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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Tier Reit, Inc. | NYSE:TIER | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 28.88 | 0 | 01:00:00 |
From Jul 2019 to Jul 2024
Tier Technologies, Inc. (Nasdaq: TIER), a leading provider of electronic payment solutions for the biller direct market, today announced results for the quarter ended December 31, 2009 and provided updates on continuing strategic growth initiatives.
Results of Operations
First Quarter Fiscal 2010 Results
For the quarter ended December 31, 2009, Tier reported revenues from Continuing Operations of $32.8 million, a 10.2% increase over the same quarter last year. Net loss from Continuing Operations was $(0.7) million, or $(0.04) per fully diluted share.
Continuing Operations include Electronic Payment Solutions, or EPS, and certain wind-down businesses. On a standalone basis, our EPS business reported quarterly revenues of $31.9 million, or a 13.0% increase over the same quarter last year. Our general, administrative, selling and marketing expenses, which support our Continuing Operations, were $7.9 million, consistent with the same quarter last year.
Management’s Comments
Ronald L. Rossetti, Chairman and Chief Executive Officer of Tier Technologies stated, “I am pleased to report adjusted EBITDA from EPS Operations for the first quarter of FY2010 of $0.8 million as compared with a loss in adjusted EBITDA from EPS Operations of ($1.0) million in the first quarter of FY2009.”
“Our concentration today in our EPS “biller direct” business is to continue increasing EPS Net Revenue growth over a fixed cost platform,” said Rossetti. “What is very encouraging to me and should be to our stockholders is that despite the fact that over 60% of our current EPS business is tied directly to the collection of tax revenue, which depending on the taxing authority has experienced 10-30% decreases in revenue, we were able to improve our financial performance. In fact, we increased our EPS Net Revenue in the quarter by 29%, or $2.2 million, and increased adjusted EBITDA from EPS Operations by $1.8 million. Stated differently, we delivered 82% of our increase in EPS Net Revenues through to adjusted EBITDA from EPS Operations. This improvement was the result of increasing our profitability per transaction and driving substantial transaction growth, while reducing overhead and holding platform costs relatively flat. For the quarter ended December 31, 2009 our EPS transactions grew by 65% and our EPS gross margin (gross sales less direct and other costs) increased by 270 basis points, as compared with the prior year quarter.”
Tier defines EPS Net Revenue as revenue less wind-down revenue, discount fees, processing and interchange costs and adjusted EBITDA from EPS Operations as net income from our EPS business before interest expense net of interest income, income taxes, depreciation and amortization and stock-based compensation in both equity and cash.
The following table shows a reconciliation of revenue to EPS Net Revenue for the three months ended December 31, 2009 and 2008 (in thousands):
Three months ended December 31, 2009 2008 Change Revenue $ 32,768 $ 29,740 $ 3,028 Less Wind-down Revenue 848 1,499 (651 ) EPS Gross Revenue 31,920 28,241 3,679 Discount Fees, Interchange & Processing Costs 22,348 20,835 1,513 EPS Net Revenue $ 9,572 $ 7,406 $ 2,166 Net Revenue Percentage Increase 29.2 %The following table shows a reconciliation of net income/(loss) from Continuing Operations to adjusted EBITDA from EPS Operations and adjusted EBITDA from Continuing Operations for the three months ended December 31, 2009 and 2008 (in thousands):
EPS Wind-down Continuing Operations Quarter 1 Quarter 1 Quarter 1 FY10 FY09 Change FY10 FY09 Change FY10 FY09 Change Net Income/(Loss) $ (930 ) $ (2,266 ) $ 1,336 $ 209 $ 374 $ (165 ) $ (721 ) $ (1,892 ) $ 1,171 Adjustments: Depreciation/Amortization 1,335 979 356 273 504 (231 ) 1,608 1,483 125 Stock/Cash based Comp 507 468 39 ― ― ― 507 468 39 Taxes ― 1 (1 ) ― ― ― ― 1 (1 ) Less: Interest Income, net 139 192 (53 ) ― ― ― 139 192 (53 ) Adjusted EBITDA $ 773 $ (1,010 ) $ 1,783 $ 482 $ 878 $ (396 ) $ 1,255 $ (132 ) $ 1,387EPS revenues, EPS Net Revenues, adjusted EBITDA from EPS Operations and adjusted EBITDA from Continuing Operations are non-GAAP financial measures. Tier’s management believes these measures are useful for evaluating performance against peer companies within its industry, and provide investors with additional transparency with respect to financial measures used by management in its financial and operational decision-making. Non-GAAP financial measures should not be considered a substitute for the reported results prepared in accordance with US GAAP. Tier’s definition used to calculate non-GAAP financial measures may differ from those used by other companies.
