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Carreker
Corporation Press Release - February
26, 2002
CARREKER BRINGS COMMUNITY AND
REGIONAL FINANCIAL INSTITUTIONS
SIGNIFICANT EARNINGS IMPROVEMENTS
Premier provider’s two-year
effort to scale down large financial
institution solutions opens large
and prosperous market
DALLAS (February 26, 2002) – Carreker
Corporation (NASDAQ: CANI), a leading
provider of technology and consulting
solutions to the financial industry,
announced the success of a two-year
effort to scale its premier solutions
for the use of large community and
small regional financial institutions.
In each of its key lines of business,
these institutions are now using
Carreker solutions to realize proportionately
the same significant earnings improvements
as the original large clients.
“We have long recognized that
the needs of community and regional
financial institutions often parallel
those of their larger counterparts,
and that the benefits we have brought
our large clients hold broad appeal,” said
Michael D. Hansen, President and
Chief Operating Officer of Carreker. "The
challenge has been to deliver the
same strong ROI while adapting our
design and delivery approach for
a new market segment. The evidence
says we have successfully faced the
challenge with new technology, scaled
implementation models, and new distribution
channels.”
This new market more than triples
the size of Carreker’s target
market, adding almost 600 institutions
(roughly those in the $500 million – $5
billion asset-range) to Carreker’s
traditional target market (banks
larger than $5 billion). Carreker
already does extensive business with
the top 20 banks in the US and more
than 75 of the top 100, in addition
to many large financial institutions
around the world. Carreker has further
expanded its reach into smaller institutions
by partnering with providers like
Fiserv and Metavante who already
have active sales channels and delivery
resources in this market and who
are also established in the next
tier of 1,000 financial institutions
in the $200-$500 million asset range.
Michael Croal, Senior Vice President
of Operations of Hancock Holding
Company, the $3.7-billion-asset bank
holding company which operates Hancock
Bank in Mississippi and Hancock Bank
of Louisiana, said, “Carreker’s
depth of consulting expertise and
technology in a number of vital areas – product
pricing, risk management, cash handling,
payment processing – vastly
improved our cost structure and generated
significant new revenues. Carreker
showed they understand the small
bank model by structuring their overall
offering to help us fund our operational
improvements out of the increased
revenues they brought us.”
Brent Carreker, Managing Principal,
Carreker Corporation, added, “There
is tremendous pent-up demand in this
segment for scaled-down solutions.
These institutions may not have the
means to experiment with innovations,
but they have the same incentive
as larger banks and, with their record
2001 earnings, they have the means
to acquire scaled-down solutions
that have already proven their ROI.”
Among the Carreker successes recorded
in the new market segment are:
- Revenue Enhancement, Carreker’s
unique methodology and consulting
for identifying new revenue opportunities
which typically provides large
clients with about $½ million
in sustainable new revenues per
$1 billion in client assets – a
metric consistently exceeded in
the new smaller institution segment.
- Risk Management, where
Carreker’s FraudLink PC™,
a PC version of its mainframe FraudLink™ for
detecting fraudulent items in the
back office and in deposited items,
typically provides large banks
with ROI in three to nine months
and fraud loss reductions up to
$1 million per month. FraudLink
PC users are realizing benefits
of the same proportion relative
to their volumes. Carreker has
also developed EFraudLink.com,
a risk management web site with
services available on a transaction
fee basis, for this market. For
community institutions, Carreker
also offers FraudLink Kite which
uses extensive analysis modules
to detect fraudulent kite schemes
early in their cycle.
- Cash Inventory Management,
where Carreker’s iCom™,
an Internet-based and ASP-hostable
cash forecasting and inventory
management desktop system, consistently
reduces an institution’s
cash needs by 20-40%. The delivery
of this solution via the Internet,
coupled with a pricing strategy
tied to the number of cash points
in a financial institution, eliminates
the need for software installation
thereby reducing the installation
cost to a point where any institution
can afford this solution.
