STRATEGIC PARTNERS
June 4, 2002
SCOTTSDALE, Ariz. -- Citing a combination of longer than expected sales cycles, economic and political uncertainties, delayed buying decisions and product cancellations, eFunds Corporation (Nasdaq: EFDS) said that revenue and earnings per share for its second quarter ending June 30, 2002, and full year 2002 will be below previous expectations.
Revenue for the second quarter is now expected to be in the range of $130 million to $134 million. The company expects to incur, but cannot presently quantify, a restructuring charge in the second quarter of 2002 related to expense-reduction initiatives and possible product-line consolidations. Excluding this charge, diluted earnings per share are expected to be in the range of 11 cents to 18 cents for the quarter.
Based on the current outlook, full-year 2002 revenue is expected to be in the range of $520 million to $535 million. This full-year revenue outlook does not include anticipated acquisitions of additional ATM management assets during the balance of the year.
Earnings for the full year, excluding the anticipated second quarter restructuring charge, are expected to be in the range of 55 cents to 80 cents per diluted share.
The company previously anticipated revenue and reported diluted earnings per share for the second quarter to be in the range of $139 million to $145 million and 24 cents to 26 cents, respectively. For the full year, eFunds had targeted revenues of $624 million and reported diluted earnings of $1.18 per share.
According to CEO Gus Blanchard, achieving eFunds' original targets for 2002 required a number of significant new sales to occur in each quarter, with the second quarter especially critical in building a higher revenue base for the year.
"In recent weeks, we have seen major financial and retail customers postpone or delay indefinitely decisions that were expected to collectively deliver more than $45 million in revenues in 2002," Blanchard said in a news release. "These delays have affected expected sales of our eCheck, customer acquisition and retention solutions, DebitReport and BPO offerings."
Also, Blanchard added, the company is experiencing pricing pressure from some of its larger EFT customers, the rate of organic growth from the new ATM management business has ramped up more slowly than expected.
eFunds has initiated a six-week intensive examination of each of its business lines, product development plans and expense streams. When completed by mid-July, these will form the basis for a more detailed outlook for the remainder of 2002, according to the release.
The company also announced that, in anticipation of Blanchard's previously disclosed retirement plans, it has hired an executive search firm to assist in finding a successor. In addition, Chief Financial Officer Paul Bristow will leave the company on June 30.
