Tier Technologies, Inc. (Nasdaq: TIER) today announced results
for the quarter ended December 31, 2008 and provided updates on
continuing strategic growth initiatives.
�Following our strategic review of the company in late 2007 we
committed to restructure the company to increase shareholder value.
That restructuring is now substantially complete with six completed
sales and one signed asset purchase agreement. We are now able to
focus all of our attention and resources on advancing our
electronic payments solutions in the biller direct market,� said
Ronald L. Rossetti, Chairman and Chief Executive Officer of Tier
Technologies.
Nina Vellayan, Chief Operating Officer said, �We are pleased to
have concluded the acquisition of most of the assets of ChoicePay
in late January. We now have a strong and growing Utilities
vertical to add to our Government and Higher Education verticals as
we continue to broaden our market position.�
Mr. Rossetti added, �The ChoicePay technology, products, and
clients are an excellent fit for our long-term strategy and will
contribute to our growth this year. In spite of severe economic
conditions, we experienced performance in our Property Tax market
that was consistent with forecast, and our Utilities and Higher
Education verticals are producing strong growth.�
Conference Call
Tier will host a conference call tonight 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 # 84188515. The
conference call will also be broadcast live via the Internet at
www.tier.com. A replay will be available at Noon on February 10,
2009 at www.tier.com or by calling 800-642-1687 and entering
conference ID # 84188515. The replay will be available until 11:59
p.m. Eastern Time on February 23, 2009.
First Quarter Fiscal 2009 Results
For the quarter ended December�31, 2008, Tier reported revenues
from Continuing Operations of $29.7�million, a 2.7% increase over
the same quarter last year. Net loss from Continuing Operations was
($1.9)�million, or ($0.10) per fully-diluted share.
Continuing Operations include Electronic Payment Processing, or
EPP, and certain wind-down businesses. On a standalone basis, our
core EPP business reported quarterly revenues of $28.2�million, or
a 1.6% increase over the same quarter last year. Our general,
administrative, selling and marketing expenses, which support our
Continuing Operations, were $7.9�million, down $1.3�million over
the same period last year. We expect to see a continued decrease in
these types of expenses as we streamline our operations.
Tier�s Discontinued Operations reported revenues of $4.5�million
for the quarter, down 67.5% from the same quarter last year. The
decrease is primarily due to the sale of several businesses during
fiscal 2008. Net loss from Discontinued Operations was
($3.3)�million for the quarter.
Liquidity
As of December�31, 2008, Tier had $77.1�million in cash and
marketable securities, and $7.4 million in restricted investments.
Tier currently holds $31.2 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.
About Tier Technologies, Inc.
Tier Technologies, Inc. provides federal, state and local
government and other public sector clients with electronic payments
solutions and other transaction processing services. Headquartered
in Reston, Virginia, Tier Technologies serves over 3,300 electronic
payments clients throughout the United States, including federal,
state, and local governments, educational institutions, utilities
and commercial clients. Through its subsidiary, Official Payments
Corp., Tier delivers payments solutions for a wide range of
markets. 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. 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: the impact of governmental
investigations; 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; the Company�s ability to
realize revenues from its business development opportunities; the
timing and completion of the divestment of the Company�s non-core
assets; 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
the Company's annual report on Form 10-K for the fiscal year ended
September 30, 2008 filed with the SEC.
IMPORTANT INFORMATION
Tier Technologies, Inc. plans to file with the SEC and furnish
to its shareholders a Definitive Proxy Statement in connection with
its 2009 Annual Meeting, and advises its security holders to read
the Proxy Statement relating to the 2009 Annual Meeting when it
becomes available, because it will contain important information.
Security holders may obtain a free copy of the Proxy Statement and
other documents (when available) that Tier files with the SEC at
the SEC�s website at www.sec.gov. The Proxy Statement and these
other documents may also be obtained for free from Tier by
directing a request to Tier Technologies, Inc., Attn: Corporate
Secretary, Keith Omsberg, 10780 Parkridge Blvd., 4th Floor, Reston,
VA 20191.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Tier, its directors and named executive officers may be deemed
to be participants in the solicitation of Tier�s security holders
in connection with its 2009 Annual Meeting. Security holders may
obtain information regarding the names, affiliations and interests
of such individuals in Tier�s Annual Report on Form 10-K for the
year ended September 30, 2008, as amended on January 28, 2009, and
its Revised Preliminary Proxy Statement filed January 28, 2009,
each of which is on file with the SEC, as well as its upcoming
Definitive Proxy Statement for the 2009 Annual Meeting (when
available). To the extent there have been changes in Tier�s
directors and executive officers, such changes have been reported
on Current Reports on Form 8-K filed with the SEC. To the extent
holdings of Tier securities have changed since the amounts printed
in the Revised Preliminary Proxy Statement filed January 29, 2009,
such changes have been or will be reflected on Statements of Change
in Beneficial Ownership on Form 4 or Form 5 filed with the SEC.
