8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): April 27, 2006

CARREKER CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	0-24201	75-1622836
(State or Other Jurisdiction of	(Commission File Number)	(I.R.S. Employer
Incorporation or Organization)		Identification No.)
4055 VALLEY VIEW LANE
DALLAS, TEXAS		75244
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (972) 458-1981

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 4.02Non-Reliance on Previously Issued Financial Statements or a Related Audit Report of Completed Interim Review

As first disclosed on March 14, 2006, Carreker Corporation (the “Company”) has been in the process of reviewing an accounting issue related to deferred revenue that the Company believed could impact its historical consolidated financial statements. On April 27, 2006, the Company’s Audit Committee of the Board of Directors, after consultation with the Company’s management and Ernst & Young LLP, its independent auditors, concluded that its consolidated financial statements for the year ended January 31, 2004 (“Fiscal 2003”) and its consolidated balance sheet at January 31, 2005 should be restated and therefore should no longer be relied upon.

These consolidated financial statements are being restated to correct an error identified in deferred revenue resulting primarily from the duplicate recording of a customer software maintenance contract in connection with an accounting system conversion that occurred in October 2002. Software maintenance revenue related to this contract was erroneously recognized twice during the year ended January 31, 2004. Therefore, the consolidated financial statements for the fiscal year ended January 31, 2004 are being restated to reflect a corresponding $2.0 million reduction in software maintenance revenue and net income, and the consolidated balance sheets at January 31, 2004 and 2005 are being restated to reflect a corresponding $2.0 million increase in deferred revenue and in accumulated deficit.

The Company’s consolidated financial statements and related financial information are being restated as follows:

	Year Ended January 31, 2005						Year Ended January 31, 2004
	As Reported			Restated			As Reported			Restated
Operations Data:
Total revenues	$	118,891		$	118,891		$	128,908		$	126,867
Software maintenance revenue	43,293			43,293			45,122			43,081
Income (loss) before provision (benefit) for income taxes	(628		)	(628		)	3,906			1,865
Net income (loss)	(1,196		)	(1,196		)	3,706			1,665
Basic earnings (loss) per share	$	(0.05	)	$	(0.05	)	$	0.16		$	0.07
Diluted earnings (loss) per share	$	(0.05	)	$	(0.05	)	$	0.15		$	0.07
Balance Sheet Data:
Deferred revenue	$	22,181		$	24,222		$	25,231		$	27,272
Total liabilities	35,657			37,984			48,212			50,253
Accumulated deficit	(53,876		)	(55,917		)	(52,680		)	(54,721		)
Total stockholders equity	$	57,362		$	55,321		$	56,318		$	54,277

We plan to file our Form 10-K for the year ended January 31, 2006, which will include the foregoing restated consolidated financial statements, by May 2, 2006.

Also, in Item 9A of the Company’s Form 10-K for each of the years ended January 31, 2004 and 2005, as well as Item 4 in the Company’s Form 10-Qs relating to each of the interim quarterly periods between April 30, 2004 and October 31, 2005, Company management had previously concluded that its disclosure controls and procedures were effective as of the end of each of such annual and quarterly periods. In connection with the restatement described above, management has now identified a material weakness in the Company’s internal control over financial reporting, which management has concluded existed as of the end of each of the foregoing referenced annual and quarterly periods. A material weakness is a control deficiency, or a combination of control deficiencies, that

2

results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. Specifically, the Company did not maintain effective controls to ensure the accuracy of its deferred software maintenance reconciliations. The Company’s accounting personnel did not perform accurate reconciliations and did not properly identify and resolve reconciling items. This control deficiency resulted in the misstatement of the Company’s consolidated financial statements. Additionally, this control deficiency could result in a material misstatement to annual or quarterly financial statements that would not be prevented or detected. Accordingly, management has determined that this control deficiency constitutes a material weakness. As a result of this material weakness, management concluded that the Company’s disclosure controls and procedures as of January 31, 2004 and January 31, 2005, as well as of the end of each of the interim quarterly periods between April 30, 2004 and October 31, 2005, were ineffective. As a result, management’s conclusions that the effectiveness of the Company’s disclosure controls and procedures as originally stated in the foregoing referenced public filings should no longer be relied upon. In addition, management will conclude in “Management’s Report on Internal Control over Financial Reporting” in its Form 10-K for the year ended January 31, 2006 that the Company’s internal control over financial reporting was not effective as of January 31, 2006. Also, as a result of the material weakness, senior management believes that the report of its independent registered public accounting firm will conclude that the Company’s internal control over financial reporting was not effective as of January 31, 2006.

