CHANTILLY, Va., Feb 25, 2010 (BUSINESS WIRE) –Online Resources Corporation /quotes/comstock/15*!orcc/quotes/nls/orcc (ORCC 3.67, -0.53, -12.62%) , a leading provider of online financial services, today reported financial and operating results for the three months and full year ended December 31, 2009. for the fourth quarter:

– Revenue was $38.2 million, compared to $37.2 million in the fourth quarter of 2008.

– Adjusted Ebitda, a non-GAAP measure that adjusts Ebitda for equity compensation expense and other expense was $10.2 million, compared to $9.6 million in the prior year period.

– Net loss available to common stockholders was $1.1 million, or $0.04 per share, compared to net income available to common stockholders of $1.3 million or $0.04 per diluted share in the fourth quarter of 2008.

– Core net income, a non-GAAP measure, was $1.8 million, or $0.06 per diluted share, compared to $2.0 million, or $0.07 per diluted share, in the same quarter of 2008.

Excluding a tax provision charge of $0.9 million related to equity compensation, as well as costs of $0.4 million related to the departure of the Company’s former CEO (not including an equity compensation benefit of $0.2 million), adjusted Ebitda, net loss available to common stockholders per share and core net income per diluted share would have been $10.7 million, $0.00 and $0.10, respectively.

For the full year 2009, Online Resources reported revenue of $151.9 million, compared to $151.6 million in 2008; adjusted Ebitda of $37.7 million, compared to $32.7 million in 2008; net loss available to common stockholders of $0.14 per share, compared to $0.24 per share in 2008 and core net income of $0.29 per diluted share, compared to $0.24 per share in 2008.

“Despite a revenue environment that remained challenging, we closed the year with strong new client signings, particularly for our customizable Internet banking products. we also forged several new distribution partnerships that will give us broader access to the small financial institution market,” said Raymond T. Crosier, the Company’s president, chief operating officer and interim chief executive officer. “In addition, we achieved our goals for earnings and cash flow for the quarter and the year, which enabled us to significantly accelerate the pace of reducing our senior debt.”

On December 1, 2009, the Company prepaid $15 million of the senior secured debt it incurred to finance the acquisition of Princeton eCom. Of the $85 million originally borrowed, $48.8 million now remains outstanding.

“During the current leadership transition, the Board is very pleased to have deep operating expertise within the Company that allows us to continue to drive the business and maintain our focus,” said John Dorman, co-chairman of the Company’s Board of Directors. “We are also working actively with management to thoroughly examine all aspects of the business for new ways to drive additional growth and profitability. Meanwhile, the Board has made excellent progress in identifying CEO candidates with proven track records of driving revenue and profitability and expects to be able bring this process to a conclusion quickly.”

Outlook for First Quarter 2010

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

– Revenue for the first quarter is expected to be between $35.5 and $37.5 million.

– Adjusted Ebitda(1,2) for the quarter is expected to be between $7.4 and $8.7 million.

– Core net income(1,3,4,5) is expected to be between $0.04 and $0.06 per share.

The adjusted Ebitda and core net income guidance excludes any charges that may be incurred in the first quarter related to the departure of the Company’s former CEO. This may include litigation costs as the parties were not able to reach a financial settlement.

(1) the Company uses non-GAAP (Generally Accepted Accounting Principles) financial measures, including 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) Adjusted Ebitda is defined as earnings before interest, taxes, depreciation and amortization, preferred stock accretion, other (income) expense and equity compensation expense.(3) Core net income is defined as net income available to common stockholders before, on a pre-tax basis, the amortization of acquisition-related intangible assets, equity compensation expense, income tax benefit from the release of 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 $1.6 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 32.5 million.

Conference call and Web Cast

The Company’s management will host a conference call to discuss the results today at 5:00 p.m. ET. the conference call dial-in number is (888) 296-4215 for domestic participants and (719) 457-2674 for international participants. Alternatively, a live web cast of the call will be available through the “Investors” section of Online Resources’ web site at orcc.com.

The call and web cast will be recorded and available for playback from 8:00 p.m. ET on February 25th until midnight on Thursday, March 4th. for the conference call playback, dial (888) 203-1112 for domestic participants and (719) 457-0820 for international participants and enter code 4579785. for web cast replay, go to the “Investors” section of orcc.com.

About Online Resources

Online Resources /quotes/comstock/15*!orcc/quotes/nls/orcc (ORCC 3.67, -0.53, -12.62%) 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 orcc.com.

This news release contains statements about future events and expectations, which are “forward-looking statements.” Any statement in this release that is not a statement of historical fact may be deemed to be a forward-looking statement. such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Specifically factors that might cause such a difference include, but are not limited to: the company’s history of losses and anticipation of future losses; the company’s dependence on the marketing efforts of third parties; the potential fluctuations in the company’s operating results; the company’s potential need for additional capital; the company’s potential inability to expand the company’s services and related products in the event of substantial increases in demand for these services and related products; the company’s competition; the company’s ability to attract and retain skilled personnel; the company’s reliance on the company’s patents and other intellectual property; the early stage of market adoption of the services it offers; consolidation of the banking and financial services industry; and those risks and uncertainties discussed in filings made by the company with the Securities and Exchange Commission, including those risks and uncertainties contained under the heading “Risk Factors” in the company’s Form 10-K, latest 10-Q, and S-3 as filed with the Securities and Exchange Commission. these factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements.