�
TIER TECHNOLOGIES, INC. Consolidated Balance Sheets
� � (in thousands) � December 31, 2008 � September 30, 2008
(unaudited)
ASSETS: Current assets: Cash and cash
equivalents $ 34,393 $ 47,735 Investments in marketable securities
11,485 2,415 Accounts receivable, net 5,897 4,209 Prepaid expenses
and other current assets 3,108 1,863 Current assets�held-for-sale �
� 10,293 � � � 11,704 � Total current assets 65,176 67,926 �
Property, equipment and software, net 4,618 4,479 Goodwill 14,526
14,526 Other intangible assets, net 12,276 13,455 Investments in
marketable securities 31,213 28,821 Restricted investments 7,361
7,861 Other assets � � 272 � � � 283 �
Total assets �
$ 135,442 � �
$ 137,351 � �
LIABILITIES AND SHAREHOLDERS� EQUITY: Current liabilities:
Accounts payable $ 676 $ 918 Accrued compensation liabilities 3,690
4,289 Accrued discount fees 7,497 5,243 Other accrued liabilities
4,608 4,667 Deferred income 1,790 1,790 Current
liabilities�held-for-sale � � 7,988 � � � 9,061 � Total current
liabilities 26,249 25,968 Other liabilities � � 106 � � � 136 �
Total liabilities � �
26,355 � � �
26,104 � �
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: 20,619 and 20,619; shares
outstanding: 19,735 and 19,735
190,588 190,099 Treasury stock�at cost, 884 shares (8,684 ) (8,684
) Accumulated other comprehensive income 1 (2,504 ) Accumulated
deficit � � (72,818 ) � � (67,664 )
Total shareholders�
equity � �
109,087 � � �
111,247 �
Total
liabilities and shareholders� equity �
$ 135,442
� �
$ 137,351 � � �
TIER TECHNOLOGIES, INC.
Consolidated Statements of Operations � �
Three months
endedDecember 31, (in thousands, except per share data)
� �
2008 � � �
2007 � Revenues � $ 29,740 � � $
28,955 � � Costs and expenses: Direct costs 22,418 22,234 General
and administrative 6,630 7,109 Selling and marketing 1,316 2,114
Depreciation and amortization � � 1,459 � � � 1,296 � Total costs
and expenses � � 31,823 � � � 32,753 � Loss from continuing
operations before other income/(loss) and income taxes � � (2,083 )
� � (3,798 ) � Other income/(loss): Loss on investment (112 ) �
Interest income, net � � 304 � � � 967 � Total other income � � 192
� � � 967 � � Loss from continuing operations before income taxes
(1,891 ) (2,831 ) Income tax provision � � 1 � � � 16 � � Loss from
continuing operations (1,892 ) (2,847 ) (Loss)/income from
discontinued operations, net � � (3,262 ) � � 1,416 � � Net loss �
$ (5,154 ) � $ (1,431 ) � (Loss)/earnings per share�Basic and
diluted: From continuing operations $ (0.10 ) $ (0.14 ) From
discontinued operations � � (0.16 ) � � 0.07 � (Loss)/earnings per
share�Basic and diluted � $ (0.26 ) � $ (0.07 ) � Weighted average
common shares used in computing: Basic and diluted (loss)/earnings
per share 19,735 19,543 � �
TIER TECHNOLOGIES, INC.
