- 2nd Quarter revenue of $40.5 million represents year-over-year
organic growth of 16%.
- 2nd Quarter GAAP EPS 13 Cents /2nd Quarter Non GAAP EPS 27
Cents.
Fundtech Ltd. (Nasdaq:FNDT), a market leader in global transaction
banking solutions, today announced financial results for the second
quarter 2011. Fundtech posted quarterly revenues of $40.5 million,
a 16% increase year-over-year, compared to second quarter revenues
of $34.8 million in 2010, and a 9% increase compared to first
quarter 2011 revenues of $37.2 million.
On a GAAP (Generally Accepted Accounting Principles) basis,
Fundtech reported net income of $2.1 million, or $0.13 per diluted
share, for the second quarter of 2011 compared with net income of
$2.4 million, or $0.15 per diluted share, in the second quarter of
2010, and net income of $2.4 million, or $0.15 per diluted share,
in the first quarter of 2011.
Excluding stock-based compensation, amortization of intangibles,
costs incurred in connection with the previously announced
agreement to merge with S1 Corporation and deferred taxes,
Fundtech's adjusted (non-GAAP) net income for the second quarter of
2011 was $4.2 million, or $0.27 per diluted share, compared with
$3.5 million, or $0.22 per diluted share, in the second quarter of
2010 and $3.6 million, or $0.23 per diluted share, in the first
quarter of 2011. (See Schedule A attached to this news release --
Reconciliation from GAAP).
"The second quarter was another strong quarter for us as we
posted record revenues exceeding our revenue guidance and meeting
the high end of our non-GAAP earnings per share guidance," said
Fundtech CEO Reuven BenMenachem. "The second quarter was an
especially strong quarter for our messaging business. We closed 15
new system sales, 13 of which were hosting deals. We continued to
make good progress cross-selling our Swift product in the United
States, as evidenced by four new system sales and we also closed
two important GPP-SP sales, one in Europe and one in the Pacific
Rim."
Other Highlights:
- During the second quarter of 2011 Fundtech closed 130 new deals
and added 14 new bank customers.
- During the second quarter of 2011 Fundtech closed 20 new system
sales with banks, including 15 for BBP's products, one US Payments,
two PAYplus FTS, and two for GPP-SP.
- During the second quarter Fundtech paid a quarterly dividend of
$0.10 per share, amounting to a cash outlay of $1.5 million. The
Company has agreed not to pay any additional dividends while the
agreement with S1, as referenced below, is pending.
- On June 27, 2011, Fundtech and S1 Corporation announced that
they entered into a definitive agreement to combine businesses
through a stock-for-stock merger. Under the terms of the agreement,
Fundtech shareholders will receive 2.72 shares of S1 common stock
for each Fundtech ordinary share they own. The merger is expected
to close in the fourth quarter of 2011 and is subject to approval
by S1 and Fundtech shareholders, receipt of regulatory and court
approvals, and the satisfaction of customary closing
conditions.
Guidance
The financial guidance provided is current as of today only and
Fundtech undertakes no obligation to update its estimates.
For the year 2011 Fundtech is increasing its revenue guidance,
primarily due to the weakening of the US Dollar vs. the Swiss
Franc, while reducing its guidance for GAAP earnings per share due
to the costs incurred during the second quarter in connection with
the S1 merger and keeping its non-GAAP guidance unchanged as
follows:
- Fundtech estimates that revenues for 2011 will be between $160
million and $163 million compared to the previous guidance of $155
million to $160 million; that GAAP net income per diluted share
will be between $0.71 and $0.81 compared to the prior guidance of
$0.76 and $0.86; and that non-GAAP net income per diluted share,
before all amortization expenses, stock-based compensation
expenses, costs incurred in connection with the S1 merger and
deferred taxes, will be between $1.03 and $1.13 unchanged compared
to the prior guidance.
- Fundtech estimates that financial income for the year 2011 will
be $0.6 million and that tax expenses, excluding deferred taxes,
will be approximately $2.2 million.
- Fundtech estimates that annual amortization expenses for the
year 2011 will be approximately $1.4 million and that stock-based
compensation expenses will be approximately $3.6
million.
- Fundtech estimates that the number of shares used for the
calculation of the annual net income per share will be 16 million
shares.
For the third quarter of 2011 Fundtech is providing the
following guidance:
- Fundtech estimates that third quarter revenues will be between
$41.5 million and $42.5 million; that GAAP net income per diluted
share will be between $0.19 and $0.22; and that non-GAAP net income
per diluted share, before all amortization expenses, stock-based
compensation expenses, costs incurred in connection with the
S1 merger and deferred taxes, will be between $0.27 and $0.30.
