Online Resources Posts Second Quarter 2010 Results

CHANTILLY, Va. — Online Resources Corporation (Nasdaq: ORCC), a leading provider of online financial services, today reported financial and operating results for the three months ended June 30, 2010.

• Revenue was $36.4 million, compared to $37.8 million in the second quarter of 2009.
• Ebitda, a non-GAAP measure, was $6.0 million, compared to $8.4 million in the same quarter of 2009.
• Adjusted Ebitda, a non-GAAP measure that adjusts Ebitda for equity compensation and other expense, was $6.6 million, compared to $9.3 million in the prior year period.
• Net loss available to common stockholders was $1.3 million, or $0.04 per share, compared to a loss of $1.7 million, or $0.06 per share, in the same quarter of 2009.
• Core net income, a non-GAAP measure, was $1.7 million, or $0.06 per diluted share, compared to $2.5 million, or $0.08 per diluted share, in the same quarter of 2009.

Excluding $1.3 million in restructuring costs, Ebitda, adjusted Ebitda and net loss available to common stockholders per share would have been $7.3 million, $7.9 million and a loss of $0.01 net of tax, respectively.

“We performed well in the second quarter, with revenue and earnings near the high end of our expectations,” said Joseph L. Cowan, the company’s president and chief executive officer. “As anticipated, we saw the typical first-to-second quarter decline in eCommerce transactions and associated revenue during the quarter.”

“I believe the organizational changes made in April were an excellent first step toward increasing focus across the company. We are now in the process of a deep evaluation of the business that will further align Online Resources’ strategy with the best possible path for revenue growth. I am encouraged by the strengths I see in our products and people, and believe we can match those to achieve top and bottom line growth. I look forward to sharing more about our plans in the fourth quarter, after we complete this evaluation process.”

Outlook for Third Quarter 2010

Online Resources provided the following guidance for the third quarter of 2010. These statements are forward-looking, and actual results may differ materially.

• Revenue for the third quarter is expected to be between $34.6 and $36.6 million.
• Ebitda1,2 for the quarter is expected to be between $4.8 and $6.3 million
• Adjusted Ebitda1,2 for the quarter is expected to be between $6.0 and $7.3 million.
• Core net income1,3,4,5 is expected to be between $0.01 and $0.03 per diluted share.

(1) The Company uses non-GAAP (Generally Accepted Accounting Principles) financial measures, including Ebitda, adjusted Ebitda and core net income, to evaluate performance and establish goals. It believes that these measures are valuable to investors in assessing the Company’s operating results when viewed in conjunction with GAAP results.
(2) Ebitda is defined as net income before interest, taxes, depreciation and amortization expense. Adjusted Ebitda is defined as net income before interest, taxes depreciation and amortization, and equity compensation expense.
(3) Core net income is defined as net income available to common stockholders before, on a pre-tax basis unless otherwise noted, the amortization of acquisition-related intangible assets, equity compensation expense, income tax benefit from the change in valuation allowance, income (costs) related to the fair market valuation of certain derivatives and mark-to-market investments, preferred stock accretion related to the redemption premium and all other non-recurring charges. Some or all of these items may not be applicable in any given reporting period.
(4) Excludes estimates for amortization of acquisition-related intangible assets of $1.3 million, equity compensation expense of $1.0 million and preferred stock accretion related to the redemption premium of $0.4 million.
(5) Core net income per share calculated using estimated fully diluted shares outstanding of 32.1 million.

Conference Call and Web Cast

Management will host a conference call to discuss results at 5:00 p.m. ET today. The conference call dial-in number is (877) 303-6496 for domestic participants and (707) 287-9318 for international participants. Alternatively, a live web cast of the call will be available through the "Investors" section of Online Resources’ web site at www.orcc.com. The call and web cast will be recorded and available for playback from 8:00 p.m. ET on August 5th until midnight on Thursday, August 12th. For the conference call playback, dial (800) 642-1687 for domestic participants and (706) 645-9291 for international participants and enter code 86129994. For web cast replay, go to the “Investors” section of www.orcc.com.

About Online Resources
Online Resources (Nasdaq: ORCC) powers financial interactions between millions of consumers and the Company’s financial institution and biller clients. Backed by its proprietary payments gateway that links banks directly with billers, the Company provides web and phone-based financial services, electronic payments and marketing services to drive consumer adoption. Founded in 1989, Online Resources is the largest financial technology provider dedicated to the online channel. For more information, visit www.orcc.com.