Online Resources CorporationQuarterly Operating Data(1)(Unaudited) 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09BANKING SERVICESPayment Services(2)Revenue $19.7 $18.1 $18.4 $17.9 $17.5 $17.2 $17.1 $16.7Bill Payment Transactions 41.8 39.0 39.1 39.4 39.0 37.3 38.5 37.8Other Revenue $4.5 $5.1 $5.6 $5.3 $5.4 $5.9 $5.7 $7.7eCOMMERCE SERVICESPayment Services – User PaidRevenue $7.0 $6.4 $6.2 $5.8 $6.5 $5.8 $4.7 $4.1Bill Payment Transactions 1.7 1.7 1.7 1.6 1.7 1.6 1.4 1.2Payment Services – Biller PaidRevenue $5.2 $5.6 $6.0 $6.2 $7.1 $7.0 $7.2 $7.3Bill Payment Transactions 10.3 10.5 11.3 11.8 12.7 13.5 13.7 14.2Other Revenue(3) $2.8 $2.0 $1.9 $2.0 $2.7 $1.9 $1.9 $2.4OTHER KEY METRICSInternet Banking Adoption Rate(4) 28.2% 32.8% 33.6% 35.4% 38.3% 40.8% 43.2% 46.0%Banking Billpay Adoption Rate 9.0% 9.4% 10.0% 10.2% 10.4% 10.7% 11.1% 11.4%Enterprise Users 13.5 12.6 13.0 13.2 13.8 14.0 14.3 14.8 Notes:1. in millions except adoption rates.2. Includes the revenues and transactions for large client Corporate Network eCom, which departed in 2Q08.3. Includes revenues for large client Certegy, which departed in 2Q08.4. the Company refined its definition of an Internet banking user in 1Q09 to incorporate a stricter definition of an active user. in order to make them consistent with the new definition, the Internet banking adoption rates for prior periods have been adjusted. User counts under the new definition have been estimated for the prior periods. Online Resources CorporationConsolidated Statements of Operations(In thousands, except per share data) Three Months ended twelve Months ended December 31, December 31, 2009 2008 2009 2008 (Unaudited) (Unaudited)Revenues:Account presentation services $ 2,321 $ 1,789 $ 8,198 $ 7,909Payment services 28,165 29,821 118,291 122,301Relationship management services 2,107 1,977 8,162 8,068Professional services and other 5,653 3,573 17,212 13,364Total revenues 38,246 37,160 151,863 151,642Expenses:Cost of revenues 18,764 18,546 77,260 77,353Gross profit 19,482 18,614 74,603 74,289General and administrative 7,576 6,916 31,140 33,445Selling and marketing 4,796 5,526 20,747 24,207Systems and development 2,763 2,408 9,394 9,906Total expenses 15,135 14,850 61,281 67,558Income from operations 4,347 3,764 13,322 6,731Other income (expense)Interest income 13 98 117 531Interest expense (965 ) 1,462 (4,265 ) (3,612 )Other (expense) income – (392 ) 91 (556 )Total other income (expense) (952 ) 1,168 (4,057 ) (3,637 )Income before tax provision 3,395 4,932 9,265 3,094Income tax provision 2,185 1,399 4,135 1,175Net income 1,210 3,533 5,130 1,919Preferred stock accretion 2,347 2,260 9,208 8,873Net (loss) income available to common stockholders $ (1,137 ) $ 1,273 $ (4,078 ) $ (6,954 )Net (loss) income available to common stockholders per share:Basic $ (0.04 ) $ 0.04 $ (0.14 ) $ (0.24 )Diluted $ (0.04 ) $ 0.04 $ (0.14 ) $ (0.24 )Shares used in calculation of net (loss) income available to commonstockholders per share:Basic 30,092 29,387 29,947 29,111Diluted 30,092 30,062 29,947 29,111 Online Resources CorporationCondensed Consolidated Balance Sheets(In thousands) December 31, December 31, 2009 2008 (Unaudited)ASSETSCurrent assets:Cash and cash equivalents $22,907 $22,969Short-term investments – 1,009Accounts receivable, net 17,457 15,742Deferred tax asset, current portion 7,477 8,782Prepaid expenses and other current assets 4,043 4,013Total current assets 51,884 52,515Property and equipment, net 25,561 28,707Deferred tax asset, less current portion 22,490 25,295Goodwill 181,516 181,516Intangible assets 19,972 27,668Deferred implementation costs, less current portion, and other assets 7,067 7,976Total assets $308,490 $323,677LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent liabilities:Accounts payable $2,008 $1,198Accrued expenses 3,739 3,618Notes payable, senior secured debt, current portion 8,250 15,937Interest payable 27 6Deferred revenues, current portion, and other current liabilities 6,793 7,513Total current liabilities 20,817 28,272Notes payable, senior secured debt, less current portion 40,500 59,500Deferred revenues, less current portion, and other long-term 6,888 6,377liabilitiesTotal liabilities 68,205 94,149Redeemable convertible preferred stock 100,623 91,415Stockholders’ equity 139,662 138,113Total liabilities and stockholders’ equity $308,490 $323,677 Online Resources CorporationCondensed Consolidated Statements of Cash Flows(In thousands) twelve