Liquidity
As of December 31, 2009, Tier had $57.7 million in cash and marketable securities, and $7.4 million in restricted investments, for a total of $65.1 million. Tier currently holds $30.1 million in auction rate securities as long-term investments. These investments are revenue bonds and asset-backed notes issued by state agencies. The investments are AAA-rated and collateralized with student loans and guaranteed under the Federal Family Education Loan Program. Tier has no short-term or long-term debt.
Conference Call
Tier will host a conference call Tuesday, February 9, 2010 at 5:00 p.m. Eastern Time to discuss these results. To access the conference call, please dial (888)335-3240 and provide conference ID # 54925076. The conference call is also available live via the Internet at www.tier.com. A replay will be available at 5:00 p.m. Eastern Time on Wednesday, February 10, 2010 at www.tier.com or by calling (800) 642-1687 and entering conference ID # 54925076. The replay will be available until 11:45 p.m. Eastern Time on February 23, 2010.
About Tier Technologies, Inc.
Tier Technologies, Inc. is a leading provider of electronic payment solutions in the biller direct market. Headquartered in Reston, Virginia, the company provides over 3,900 electronic payment clients in all 50 states and the District of Columbia with enhanced payment services that include multiple payment choices, payment channels, and bill payment products and services. Tier serves clients in multiple markets including federal, state, and local governments, educational institutions, utilities and commercial clients primarily through its wholly-owned subsidiary, Official Payments Corporation. For more information, see www.tier.com and www.officialpayments.com.
Statements made in this press release that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to future events or Tier’s future financial and/or operating performance and generally can be identified as such because the context of the statement includes words such as “may,” “will,” “intends,” “plans,” “believes,” “anticipates,” “expects,” “estimates,” “shows,” “predicts,” “potential,” “continue,” or “opportunity,” the negative of these words or words of similar import. Tier undertakes no obligation to update any such forward-looking statements. Each of these statements is made as of the date hereof based only on current information and expectations that are inherently subject to change and involve a number of risks and uncertainties. Actual events or results may differ materially from those projected in any of such statements due to various factors, including, but not limited to: general economic conditions, which affect Tier’s financial results in all our markets, which we refer to as “verticals,” including our property tax vertical; the timing and the cost of consolidating our payment processing platforms; our ability to grow EPS Net Revenue while keeping costs relatively fixed; the potential loss of funding by clients, including due to government budget shortfalls or revisions to mandated statutes; the timing, initiation, completion, renewal, extension or early termination of client projects; our ability to realize revenues from our business development opportunities; the impact of governmental investigations or litigation; and unanticipated claims as a result of project performance, including due to the failure of software providers or subcontractors to satisfactorily complete engagements. For a discussion of these and other factors which may cause our actual events or results to differ from those projected, please refer to our quarterly report on Form 10-Q for our fiscal quarter ended December 31, 2009, filed with the SEC.
TIER TECHNOLOGIES, INC. Consolidated Balance Sheets (in thousands)December 31,2009
September 30,2009
(unaudited) ASSETS: Current assets: Cash and cash equivalents $ 26,577 $ 21,969 Investments in marketable securities 1,000 4,499 Restricted investments 1,361 1,361 Accounts receivable, net 4,780 4,790 Settlements receivable, net 7,994 6,272 Prepaid expenses and other current assets 2,659 2,239 Total current assets 44,371 41,130 Property, equipment and software, net 8,470 7,990 Goodwill 17,345 17,329 Other intangible assets, net 10,906 12,038 Investments in marketable securities 30,081 31,169 Restricted investments 6,000 6,000 Other assets 709 571 Total assets $ 117,882 $ 116,227 LIABILITIES AND SHAREHOLDERS’ EQUITY: Current liabilities: Accounts payable $ 373 $ 84 Settlements payable 9,808 9,591 Accrued compensation liabilities 2,037 3,213 Accrued discount fees 9,697 5,343 Other accrued liabilities 2,465 3,425 Deferred income 778 861 Total current liabilities 25,158 22,517 Other liabilities 1,266 1,121 Total liabilities 26,424 23,638 Commitments and contingencies Shareholders’ equity:Preferred stock, no par value; authorized shares: 4,579; no shares issued and outstanding
— —Common stock and paid-in capital; shares authorized: 44,260; shares issued: 20,687 and 20,687; shares outstanding: 18,151 and 18,238