The Company’s Audit Committee and senior management have discussed the matters disclosed in this Item 4.02(a) with Ernst & Young LLP, the Company’s independent registered public accounting firm.

Item 9.01Financial Statements and Exhibits

(c)  Exhibits.

Exhibit
Number	Description
99.1	Carreker Corporation press release dated April 27, 2006

3

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CARREKER CORPORATION
	(Registrant)
Date:  April 28, 2006	By:	/s/ Lisa K. Peterson
		Executive Vice President and Chief Financial
		Officer

4

EX-99.1

Exhibit 99.1

New Release

Carreker Corporation Announces Resolution of Accounting Issue and Restatement of Certain Prior Period Results

DALLAS (April 27, 2006) — Carreker Corporation (Nasdaq: CANI), a leading provider of payments technology and consulting solutions for the financial services industry, announced today that it will restate its audited consolidated financial results for the fiscal year ended January 31, 2004 and its consolidated balance sheet at January 31, 2005 as a result of the correction of a deferred revenue accounting error, which was previously announced on March 14, 2006. Accordingly, these financial statements should no longer be relied upon.

The correction relates to an error identified in deferred revenue and is primarily attributable to the duplicate recording of a customer software maintenance contract in conjunction with an accounting system conversion in October 2002. Software maintenance revenue related to this contract was erroneously recognized twice during the year ended January 31, 2004. This has been identified as a material weakness in management’s evaluation of the Company’s disclosure controls and procedures and, based upon this evaluation; management has concluded that the Company’s disclosure controls and procedures were ineffective for the relevant periods. Management has established specific processes and controls and has modified others to provide reasonable assurance that these measures, when effectively implemented and maintained, will remediate the material weakness.

Consistent with previous indications, the net adverse impact on the consolidated financial statements as of and for the fiscal year ended January 31, 2004 will be a $2.0 million reduction in software maintenance revenue and net income. The consolidated balance sheets at January 31, 2004 and 2005 will reflect a $2.0 million increase in deferred revenue and a corresponding increase in accumulated deficit. As previously stated, the item is not related to ongoing accounting practices, does not impact future results of operations and does not affect the Company’s cash position.

As previously announced, the Company expects to report fourth quarter and fiscal year end 2005 financial results on May 1st, 2006 after 4:00 pm Eastern Time.. Management will subsequently host a conference call and Web cast at 4:30 p.m. Eastern Time to discuss the fourth quarter and fiscal 2005 financial results as well as other items of interest. To join the conference call, dial 866-348-8664 in the United States or 706-679-0430 internationally. All participants enter code 5845508. Additionally, a live Web cast of the conference call will be available through the investor relations section of the Company’s Web site at http://ir.carreker.com.

About Carreker Corporation

Carreker Corporation improves earnings for financial institutions around the world. The Company’s integrated consulting and software solutions are designed to increase clients’ revenues and reduce their expenses, while improving security and increasing the value of their customer relationships. Carreker provides products and services to more than 250 clients in the United States, Canada, the United Kingdom, Ireland, continental Europe, Australia, New Zealand, South Africa, South America, Mexico, and the Caribbean. Clients include the full range of community, regional and large banks, among them more than 75 of the largest 100 banks in the United States. Headquartered in Dallas, Texas since 1978, Carreker Corporation has offices in London and Sydney. For more information, visit www.carreker.com.

Forward Looking Statements

Except for historical information, the statements in this release constitute forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially as well as the risks and uncertainties arising out of the restatement of the Company’s consolidated financial statements and also economic, competitive, governmental and technological factors affecting the Company’s operations, markets, services, products, sales, potential sales and prices. For further information concerning certain of these risks and uncertainties, see under the caption “Risk Factors” in the Company’s most recent Form 10-K. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

Lisa Peterson, Executive Vice President	Gary Samberson, SVP, Treasury, Risk
and CFO	Management and Investor Relations
(972) 371-1454 PH	(972) 371-1590 PH
(972) 458-2567 FX	(972) 458-2567 FX
Email: lpeterson@carreker.com	Email: gsamberson@carreker.com