â¢ Revenues of $79.0 million versus $69.7 million, a 13 percent increase over the fourth quarter of fiscal 2004
â¢ Diluted earnings per share of $0.24, which included special restructuring charges of $.02 per share, versus $0.26 per share, an 8 percent decrease from the fourth quarter of fiscal 2004
â¢ Twelve-month revenue backlog of $242.6 million versus $229.6 million, a 6 percent increase over the fourth quarter of fiscal 2004
â¢ Signed 12 new customers and 24 new applications during the fourth quarter
â¢ Signed 18 capacity upgrades over $100 thousand during the fourth quarter
â¢ Fiscal 2005 revenues of $313.2 million versus $292.8 million, a 7 percent increase over fiscal year 2004
â¢ Diluted earnings per share of $1.12, which included special charges of $.02 per share, for fiscal 2005 versus $1.23 per share, which included a net one-time tax benefit of $0.28 per diluted share, for fiscal 2004
â¢ Closed acquisition of S2 Systems, Inc. on July 29, 2005
â¢ Announced combination of business units on October 5, 2005
â¢ Initiating fiscal 2006 guidance:
o Revenues range of $340.0 million to $358.0 million
o Fully diluted earnings per share range of $1.32 to $1.46
"We had broad success across all geographies and several product lines in the fourth quarter," said Philip G. Heasley, CEO. "We were pleased to add 12 new customers to the TSA family, and the fact that we signed 18 capacity upgrades during the quarter is evidence of continued growth in the market and our customersâ systems. We closed significant business in the fraud detection, payments engine and settlement arenas during the quarter. In addition, we closed the S2 Systems acquisition and, subsequent to the closing of the fourth quarter, announced that we are restructuring our business to create more focus and efficiency. Our market position remains strong, and we look forward to continued success in fiscal 2006.â
Fourth Quarter Results
The Company signed 12 new customers during the fourth quarter.
â¢ ACI Worldwide added seven new customers. Highlights within the ACI Worldwide business unit include the licensing of BASE24-esâ¢ by a major systems integrator for a managed services offering in Northern Europe; the licensing of WINPAY24â¢ by a top 100 U.S. retailer; the licensing of 18 capacity upgrades over $100 thousand, which included licenses by a top 20 world bank, one of the top five U.S. credit card issuers and the largest bank in India; and new applications with 17 existing customers, including the licensing of ACI Proactive Risk Managerâ¢ by a top 10 world bank to support a large, private label credit card portfolio, the licensing of ACI Payments Managerâ¢ by a top 10 U.S. bank to consolidate multiple legacy settlement systems, the licensing of eCourierâ¢ by one of the key U.S. equity index reporting services, and licenses of the Automated Key Distribution System (AKDS) by several financial institutions.
â¢ Insession Technologies added five customers and licensed seven new applications to existing customers. Demand for Insessionâs transactional data management and web security products continued to be strong, and the unit signed a significant WorkpointÂ® OEM license with one of the leading Internet security firms.
â¢ IntraNet Worldwide signed a five-year extension with a top 20 U.S. bank and licensed additional transaction capacity to a top 20 world bank.
Revenue detail for the quarter is as follows: the Americas' revenues were $42.4 million, as compared to $38.7 million for the fourth quarter of fiscal 2004. The Americas' revenues consisted of U.S. revenues of $29.8 million and Americas' international revenues of $12.6 million, as compared to $29.3 million and $9.4 million, respectively, for the same period last year. Revenues for the Europe/Middle East/Africa region were $26.1 million, as compared to $22.2 million for the fourth quarter of fiscal 2004. Asia-Pacific's revenues were $10.5 million, as compared to $8.8 million for the fourth quarter of 2004. Total international revenues were $49.2 million, or 62 percent of total revenues, as compared to $40.4 million, or 58 percent of total revenues, for the fourth quarter of fiscal 2004.
Revenues were comprised of software license fees of $40.0 million, maintenance fees of $23.8 million and services of $15.2 million. Monthly license fees of $18.1 million, maintenance fees of $23.8 million and $3.0 million of services (facilities management fees) represent recurring revenue.
Operating expenses were $67.9 million, as compared to $57.4 million for the fourth quarter of fiscal 2004. Operating expenses for the fourth quarter of fiscal 2005 include approximately $3.8 million in S2 related expenses, $2.5 million in sales commissions and related selling expenses on strong fourth quarter sales, approximately $1.2 million in special charges from the reorganization of the Companyâs business units and approximately $0.9 million for Sarbanes-Oxley compliance and other corporate initiatives.
Operating income was $11.1 million, with an operating margin of 14.1 percent. This compared to operating income of $12.3 million, with an operating margin of 17.6 percent, for the same period last year. Net income was $9.1 million, or $0.24 per diluted share, compared to $10.0 million, or $0.26 per diluted share in the fourth quarter of fiscal 2004.
The Companyâs effective tax rate for the fourth quarter was 23.4 percent, which reflects a downward adjustment of the annual rate from 37 percent to 34.6 percent.
Operating cash flow was $4.8 million compared to operating cash flow of $13.4 million in the fourth quarter of fiscal 2004. This reduction is primarily a result of the timing of cash collections and the cash effect of the initial integration of the S2 acquisition.
During the quarter, the Company repurchased 156,154 shares of its common stock for approximately $4.1 million. Through September 30, 2005, the Company has repurchased a total of approximately 1.5 million shares for approximately $33.3 million. Total shares outstanding were 37.4 million as of September 30, 2005. The Company's cash, cash equivalents and marketable securities as of September 30, 2005, were $156.5 million.
Revenues for the fiscal year totaled $313.2 million, as compared to $292.8 million for fiscal 2004, an increase of seven percent. Operating income was $64.5 million, as compared to $54.8 million last year, an increase of 18 percent. Net income was $43.2 million, or $1.12 per diluted share, compared to $46.7 million, or $1.23 per diluted share for fiscal 2004, which included a net, one-time tax benefit of $10.6 million, or $.28 per diluted share. Operating cash flow was $53.2 million, as compared to $58.1 million last year, a decrease of eight percent.
As of September 30, 2005, the Company's backlog totaled $242.6 million, up six percent from $229.6 million last year. The recurring portion of backlog, which includes monthly license fees, maintenance fees and facilities management fees, amounted to $173.8 million. The non-recurring portion of backlog, which totaled $68.8 million, includes other software license fees and services.
The Company announced on July 29, 2005 that it had closed its acquisition of S2 Systems, Inc., a global provider of electronic payments and network connectivity software. Subsequent to the end of the fourth quarter, the Company announced that it was combining its three business units into one operating unit to create more market focus, better operating efficiency and improved strategic acquisition integration.
The Company is initiating fiscal 2006 guidance including revenues of $340.0 million to $358.0 million, and fully diluted earnings per share of $1.32 to $1.46.
"We believe that TSA is well-positioned for fiscal 2006 and beyond," added Heasley. "The Company has excellent sales momentum, we continue to invest in market-leading solutions for converging electronic payments, and our worldwide distribution channel is second to none in our market. We look forward to capitalizing on the opportunities ahead of us in the expanding electronic payments market."