192,423 192,030 Treasury stock—at cost, 2,536 and 2,449 shares (21,020 ) (20,271 ) Accumulated deficit (79,945 ) (79,170 ) Total shareholders’ equity 91,458 92,589 Total liabilities and shareholders’ equity $ 117,882 $ 116,227 TIER TECHNOLOGIES, INC. Consolidated Statements of Operations Three months endedDecember 31, (in thousands, except per share data) 2009 2008 Revenues $ 32,768 $ 29,740 Costs and expenses: Direct costs 24,092 22,418 General and administrative 6,327 6,630 Selling and marketing 1,601 1,316 Depreciation and amortization 1,608 1,459 Total costs and expenses 33,628 31,823 Loss from continuing operations before other income/(loss) and income taxes (860 ) (2,083 ) Other income/(loss): Gain/(loss) on investments 12 (112 ) Interest income, net 127 304 Total other income 139 192 Loss from continuing operations before income taxes (721 ) (1,891 ) Income tax provision — 1 Loss from continuing operations (721 ) (1,892 ) Loss from discontinued operations, net (54 ) (3,262 ) Net loss $ (775 ) $ (5,154 ) Loss per share—Basic and diluted: From continuing operations $ (0.04 ) $ (0.10 ) From discontinued operations — (0.16 ) Loss per share—Basic and diluted $ (0.04 ) $ (0.26 ) Weighted average common shares used in computing: Basic and diluted loss per share 18,156 19,735 TIER TECHNOLOGIES, INC. Consolidated Statements of Cash Flows Three months endedDecember 31,
(in thousands) 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (775 ) $ (5,154 ) Less: Loss from discontinued operations, net (54 ) (3,262 ) Loss from continuing operations, net (721 ) (1,892 ) Non-cash items included in net loss: Depreciation and amortization 1,608 1,483 Provision for doubtful accounts 299 39 Deferred rent 26 — Share-based compensation 507 468 (Gain)/loss on trading securities (12 ) 112 Other (4 ) 25 Net effect of changes in assets and liabilities: Accounts and settlements receivable, net (2,011 ) (1,727 ) Prepaid expenses and other assets (737 ) (602 ) Accounts and settlements payable and accrued liabilities 2,737 1,308 Income taxes receivable (77 ) (61 ) Deferred income (83 ) — Cash provided by (used in) operating activities from continuing operations 1,532 (847 ) Cash used in operating activities from discontinued operations (54 ) (3,209 ) Cash provided by (used in) operating activities 1,478 (4,056 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available-for-sale securities (1,000 ) (11,470 ) Maturities of available-for-sale securities 4,499 2,401 Sales of trading securities 1,100 — Maturities of restricted investments — 500 Purchase of equipment and software (956 ) (480 ) Additions to goodwill—ChoicePay acquisition (16 ) — Collection on note receivable 261 — Proceeds from sale of discontinued operations — 205Cash provided by (used in) investing activities from continuing operations
3,888 (8,844 ) Cash used in investing activities from discontinued operations — (437 ) Cash provided by (used in) investing activities 3,888 (9,281 ) CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of company stock (749 ) — Capital lease obligations and other financing arrangements (9 ) (5 ) Cash used in financing activities (758 ) (5 ) Net increase (decrease) in cash and cash equivalents 4,608 (13,342 ) Cash and cash equivalents at beginning of period 21,969 47,735 Cash and cash equivalents at end of period $ 26,577 $ 34,393 TIER TECHNOLOGIES, INC. Consolidated Statement of Operations—Continuing Operations (in thousands) EPS Wind-down Total Three months ended December 31, 2009: Revenues $ 31,920 $ 848 $ 32,768 Costs and expenses: Direct costs 23,832 260 24,092 General and administrative 6,221 106 6,327 Selling and marketing 1,601 — 1,601 Depreciation and amortization 1,335 273 1,608 Total costs and expenses 32,989 639 33,628 (Loss)/income from continuing operations before other income and income taxes (1,069 ) 209 (860 ) Other income/(expense): Interest income 127 — 127 Gain on investments 12 — 12 Total other income 139 — 139 (Loss)/income from continuing operations before taxes (930 ) 209 (721 ) Income tax provision — — — (Loss)/income from continuing operations $ (930 ) $ 209 $ (721 ) (in thousands) EPS Wind-down Total Three months ended December 31, 2008: Revenues $ 28,241 $ 1,499 $ 29,740 Costs and expenses: Direct costs 21,838 580 22,418 General and administrative 6,568 62 6,630 Selling and marketing 1,313 3 1,316 Depreciation and amortization 979 480 1,459 Total costs and expenses 30,698 1,125 31,823 (Loss)/income from continuing operations before other income/(loss) and income taxes (2,457 ) 374 (2,083 ) Other income/(loss): Interest income, net 304 — 304 Loss on investment (112 ) — (112 ) Total other income 192 — 192 (Loss)/income from continuing operations before taxes (2,265 ) 374 (1,891 ) Income tax provision 1 — 1 (Loss)/income from continuing operations $ (2,266 ) $ 374 $ (1,892 )
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