Online Resources / ORCC

About Online Resources

4795 Meadow Wood Lane, Chantilly, Va. 20151
www.orcc.com | 703-653-3100 | Founded: 1989

Industry: Information Technology | Category: Public Companies

In 2005, "by any way you cut it, we had a breakout year," Chairman Matthew P. Lawlor said in an interview. The firm recorded $60.5 million in revenue, up 43 percent from 2004. Profit for the year was $22.7 million, including a one-time tax benefit of $13.7 million.
Online Resources' new strategy of marketing itself to end-users paid off handsomely, as the total number of unique users of its banking and bill-payment services rose from 3.1 million in the fourth quarter of 2004 to nearly 4.3 million a year later. Its client list grew from 722 institutions to 829 over the same period.
The company also made its second major acquisition, paying $5 million and assuming $300,000 in debt to acquire Integrated Data Systems Inc., a private California firm that provided technology to more than 50 credit unions. The company still has ample cash on hand and is in the market for additional purchases, Lawlor said. "We're looking for acquisitions that will add volume and add customers to our fixed-cost platforms," he said.
Online Resources briefly ran into legal and accounting trouble in 2005, announcing in August that it was restating its results for the previous seven quarters because of issues with the way it had handled $2.2 million in unclaimed bill payments. Rather than keeping the money, the company will now return unclaimed payments to the originating banks or turn the funds over to state escheat funds. While it was resolving the issue, the company was briefly threatened with delisting from the Nasdaq stock market for failing to file on time its quarterly report for the period ending June 30, 2005.
Online Resources is predicting 21 percent revenue growth for 2006 and a 22 percent increase in earnings per share. Much of the growth this year is expected to come from Internet banking services and the company's effort to persuade people who use its software as a way of viewing their bank account information to take the next step and pay their bills online, Lawlor said. Currently, 28 to 29 percent of its client banks' customers check their balances online, but only 11 percent pay bills online.
Lawlor said the company is also just getting started with a variety of other e-commerce and credit card services. One of the most promising is an online collections service for credit card issuers that allows cardholders who are behind on their payments to go to a special Web site and negotiate a payment plan. Four large card issuers have agreed to use the service, and a pilot program indicated that allowing cardholders to use a Web site, rather than forcing them to talk to a live person, cut delinquency by 3 percent.

Chairman and CEO: Matthew P. Lawlor

2005 Financial Data

Revenues: $60,501,000 | Net Income: $22,663,000
Assets: $115,596,000 | Earnings Per Share: $0.88
Total employees: 435 | Local employees: 328