Online Resources Posts First Quarter Results

Online Resources Corporation reported financial and operating results for the three months ended March 31, 2007.

The following results include the impact of the acquisition of Princeton eCom on July 3, 2006, and reflect the introduction in 2007 of related acquisition financing costs, not included in 2006.

Revenue for the first quarter of 2007 was $30.8 million, up 85 percent from $16.7 million in first quarter 2006.

Earnings before interest, taxes, depreciation and amortization (Ebitda), a non-GAAP measure, was $6.4 million, an increase of 104 percent compared to $3.1 million in the prior year.

Net loss available to common stockholders was $9.5 million, or a $0.36 loss per diluted share, including approximately $0.41 per diluted share in acquisition related costs. This compares to net income of $0.8 million, or $0.03 per diluted share, in 2006.

Core net loss, a non-GAAP measure, was $0.2 million, or $0.01 per diluted share, including approximately $0.16 per diluted share in acquisition financing costs. In first quarter of 2006, core net income was $1.5 million, or $0.06 per diluted share.

“We posted strong year-over-year revenue and Ebitda growth this quarter, as the benefits of our Princeton eCom acquisition continue to accumulate,” stated Matthew P. Lawlor, chairman and chief executive officer of the Company. “Top line growth was fueled by a healthy increase in payment transactions across the Company, and earnings metrics would also have been in the mid- to highend of our guidance range if we had not incurred approximately $400,000 in higher than expected accounting costs.”

The Company reported seasonally high growth in its key payment operating metrics. On the bank and credit union side of its business, billpay transactions grew 8 percent sequentially. On the ecommerce side of its business, payment transactions grew 17 percent sequentially, for an average of 9 percent total payments growth across the Company. Additionally, unique users of the Company’s services grew 8 percent sequentially, driven largely by an increase in users of biller-direct payments. Lawlor added, “This was a pivotal quarter in which we accomplished some key goals. First, we completed our debt refinancing, significantly lowering future cash interest expense. Second, we achieved the cost synergies we had targeted from the Princeton acquisition, and positioned ourselves for future revenue synergies by integrating a number of products across our market segments. After seeing typical margin declines in the first quarter due to front-loaded annual compensation and benefits costs, we expect to see margins rebound strongly in the second quarter.”

2007 Business Outlook
The Company provided guidance for the second quarter and confirmed its full year 2007 guidance. Guidance does not anticipate the release of any additional tax valuation allowance in 2007, though the Company may do so. These statements are forward-looking, and actual results may differ materially.