CoreCard Corporation [NYSE: CCRD], the leading provider of
innovative credit technology solutions and processing services to
the financial technology and services market, announced today its
financial results for the quarter ended September 30, 2023.
"Overall revenue of $13.4 million in the third
quarter was in-line with our expectations, reflecting continued
growth in processing and maintenance revenue of 10%, which was
offset by lower professional services revenue, primarily driven by
our largest customer. We continue to invest in our platform and
processing capabilities, which are showing encouraging results.
CoreCard provides a best-in-class credit platform that is extremely
well positioned to capture the growing demand for next-generation
card management platforms by large and complex modern card
issuers,” said Leland Strange, CEO of CoreCard Corporation. "We
expect the lower level of professional services revenue to continue
in the fourth quarter and into 2024. As a result, we now expect
full-year services revenue to be approximately flat for 2023 as
compared to 2022. We anticipate additional license revenue during
the first half of 2024.”
Financial Highlights for the three
months ended September 30, 2023
Total revenues in the
three-month period ended September 30, 2023, was $13.4 million
compared to $14.5 million in the comparable period in 2022.
In the following table, revenue is disaggregated
by type of revenue for the three months ended September 30, 2023
and 2022:
|
|
Three Months Ended |
|
|
September 30, |
(in thousands) |
|
|
|
2023 |
|
2022 |
License |
|
$ |
− |
$ |
− |
Professional services |
|
|
6,432 |
|
7,776 |
Processing and
maintenance |
|
|
5,814 |
|
5,267 |
Third
party |
|
|
1,153 |
|
1,407 |
Total |
|
$ |
13,399 |
$ |
14,450 |
Income from operations was $0.4
million for the third quarter compared to income from operations of
$1.7 million in the comparable prior year quarter.
Net income (loss) was a loss of
$0.2 million for the third quarter compared to net income of $1.4
million in the comparable prior year quarter.
Earnings per diluted share was
a loss of $0.03 for the third quarter compared to earnings per
share of $0.16 in the comparable prior year quarter.
Adjusted earnings per diluted share was $0.09
for the third quarter compared to $0.16 in the comparable prior
year quarter.
Use of Non-GAAP Financial
Measures
Reconciliations of non-GAAP financial measures
to the most directly comparable financial results as determined in
accordance with GAAP are included at the end of this press release
following the accompanying financial data. For a description of
these non-GAAP financial measures, including the reasons management
uses each measure, please see the section of the tables titled
"Information Regarding Non-GAAP Financial Measures".
Investor Conference Call
The company is holding an investor conference
call today, November 1, 2023, at 11:00 A.M. Eastern Time.
Interested investors are invited to attend the conference call by
accessing the webcast at
https://www.webcast-eqs.com/register/corecard110123/en or by
dialing 1-877-407-0890. As part of the conference call CoreCard
will be conducting a question-and-answer session where participants
are invited to email their questions to questions@corecard.com
prior to the call. A transcript of the call will be posted on the
company’s website at investors.corecard.com as soon as available
after the call.
The company will file its Form 10-Q for the
period ended September 30, 2023, with the Securities and Exchange
Commission today. For additional information about reported
results, investors will be able to access the Form 10-Q on the
company’s website at investors.corecard.com or on the SEC website,
www.sec.gov.
About CoreCard Corporation
CoreCard Corporation (NYSE: CCRD) provides the
gold standard card issuing platform built for the future of global
transactions in an embedded digital world. Dedicated to continual
technological innovation in the ever-evolving payments industry
backed by decades of deep expertise in credit card offerings,
CoreCard helps customers conceptualize, implement, and manage all
aspects of their issuing card programs. Keenly focused on steady,
sustainable growth, CoreCard has earned the trust of some of the
largest companies and financial institutions in the world,
providing truly real-time transactions via their proven, reliable
platform operating on private on-premise and leading cloud
technology infrastructure.
