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CheckFree Cutting Another 450 Jobs

Atlanta-based electronic billing and payments company CheckFree Corp. is eliminating about 450 more jobs and closing four offices, while raising its guidance for third quarter pro forma earnings per share to 3 to 5 cents.

CheckFree saw its stock price dip last week when Deutsche Banc Alex Brown lowered its earnings and revenue estimates for 2003, citing stiff competition in the industry.

The company said today that the office consolidations and job cuts, which will mean one-time charges of $14 to $16 million, are expected to add about 3 cents per share, pro forma, in fiscal fourth quarter 2002, and as much as 20 cents per share, pro forma, in fiscal 2003.

The consolidation of transaction processing from three legacy platforms onto CheckFree's state-of-the-art platform, Genesis, is letting the company streamline its Electronic Commerce Division.

The market's initial take on the news was positive; the stock was up 48 cents to $15.08 per share in the early going.

In January, CheckFree said it would close its San Francisco-based customer operations center in April, shedding about 100 jobs there.

Now, the company will close its Houston and Austin, Texas facilities this summer, and manage all e-commerce business through four remaining locations: Aurora, Ill.; Dublin, Ohio; Norcross, Ga.; and Phoenix. About 150 jobs will be lost in Texas and another 150 across the four remaining sites of the Electronic Commerce Division.

The company also plans to close its i-Solutions offices in Ann Arbor, Mich. and Singapore, cutting about 100 jobs in those offices. About 50 positions in corporate staff functions also are being cut.

"We are executing on our plans to consolidate operations in our Electronic Commerce Division, and to derive further economic benefits from a variety of operational initiatives," said Pete Kight, CheckFree's chairman and chief executive officer. "These business improvements are beginning to translate into economic gains that enable us to improve our financial performance ..."

CheckFree launched its first integrated electronic billing and payment solution in 1997. As of December 31, 2001, its Electronic Commerce division enabled 5.9 million consumers to receive and pay bills electronically. For its last fiscal year ending June 30, 2001, the company lost $363 million.