The online banking provider Online Resources Corp. moved into the red in the fourth quarter, in part because of expenses related to the departure of its chief executive as well as customer losses stemming from the financial crisis.
"We can't do a thing about a bank that goes under," Raymond T. Crosier, the Chantilly, Va., company's president, chief operating officer and interim chief executive, said in a conference call last week. "There's nothing that we can do about an acquired client. There's nothing we can do for an ARM client who goes out of business because of the economy.
"We can do things about clients who use our services and we get into a competitive situation. It's incumbent upon us to get our clients to the stickiest products we've got," he said.
Crosier said Online Resources is continuing to look for a replacement for Matthew P. Lawlor, its longtime CEO who left at the end of 2009, though it has not yet interviewed anyone.
Though Lawlor's departure was described by the company then as a retirement, analysts have suspected he was asked to leave, and comments Online Resources made on the call seem to reinforce that theory.
Online Resources' chief financial officer, Catherine A. Graham, said the company's "guidance does not include the impact of any costs that we may incur in connection with our former CEO's departure. These costs may include litigation and other legal costs as we were unable to reach a financial settlement with him."
Online Resources said it has so far spent $400,000 in costs related to Lawlor's departure, plus an additional $200,000 in equity compensation. Online Resources revenue rose 3% in the fourth quarter, to $38.2 million from a year earlier. It had a net loss of $1.1 million in the fourth quarter, down from a profit of $1.3 million.
For the full year, Online Resources' revenue rose less than 1%, to $151.9 million. Its net loss narrowed to $4.1 million from a loss of $7 million in 2008.
Online Resources projects its revenue for the first quarter will be $35.5 million to $37.5 million. It did not provide long-term guidance as it is undergoing a review of its business.