Fundtech Reports Financial Results for the Second Quarter of 2009
- Press Release
- Source: Fundtech Ltd.
- On 7:00 am EDT, Tuesday August 4, 2009
GAAP EPS 3 Cents
Non GAAP EPS 11 Cents
Quarterly Revenues of $28.3 Million
Related Quotes
| Symbol | Price | Change |
|---|---|---|
| FNDT | 12.46 | +0.43 |
JERSEY CITY, N.J., Aug. 4, 2009 (GLOBE NEWSWIRE) -- Fundtech Ltd. (Nasdaq:FNDT - News), a leader in global transaction banking solutions, today announced financial results for the second quarter of 2009. Fundtech posted quarterly revenues of $28.3 million, an 11% decrease year-over-year, compared to second quarter revenues of $31.6 million in 2008, and an 8% increase compared to first quarter 2009 revenues of $26.1 million.
On a GAAP (Generally Accepted Accounting Principles) basis, Fundtech reported a net profit of $0.5 million or $0.03 per diluted share, for the second quarter of 2009 compared with net income of $1.7 million, or $0.10 per diluted share, in the second quarter of 2008, and net loss of ($0.9) million, or ($0.16) per diluted share, in the first quarter of 2009.
Excluding stock-based compensation and, amortization of intangibles, Fundtech's adjusted net income for the second quarter of 2009 was $1.8 million, or $0.11 per diluted share, compared with $3.0 million, or $0.18 per diluted share, in the second quarter of 2008 and $0.4 million, or $0.03 per diluted share, in the first quarter of 2009 (See Schedule A attached to this news release -- Reconciliation to GAAP).
"I am pleased that we have been able to meet guidance and sequentially improve our financial results in the second quarter" said Fundtech CEO Reuven Ben Menachem. "While market conditions remain uncertain we are starting to see some signs that the large Banks may be starting to invest in their infrastructure again. We believe that our proven success delivering large payment systems on a global scale combined with our superior technology will provide us with an important competitive advantage selling to these large global and regional banks."
Other highlights:
* During the second quarter (excluding Accountis and Synergy) Fundtech closed 148 new deals and added 4 new bank customers. * During the second quarter Fundtech closed 10 new system sales including 3 US Payments, 2 CASHplus, 1 Global CASHplus and 2 at BBP. * During the second quarter Fundtech closed the sale of two Global PAYplus systems one of which was in the US and the other to a Pacific Rim Bank. * As previously reported, on April 1 Fundtech closed through its wholly owned subsidiary Accountis the acquisition of InterSoftware. InterSoftware provides payment services to UK corporations and its 2008 revenues were approximately GBP 1.1 million. Cash consideration paid for the acquired 100% interest in InterSoftware was GBP 2.7 million.
Fundtech also announced today that its board of directors approved expanding its previously announced $10 million stock repurchase program. Under this previously approved plan Fundtech has acquired approximately 707,000 Ordinary Shares in consideration for approximately $5.8 million since November 2008. Under Israeli Companies law Fundtech is currently restricted from continuing to buy additional shares due to lack of sufficient retained earnings. Fundtech is planning to file a petition with the Israeli courts to permit the continuation and expansion of the repurchase program. Fundtech will be asking the courts to permit the repurchase of Ordinary Shares limited to an additional investment of $10 million beyond the $5.8 million already invested since the fourth quarter of 2008. Fundtech expects to file the petition over the next few weeks and for the courts to reply to the petition within approximately 60-90 days thereafter.
Reconciliation of GAAP results to non-GAAP results
Fundtech provides non-GAAP operating results as a supplement to its GAAP financial results. The presentation of this information should not be considered in isolation to, or as a substitute for, the financial results presented in accordance with GAAP. Management believes that non-GAAP financial measures are useful to investors because they allow for an evaluation of Fundtech with a focus on the performance of its core operations.
Fundtech's executive management team uses these same non-GAAP measures internally to assess the ongoing performance of the company. Since this information is not a GAAP measurement of financial performance, there are material limitations to its usefulness on a stand-alone basis, including the lack of comparability of this presentation to the GAAP financial results of other companies.
Fundtech's non-GAAP results exclude stock-based compensation, amortization of intangibles, impairment of goodwill and other intangible assets, deferred taxes as well as other items that management deems as non recurring items.
A detailed reconciliation of GAAP net income to non-GAAP net income is included in the attached Schedule A.
Guidance
The financial guidance provided is current as of today only and Fundtech undertakes no obligation to update its estimates.
Due to the current market environment we are providing updated guidance only for the third quarter of 2009.
For the third quarter of 2009 we now expect revenues of between $29 million and $30 million, GAAP earnings per diluted share of between $0.02 and $0.06 and non-GAAP earnings per diluted share, before all amortization expenses and stock-based compensation expenses, of between $0.10 and $0.14.
Fundtech estimates that quarterly financial income for the third quarter will be approximately zero and that tax expenses, excluding deferred taxes will be approximately $300,000.
Fundtech estimates that quarterly amortization expenses for the third quarter will be approximately $500,000 and that stock-based compensation expenses will be approximately $700,000.