- Fundtech estimates that financial income for the third quarter
will be $0.2 million and that tax expenses, excluding deferred
taxes, will be approximately $0.6 million.
- Fundtech estimates that quarterly amortization expenses for the
third quarter of 2011 will be approximately $350,000 and that
stock-based compensation expenses will be approximately
$900,000.
- Fundtech estimates that the number of shares used for the
calculation of quarterly net income per share will be 16.0 million
shares.
Fundtech's guidance for the remainder of 2011 does not include
the impact in the third and fourth quarters of the S1 merger
(including the costs incurred by Fundtech and the impact of the
closing of the merger, if the closing occurs prior to December 31,
2011), deferred taxes, other one- time charges 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.
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.
We are presenting Fundtech's non-GAAP net income as well as
Adjusted EBITDA. We define non-GAAP net income as net income plus
stock-based compensation, amortization of intangibles, impairment
of goodwill and other intangible assets, impairment of marketable
securities, and deferred taxes. We define Adjusted
EBITDA as net income plus stock-based compensation, depreciation
and amortization expenses, impairment of marketable securities,
deferred and current taxes, and interest expense (income).
A detailed reconciliation of GAAP net income to non-GAAP net
income and Adjusted EBITDA is included in the attached Schedule
A.
Fundtech to Host Conference Call
The senior management of Fundtech will host a conference call at
8:30 AM (ET), Wednesday, August 3, to discuss Fundtech's second
quarter 2011 results and to answer questions from the investment
community.
To participate, please call 1-877-303-7023 or +1-224-357-2223
and ask for the Fundtech call. Participants from Israel may dial
toll free 1809-245917 and ask for the Fundtech call.
A replay of the conference call will be available from 11:30 AM
(ET) Wednesday August 3, until 11:59 PM (ET) August 10. The replay
may be accessed by dialing 1-855-859-2056 or 1+404-537-3406,
conference ID: 84876018.
This call will also be web cast live on:
http://www.fundtech.com. An online replay will be available until
August 31, 2011.
About Fundtech
Fundtech (Nasdaq:FNDT), 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 operates the world's largest SWIFT service bureau. We
offer an extensive line of financial supply chain applications
including electronic invoice presentment and supply chain
financing. 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 news release contains forward-looking statements made
pursuant to the safe-harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements may include, but are
not limited to, projections of revenues, income or loss, capital
expenditures, plans for growth and future operations, competition
and regulation. Forward-looking statements are inherently subject
to risks and uncertainties, many of which cannot be predicted or
quantified. When used in this Release, the words, "estimates,"
"expects," "anticipates," "believes," "plans," "intends," and
variations of such words and similar expressions are intended to
identify forward-looking statements that involve risks and
uncertainties. Future events and actual results could differ
materially from those set forth in, contemplated by or underlying
the forward-looking statements. The factors that could cause actual
results to differ materially from those discussed or identified
from time to time in Fundtech's public filings, including its
Annual Report on Form 20-F for the year ended December 31, 2010,
including general economic and market conditions, changes in
regulations and taxes and changes in competition in the pricing
environment. Undue reliance should not be placed on these
forward-looking statements, which are applicable only as of the
date hereof. 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.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed transaction, Fundtech and S1
Corporation ("S1") intend to file relevant materials with the U.S.
Securities and Exchange Commission (the "SEC") and other
governmental or regulatory authorities, including an information
statement and proxy statement, respectively. INVESTORS ARE URGED TO
READ THESE MATERIALS WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT FUNDTECH AND S1 AND THE
TRANSACTION. The proxy statement, information statement and certain
other relevant materials (when they become available) and any other
documents filed by Fundtech or S1 with the SEC may be obtained free
of charge at the SEC's website at http://www.sec.gov. In addition,
investors may obtain free copies of the documents filed with the
SEC (i) by contacting Fundtech's Investor Relations at (201)
946-1100 or by accessing Fundtech's investor relations website at
www.fundtech.com or (ii) by contacting S1's Investor Relations at
(404) 923-3500 or by accessing S1's investor relations website at
www.s1.com. Investors are urged to read the proxy statement and
information statement and the other relevant materials when they
become available before making any voting or investment decision
with respect to the transaction.
PARTICIPANTS IN THE SOLICITATION
S1, Fundtech and their respective executive officers and
directors may be deemed to be participating in the solicitation of
proxies in connection with the transaction. Information about the
executive officers and directors of S1 and the number of shares of
S1's common stock beneficially owned by such persons is set forth
in the proxy statement for S1's 2011 Annual Meeting of Stockholders
on Schedule 14A, which was filed with the SEC on April 8, 2011.