Consolidated Statements of Cash Flows � � Three months ended
December 31,
(in thousands) � 2008 � 2007
CASH FLOWS FROM OPERATING
ACTIVITIES: � Net loss $ (5,154 ) $ (1,431 )
Less: Income/(loss) from
discontinued operations, net
� � (3,262 ) � � 1,416 � Loss from continuing operations, net
(1,892 ) (2,847 ) Non-cash items included in net loss: Depreciation
and amortization 1,483 1,314 Provision for doubtful accounts 39 35
Accrued forward loss on contract 25 125 Share-based compensation
468 789 Loss on trading securities 112 � Other � 37 Net effect of
changes in assets and liabilities: Accounts receivable, net (1,727
) (392 ) Prepaid expenses and other assets (602 ) 308 Accounts
payable and accrued liabilities 1,308 2,484 Income taxes receivable
(61 ) 15 Deferred income � � � � � � (247 ) Cash (used in) provided
by operating activities from continuing operations (847 ) 1,621
Cash (used in) provided by operating activities from discontinued
operations � � (3,209 ) � � 3,254 � Cash (used in) provided by
operating activities � � (4,056 ) � � 4,875 �
CASH FLOWS FROM
INVESTING ACTIVITIES: Purchases of available-for-sale
securities (11,470 ) (3,925 ) Maturities of available-for-sale
securities 2,401 5,600 Maturities of restricted investments 500 �
Purchase of equipment and software (480 ) (778 ) Proceeds from sale
of discontinued operations � � 205 � � � � � Cash (used in)
provided by investing activities from continuing operations (8,844
) 897 Cash used in investing activities from discontinued
operations � � (437 ) � � (1,269 ) Cash used in investing
activities � � (9,281 ) � � (372 )
CASH FLOWS FROM FINANCING
ACTIVITIES: Net proceeds from issuance of common stock � 29
Capital lease obligations and other financing arrangements � � (5 )
� � (36 ) Cash used in financing activities from continuing
operations (5 ) (7 ) Cash used in financing activities from
discontinued operations � � � � � � (2 ) Cash used in financing
activities � � (5 ) � � (9 )
Net (decrease)/increase in cash
and cash equivalents
(13,342 ) 4,494 Cash and cash equivalents at beginning of period �
� 47,735 � � � 16,516 � Cash and cash equivalents at end of period
� $ 34,393 � � $ 21,010 � � �
TIER TECHNOLOGIES, INC.
Consolidated Statements of Operations�Continuing Operations
� � � (in thousands) �
EPP �
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): Loss on investment (112 ) � (112
)
Interest income, net
� � 304 � � � � � � 304 � 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 )
Three months ended December 31, 2007: Revenues � $
27,809 � � $ 1,146 � � $ 28,955 � Costs and expenses: Direct costs
21,118 1,116 22,234 General and administrative 6,656 453 7,109
Selling and marketing 1,996 118 2,114 Depreciation and amortization
� � 924 � � � 372 � � � 1,296 � Total costs and expenses � � 30,694
� � � 2,059 � � � 32,753 �
Loss from continuing operations
before other income and income taxes
� � (2,885 ) � � (913 ) � � (3,798 ) Other income:
Interest income, net
� � 967 � � � � � � � 967 � Total other income � � 967 � � � � � �
� 967 � Loss from continuing operations before taxes (1,918 ) (913
) (2,831 ) Income tax provision � � 16 � � � � � � � 16 � Loss from
continuing operations � $ (1,934 ) � $ (913 ) � $ (2,847 ) � �
TIER TECHNOLOGIES, INC. Consolidated Statements of
Operations�Discontinued Operations � �
Three months ended
December 31, 2008 (in thousands) �
GBPO �
PSSI �
Total Revenues � $ � � � $ 4,469 � � $ 4,469 � Costs and
expenses: � � Direct costs 3 3,851 3,854 General and administrative
49 675 724 Selling and marketing � 103 103 Depreciation and
amortization � 12 12 Write-down of goodwill and intangibles � � � �
� � 2,594 � � � 2,594 � Total costs and expenses � � 52 � � � 7,235
� � � 7,287 � Loss before loss of disposal on discontinued
operations (52 ) (2,766 ) (2,818 ) Loss on disposal of discontinued
operations � � (17 ) � � (427 ) � � (444 ) Loss from discontinued
operations, net � $ (69 ) � $ (3,193 ) � $ (3,262 ) � � �
Three
months ended December 31, 2007 (in thousands) �
GBPO �
PSSI �
Other
andEliminations
�
Total Revenues � $ 7,133 � $ 6,610 � � $ � � � $ 13,743
Costs and expenses: � � � Direct costs 4,303 5,047 (138 ) 9,212
General and administrative 550 1,502 41 2,093 Selling and marketing
551 368 14 933 Depreciation and amortization � 20 � 20 Write-down
of goodwill and intangibles � � � � � 373 � � � � � � � 373 Total
costs and expenses � � 5,404 � � 7,310 � � � (83 ) � � 12,631
Income/(loss) before income on disposal of discontinued operations
1,729 (700 ) 83 1,112 Income on disposal discontinued operations �
� � � � 304 � � � � � � � 304 Income/(loss) from discontinued
operations, net � $ 1,729 � $ (396 ) � $ 83 � � $ 1,416 �
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