Fundtech's guidance for the third quarter of 2009 does not include the impact of deferred taxes and also does not include the impact of any future impairment of intangible assets, as these assets are periodically being evaluated by Fundtech's management under evolving accounting standards which are incapable of assessment in advance.
Company to Host Conference Call
The senior management of Fundtech will host a conference call at 8:30 a.m. (EDT) today, Tuesday, August 4, to discuss the Company's second-quarter and results as well as financial guidance, and to answer questions from the investment community.
To participate, please call 1-888-300-2324 or 1-719-325-2332 and ask for the Fundtech call.
A replay of the conference call will be available for playback from 11:30am (EDT) Tuesday August 4, until 11:59pm (EDT) Friday August 21. The replay may be accessed by dialing 1-888-203-1112 or 1-719-457-0820, pass code 7211794.
This call will also be web cast live on: http://www.fundtech.com. An online replay will be available until August 31.
About Fundtech
Fundtech (Nasdaq:FNDT - News), was founded in 1993, and is a leading provider of software and services to banks of all sizes around the world. Payments systems include wire transfers, ACH origination, cross-border payments and remittance. Cash management systems are designed for large corporate through small business clients. Fundtech is a leader in SWIFT services, operating one of the world's largest SWIFT service bureaus in the world. We offer an extensive line of financial supply chain applications including electronic invoice presentment and supply trade financing. And we are the leading provider of CLS systems to the world's largest banks. More than 1,000 clients throughout the world rely on Fundtech solutions to improve operational efficiency and provide greater competitiveness through innovative business-to-business services. For more information, visit www.fundtech.com.
Forward Looking Statements:
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, the expectations related to third quarter 2009 revenues, GAAP earnings per share and, non-GAAP earnings per share. These statements are based on management's current expectations and are subject to risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, expected, estimated or projected. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: the ongoing downturn in the financial services industry and the global economy; failure to obtain revenue as anticipated; and risks and other factors detailed from time to time in Fundtech's public filings, including its Annual Report on Form 20-F for the year ended December 31, 2008 . Fundtech undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances that arise after the date of this Release or to reflect the occurrence of unanticipated events.
FUNDTECH LTD. AND ITS SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In Thousands)
June 30, December 31,
2009 2008
---- ----
ASSETS
------
Current assets:
Cash and cash equivalents $ 31,003 $ 29,642
Short term deposits 1,847 1,415
Marketable securities 11,390 9,563
Trade receivables, net 27,351 28,264
Deferred taxes 1,070 1,022
Other accounts receivable, prepaid
expenses 7,409 5,055
------------ ------------
Total current assets 80,070 74,961
Marketable securities 1,026 2,204
Severance pay fund 1,369 1,394
Long term deposits 1,296 1,003
Prepaid expenses 2,242 2,797
Property and equipment, net 15,177 15,898
Goodwill, net 37,073 34,520
Other assets, net 7,117 5,995
------------ ------------
Total assets $ 145,370 $ 138,772
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Trade payables $ 2,222 $ 2,908
Deferred revenues 21,202 9,910
Employee and payroll accruals 5,770 6,807
Other accounts payable and accrued
expenses 5,902 7,228
------------ ------------
Total current liabilities 35,096 26,853
Accrued severance pay 2,022 1,734
Deferred taxes 1,084 970
Other long term liabilities 3,127 2,278
------------ ------------
Total liabilities 41,329 31,835
------------ ------------
Shareholders' equity:
Share capital 49 49
Additional paid-in capital 157,562 155,976
Accumulated other comprehensive income 1,240 290
Accumulated deficit (45,812) (45,470)
Treasury stock, at cost (8,998) (3,908)
------------ ------------
Total shareholders' equity 104,041 106,937
------------ ------------
Total liabilities and shareholders'
equity $ 145,370 $ 138,772
============ ============
FUNDTECH LTD. AND ITS SUBSIDIARIES
Consolidated Statements of Operations
(In Thousands, Except Share and Per Share Data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Software license $ 1,978 $ 4,061 $ 3,808 $ 8,926
Software hosting 6,206 5,067 11,914 9,734
Maintenance 9,950 8,435 19,424 16,381
Services 10,144 14,061 19,204 24,637
---------- ---------- ---------- ----------
Total revenues 28,278 31,624 54,350 59,678
---------- ---------- ---------- ----------
Operating expenses:
Software licenses
costs 83 112 432 144
Amortization of other
intangible assets 527 554 1,000 1,028
Maintenance, hosting
and services costs(1) 12,864 14,321 25,007 27,592
Software development(1) 5,214 5,584 9,955 10,796
Selling and
marketing(1) 4,544 5,163 8,511 9,994
General and
