SEC Comment Letter for ONLINE RESOURCES CORP (CIK 0000888953) — Jun 16, 2005
ONLINE RESOURCES CORP (CIK 0000888953)
Date: June 16, 2005 · CIK: 0000888953 · Accession: 0000000000-05-030592
AI Filing Summary & Sentiment
File numbers found in text: 000-26123
Referenced dates: May 11, 2005
Letter
Mail Stop 4561 VIA U.S. MAIL AND FAX (703) 653-3105 Ms. Catherine A. Graham Executive Vice President and Chief Financial Officer Online Resources Corporation 4795 Meadow Wood Lane, Suite 300 Chantilly, VA 20151
Re: Online Resources Corporation Form 10-K for the year ended December 31, 2004 Filed March 15, 2005 File No. 000-26123
Dear Ms. Graham:
We have reviewed your response letter dated May 11, 2005 and have the following additional comments. Please understand that the purpose of our review process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
1. We note in response to comment 1 that you rely on the exclusion in Item 10(e)(4) of Regulation S-K. Please tell us in sufficient detail how each of your financial measures (1) recurring revenue, (2) recurring costs of revenues and (3) recurring gross profit are calculated in accordance with GAAP. If they are not calculated in accordance with GAAP, please reconcile these amounts to the most comparable GAAP measure. In addition, please tell us whether you use the actual number of recurring users in the denominator since the number of users disclosed on page 28 does not appear to be on a recurring basis.
2. Please tell us and expand your disclosure in future filings to specifically explain how you calculate your recurring average monthly metrics per user. Please also separately disclose each component used in this calculation including recurring revenue, recurring costs and recurring users and how you determine each of these components or tell us where they are disclosed elsewhere in your filing.
3. Your revised disclosure in response to the above comment should clarify what is meant by "recurring". If you do not present these metrics based on a recurring user basis, please revise your description to exclude the word "recurring".
4. We read your response to comment 2. We object to your use of this non-GAAP financial measure since the nature of your termination fees appear to be recurring. Accordingly, please exclude this measure in future filings. Please note however, that it is permissible and may be necessary to identify, discuss, and analyze material items, whether they are recurring or non-recurring, in Management`s Discussion and Analysis. Refer to Question 8 of the Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures.
5. We read your response to comment 3. Please explain to us how you legally acquired these aged funds. In addition, please explain why you do not consider yourself a debtor if you assume "the financial liability for the payment...thereby becoming primary liable for the bill payment." We note that this obligation does not appear to be a contingent liability; therefore, we do not understand why you would not record the liability in its entirety when the funds are acquired. In your response, please also summarize your performance obligations under your contractual agreements with your financial institution client and consumer client, if applicable, and whether your consumer client has transferred ownership of their funds to you.
6. Notwithstanding our comment above, please also tell us how you considered the applicable state escheat laws when making the determination that you are the beneficiary of these unclaimed funds. In addition, please explain to us how you determined that the recipient does not consider the obligation as outstanding for each of the transactions.
* * * *
You may contact Josh Forgione, at (202) 551-3431, or me, at (202) 551-3403, if you have questions. Please respond to the comments included in this letter within ten business days or tell us when you will provide us with a response. Please file your response on EDGAR.
Sincerely,
Steven Jacobs
Accounting Branch Chief
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<TEXT>
June 16, 2005
Mail Stop 4561
VIA U.S. MAIL AND FAX (703) 653-3105
Ms. Catherine A. Graham
Executive Vice President and Chief Financial Officer
Online Resources Corporation
4795 Meadow Wood Lane, Suite 300
Chantilly, VA 20151
Re: Online Resources Corporation
Form 10-K for the year ended December 31, 2004
Filed March 15, 2005
File No. 000-26123
Dear Ms. Graham:
We have reviewed your response letter dated May 11, 2005 and
have the following additional comments. Please understand that
the
purpose of our review process is to assist you in your compliance
with the applicable disclosure requirements and to enhance the
overall disclosure in your filing. We look forward to working
with
you in these respects. We welcome any questions you may have
about
our comments or any other aspect of our review. Feel free to call
us
at the telephone numbers listed at the end of this letter.
1. We note in response to comment 1 that you rely on the exclusion
in
Item 10(e)(4) of Regulation S-K. Please tell us in sufficient
detail
how each of your financial measures (1) recurring revenue, (2)
recurring costs of revenues and (3) recurring gross profit are
calculated in accordance with GAAP. If they are not calculated in
accordance with GAAP, please reconcile these amounts to the most
comparable GAAP measure. In addition, please tell us whether you
use
the actual number of recurring users in the denominator since the
number of users disclosed on page 28 does not appear to be on a
recurring basis.
2. Please tell us and expand your disclosure in future filings to
specifically explain how you calculate your recurring average
monthly
metrics per user. Please also separately disclose each component
used in this calculation including recurring revenue, recurring
costs
and recurring users and how you determine each of these components
or
tell us where they are disclosed elsewhere in your filing.
3. Your revised disclosure in response to the above comment should
clarify what is meant by "recurring". If you do not present these
metrics based on a recurring user basis, please revise your
description to exclude the word "recurring".
4. We read your response to comment 2. We object to your use of
this
non-GAAP financial measure since the nature of your termination
fees
appear to be recurring. Accordingly, please exclude this measure
in
future filings. Please note however, that it is permissible and
may
be necessary to identify, discuss, and analyze material items,
whether they are recurring or non-recurring, in Management`s
Discussion and Analysis. Refer to Question 8 of the Frequently
Asked
Questions Regarding the Use of Non-GAAP Financial Measures.
5. We read your response to comment 3. Please explain to us how
you
legally acquired these aged funds. In addition, please explain
why
you do not consider yourself a debtor if you assume "the financial
liability for the payment...thereby becoming primary liable for
the
bill payment." We note that this obligation does not appear to be
a
contingent liability; therefore, we do not understand why you
would
not record the liability in its entirety when the funds are
acquired.
In your response, please also summarize your performance
obligations
under your contractual agreements with your financial institution
client and consumer client, if applicable, and whether your
consumer
client has transferred ownership of their funds to you.
6. Notwithstanding our comment above, please also tell us how you
considered the applicable state escheat laws when making the
determination that you are the beneficiary of these unclaimed
funds.
In addition, please explain to us how you determined that the
recipient does not consider the obligation as outstanding for each
of
the transactions.
* * * *
You may contact Josh Forgione, at (202) 551-3431, or me, at
(202) 551-3403, if you have questions. Please respond to the
comments
included in this letter within ten business days or tell us when
you
will provide us with a response. Please file your response on
EDGAR.
Sincerely,
Steven Jacobs
Accounting Branch Chief
??
??
??
??
Ms. Catherine A. Graham
Online Resources Corporation
June 16, 2005
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