|
| · |
Risks
associated with litigation in the software industry regarding intellectual
property rights
|
| · |
Risks
associated with the Company's ability to protect its proprietary
rights
|
| · |
Risks
associated with the Company's concentration of business in the financial
services industry
|
| · |
Risks
associated with fluctuations in quarterly operating results and
resulting
stock price volatility
|
| · |
Risks
associated with conducting international
operations
|
| · |
Risks
regarding the Company’s new BASE24-es
product
|
| · |
Risks
associated with the Company's dependence on its BASE24
solution
|
| · |
Risks
associated with the Company's dependence on the licensing of software
products that operate on Hewlett-Packard NonStop
servers
|
| · |
Risks
associated with the complexity of the Company’s software products
|
| · |
Risks
associated with the Company's acquisition of new products and services
or
enhancement of existing products and services through acquisitions
of
other companies, product lines, technologies and personnel, or through
investments in other companies
|
| · |
Risks
associated with the acquisition of S2 Systems and the integration
of its
operations and customers, including, without limitation, the risks
described in the Company’s Form 8-K filed July 1,
2005
|
| · |
Risks
associated with new accounting standards, or revised interpretations
or
guidance regarding existing
standards
|
| · |
Risks
associated with the assessment and maintenance of internal controls
over
the Company’s financial reporting
|
Backlog
Estimates
The
Company’s 12-month
and 60-month backlog estimates are based on the Company's judgment about future
events which, as described above, involve a number of risks and uncertainties.
The Company estimates backlog using the methodology described in the Company's
Form 10-Q filed on May 10, 2006 in the section entitled "Backlog" under Item
2.
-- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF
OPERATIONS -- and on the Company's website at www.tsainc.com.
FINANCIAL
HIGHLIGHTS TO FOLLOW
|
TRANSACTION
SYSTEMS ARCHITECTS, INC.
|
||||||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
(in
thousands)
|
||||||||
|
June
30,
|
September
30,
|
|||||||
|
2006
|
2005
|
|||||||
|
(unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$
|
108,365
|
$
|
83,693
|
||||
|
Marketable
securities
|
67,725
|
72,819
|
||||||
|
Billed
receivables, net
|
62,324
|
63,530
|
||||||
|
Accrued
receivables
|
9,992
|
5,535
|
||||||
|
Recoverable
income taxes
|
-
|
3,474
|
||||||
|
Deferred
income taxes, net
|
3,103
|
2,552
|
||||||
|
Other
|
13,740
|
13,009
|
||||||
|
Total
current assets
|
265,249
|
244,612
|
||||||
|
Property
and equipment, net
|
9,234
|
9,089
|
||||||
|
Software,
net
|
11,044
|
4,930
|
||||||
|
Goodwill
|
88,411
|
66,169
|
||||||
|
Other
intangible assets, net
|
17,985
|
13,573
|
||||||
|
Deferred
income taxes, net
|
29,125
|
21,884
|
||||||
|
Other
|
6,288
|
3,123
|
||||||
|
Total
assets
|
$
|
427,336
|
$
|
363,380
|
||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Current
portion of debt - financing agreements
|
$
|
78
|
$
|
2,165
|
||||
|
Accounts
payable
|
6,960
|
9,521
|
||||||
|
Accrued
employee compensation
|
15,794
|
19,296
|
||||||
|
Income
taxes payable
|
8,362
|
-
|
||||||
|
Deferred
revenue
|
78,808
|
81,374
|
||||||
|
Accrued
and other liabilities
|
19,638
|
11,662
|
||||||
|
Total
current liabilities
|
129,640
|
124,018
|
||||||
|
Debt
- financing agreements
|
-
|
154
|
||||||
|
Deferred
revenue
|
16,561
|
20,450
|
||||||
|
Other
|
2,638
|
1,640
|
||||||
|
Total
liabilities
|
148,839
|
146,262
|
||||||
|
Stockholders'
equity:
|
||||||||
|
Common
stock
|
204
|
202
|
||||||
|
Treasury
stock, at cost
|
(79,305
|
)
|
(68,596
|
)
|
||||
|
Additional
paid-in capital
|
292,322
|
274,344
|
||||||
|
Retained
earnings
|
73,813
|
20,329
|
||||||
|
Accumulated
other comprehensive loss
|
(8,537
|
)
|
(9,161
|
)
|
||||
|
Total
stockholders' equity
|
278,497
|
217,118
|
||||||
|
Total
liabilities and stockholders' equity
|
$
|
427,336
|
$
|
363,380
|
||||
|
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,
|
|||||||||||
|
2006
|
2005
|
2006
|
2005
|
|||||||||||
|
Revenues:
|
||||||||||||||
|
Software
license fees
|
$
|
41,955
|
$
|
37,656
|
$
|