administrative(1) 5,009 4,344 9,568 8,287
---------- ---------- ---------- ----------
Total operating
expenses 28,241 30,078 54,473 57,841
---------- ---------- ---------- ----------
Operating income (Loss) 37 1,546 (123) 1,837
Financial income, net 680 438 178 837
Income taxes (172) (323) (397) (684)
---------- ---------- ---------- ----------
Net income (Loss) $ 545 $ 1,661 $ (342) $ 1,990
========== ========== ========== ==========
Net income per share:
Net income (Loss) used
in computing income
per share $ 545 $ 1,661 $ (342) $ 1,990
Basic income (Loss)
per share $ 0.04 $ 0.11 $ (0.02) $ 0.13
Diluted income (Loss)
per share $ 0.03 $ 0.10 $ (0.02) $ 0.12
Shares used in
computing:
Basic income per
share 15,361,724 15,667,084 15,342,159 15,666,789
Diluted income per
share 15,800,079 16,712,889 15,609,889 16,663,137
Adjusted non-GAAP(2)
net income per share:
Adjusted non-GAAP(2)
net income used in
computing income per
share $ 1,760 $ 2,945 $ 2,171 $ 4,553
Adjusted non-GAAP(2)
net income per share $ 0.11 $ 0.18 $ 0.14 $ 0.27
Shares used in
computing adjusted
non-GAAP(2) net
income per share 15,800,079 16,712,889 15,609,889 16,663,137
Reconciliation of net
income to adjusted
non-GAAP(2) net
income:
Net income (Loss) $ 545 $ 1,661 $ (342) $ 1,990
Amortization 527 554 1,000 1,028
Stock-based
compensation 688 730 1,513 1,535
---------- ---------- ---------- ----------
Adjusted non-GAAP(2)
net income $ 1,760 $ 2,945 $ 2,171 $ 4,553
========== ========== ========== ==========
(1) Includes charges for stock-based compensation in 2009 and 2008
(2) See Reconciliation to GAAP
FUNDTECH LTD. AND ITS SUBSIDIARIES
Consolidated Statement of Cash Flows
(In Thousands)
Six Months Ended
June 30,
--------
2009 2008
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (Loss) $ (342) $ 1,990
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,312 3,919
Stock-based compensation 1,513 1,535
Decrease in accrued interest on marketable
securities 49 56
Deferred income taxes 87 35
Changes in assets and liabilities
Decrease (Increase) in trade receivables 1,202 (3,542)
Decrease (Increase) in prepaid expenses, other
accounts receivable (1,287) (1,344)
Increase (Decrease) in trade payables (705) 830
Increase (Decrease) in deferred revenues 11,052 11,210
Decrease in employee and payroll accruals (857) (476)
Increase (Decrease) in other accounts payable
and accrued expenses 259 (290)
Decrease in accrued restructuring expenses -- (62)
Increase in accrued severance pay, net 102 47
-------- --------
Net cash provided by operations 15,385 13,908
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in held-to-maturity marketable
securities (5,217) (3,812)
Realization of held-to-maturity marketable
securities 4,519 10,475
Investment in short term deposits (367) (56)
Purchase of property and equipment (2,597) (3,456)
Net change in long term lease deposits and long
term prepaid expenses (284) (252)
Investments in subsidiaries (5,497) (12,475)
-------- --------
Net cash used in investing activities (9,443) (9,576)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of share capital,
Exercise of stock options and warrants, net 73 191
Investment in treasury stock, at cost (5,090) --
-------- --------
Net cash provided by (used in) financing
activities (5,017) 191
-------- --------
Effect of exchange rate on cash and cash
equivalents 436 139
-------- --------
Increase (Decrease) in cash and cash equivalents 1,361 4,662
Cash and cash equivalents at the beginning of the
period 29,642 31,612
-------- --------
Cash and cash equivalents at the end of the period $ 31,003 $ 36,274
======== ========
Appendix A
----------
Investment in Subsidiaries
--------------------------
Working Capital $ (167) $ (815)
Long term assets 1,804 5,555
Long term liabilities -- (39)
Goodwill 3,860 7,774
-------- --------
$ 5,497 $ 12,475
======== ========
Schedule A to Press Release
Reconciliation to GAAP
(In Thousands, Except Share and Per Share Data)
The following information sets forth Fundtech's calculation of
adjusted non-GAAP net income as contained in the Company's press
release:
Three Months Ended
-------------------------
June 30,
-------------------------
2009 2008
---- ----
Reconciliation of net income (loss) to
adjusted non-GAAP net income:
Net income (Loss) $ 545(1) $ 1,661(1)
Amortization of other intangible assets 527 554
Stock-based compensation charged as
follows:
Maintenance, hosting and services costs 130 129
Software development 48 64
Selling and marketing 165 156
General and administrative 345 381
---------- ----------
Adjusted non-GAAP net income $ 1,760 $ 2,945
========== ==========
Adjusted non-GAAP net income per share $ 0.11 $ 0.18
========== ==========
Shares used in computing
adjusted non-GAAP net income per share 15,800,079 16,712,889
========== ==========
(1) Net income per share (diluted) was approximately $0.03, $0.10 for
the three months ended June 30, 2009 and 2008, respectively. Net
income (loss) per share (diluted) was approximately ($0.02),
$0.12 for the Six months ended June 30, 2009 and 2008,
respectively.
Contact:
Fundtech Ltd.
Yoram Bibring
1-201-946-1100
yoram.bibring@fundtech.com
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