Higher One Holdings, Inc. Reports Second Quarter 2013 Financial Results

Higher One Holdings, Inc. Reports Second Quarter 2013 Financial Results

• Revenue was $40.0 million, up 2% year-over-year

• Total Signed School Enrollment (SSE) increased to approximately 13 million students at quarter end

• OneDisburse new sales over 100,000 SSE

NEW HAVEN, Conn.--(BUSINESS WIRE)-- Higher One Holdings, Inc. (NYS: ONE) ("Higher One" or the "Company"),a leader in providing financial services and data analytics to over 1,600 college and university campuses across the U.S., today announced financial results for the second quarter of 2013.

Higher One reported revenue of $40.0 million, as compared to $38.9 million in the second quarter of 2012. The Company reported GAAP net income of $3.6 million for second quarter 2013, and non-GAAP adjusted net income, which excludes certain non-recurring or non-cash items, of $2.2 million. GAAP diluted EPS was $0.07 in the quarter, as compared to $0.07 in the second quarter of 2012. Non-GAAP adjusted diluted EPS was $0.05, as compared to $0.09 for the same period a year ago. In the second quarter of 2013, non-GAAP adjusted EBITDA was $5.9 million.

Mark Volchek, Chief Executive Officer, said, "The second quarter is a seasonally slower period for company revenue. While organic revenue was lower on a year over year basis, we were able to grow overall revenue as a result of the additions of the Campus Labs suite of data analytics software, and the Campus Solutions business, which we acquired from Sallie Mae during the second quarter. We have successfully completed the integration of our sales teams and are pleased with the overall feedback we are receiving from schools about the acquisition."

Volchek continued, "We have made changes to the fee schedule for the OneAccount over the past year. These changes make the account even more consumer-friendly than it already was, as we continue to compare favorably to the other student checking and prepaid card options for students. The issues of how the fee changes will roll out, the changes in the rate of adoption of the OneAccount, the variations in financial aid volumes and the unpredictability of enrollment trends make it challenging to provide accurate guidance at this time. As such, we are suspending providing revenue and earnings guidance."

Total enrollment at higher education clients that have purchased the OneDisburse® service increased to 4.8 million, an increase of approximately 300,000 from 4.5 million at the end of the second quarter of 2012. Total enrollment at higher education clients that have signed up for at least one of our OneDisburse, CASHNet, Campus Labs or Campus Solutions modules totals approximately 13 million.

The number of OneAccounts at the end of the second quarter of 2013 was approximately 2.2 million, up 14% from the second quarter of 2012. The number of OneAccounts was essentially flat on a sequential basis.

Conference Call Information

Higher One will host a conference call at 8:30 a.m. ET today to discuss second quarter results. The dial in phone number is 866-318-8613 for domestic listeners and 617-399-5132 for international listeners. The conference ID # is 25495047. A live webcast of the conference call, together with a slide presentation that includes supplemental financial information and reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures can be accessed through Higher One's investor relations website at http://www.ir.higherone.com. In addition, an archive of the webcast will be available for 90 days through the same link.

About Higher One Holdings

Higher One Holdings, Inc. (NYS: ONE) partners with colleges and universities to lower their administrative costs and to improve graduation rates. We provide a broad array of payment, refund disbursement and data analytics and management tools to institutions that help them save money and enhance institutional effectiveness. And for students, we offer financial literacy programs and convenient, flexible and affordable transaction options to help them manage their finances. Higher One is a leader in higher education, supporting more than 1,600 schools and 13 million enrolled students. More information about Higher One can be found at www.ir.higherone.com.

Forward-Looking Statements

This press release contains statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Management's projections and expectations are subject to a number of risks and uncertainties that could cause actual performance to differ materially from that predicted or implied. Forward-looking statements may be identified by the use of words such as "expect," "anticipate," "believe," "estimate," "potential," "should" or similar words intended to identify information that is not historical in nature. Forward-looking statements contained herein include, among others, statements about the expected benefits of the acquisition of Sallie Mae's Campus Solutions business by Higher One and such statements are based on the current beliefs and expectations of Higher One and Sallie Mae's management, as applicable, and are subject to known and unknown risks and uncertainties. There are a number of risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements, including, but not limited to Higher One being unable to achieve expected synergies and operating efficiencies in the acquisition within the expected time-frames or at all and to successfully integrate Sallie Mae's Campus Solutions business operations into those of Higher One; such integration may be more difficult, time-consuming or costly than expected; revenues following the transaction may be lower than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the transaction; the retention of certain key employees in the Campus Solutions business at Sallie Mae; the outcome of any legal proceedings that may be instituted against the parties and others related to the acquisition agreement and the amount of the costs, fees, expenses and charges related to the acquisition. These statements speak only as of the date they are made, and the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. The forward-looking statements in this press release do not include the potential impact of any acquisitions or divestitures that may be announced and/or completed after the date hereof. Information about the risks and factors that could affect future performance can be found in our recent SEC filings.

Use of Non-GAAP Financial Measures

This release includes certain metrics presented on a non-GAAP basis, including non-GAAP adjusted EBITDA, non-GAAP adjusted net income, and non-GAAP adjusted EPS. We believe that these non-GAAP measures, which exclude amortization of intangibles, stock-based compensation, and certain non-recurring or non-cash impacts to our results, all net of taxes, provide useful information regarding normalized trends relating to the company's financial condition and results of operations. Reconciliations of these non-GAAP measures to their closest comparable GAAP measure are included in this press release.