Headlines:
Bisys Swings to Profit of $236 Million KeyCorp Renews CheckFree Bill-Pay Pact Profit Up, Ratings Down at Jack Henry Goldleaf Offers Adaptive Authentication
Bisys Swings to Profit of $236 Million
Bisys Group Inc. posted strong gains in its fiscal third quarter, in a long-delayed earnings report.
The New York outsourcing provider reported Wednesday that it had net income of $236.2 million in the three months that ended March 31, versus a net loss of $66.4 million in the year-earlier period. Revenue rose 0.3%, to $211.7 million.
Most of the profits came from Bisys' March sale of its information services unit to Open Solutions Inc. for $470 million.
The company said that it expects its fourth-quarter report to be delayed by at least a month beyond its Sept. 13 filing deadline.
Bisys has been plagued with accounting issues. In 2004 it restated results going back to 2001 to correct its reporting on commissions in its life insurance business. The restatement lowered earnings and shareholders' equity by $100 million.
In April, Bisys finally filed its annual report for the fiscal year that ended June 30, 2005, along with restated results for previous years. It had delayed the filing while it investigated the accounting treatment of fees received from mutual funds for which it provided outsourced processing. The restatements forced the company to delay the Open Solutions deal twice.
Bisys' president and chief executive, Russell P. Fradin, submitted his resignation this month, and the company said it had hired an investment bank to explore its strategic options.
KeyCorp Renews CheckFree Bill-Pay Pact
KeyCorp of Cleveland has signed a multiyear renewal of its bill-payment contract with CheckFree Corp.
The Atlanta vendor announced the agreement Wednesday and said it would collaborate with Key on an informational campaign.
"CheckFree will devote significant resources to educating the bank's customers about the benefits of electronic billing and payment as the bank expands its technologically savvy user base," Jeff Weikert, a senior vice president in CheckFree's electronic commerce division, said in a press release.
Profit Up, Ratings Down at Jack Henry
After issuing a solid earnings report, Jack Henry & Associates Inc. got a pair of downgrades and boosted its stock repurchase plan.
The Monett, Mo., company, which sells core processing software and services to more than 2,400 banks and credit unions, said Monday that its board had doubled an ongoing stock repurchase authorization, to 10 million shares. It plans to finance the stock repurchases with available cash or short-term borrowings on an existing credit line.
Kevin D. Williams, Jack Henry's chief financial officer, said in a press release, "We sincerely believe that repurchasing shares of our stock at the current market price is a great use of capital that will drive up earnings per share and provide a solid return."
Jack Henry reported last week that its earnings grew 19% in fiscal 2006, which ended June 30, and that revenue grew 11%, to $592.2 million.
But analysts at Robert W. Baird & Co. and Wedbush Morgan Securities downgraded the stock to "hold" from "buy" after the release of the report, citing prospects for slower growth in the coming year.
Jack Henry's board authorized the buyback program in October 2002, originally for 3 million shares, and increased it to 5 million shares in May 2005. An earlier 3-million-share program approved in September 2001 was completed in the fiscal year ended June 30, 2003. The company said it has 91.2 million shares outstanding.
Jack Henry also processes automated teller machine transactions.
Goldleaf Offers Adaptive Authentication
Goldleaf Financial Solutions Inc. of Brentwood, Tenn., is offering software from RSA Security Inc. to its bank and credit union customers.
RSA, of Bedford, Mass., said Monday that Goldleaf is offering its Adaptive Authentication software, which includes the software RSA obtained by acquiring PassMark Security Inc. in April, and the transaction-monitoring software that came with its December purchase of Cyota Inc.
Goldleaf is also inviting customers to join RSA's eFraudNetwork, which pools observations from many banks to spot fraud that may be affecting multiple companies.
The agreement is designed to help Goldleaf customers meet the Federal Financial Institutions Examiners Council's guidance for online security, which requires companies to implement strong safeguards by yearend.