Months ended December 31, 2009 2008 (Unaudited)Operating activitiesNet income $ 5,130 $ 1,919Adjustments to reconcile net income to net cash provided byoperating activities:Deferred tax expense 3,568 778Depreciation and amortization 20,236 21,270Equity compensation expense 4,201 4,696Write off and amortization of debt issuance costs 285 372(Gain) loss on disposal of assets (14 ) 50Provision for losses on accounts receivable 77 56(Gain) loss on investments (91 ) 556Change in fair value of stock price protection – 1,565Change in fair value of theoretical swap derivative (106 ) (3,574 )Loss on cash flow hedge derivative security – 261Changes in operating assets and liabilities, net of acquisitions:Consumer deposit receivable – 8,279Consumer deposit payable – (10,555 )Changes in certain other assets and liabilities (79 ) 1,929Net cash provided by operating activities 33,207 27,602Investing activitiesPurchases of property and equipment (9,260 ) (13,471 )Sale of property and equipment 46 -Sales of short term securities 2,100 6,570Acquisition of Internet Transaction Solutions, Inc., net of cash – (110 )acquiredNet cash used in investing activities (7,114 ) (7,011 )Financing activitiesNet proceeds from issuance of common stock 568 827Repurchase of shares issued related to ITS acquisition – (1,965 )Payments for ITS stock protection – (112 )Repayment of 2007 notes (26,687 ) (9,563 )Repayment of capital lease obligations (36 ) (36 )Net cash used in by financing activities (26,155 ) (10,849 )Net (decrease) increase in cash and cash equivalents (62 ) 9,742Cash and cash equivalents at beginning of year 22,969 13,227Cash and cash equivalents at end of period $ 22,907 $ 22,969 Online Resources CorporationReconciliation of Non-GAAP Measures(In thousands, except per share data) Three Months ended twelve Months ended December 31, December 31, 2009 2008 2009 2008 (Unaudited) (Unaudited)Reconciliation of adjusted Ebitda (See Note 1):Net income $ 1,210 $ 3,533 $ 5,130 $ 1,919Depreciation and amortization (incl. loss on disposal of assets) 4,976 5,149 20,222 21,320Equity compensation expense 894 725 4,201 4,696Interest Expense, net 952 (1,560 ) 4,148 3,081Other (income) expense – 392 (91 ) 556Income tax provision 2,185 1,399 4,135 1,175Adjusted Ebitda (See Note 1) $ 10,217 $ 9,638 $ 37,745 $ 32,747Reconciliation of core net income (See Note 2):Net (loss) income available to common stockholders $ (1,137 ) $ 1,273 $ (4,078 ) $ (6,954 )Preferred stock accretion related to redemption premium 400 392 1,590 1,558Change in fair value of stock price protection – 127 – 1,692Change in fair value of theoretical swap derivative (114 ) (2,885 ) (106 ) (3,574 )Change in fair value of mark to market investments – 393 (91 ) 556Equity compensation expense 894 725 4,201 4,696Tax valuation allowance benefit 2 (186 ) 36 (186 )Amortization of intangible assets 1,779 2,170 7,697 9,518Core net income (see Note 2) $ 1,824 $ 2,009 $ 9,249 $ 7,306Reconciliation of core net income per share:Diluted net (loss) income available to common stockholders $ (0.04 ) $ 0.04 $ (0.14 ) $ (0.24 )Preferred stock accretion related to redemption premium 0.01 0.01 0.05 0.05Change in fair value of stock price protection – - – 0.06Change in fair value of theoretical swap derivative – (0.10 ) – (0.12 )Change in fair value of mark to market investments – 0.01 – 0.02Equity compensation expense 0.03 0.02 0.14 0.15Tax valuation allowance benefit – (0.01 ) – (0.01 )Amortization of intangible assets 0.06 0.07 0.26 0.33Other, including impact of treasury method and rounding – 0.03 (0.02 ) -Core net income per share $ 0.06 $ 0.07 $ 0.29 $ 0.24 Notes:1. Adjusted Ebitda is a non-GAAP measure defined as earnings before interest, taxes, depreciation and amortization, other (income) expense, preferred stock accretion and equity compensation expense.2. Core net income is a non-GAAP measure defined as net income available to common stockholders before, on a pre-tax basis, the amortization of acquisition-related intangible assets, equity compensation expense, income tax benefit from the release of 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.

SOURCE: Online Resources Corporation

Online Resources Media Contact: Beth Halloran Sr. Dir., Corporate Communications 703-653-2248 bhalloran@orcc.com or Investor Contact: Catherine Graham EVP & Chief Financial Officer 703-653-3155 cgraham@orcc.com

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