News

Carreker Corporation to remain on Nasdaq

February 23, 2003

DALLAS -- Carreker Corporation (Nasdaq: CANIE) says that the Nasdaq Listing Qualifications Panel has granted an exception for Carreker's securities to continue trading on The Nasdaq National Market.

The company was in danger of delisting because it has not yet filed its fiscal 2002 third quarter and annual results.

According to a news release, the Nasdaq exception requires Carreker to file its fiscal 2002 third quarter Form 10-Q, annual report on Form 10-K, and all other necessary restatements on or before April 30. The company expects to fulfill this requirement, according to the release.

After an internal investigation, Carreker in late January decided to restate its financials from 1998 through 2002, primarily to revise its accounting for certain licenses and service revenues.

Carreker's situation appears similar to a recent decision by Omaha, Neb.-based Transaction Systems Architects, parent of ACI Worldwide, to restate its financial results going back to 1998. Both Carreker and ACI apparently booked revenue from software licensing at the time agreements were made, even though the fees were collected in installments over several years.

"We expect this revision will tend to spread revenues over multiple periods and should, going forward, provide better visibility into future periods," said Denny Carreker, the company's chairman and chief executive, in the release.

While the company doesn't yet have an estimate on the overall effect of the change, Carreker warned that its sales -- like those of other financial technology companies -- have been negatively impacted by a slowdown in bank technology spending.

Carreker said in the release that the slowdown, combined with a soft economy and increasing competition, continue to affect his company's sales.

Carreker has also incurred "significant expenses" associated with both its internal investigation into how and when revenues were reported and its resulting decision to restate earnings going back to 1998, he said in the release.

On a more positive note, Carreker said his company has paid down its long-term debt by $10 million since the second quarter, to end the year with $25 million in long-term debt and more than $24 million in cash.

After reducing its workforce by 5 percent last November, the company is "continuing to right size the business with additional cost reduction measures and organizational changes that we believe will help us meet our strategic objectives," Carreker said in the release.

"I can't recall a time in our 25 years of business that we've faced so many challenges in such a short period of time," he said.

Earlier this month, a class-action lawsuit was filed against Carreker in Northern Texas District Court, contending that the company issued "false and misleading statements" to the market between May of 1998 and December of 2002, resulting in inflated revenues.

Carreker's stock was trading at $2.39, a 52-week low, the afternoon of Feb. 24. Its 52-week high was $11.73.