133,077
|
$
|
128,415
|
||||||
|
Maintenance
fees
|
25,989
|
24,938
|
76,053
|
69,667
|
||||||||||
|
Services
|
16,820
|
15,409
|
50,542
|
36,153
|
||||||||||
|
Total
revenues
|
84,764
|
78,003
|
259,672
|
234,235
|
||||||||||
|
Expenses:
|
||||||||||||||
|
Cost
of software license fees
|
7,895
|
6,539
|
22,335
|
18,170
|
||||||||||
|
Cost
of maintenance and services
|
19,385
|
14,102
|
59,332
|
41,756
|
||||||||||
|
Research
and development
|
10,191
|
9,704
|
29,921
|
29,842
|
||||||||||
|
Selling
and marketing
|
15,896
|
16,183
|
48,437
|
46,852
|
||||||||||
|
General
and administrative
|
15,877
|
16,289
|
48,410
|
44,301
|
||||||||||
|
Total
expenses
|
69,244
|
62,817
|
208,435
|
180,921
|
||||||||||
|
Operating
income
|
15,520
|
15,186
|
51,237
|
53,314
|
||||||||||
|
Other
income (expense):
|
||||||||||||||
|
Interest
income
|
1,641
|
1,279
|
6,154
|
2,727
|
||||||||||
|
Interest
expense
|
(10
|
)
|
(102
|
)
|
(126
|
)
|
(407
|
)
|
||||||
|
Other,
net
|
(227
|
)
|
(453
|
)
|
(239
|
)
|
(1,445
|
)
|
||||||
|
Total
other income (expense)
|
1,404
|
724
|
5,789
|
875
|
||||||||||
|
Income
before income taxes
|
16,924
|
15,910
|
57,026
|
54,189
|
||||||||||
|
Income
tax benefit (provision)
|
6,384
|
(5,915
|
)
|
(3,542
|
)
|
(20,078
|
)
|
|||||||
|
Net
income
|
$
|
23,308
|
$
|
9,995
|
$
|
53,484
|
$
|
34,111
|
||||||
|
Earnings
per share information:
|
||||||||||||||
|
Weighted
average shares outstanding:
|
||||||||||||||
|
Basic
|
37,529
|
37,576
|
37,341
|
37,825
|
||||||||||
|
Diluted
|
38,454
|
38,312
|
38,199
|
38,598
|
||||||||||
|
Earnings
per share:
|
||||||||||||||
|
Basic
|
$
|
0.62
|
$
|
0.27
|
$
|
1.43
|
$
|
0.90
|
||||||
|
Diluted
|
$
|
0.61
|
$
|
0.26
|
$
|
1.40
|
$
|
0.88
|
||||||
|
TRANSACTION
SYSTEMS ARCHITECTS, INC.
|
||||||||
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
|
(unaudited
and in thousands)
|
||||||||
|
Nine
Months Ended June 30,
|
||||||||
|
|
|
2006
|
|
|
2005
|
|||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$
|
53,484
|
$
|
34,111
|
||||
|
Adjustments
to reconcile net income to net cash
|
||||||||
|
provided
by operating activities:
|
||||||||
|
Depreciation
|
3,035
|
2,869
|
||||||
|
Amortization
|
2,943
|
714
|
||||||
|
Deferred
income taxes
|
(11,797
|
)
|
(7,007
|
)
|
||||
|
Share-based
compensation expense
|
4,412
|
-
|
||||||
|
Tax
benefit of stock options exercised
|
1,456
|
2,736
|
||||||
|
Changes
in operating assets and liabilities:
|
||||||||
|
Billed
and accrued receivables, net
|
293
|
4,325
|
||||||
|
Other
current assets
|
(33
|
)
|
(3,131
|
)
|
||||
|
Other
assets
|
(3,021
|
)
|
(1,305
|
)
|
||||
|
Accounts
payable
|
(3,378
|
)
|
1,025
|
|||||
|
Accrued
employee compensation
|
(3,855
|
)
|
(110
|
)
|
||||
|
Accrued
liabilities
|
246
|
896
|
||||||
|
Current
income taxes
|
12,022
|
14,531
|
||||||
|
Deferred
revenue
|
(8,210
|
)
|
(1,490
|
)
|
||||
|
Other
current and noncurrent liabilities
|
107
|
300
|
||||||
|
Net
cash provided by operating activities
|
47,704
|
48,464
|
||||||
|
Cash
flows from investing activities:
|
||||||||
|
Purchases
of property and equipment
|
(3,133
|
)
|
(3,170
|
)
|
||||
|
Purchases
of software
|
(2,401
|
)
|
(1,347
|
)
|
||||
|
Purchases
of marketable securities
|
(50,937
|
)
|
(76,875
|
)
|
||||
|
Sales
of marketable securities
|
56,038
|
36,166
|
||||||
|
Acquisitions
of businesses, net of cash acquired
|
(13,139
|
)
|
-
|
|||||
|
Net
cash used in investing activities
|
(13,572
|
)
|
(45,226
|
)
|
||||
|
Cash
flows from financing activities:
|
||||||||
|
Proceeds
from issuance of common stock
|
909
|
736
|
||||||
|
Proceeds
from exercises of stock options
|
11,608
|
8,489
|
||||||
|
Excess
tax benefit of stock options exercised
|
2,321
|
-
|
||||||
|
Purchases
of common stock
|
(24,688
|
)
|
(28,897
|
)
|
||||
|
Payments
on debt - financing arrangements
|
(2,949
|
)
|
(5,943
|
)
|
||||
|
Other
|
(15
|
)
|
402
|
|||||
|
Net
cash used in financing activities
|
(12,814
|
)
|
(25,213
|
)
|
||||
|
Effect
of exchange rate fluctuations on cash
|
3,354
|
792
|
||||||
|
Net
increase (decrease) in cash and cash equivalents
|
24,672
|
(21,183
|
)
|
|||||
|
Cash
and cash equivalents, beginning of period
|
83,693
|
134,198
|
||||||
|
Cash
and cash equivalents, end of period
|
$
|
108,365
|
$
|
113,015
|
||||