Online Resources Reports Third Quarter Profit and Strong Cash Flow

Gross profit for the third quarter of 2003 was $5.2 million, up 14 percent from $4.6 million in the third quarter of 2002. Gross margin was unchanged at 57 percent. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the third quarter of 2003 was $1.4 million, up 28 percent from $1.1 million in third quarter 2002. Income from operations for the third quarter of 2003 was $0.6 million, compared to $0.4 million in the prior year. Net income for the third quarter 2003 was $364,000, or $0.02 per share. This compares to net income of $93,000, or $0.01 per share, in the third quarter of 2002. 2003 Business Outlook The following statements are forward-looking, and actual results may differ materially. This guidance assumes no change in the method of accounting for equity compensation. For fourth quarter and full year 2003, the Company expects the following: Fourth Quarter 2003 -- The Company expects revenue to be between $9.3 million and $9.5 million. -- Gross profit margin is expected to be between 56 and 57 percent. -- The Company expects EBITDA to be between $1.4 million and $1.6 million -- Net income is expected to be between $0.01 and $0.02 per share. This assumes 18.8 million fully diluted shares outstanding and the acceleration of approximately $300,000 in unamortized deferred debt expense related to the expected conversion of 75 percent of the Companys convertible debt into common equity. Full Year 2003 -- The Company narrowed the low end of its revenue range for the 2003 year, and expects revenue to be between $38.0 million and $38.2 million. -- Gross profit margin expectation is raised slightly to between 58 and 59 percent. -- EBITDA expectation is narrowed to range between $7.1 million and $7.3 million for the 2003 year. -- The Company narrowed the top end of its net income expectation of $0.15 to $0.17 per share, assuming an average of 16.2 million fully diluted shares outstanding.