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UNITED STATES
FORM 8-K
CURRENT REPORT
Date of Report (Date of earliest event reported) April 23, 2003
FAIR ISAAC CORPORATION
| Delaware | 0-16439 | 94-1499887 | ||
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| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
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| 200 Smith Ranch Road | ||||
| San Rafael, California | 94903 | |||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code (415) 472-2211
| Item 7. Financial Statements and Exhibits. | ||||||||
| Item 9. Regulation FD Disclosure. | ||||||||
| SIGNATURE | ||||||||
| EXHIBIT INDEX | ||||||||
| EXHIBIT 99 | ||||||||
Table of Contents
Item 7. Financial Statements and Exhibits.
(c) Exhibits
99 Press Release dated April 23, 2003
Item 9. Regulation FD Disclosure.
The following information is furnished pursuant to Item 12, “Results of Operations and Financial Condition.”
On April 23, 2003, Fair Isaac Corporation (the “Company”) reported its financial results for the quarter and six months ended March 31, 2003. See the Company’s press release dated April 23, 2003, which is furnished as Exhibit 99 hereto and incorporated by reference in this Current Report on Form 8-K. In the press release, the Company provides the amount of charges resulting from the HNC Software Inc. acquisition included in its financial results for the periods presented and the impact of these charges on earnings per share. This information may be considered to be a “non-GAAP financial measure” under Regulation G recently adopted by the Securities and Exchange Commission. The Company believes that this information is useful in that it helps investors evaluate the Company’s operating performance and compare this performance between periods.
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SIGNATURE
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 CORPORATION | ||||
| Dated: April 23, 2003 | By | /s/ Kenneth J. Saunders | ||
| Kenneth J. Saunders | ||||
| Vice President and Chief Financial Officer | ||||
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EXHIBIT INDEX
| Method | ||||
| Exhibit | Description | of Filing | ||
| 99 | Press Release dated April 23, 2003. | Filed Electronically |
EXHIBIT 99 [FAIRISAAC LOGO] Contacts: INVESTORS & ANALYSTS: Heidi Flannery Fair Isaac Corporation (800) 213-5542 investor@fairisaac.com FAIR ISAAC REPORTS STRONG SECOND QUARTER RESULTS 82% Year-over-Year Revenue Growth with HNC Revenues SAN RAFAEL, Calif. -- April 23, 2003 -- Fair Isaac Corporation (NYSE:FIC), the leader in customer analytics and decision technology, today announced financial results for the second fiscal quarter ended March 31, 2003. The company achieved second quarter revenues of $158.6 million versus $87.1 million reported in the second quarter of fiscal 2002, and above the company's previous guidance. Revenues for the six months ended March 31, 2003 totaled $305.3 million as compared to revenues of $172.1 million reported in the same period last year. Net income for the second quarter of fiscal 2003 totaled $25.6 million, or $0.51 per share on 50.5 million diluted shares outstanding, compared with $14.2 million, or $0.39 per share on 36.3 million diluted shares outstanding reported in the same quarter last year. Net income for the six months ended March 31, 2003 totaled $45.4 million, or $0.89 per share on 51.3 million diluted shares outstanding, compared with $27.7 million, or $0.77 per share on 36.1 million diluted shares outstanding reported in the same period last year. Results for the second quarter and six months ended March 31, 2003 include $0.6 million and $2.6 million in merger-related charges, respectively, resulting from the HNC Software acquisition, which resulted in a negative one-cent(1) and a negative three-cent(2) impact to diluted earnings per share during these periods, respectively. "I'm very pleased with our results this quarter, producing both revenue and earnings above our previous guidance," said Tom Grudnowski, President and CEO of Fair Isaac. "Now with two full quarters behind us as a combined company, we are proud to say that we have delivered positive results in both revenue and expense synergies. I think our results demonstrate how the predictive analytics market is heating up, and we're right in the middle of it all. Our strategy to sell transaction-based services around analytically-based solutions now in nine different markets gives us even greater stability and opportunities for future growth." The company will host a conference call today at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss its second quarter results and provide guidance for the remainder of fiscal 2003.