Information about the executive officers and directors of Fundtech
and the number of shares of Fundtech's ordinary shares beneficially
owned by such persons is set forth in Fundtech's annual report on
Form 20-F which was filed with the SEC on May 31, 2011. Investors
may obtain additional information regarding the direct and indirect
interests of S1, Fundtech and their respective executive officers
and directors in the transaction by reading the proxy statement and
information statement regarding the transaction when they become
available.
This communication shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
| |
| FUNDTECH LTD. AND ITS
SUBSIDIARIES |
| Condensed Consolidated
Balance Sheets |
| (In Thousands) |
| |
|
|
| |
June 30, |
December 31, |
| |
2011 |
2010 |
| ASSETS |
|
|
| |
|
|
| Current assets: |
|
|
| Cash and cash equivalents |
$ 44,214 |
$ 24,916 |
| Short term deposit |
3,370 |
1,910 |
| Marketable securities |
26,568 |
26,419 |
| Trade receivables, net |
32,096 |
29,706 |
| Deferred tax asset |
4,574 |
4,552 |
| Other accounts receivable and prepaid
expenses |
7,605 |
6,411 |
| |
|
|
| Total current assets |
118,427 |
93,914 |
| |
|
|
| Marketable securities |
754 |
753 |
| Severance pay fund |
2,203 |
1,953 |
| Long term lease deposits |
1,931 |
1,931 |
| Long term prepaid expenses |
2,355 |
2,289 |
| Property and equipment, net |
11,002 |
11,453 |
| Goodwill, net |
43,418 |
41,041 |
| Other assets, net |
3,491 |
4,126 |
| |
|
|
| Total assets |
$ 183,581 |
$ 157,460 |
| |
|
|
| |
|
|
| LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
| |
|
|
| Current liabilities: |
|
|
| Trade payables |
$ 2,019 |
$ 2,309 |
| Deferred revenues |
28,545 |
11,541 |
| Employee and payroll accruals |
9,840 |
10,159 |
| Other accounts payable and accrued
expenses |
9,951 |
9,513 |
| |
|
|
| Total current liabilities |
50,355 |
33,522 |
| |
|
|
| Accrued severance pay |
6,365 |
5,554 |
| Deferred tax liability |
1,280 |
1,190 |
| Other long term liabilities |
1,505 |
1,732 |
| |
|
|
| Total liabilities |
59,505 |
41,998 |
| |
|
|
| Shareholders' equity: |
|
|
| Share capital |
51 |
51 |
| Additional paid-in capital |
164,298 |
163,252 |
| Accumulated other comprehensive
income |
5,243 |
1,867 |
| Accumulated deficit |
(23,819) |
(28,265) |
| Treasury stock, at cost |
(21,697) |
(21,443) |
| |
|
|
| Total shareholders' equity |
124,076 |
115,462 |
| |
|
|
| Total liabilities and shareholders'
equity |
$ 183,581 |
$ 157,460 |
| |
| |
| 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, |
| |
2011 |
2010 |
2011 |
2010 |
| Revenues: |
|
|
|
|
| Software license |
$ 3,578 |
$ 4,768 |
$ 7,853 |
$ 8,482 |
| Software hosting |
8,746 |
7,380 |
16,577 |
14,402 |
| Maintenance |
11,292 |
10,579 |
22,042 |
20,721 |
| Services |
16,855 |
12,033 |
31,199 |
24,564 |
| |
|
|
|
|
| Total revenues |
40,471 |
34,760 |
77,671 |
68,169 |
| |
|
|
|
|
| Operating expenses: |
|
|
|
|
| Software licenses costs |
20 |
84 |
54 |
295 |
| Amortization of other intangible
assets |
354 |
405 |
705 |
831 |
| Maintenance, hosting and services costs
[1] |
19,657 |
15,914 |
37,708 |
31,517 |
| Software development [1] |
5,588 |
5,455 |
11,151 |
10,829 |
| Selling and marketing [1] |
5,462 |
4,606 |
10,307 |
9,112 |
| General and administrative [1] |
6,959 |
4,771 |
12,461 |
9,769 |
| |
|
|
|
|
| Total operating expenses |
38,040 |
31,235 |
72,386 |