Forward-Looking Statements
The forward-looking statements in this press
release are made under the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. The Company’s actual
results could differ materially from those indicated by the
forward-looking statements because of various risks and
uncertainties including those listed in Item 1A of the Company’s
Annual Report on Form 10-K and in the Company’s other filings and
reports with the Securities and Exchange Commission. All of the
risks and uncertainties are beyond the ability of the Company to
control, and in many cases, the Company cannot predict the risks
and uncertainties that could cause its actual results to differ
materially from those indicated by the forward-looking statements.
When used in this press release, the words “believes,” “plans,”
“expects,” “will,” “intends,” “continue,” “outlook,” “progressing,”
and “anticipates” and similar expressions as they relate to the
Company or its management are intended to identify forward-looking
statements. Except as required by law, the Company is not obligated
to publicly release any revisions to these forward-looking
statements to reflect the events or circumstances after the date of
this press release or to reflect the occurrence of unanticipated
events.
For further information, email CoreCardIR@icrinc.com
CoreCard Corporation
CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited, in thousands, except share and per
share amounts)
|
Three Months Ended September
30, |
Nine Months EndedSeptember
30, |
|
|
2023 |
|
|
2022 |
|
2023 |
|
|
2022 |
Revenue |
|
|
|
|
Services |
$ |
13,399 |
|
$ |
14,450 |
$ |
42,053 |
|
$ |
39,657 |
Products |
|
- |
|
− |
|
1,794 |
|
|
14,283 |
Total net revenue |
|
13,399 |
|
|
14,450 |
|
43,847 |
|
|
53,940 |
Cost of revenue |
|
|
|
|
Services |
|
9,279 |
|
|
8,431 |
|
28,380 |
|
|
23,824 |
Products |
|
- |
|
− |
|
- |
|
− |
Total cost of revenue |
|
9,279 |
|
|
8,431 |
|
28,380 |
|
|
23,824 |
Expenses |
|
|
|
|
Marketing |
|
63 |
|
|
80 |
|
237 |
|
|
231 |
General and administrative |
|
1,155 |
|
|
1,107 |
|
4,220 |
|
|
4,048 |
Development |
|
2,489 |
|
|
3,129 |
|
6,094 |
|
|
8,916 |
Income from operations |
|
413 |
|
|
1,703 |
|
4,916 |
|
|
16,921 |
Investment income (loss) |
|
(1,015 |
) |
|
39 |
|
(1,701 |
) |
|
196 |
Other income (loss), net |
|
308 |
|
|
60 |
|
653 |
|
|
126 |
(Loss) Income before income taxes |
|
(294 |
) |
|
1,802 |
|
3,868 |
|
|
17,243 |
Income tax expense (benefit) |
|
(72 |
) |
|
443 |
|
959 |
|
|
4,358 |
Net (loss) income |
$ |
(222 |
) |
$ |
1,359 |
$ |
2,909 |
|
$ |
12,885 |
Earnings
(loss) per share: |
|
|
|
Basic |
$ |
(0.03 |
) |
$ |
0.16 |
$ |
0.34 |
|
$ |
1.50 |
Diluted |
$ |
(0.03 |
) |
$ |
0.16 |
$ |
0.34 |
|
$ |
1.49 |
Basic weighted average common shares outstanding |
|
8,460,473 |
|
|
8,538,954 |
|
8,485,416 |
|
|
8,596,654 |
Diluted weighted average common shares outstanding |
|
8,460,473 |
|
|
8,559,665 |
|
8,509,825 |
|
|
8,621,388 |
CoreCard Corporation
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share
amounts)
As of |
September 30, 2023 |
December 31, 2022 |
ASSETS |
|
(unaudited) |
|
(audited) |
Current assets: |
|
|
Cash and cash equivalents |
$ |
31,614 |
|
$ |
20,399 |
|
Marketable securities |
|
5,147 |
|
|
4,973 |
|
Accounts receivable, net |
|
5,875 |
|
|
13,220 |
|
Other current assets |
|
5,887 |
|
|
3,729 |
|
Total current assets |
|
48,523 |
|
|
42,321 |
|
Investments |
|
3,634 |
|
|
5,180 |
|
