Metavante Announces First Quarter Results

Business Wire, April 29, 2008

MILWAUKEE -- Metavante Technologies, Inc. (NYSE:MV):

* Revenue growth of 10 percent; organic growth of 9 percent

* Segment operating income up 16 percent

* EPS of $0.29; cash EPS of $0.35

* Raising full year earnings guidance to reflect strong start

Metavante Technologies, Inc. (NYSE:MV) today reported first quarter 2008 revenue of $424.6 million, up 10 percent compared to $387.2 million in the first quarter of 2007. Organic growth was driven by higher transaction volumes in the payment businesses and higher core processing activity. Acquisitions added approximately 1 percentage point to the growth rate.

Segment operating income for the first quarter of 2008 was $119.3 million, an increase of 16 percent compared to the first quarter of 2007. The segment operating margin for the first quarter of 2008 improved to 28.1 percent, an increase of 1.4 percentage points compared to the first quarter of 2007.

Net income for the first quarter of 2008 was $35.0 million, or $0.29 per share. Cash net income for the first quarter of 2008 was $41.4 million, or $0.35 per share. Comparison of either of these financial metrics to prior year results is not instructive due to the significantly different capital structure of the company prior to the separation from Marshall & Ilsley Corporation in November 2007.

EBITDA in the first quarter of 2008 was $122.8 million. This result compares to EBITDA of $121.5 million in the first quarter of 2007, which included an $8.0 million gain related to an investment in Firstsource Solutions.

Commenting on the results, Frank R. Martire, President and Chief Executive Officer, said, "Our first quarter was a good start to 2008. The strong organic revenue growth was driven by higher transaction volumes and by our recent successes cross-selling our product portfolio and capturing new business. I am particularly pleased that the combination of operating leverage and cost productivity allowed us to make additional investments in future growth while still improving profitability." Martire continued, "Our customers continue to confront a difficult and uncertain environment, and are deferring decisions and delaying capital spending."

Cash provided by operating activities for the first quarter of 2008 was $121.0 million, compared to $59.0 million in 2007. Free cash flow for the quarter was $84.0 million, compared to $20.3 million in 2007. Free cash flow exceeded both 2007 results and net income in the first quarter of 2008 due to the timing of payment transaction settlement and working capital performance.

Cash net income (including per share amounts), EBITDA, and free cash flow are non-GAAP financial measures. These measures should not be considered substitutes for GAAP measures. See the attachments to this release under "Non-GAAP Financial Measures" for an explanation of these measures and reconciliations to GAAP financial measures.

Financial Solutions Group (FSG)

Metavante's Financial Solutions Group offers a comprehensive suite of technology and business services that are critical to a financial institution's ability to attract, expand, and service existing and prospective customers.

FSG's first quarter 2008 revenue was $164.0 million, an increase of 8 percent compared to $152.0 million in the first quarter of 2007. Segment operating income for the first quarter of 2008 was $37.2 million compared to $38.7 million in the first quarter of 2007. Segment operating margin was 22.7 percent in the first quarter of 2008 compared to 25.5 percent in the first quarter of 2007. The decline in operating margin was due to increased investments in product development, which more than offset the benefit of operating leverage.

Payment Solutions Group (PSG)

Metavante's Payment Solutions Group offers one of the industry's most comprehensive suites of payment products and services, including credit, debit and prepaid debit card management and a national payments network in NYCE.

PSG's first quarter 2008 revenue was $260.6 million, an increase of 11 percent compared to $235.2 million in the first quarter of 2007. Segment operating income in the first quarter of 2008 was $82.1 million compared to $64.5 million in the first quarter of 2007. Segment income margin was 31.5 percent in the first quarter of 2008 compared to 27.4 percent in the first quarter of 2007. The improvement in operating margins was driven by the benefits of cost actions taken in the Image business in the fourth quarter of 2007 and operating leverage.

Interest Expense

Interest expense in the first quarter of 2008 was $20.4 million higher than the first quarter of 2007 as a result of the borrowings incurred in connection with the separation from Marshall & Ilsley Corporation in November 2007.

Income Taxes

The effective tax rate in the first quarter of 2008 was 39.1 percent compared to 36.0 percent in the first quarter of 2007. The increase in the effective tax rate is primarily due to the expiration of the research and development tax credit for federal tax purposes on December 31, 2007. The full year 2008 effective tax rate is still expected to be approximately 37 percent, which anticipates that the research and development tax credit will be reinstated during 2008.