62,353 |
| |
|
|
|
|
| |
|
|
|
|
| Operating income |
2,431 |
3,525 |
5,285 |
5,816 |
| |
|
|
|
|
| Financial income (expense), net |
89 |
(615) |
439 |
(1,085) |
| Income taxes |
(446) |
(496) |
(1,278) |
(923) |
| |
|
|
|
|
| Net income |
$ 2,074 |
$ 2,414 |
$ 4,446 |
$ 3,808 |
| |
|
|
|
|
| |
|
|
|
|
| Net income per share: |
|
|
|
|
| Net income used in computing income per
share |
$ 2,074 |
$ 2,414 |
$ 4,446 |
$ 3,808 |
| Basic income per share |
$ 0.14 |
$ 0.16 |
$ 0.29 |
$ 0.25 |
| Diluted income per share |
$ 0.13 |
$ 0.15 |
$ 0.28 |
$ 0.24 |
| Shares used in computing: |
|
|
|
|
| Basic income per share |
15,120,912 |
15,197,440 |
15,114,569 |
15,275,326 |
| Diluted income per share |
15,886,344 |
15,919,582 |
15,873,248 |
16,035,729 |
| |
|
|
|
|
| Adjusted non-GAAP[2] net income per
share: |
|
|
|
|
| Adjusted non-GAAP[2] net income used in
computing income per share |
$ 4,224 |
$ 3,579 |
$ 7,842 |
$ 6,158 |
| Adjusted non-GAAP[2] net income per
share |
$ 0.27 |
$ 0.22 |
$ 0.49 |
$ 0.38 |
| Shares used in computing adjusted non-GAAP[2]
net income per share |
15,886,344 |
15,919,582 |
15,873,248 |
16,035,729 |
| |
|
|
|
|
| [1] Includes charges for stock-based
compensation in 2011 and 2010 |
|
|
|
|
| [2] See Reconciliation from GAAP |
|
|
|
|
| |
| |
| FUNDTECH LTD. AND ITS
SUBSIDIARIES |
| Consolidated Statement
of Cash Flows |
| (In Thousands) |
| |
|
|
|
|
| |
Three Months
Ended |
Six Months
Ended |
| |
June
30, |
June
30, |
| |
2011 |
2010 |
2011 |
2010 |
| CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
| Net income |
$ 2,074 |
$ 2,414 |
$ 4,446 |
$ 3,808 |
| Adjustments to reconcile net income to
net cash provided by (used in) operating activities: |
|
|
|
|
| Depreciation and amortization |
1,766 |
1,866 |
3,401 |
3,885 |
| Stock-based compensation |
899 |
675 |
1,764 |
1,371 |
| Loss from sale of fixed assets |
9 |
-- |
9 |
-- |
| Accrued interest on marketable securities
and accretion amortization |
106 |
44 |
207 |
25 |
| Deferred income taxes |
67 |
85 |
97 |
148 |
| Decrease (Increase) in trade
receivables |
(3,387) |
3,002 |
(2,232) |
(2,834) |
| Decrease (Increase) in prepaid expenses
and other accounts receivable |
416 |
1,598 |
(514) |
96 |
| Increase (Decrease) in trade
payables |
(435) |
(209) |
(379) |
85 |
| Increase (Decrease) in deferred
revenues |
(7,719) |
(9,165) |
14,833 |
12,432 |
| Increase (Decrease) in employee and
payroll accruals |
135 |
332 |
(593) |
657 |
| Increase (Decrease) in other accounts
payable and accrued expenses |
(448) |
(941) |
526 |
622 |
| Increase in accrued severance pay,
net |
309 |
54 |
362 |
254 |
| |
|
|
|
|
| Net cash provided by (used in)
operations |
(6,208) |
(245) |
21,927 |
20,549 |
| |
|
|
|
|
| CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
| Investment in held-to-maturity marketable
securities |
(6,817) |
(7,911) |
(13,447) |
(19,404) |
| Redemption of held-to-maturity marketable
securities |
6,345 |
13,058 |
13,090 |
16,365 |
| Investment in short term deposits |
(1,873) |
(1,032) |
(1,456) |
(1,032) |
| Purchase of property and equipment |
(1,217) |
(1,343) |
(2,115) |
(2,102) |
| Net change in long term lease deposits
and long term prepaid expenses |
(610) |
(130) |
-- |
(117) |
| Additional consideration in a business
combination |
-- |
-- |
(454) |
(830) |
| Proceeds from sale of fixed assets |
148 |
-- |
148 |
-- |
| |
|
|
|
|
