eFunds Reports Third Quarter 2003 Results

Operating income was $12.2 million, or 9.1 percent of net revenue, compared to operating income of $15.5 million, or 10.8 percent of net revenue reported in the third quarter of 2002. Net revenue was $133.1 million compared to net revenue of $144.0 million reported in the third quarter of 2002. Results for the third quarter of 2003 included $2.6 million in net restructuring charges and a $2.3 million benefit from the reversal of the provision for expected future losses on government services contracts. Third quarter results were also positively impacted by a decrease in the Companys estimated annual effective tax rate from 32 percent to just under 31 percent and the recognition of certain tax deductions available to the Company, some of which related to prior tax years. Results for the third quarter of 2002 included $6.1 million in restructuring charges and a $2.0 million reduction in the estimate of future losses on government services contracts. For the nine months ended September 30, 2003 eFunds reported net income of $18.8 million, or $0.40 per diluted share, compared to net income of $23.7 million, or $0.51 per diluted share reported in the nine months ended September 30, 2002. Net revenue for the nine months ended September 30, 2003 was $396.6 million, compared to net revenue of $411.5 for the nine months ended September 30, 2002. This revenue decline is largely attributable to the loss of the STAR and EMEVS contracts during 2002 and a decline in revenues from IT consulting services during 2003 from the same period last year. The effect of the revenue declines was somewhat offset by increased revenue from ATM acquisitions and ongoing cost reduction efforts. Reported operating income for the nine months ended September 30, 2003 was $25.7 million, or 6.5 percent of net revenue, as compared to operating income of $33.5 million, or 8.1 percent of net revenue reported in the same period of 2002.