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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (date of earliest event reported): MARCH 8, 1999
Commission File Number
0-16439
FAIR, ISAAC AND COMPANY, INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 94-1499887
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
120 North Redwood Drive, San Rafael, California 94903
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (415) 472-2211
ITEM 5. Other Events
On March 8, 1999, the Registrant issued the press release attached hereto
as Exhibit 99.1 and incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
99.1 Press Release of the Registrant dated March 8, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FAIR, ISAAC AND COMPANY, INCORPORATED
DATE: March 8, 1999
By: /s/ PETER L. McCORKELL
--------------------------------------
Peter L. McCorkell
Senior Vice President,
Secretary and General Counsel
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Exhibit Index
To Fair, Isaac and Company, Incorporated
Report on Form 8-K dated March 8, 1999
Sequentially
Exhibit No. Exhibit Numbered Page
- ----------- ------- -------------
99.1 Press Release dated March 8, 1999. 4
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Exhibit No. 99.1
NEWS FROM FAIR, ISAAC NYSE SYMBOL: FIC
FOR IMMEDIATE RELEASE Contact: Peter L. McCorkell
(415) 491-5101
March 8, 1999
Fair, Isaac Announces New e-Business and Telecom Initiatives
and Realignment of Existing Units
San Rafael, California--Fair, Isaac and Company, Incorporated (NYSE: FIC) today
announced that it will form new business units to pursue opportunities in the
electronic commerce and telecommunications industries. At the same time the
company announced the realignment of existing business and service units to
support these new initiatives, to provide a more cohesive and comprehensive
array of products and services to the financial services industry, and to
continue its ventures in healthcare information.
Fair, Isaac President & CEO Larry Rosenberger described these announcements as
the result of a comprehensive review of the company's vision and strategic plan
carried out over the past six months. He said, "Fair, Isaac's vision is to
become the global leader in providing critical decision control systems for
maximizing customer profitability in selected markets in the physical and Web
worlds. The markets we have elected to actively pursue at this time are
financial services, healthcare information, telecommunications and eBusiness,
each of which will be served by a market-facing business unit providing product
and service management, sales, and alliance management functions."
"We realize that significant changes in our organizational structure are needed
to allow us to continue to effectively serve our existing clients and
efficiently pursue major new opportunities." Rosenberger described the new
organization as follows: "The four market-oriented business units will be
supported by three cross-market functional units:
[] Delivery, including data management services, consulting, and product
implementation and support;
[] Development, including analytic development, software development, and
investigation of emerging technologies; and
[] Corporate Services, including corporate marketing, human resources,
information systems and technologies, legal, and facilities.
"Our Credit, DynaMark and Risk Management Technologies units now serve a
largely overlapping base of clients. In addition, the lines between different
types of financial services companies--banks, finance companies, investment
managers, and insurers--are becoming less distinct. We want to provide a
wider--but more cohesive--array of products and services to a broader spectrum
of potential clients in
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this rapidly evolving industry. Our new Financial Services unit will be
responsible for client and alliance relationships with all financial service
providers, including insurance companies. This unit will be led by Executive
Vice President Patrick G. Culhane, who currently heads our Credit business unit.
"Executive Vice President Barrett B. Roach will continue to head up the
Healthcare Information unit. The immediate focus of this unit is to establish
market acceptance of the healthcare receivables management product which we
introduced in 1998. This unit will also continue to support the pharmaceutical
decision services now provided through both Fair, Isaac and its DynaMark
subsidiary.
"We see several major opportunities in the telecommunications industry:
receivables management and direct marketing capabilities are already being
provided by our Credit and DynaMark units. The formation of a new unit, focused
solely on this industry, is expected to increase penetration of these products
and services and also allow us to pursue additional opportunities in
telecommunications
"The new eBusiness unit will provide unique decision control solutions for new
players in the Web world that do not fall into any of our other market segments,
such as internet portals, eBusiness solutions providers, and online merchants.
We are initiating searches for the leaders of the eBusiness and
Telecommunications units.
"Kenneth M. Rapp, now the president of our DynaMark subsidiary will lead the
new Delivery unit. One of the opportunities we see here is the ability to offer
our clients the option of obtaining many capabilities either in the form of
in-house systems or in a service-bureau mode, but always with the exceptional
level of client care that they have come to expect from DynaMark. The Corporate
Services unit will be headed by Executive Vice President H. Robert Heller. His
mission is to improve and coordinate these services across the entire
organization while decreasing G&A expenses as a percentage of revenues.
"The market-facing business units and the cross-functional units will report to
John Woldrich, our Chief Operating Officer. Corporate Finance, under the
leadership of Vice President Lennox L. Vernon, will continue to report directly
to me. Research and development activities, which are now carried on in a number
of different units throughout the organization, will be combined in the new
Development unit. For the time being, I will personally head up this unit." Mr.
Rosenberger was in charge of Fair, Isaac's Research and Development division
prior to becoming President and CEO in 1991.
Mr. Rosenberger said he did not expect the new initiatives to have a significant
impact on the company's operating margins for the remainder of the 1999 fiscal
year which ends on September 30. He went on, "Depending on the pace of
investment, particularly in the area of eBusiness, there will probably be some
downward pressure on margins in our 2000 fiscal year. We really won't be able to
quantify that until the heads of the new eBusiness and telecommunications units
are on board and have a chance to develop detailed business plans. However, our
expectation is that any additional investments will offer a relatively quick
payback."
Since 1956, Fair, Isaac has helped businesses maximize the value of data for
strategic decision making. The Company pioneered the commercial development of
empirically derived predictive models for the credit industry and popularized
their use in lending decisions. Today, Fair, Isaac and its subsidiaries provide
data-driven decision support solutions to a variety of industries, worldwide,
including financial services, direct marketing, personal lines insurance,
retail, health care, and telecommunications. Primary areas of focus include
customer and operational data management and modeling, information analysis,
strategy design, and software. Headquartered in San Rafael, California, Fair,
Isaac employs more than 1,500 people and has offices throughout the United
States and Europe as well as in Canada, Mexico,
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Brazil, South Africa, and Japan. For the fiscal year ended September 30, 1998,
the Company recorded net income of $24.3 million ($1.68 per share, diluted) on
revenues of $245.5 million. For the quarter ended December 31, 1998, net income
was $7.0 million ($.49 per share, diluted) on revenues of $68.0 million.
This press release contains certain forward-looking statements regarding events
and trends that may affect the Company's future results. Such statements are
subject to risks and uncertainties that could cause the Company's actual results
to differ materially. Such factors include, but are not limited to, the
Company's ability to recruit and maintain key technical and managerial
personnel, the maintenance of its existing relationships with key alliance
partners, its ability to continue to develop new and enhanced products and
services, competition, market demand, and other factors described in the
Company's annual and quarterly reports to stockholders and its annual report on
Form 10-K and other reports filed with the Securities and Exchange Commission.
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