| Net cash provided by (used in) investing
activities |
(4,024) |
2,642 |
(4,234) |
(7,120) |
| |
|
|
|
|
| CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
| Proceeds from issuance of share capital
and exercise of stock options and warrants, net |
456 |
48 |
826 |
182 |
| Dividend paid |
(1,545) |
-- |
(1,545) |
-- |
| Decrease in long term Liabilities |
-- |
(9) |
-- |
(25) |
| Investment in treasury stock, at
cost |
-- |
(2,622) |
(254) |
(4,405) |
| |
|
|
|
|
| Net cash used in financing
activities |
(1,089) |
(2,583) |
(973) |
(4,248) |
| |
|
|
|
|
| |
|
|
|
|
| Effect of exchange rate on cash and cash
equivalents |
2,299 |
(651) |
2,578 |
(842) |
| |
|
|
|
|
| |
|
|
|
|
| Increase (decrease)in cash and cash
equivalents |
(9,022) |
(837) |
19,298 |
8,339 |
| Cash and cash equivalents at the beginning of
the period |
53,236 |
30,079 |
24,916 |
20,903 |
| |
|
|
|
|
| Cash and cash equivalents at the end of the
period |
$ 44,214 |
$ 29,242 |
$ 44,214 |
$ 29,242 |
| |
|
|
|
|
| Appendix A |
|
|
|
|
| Additional
consideration in a business combination |
|
|
|
|
| Working Capital |
$ -- |
$ -- |
$ -- |
$ -- |
| Long term assets |
-- |
-- |
-- |
-- |
| Long term liabilities |
-- |
-- |
-- |
-- |
| Goodwill |
-- |
-- |
454 |
830 |
| |
|
|
|
|
| |
$ -- |
$ -- |
$ 454 |
$ 830 |
| |
| |
| Schedule A to Press
Release |
| |
|
|
|
|
| Reconciliation from
GAAP |
| (In Thousands, Except Share and
Per Share Data) |
| |
|
|
|
|
| |
Three Months
Ended |
Six Months
Ended |
| |
June
30, |
June
30, |
| |
2011 |
2010 |
2011 |
2010 |
| |
|
|
|
|
| Reconciliation of GAAP
net income to adjusted EBITDA and to adjusted net
income: |
| |
|
|
|
|
| Net income [1] |
$ 2,074 |
$ 2,414 |
$ 4,446 |
$ 3,808 |
| |
|
|
|
|
| Financial income (expense), net |
(89) |
615 |
(439) |
1,085 |
| Income taxes |
379 |
411 |
1,181 |
775 |
| Deferred taxes expenses |
67 |
85 |
97 |
148 |
| Amortization |
354 |
405 |
705 |
831 |
| Depreciation |
1,412 |
1,461 |
2,696 |
3,054 |
| Merger expenses |
830 |
-- |
830 |
-- |
| Stock based compensation [2] |
899 |
675 |
1,764 |
1,371 |
| |
|
|
|
|
| Adjusted EBITDA |
$ 5,926 |
$ 6,066 |
$ 11,280 |
$ 11,072 |
| |
|
|
|
|
| Financial income (expense), net |
89 |
(615) |
439 |
(1,085) |
| Income taxes |
(379) |
(411) |
(1,181) |
(775) |
| Depreciation |
(1,412) |
(1,461) |
(2,696) |
(3,054) |
| |
|
|
|
|
| Adjusted net income |
$ 4,224 |
$ 3,579 |
$ 7,842 |
$ 6,158 |
| |
|
|
|
|
| Adjusted net income per share |
$ 0.27 |
$ 0.22 |
$ 0.49 |
$ 0.38 |
| |
|
|
|
|
| Shares used in computing adjusted net income
per share |
15,886,344 |
15,919,582 |
15,873,248 |
16,035,729 |
| |
|
|
|
|
| [1] Net income per share
(diluted) was approximately $0.13 and $0.15 for the three months
ended June 30, 2011 and 2010, respectively |
| Net income per share
(diluted) was approximately $0.28 and $0.24 for the six months
ended June 30, 2011 and 2010, respectively |
| |
|
|
|
|
| |
|
|
|
|
| [2] Stock based compensation |
|
|
|
|
| Maintenance, hosting and services
costs |
$ 125 |
$ 77 |
$ 239 |
$ 170 |
| Software development |
75 |
61 |
149 |
114 |
| Selling and marketing |
197 |
163 |
398 |
314 |
| General and administrative |
502 |
374 |
978 |
773 |
| |
|
|
|
|
| |
$ 899 |
$ 675 |
$ 1,764 |
$ 1,371 |
CONTACT: Yoram Bibring
CFO - Fundtech Ltd.
Tel: 1-201-946-1100
yoram.bibring@fundtech.com
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