The call can be accessed live on the Investor Relations' section of the company's Web site at www.fairisaac.com, and will be archived on the site immediately following the call. ABOUT FAIR ISAAC Fair Isaac Corporation (NYSE:FIC) is the preeminent provider of creative analytics that unlock value for people, businesses and industries. The company's predictive modeling, decision analysis, intelligence management, decision management systems and consulting services power more than 25 billion mission-critical customer decisions a year. Founded in 1956, Fair Isaac helps thousands of companies in over 60 countries acquire customers more efficiently, increase customer value, reduce fraud and credit losses, lower operating expenses and enter new markets more profitably. Most leading banks and credit card issuers rely on Fair Isaac solutions, as do insurers, retailers, telecommunications providers, healthcare organizations and government agencies. Through the www.myfico.com Web site, consumers use the company's FICO(R) scores, the standard measure of credit risk, to manage their financial health. As of August 5, 2002, the business of HNC Software Inc., a leading provider of high-end analytic and decision management software, is part of Fair Isaac. For more information, visit www.fairisaac.com. FORWARD-LOOKING STATEMENTS Except for historical information contained herein, the statements contained in this press release that relate to Fair Isaac, including statements regarding our ability to build and maintain customer and other business relationships, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the company's ability to recruit and retain key technical and managerial personnel, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, competition, regulatory changes applicable to the use of consumer credit and other data, the possibility that the anticipated benefits of its recent merger with HNC, including expected synergies, cannot be fully realized, the possibility that costs or difficulties related to the integration of our business and HNC's business will be greater than expected, and other risks described from time to time in Fair Isaac's SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2002. If any of these risks or uncertainties materializes, Fair Isaac's results could differ materially from Fair Isaac's expectations in these statements. Fair Isaac disclaims any intent or obligation to update these forward-looking statements. Fair Isaac, HNC and FICO are trademarks or registered trademarks of Fair Isaac Corporation, in the United States and/or in other countries. Other product and company names herein may be trademarks of their respective owners. - ---------------------------- (1) Calculated as $0.6 million in merger-related charges less $0.2 million income tax benefit (by application of the company's 37.6 percent effective tax rate for the quarter), or $0.4 million, divided by 50.5 million diluted shares outstanding for the quarter. (2) Calculated as $2.6 million in merger-related charges less $1.0 million income tax benefit (by application of the company's 38.0 percent effective tax rate for the six month period), or $1.6 million, divided by 51.3 million diluted shares outstanding for the six month period. 2
FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE QUARTERS AND SIX MONTHS ENDED MARCH 31, 2003 AND 2002 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) Quarter Ended Six Months Ended March 31, March 31, ------------------------- ------------------------ 2003 2002 2003 2002 --------- ------- -------- -------- Revenues $ 158,598 $87,050 $305,330 $172,111 --------- ------- -------- -------- Operating expenses: Cost of revenues 64,041 39,127 124,695 77,712 Research and development 17,119 7,301 34,366 14,778 Selling, general and administrative 31,724 18,719 63,898 36,661 Amortization of intangibles 3,419 609 6,681 1,134 Merger-related expenses 606 -- 2,616 -- --------- ------- -------- -------- Total operating expenses 116,909 65,756 232,256 130,285 --------- ------- -------- -------- Operating income 41,689 21,294 73,074 41,826 Other (expense) income, net (585) 1,964 208 3,823 --------- ------- -------- -------- Income before income taxes 41,104 23,258 73,282 45,649 Provision for income taxes 15,459 9,073 27,847 17,917 --------- ------- -------- -------- Net income $ 25,645 $14,185 $ 45,435 $ 27,732 ========= ======= ======== ======== Earnings per share: Basic $ 0.54 $ 0.41 $ 0.93 $ 0.81 ========= ======= ======== ======== Diluted $ 0.51 $ 0.39 $ 0.89 $ 0.77 ========= ======= ======== ======== Shares used in computing earnings per share: Basic 47,898 34,532 49,042 34,359 ========= ======= ======== ======== Diluted 50,453 36,287 51,291 36,120 ========= ======= ======== ======== 3
FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 2003 AND SEPTEMBER 30, 2002 (IN THOUSANDS) (UNAUDITED) March 31, September 30, 2003 2002 ---------- ---------- ASSETS: Current assets: Cash and investments $ 165,817 $ 281,211 Receivables, net 124,820 121,456 Other current assets 27,923 25,507 ---------- ---------- Total current assets 318,560 428,174 Investments 136,459 150,202 Property and equipment, net 53,792 63,898 Goodwill and intangibles, net 515,894 520,114 Other noncurrent assets 52,051 50,125 ---------- ---------- $1,076,756 $1,212,513 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable and other accrued liabilities $ 44,711 $ 44,135 Accrued compensation and employee benefits 26,409 28,153 Deferred revenue 19,735 17,921 ---------- ---------- Total current liabilities 90,855 90,209 Convertible subordinated notes 140,631 139,922 Other noncurrent liabilities 6,261 8,910 ---------- ---------- Total liabilities 237,747 239,041 Stockholders' equity 839,009 973,472 ---------- ---------- $1,076,756 $1,212,513 ========== ========== 4
FAIR ISAAC CORPORATION REVENUES BY SEGMENT FOR THE QUARTERS AND SIX MONTHS ENDED MARCH 31, 2003 AND 2002 (IN THOUSANDS) (UNAUDITED) Quarter Ended Six Months Ended March 31, March 31, ----------------------- ------------------------ 2003 2002 2003 2002 -------- ------- -------- -------- Scoring Solutions $ 32,868 $30,165 $ 66,960 $ 60,710 Strategy Machine Solutions 100,563 39,657 186,552 80,122 Professional Services 20,231 14,590 40,481 26,838 Analytic Software Tools 4,936 2,638 11,337 4,441 -------- ------- -------- -------- Total Revenues $158,598 $87,050 $305,330 $172,111 ======== ======= ======== ======== 5