Checkfree Corp (MM) (NASDAQ:CKFR)
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CheckFree Corporation Calls Convertible Subordinated Notes
ATLANTA, Nov. 12 /PRNewswire-FirstCall/ -- CheckFree Corporation today
announced it is calling for redemption on December 12, 2003, all of its 6.5%
Convertible Subordinated Notes due 2006 (the "Notes"). The Notes were originally
issued on November 29, 1999, in the aggregate principal amount of $172,500,000,
and such amount is currently outstanding. The CUSIP numbers for the Notes are
162816 AA0 and 162816 AC6.
Prior to 5:00 p.m. (EST) on December 11, 2003, holders may convert their Notes
called for redemption into shares of CheckFree Corporation common stock at a
price of $73.20 per share, or 13.6612 shares of CheckFree common stock per
$1,000 principal amount of the Notes. Cash will be paid in lieu of fractional
shares. On November 11, 2003, the last reported sale price of CheckFree common
stock on the NASDAQ National Market was $26.85 per share.
Alternatively, holders may have their Notes redeemed on December 12, 2003. Upon
redemption, holders will receive a total of $1,029.886 per $1,000 principal
amount of the Notes, consisting of the redemption price of $1,027.90 plus
accrued and unpaid interest thereon from December 1, 2003 through December 11,
2003 of $1.986. Interest on the Notes for the six months ended November 30,
2003, will be paid on December 1, 2003, as scheduled pursuant to the terms of
the Indenture governing the Notes. Any Notes called for redemption and not
converted on or before 5:00 p.m. (EST) on December 11, 2003, will be
automatically redeemed on December 12, 2003, and no further interest will
accrue.
"Calling the Notes eliminates interest payments of $11.2 million per year
through November 2006, or a total of $33.3 million for the remaining life of the
bonds," said CheckFree's Chief Financial Officer David Mangum. "With total cash
and investments of $424.4 million as of September 30, 2003, we believe this is
an appropriate time to call the Notes."
"The Company expects to incur a one-time pre-tax charge to GAAP earnings of $7.2
million for the second quarter of fiscal 2004, representing the cost of the call
premium and remaining unamortized issuance costs," Mangum continued. "As a
result, we now expect a GAAP loss per share in the second quarter of $0.01 to
$0.04, rather than the earnings per share of $0.01 to $0.04 we previously
announced, and underlying earnings per share to remain unchanged for the
quarter. For the full year, our GAAP expectation of breakeven to modestly
positive remains unchanged, as the reduction in interest expense will generally
offset the one-time charge. And we expect an additional $0.03 of underlying
earnings per share for fiscal 2004 as a result of the interest expense
reduction."
A Notice of Redemption is being sent to registered holders of the Notes. Copies
of the Notice of Redemption may be obtained from the paying agent, Wells Fargo
Bank Minnesota, N.A., at 1-800-344-5128.
About CheckFree ( http://www.checkfreecorp.com/ )
CheckFree (NASDAQ:CKFR) is the leading provider of financial electronic commerce
services and products. Founded in 1981 and celebrating its 23rd year in
e-commerce, CheckFree is comprised of three divisions: Electronic Commerce,
Software, and Investment Services. CheckFree launched the first fully integrated
electronic billing and payment solution in 1997. In the quarter ended September
30, 2003, more than 11 million consumers initiated online payments through
services offered by CheckFree's Electronic Commerce division. Electronic billing
and payment is available through more than a thousand financial services
organizations, including banks, brokerage firms, Internet portals and personal
financial management (PFM) software. At these sites, consumers are able to
electronically receive and pay about 300 bills, representing the bills most
common to a U.S. household. CheckFree delivers nearly 15 million e-bills each
quarter. CheckFree Investment Services provides a broad range of investment
management services to thousands of financial institutions nationwide. The
division's clients manage more than 1.3 million portfolios totaling more than
$700 billion in assets.
CheckFree's Software division provides solutions through three operating units:
CheckFree ACH Solutions, CheckFree Financial and Compliance Solutions (CFACS),
and CheckFree i-Solutions. CheckFree ACH Solutions provides software and
services that are used to process more than two-thirds of the nation's nine
billion Automated Clearing House payments, while CFACS provides reconciliation
and compliance software and services to more than 500 organizations in the
banking, brokerage, utility, retail, insurance and credit card industries, among
others. CheckFree i-Solutions is the leading provider of e-billing and
e-statement software and services for both business-to- consumer and
business-to-business applications, with more billers as clients than all of its
competitors have combined.
Certain of CheckFree's statements in this press release are not purely
historical, and as such are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. These include statements
regarding management's intentions, plans, beliefs, expectations or projections
of the future, and include statements in the document regarding forecasts and
expectations of earnings for the second quarter of fiscal 2004 and for the
fiscal year 2004 as a whole (paragraphs 4 and 5). Forward-looking statements
involve risks and uncertainties, including without limitation, the various risks
inherent in CheckFree's business, and other risks and uncertainties detailed
from time to time in CheckFree's periodic reports filed with the Securities and
Exchange Commission, including CheckFree's Annual Report on Form 10-K for the
year ended June 30, 2003 (filed September 15, 2003). One or more of these
factors have affected, and could in the future affect, CheckFree's business and
financial results in future periods, and could cause actual results to differ
materially from plans and projections. There can be no assurance that the
forward-looking statements made in this document will prove to be accurate, and
the issuance of such forward-looking statements should not be regarded as a
representation by CheckFree, or any other person, that the objectives and plans
of CheckFree will be achieved. All forward- looking statements made in this
press release are based on information presently available to management, and
CheckFree assumes no obligation to update any forward-looking statements.
DATASOURCE: CheckFree Corporation
CONTACT: Media relations, Judy DeRango Wicks, +1-678-375-1595, or
, or Investor relations, Tina Moore, +1-678-375-1278, or
, both of CheckFree Corporation
Web site: http://www.checkfreecorp.com/
Company News On-Call: http://www.prnewswire.com/comp/821650.html