Property and equipment, at cost less accumulated depreciation |
|
11,681 |
|
|
12,006 |
|
Other long-term assets |
|
2,947 |
|
|
3,725 |
|
Total assets |
$ |
66,785 |
|
$ |
63,232 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ |
1,708 |
|
$ |
2,011 |
|
Deferred revenue, current portion |
|
3,743 |
|
|
1,094 |
|
Accrued payroll |
|
1,941 |
|
|
1,888 |
|
Accrued expenses |
|
806 |
|
|
525 |
|
Other current liabilities |
|
2,043 |
|
|
2,025 |
|
Total current liabilities |
|
10,241 |
|
|
7,543 |
|
Noncurrent liabilities: |
|
|
Deferred revenue, net of current portion |
|
361 |
|
|
473 |
|
Deferred tax liability |
|
541 |
|
|
472 |
|
Long-term lease obligation |
|
1,367 |
|
|
1,981 |
|
Total noncurrent liabilities |
|
2,269 |
|
|
2,926 |
|
Stockholders’ equity: |
|
|
Common stock, $0.01 par value: Authorized shares - 20,000,000; |
|
Issued shares – 9,016,140 and 9,010,119 at September 30, 2023 and
December 31, 2022, respectively; |
|
|
Outstanding shares – 8,440,356 and 8,502,735 at September 30, 2023
and December 31, 2022, respectively |
|
90 |
|
|
90 |
|
Additional paid-in capital |
|
16,621 |
|
|
16,471 |
|
Treasury stock, 575,784 and 507,384 shares at September 30, 2023
and December 31, 2022, respectively, at cost |
|
(18,213 |
) |
|
(16,662 |
) |
Accumulated other comprehensive income (loss) |
|
(57 |
) |
|
(61 |
) |
Accumulated income |
|
55,834 |
|
|
52,925 |
|
Total stockholders’ equity |
|
54,275 |
|
|
52,763 |
|
Total liabilities and stockholders’ equity |
$ |
66,785 |
|
$ |
63,232 |
|
Reconciliation of GAAP to NON-GAAP
Measures
Information Regarding Non-GAAP Measures
In addition to the financial measures prepared
in accordance with generally accepted accounting principles in the
United States (“GAAP”), this press release contains certain
non-GAAP financial measures. CoreCard considers Adjusted earnings
per diluted share (“Adjusted EPS”) as a supplemental measure of the
company’s performance that is not required by, nor presented in
accordance with GAAP.
We define Adjusted EPS as diluted earnings per
share adjusted to exclude the impact of non-operating investment
gains or losses. We believe that Adjusted EPS is an important
measure of operating performance because it allows management and
our board of directors to evaluate and compare our core operating
results from period to period.
Adjusted EPS should not be considered in
isolation, or construed as an alternative to net income, or any
other performance measures derived in accordance with GAAP, or as
an alternative to cash flow from operating activities or as a
measure of the company's liquidity. In addition, other companies
may calculate Adjusted EPS differently than CoreCard, which limits
its usefulness in comparing CoreCard’s financial results with those
of other companies.
The following table shows CoreCard’s GAAP
results reconciled to non-GAAP results included in this
release:
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
(in thousands) |
|
|
2023 |
|
|
2022 |
|
|
|
2023 |
|
2022 |
|
GAAP net (loss)
income |
|
$ |
(222 |
) |
$ |
1,359 |
|
$ |
2,909 |
$ |
12,885 |
|
Investment loss |
|
|
1,000 |
|
- |
|
|
1,000 |
|
- |
|
Income tax benefit |
|
|
- |
|
- |
|
|
- |
|
- |
|
Adjusted net income |
|
$ |
778 |
$ |
1,359 |
|
$ |
3,909 |
$ |
12,885 |
|
Adjusted EPS |
|
$ |
0.09 |
$ |
0.16 |
|
$ |
0.46 |
|
1.49 |
|
Weighted-average shares |
|
|
8,480 |
|
8,560 |
|
|
8,510 |
|
8,621 |
|
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