Magazine article American Banker

Carreker Aiming at Nonbanks as Imaging Falters

Magazine article American Banker

Carreker Aiming at Nonbanks as Imaging Falters

Article excerpt

Carreker Corp., which has struggled to cash in on the growth in check imaging, plans to build consulting and other parts of its business and to market to industries outside banking, its chairman said.

J.D. "Denny" Carreker, who is also the Dallas company's chief executive, said Monday, "Our financial results underperformed our expectations" in 2005, but "we have true momentum" now.

Carreker announced results for the three months and fiscal year that ended Jan. 31 on Monday; it was supposed to report in mid-March but postponed because of an accounting error related to deferred revenue. It had said last week that its financial problems were more far-reaching than it had previously reported.

The accounting mishap -- a customer's software maintenance revenue was recognized twice during the fiscal year that ended Jan. 31, 2004 -- arose during an October 2002 accounting system conversion. To correct the error Carreker had to remove $2 million of revenue from its 2004 reports. Its current accounting practices would not have produced that error, it said.

Carreker, which had a loss of $1.1 million in year-earlier quarter, reported that its net income for the three months that ended Jan. 31 of this year was $1.5 million, or 6 cents a share. Revenue rose 4%, to $30.1 million. For the full fiscal year its net income was $2.1 million, compared with a net loss of $1.2 million in fiscal 2004. Revenue for the 12 months dropped 2%, to $116.6 million.

During a Monday conference call with analysts, Mr. …

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