- ReserveLink, Carreker’s
multi-platform solution that lets
banks sweep transaction account
balances to significantly reduce
their reserve requirements. This
solution consistently out-performs
other solutions on the market,
which allows a financial institution
to minimize the number and types
of accounts swept while delivering
the best return on their investment.
A combination of reserve and cash
reduction can significantly reduce
these non-earning assets.
- EnAct, Carreker’s
methodology and technology for
increasing the value of customer
relationships, typically results
in 15%-30% lift in targeted customer
income streams. This metric holds
among the new market segment, where
the beta client for Carreker’s
web-enabled version of EnAct client
reported a 26% increase in overall
household profitability one year
into implementation.
- In addition, the Corporation
for American Banking, a subsidiary
of the American Bankers Association,
recently conferred its exclusive
endorsement on three of Carreker’s
solutions scaled for the community
bank market: FraudLink PC, iCom,
and ReserveLink. Tom Vleisides,
Senior Vice President, Alliance
Management, Carreker Corporation
said, “This exclusive endorsement
was granted after the ABA/CAB performed
an extensive market study to determine
the best of breed solution for
their member banks.”
J. D. (Denny) Carreker pointed out, “From
a Carreker shareholder value perspective,
these ABA-endorsed technologies and
our other solutions position us to
expand into this large segment of
our financial institution vertical,
leveraging our investments across
a wider revenue stream.”
About Carreker Corporation
Carreker Corporation improves earnings
for financial institutions around
the world. The Company’s integrated
consulting and software solutions
are designed to increase our clients’ revenues
and reduce expenses, while improving
security and increasing the value
of their customer relationships.
Carreker provides technology and
consulting to more than 200 clients
in the United States, Canada, the
United Kingdom, Ireland, Australia,
and South Africa. Clients include
the full range of community, regional
and large banks, among them more
than 75 of the largest 100 banks
in the United States. Headquartered
in Dallas, Texas since 1978, Carreker
Corporation also has offices located
around the world including London,
Toronto, and Sydney. For more information,
visit www.carreker.com or
phone Hal Denton at 972-340-2537.
Forward Looking Statement — This
document contains forward-looking
statements based on current expectations
that are inherently subject to risks
and uncertainties. The words "estimate," "project," "intend," "expect," "believe," "plan" and
similar expressions are intended
to identify forward-looking statements.
The Company's actual results could
differ materially from those currently
anticipated due to a number of factors,
including, but not limited to, risks
associated with the Company’s
acquisition of Check Solutions, changes
in the banking industry’s demand
for the Company’s solutions,
significant customer concentration
and the potential loss of a significant
customer, variations in operating
results, reduction in revenues due
to pricing arrangements, the infrequent
use of long-term contracts with customers,
the focus of the Company's solutions
on e-finance opportunities and the
chance that they will not be accepted
in the marketplace, risks associated
with rapid growth in the Company’s
business, the inability to attract
and retain key personnel, existence
of defects or errors in the Company’s
software, ability to develop new
technologies and services, ability
to meet the changing needs of customers,
dependence on third-party Internet
providers and the Internet, intense
competition, risks associated with
strategic alliances and acquisitions,
inability to protect the Company's
proprietary rights, infringement
and other claims and related expenses,
reliance on third-party licenses,
volatility in the Company's stock
price, exposure to risks associated
with international operations, reliance
on independent contractors, governmental
regulation and legal uncertainties
and anti-takeover provisions in the
Company's charter documents and under
applicable law. These and other factors
are set forth in the Company's annual
report on Form 10-K filed on April
30, 2001 and in other reports and
documents filed by the Company with
the Securities and Exchange Commission
from time to time.
Carreker Contacts:
Hal Denton, Vice President, Marketing
972 340-2537 PH
972 233-7831 FX
Email: hdenton@carreker.com
Terry Gage, Executive Vice President,
CFO
972 371-1454 PH
972 458-2567 FX
Email: tgage@carreker.com
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