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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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) July 23, 2003
FAIR ISAAC CORPORATION
(Exact name of registrant as specified in its charter)
| 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 (Address of principal executive offices) |
94903 (Zip Code) |
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Registrant’s telephone number, including area code 415-472-2211
| Item 7. Financial Statements and Exhibits. | ||||||||
| Item 9. Regulation FD Disclosure. | ||||||||
| SIGNATURE | ||||||||
| EXHIBIT 99 | ||||||||
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Item 7. Financial Statements and Exhibits.
| (c) | Exhibits |
| Exhibit | ||
| Number | Description | |
| 99 | Press Release dated July 23, 2003 |
Item 9. Regulation FD Disclosure.
The following information is furnished pursuant to Item 12, “Results of Operations and Financial Condition.”
On July 23, 2003, Fair Isaac Corporation (the “Company”) reported its financial results for the quarter and nine months ended July 30, 2003. See the Company’s press release dated July 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 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 | ||||
| By | /s/ Kenneth J. Saunders
Kenneth J. Saunders Vice President and Chief Financial Officer |
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Date: July 23, 2003
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EXHIBIT INDEX
| Exhibit | ||||
| Number | Description | Method of Filing | ||
| 99 | Press Release dated July 23, 2003 | Filed Electronically |
EXHIBIT 99 (FAIR ISAAC LOGO) Contacts: INVESTORS & ANALYSTS: Heidi Flannery Fair Isaac Corporation (800) 213-5542 investor@fairisaac.com FAIR ISAAC REPORTS STRONG THIRD QUARTER RESULTS 79% Year-Over-Year Revenue Growth with HNC Revenues SAN RAFAEL, Calif. -- July 23, 2003 -- Fair Isaac Corporation (NYSE:FIC), the leader in customer analytics and decision technology, today announced financial results for the third fiscal quarter ended June 30, 2003. The company achieved third quarter revenues of $163.0 million versus $91.0 million reported in the third quarter of fiscal 2002, and in line with the company's previous guidance. Revenues for the nine months ended June 30, 2003 totaled $468.3 million as compared to revenues of $263.1 million reported in the same period last year. Net income for the third quarter of fiscal 2003 totaled $30.0 million, or $0.60 per share on 53.0 million diluted shares outstanding(1), compared with $14.4 million, or $0.41 per share on 35.2 million diluted shares outstanding reported in the same quarter last year. Net income for the nine months ended June 30, 2003 totaled $75.5 million, or $1.48 per share on 51.0 million diluted shares outstanding(1), compared with $42.1 million, or $1.17 per share on 35.8 million diluted shares outstanding reported in the same period last year. Results for the nine months ended June 30, 2003 include $2.6 million in merger-related charges, resulting from the HNC Software acquisition, which resulted in a negative three-cent(2) impact to diluted earnings per share during this period. "I'm very pleased with our quarterly results as we were able to hit our revenue and exceed our previous earnings guidance," said Tom Grudnowski, President and CEO of Fair Isaac. "I think our ability to show very respectable growth in a continued depressed IT spending environment is testament to the high ROI our business analytics and tools provide our clients. Our customers are willing to spend when they know they will have very compelling and demonstrable returns on their investments." The company will host a conference call today at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss its third 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 The computation of diluted earnings per share for the quarter ended June 30, 2003 includes 2.7 million shares of common stock issuable upon conversion of our convertible subordinated notes, along with a corresponding adjustment to net income to add back related interest expense, net of tax, of approximately $1.6 million. The computation of diluted earnings per share for the nine months ended June 30, 2003 excludes these shares, as they were antidilutive during this period. 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 nine month period), or $1.6 million, divided by 51.0 million diluted shares outstanding for the nine month period.
FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the Quarters and Nine Months Ended June 30, 2003 and 2002 (In thousands, except per share data) (unaudited) Quarter Ended Nine Months Ended June 30, June 30, ------------------------- ------------------------- 2003 2002 2003 2002 --------- --------- --------- --------- Revenues $ 163,000 $ 91,014 $ 468,330 $ 263,125 --------- --------- --------- --------- Operating expenses: Cost of revenues 62,209 40,724 186,904 116,853 Research and development 16,959 6,894 51,325 21,672 Selling, general and administrative 31,277 20,343 95,175 58,587 Amortization of intangibles 3,461 609 10,142 1,743 Restructuring and merger-related (36) -- 2,580 -- --------- --------- --------- --------- Total operating expenses 113,870 68,570 346,126 198,855 --------- --------- --------- --------- Operating income 49,130 22,444 122,204 64,270 Other (expense) income, net (690) 616 (482) 4,439 --------- --------- --------- --------- Income before income taxes 48,440 23,060 121,722 68,709 Provision for income taxes 18,407 8,708 46,254 26,625 --------- --------- --------- --------- Net income $ 30,033 $ 14,352 $ 75,468 $ 42,084 ========= ========= ========= ========= Earnings per share: Basic $ 0.63 $ 0.43 $ 1.56 $ 1.23 ========= ========= ========= ========= Diluted $ 0.60 (a) $ 0.41 $ 1.48 $ 1.17 ========= ========= ========= ========= Shares used in computing earnings per share: Basic 47,488 33,629 48,524 34,113 ========= ========= ========= ========= Diluted 52,957 (a) 35,233 50,968 35,832 ========= ========= ========= ========= (a) The computation of diluted earnings per share for the quarter ended June 30, 2003 includes 2.7 million shares of common stock issuable upon conversion of our convertible subordinated notes, along with a corresponding adjustment to net income to add back related interest expense, net of tax, of approximately $1.6 million. The computation of diluted earnings per share for the nine months ended June 30, 2003 excludes these shares, as they were antidilutive during this period.
FAIR ISAAC CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2003 and September 30, 2002 (In thousands) (Unaudited) June 30, September 30, 2003 2002 ---------- ---------- ASSETS: Current assets: Cash and investments $ 222,885 $ 281,211 Receivables, net 124,984 121,456 Other current assets 26,721 25,507 ---------- ---------- Total current assets 374,590 428,174 Investments 152,184 150,202 Property and equipment, net 51,041 62,474 Goodwill and intangibles, net 511,758 520,114 Other noncurrent assets 54,477 51,549 ---------- ---------- $1,144,050 $1,212,513 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable and other accrued liabilities $ 41,812 $ 44,135 Accrued compensation and employee benefits 23,304 28,153 Deferred revenue 24,863 17,921 ---------- ---------- Total current liabilities 89,979 90,209 Convertible subordinated notes 140,996 139,922 Other noncurrent liabilities 6,450 8,910 ---------- ---------- Total liabilities 237,425 239,041 Stockholders' equity 906,625 973,472 ---------- ---------- $1,144,050 $1,212,513 ========== ==========
FAIR ISAAC CORPORATION REVENUES BY SEGMENT For the Quarters and Nine Months Ended June 30, 2003 and 2002 (In thousands) (Unaudited) Quarter Ended Nine Months Ended June 30, June 30, ---------------------- ---------------------- 2003 2002 2003 2002 -------- -------- -------- -------- Scoring solutions $ 34,547 $ 33,781 $101,507 $ 94,491 Strategy machine solutions 97,399 39,852 283,951 119,974 Professional services 21,852 13,909 62,333 40,747 Analytic software tools 9,202 3,472 20,539 7,913 -------- -------- -------- -------- Total revenues $163,000 $ 91,014 $468,330 $263,125 ======== ======== ======== ========