Exhibit 99.1
Fundtech Contact:
Yoram Bibring
Fundtech Ltd.
Tel: 1-201-946-1100
yoram.bibring@fundtech.com
georger@fundtech.com
FOR IMMEDIATE RELEASE
FUNDTECH REPORTS FINANCIAL RESULTS FOR THE
FIRST QUARTER OF 2007
| | - Quarterly Revenues Grow 19% Year-over-Year to $23.2 Million |
| | - Increasing 2007 guidance |
JERSEY CITY, N.J. —May 7, 2007, — Fundtech Ltd. (NASDAQ: FNDT), a leading provider of global electronic payment, settlement and cash management solutions, today announced financial results for the first quarter ended March 31, 2007. Fundtech posted quarterly revenues of $23.2 million, a 19% increase year-over-year, compared to first quarter revenues of $19.4 million in 2006. and slightly higher than fourth quarter 2006 revenues of $23.1 million.
On a GAAP (Generally Accepted Accounting Principles) basis, the Company reported net income of $0.4 million or $0.03 per diluted share, for the first quarter of 2007, compared with net income of $0.2 million, or $0.01 per diluted share, in the first quarter of 2006, and net income of $1.6 million, or $0.10 per diluted share, in the fourth quarter of 2006.
Excluding stock-based compensation, amortization of intangibles and amortization of capitalized software costs, Fundtech’s adjusted non-GAAP net income for the first quarter of 2007 was $1.9 million, or $0.12 per diluted share, compared with $1.4 million, or $0.09 per diluted share, in the first quarter of 2006 and $3.0 million, or $0.19 per diluted share, in the fourth quarter of 2006. (See Schedule A attached to this news release -- Reconciliation to GAAP).
“We started 2007 with a strong first quarter as organic revenues increased 16%, year-over-year and non-GAAP EPS exceeded our guidance” said CEO Reuven Ben Menachem. “While our Global PAYplus product is continuing to gain momentum as the premier global payment system in the market, I am also very encouraged by the progress we are making with our CASHplus product which I believe is the best cash management system in the US market. Our comprehensive product offering will propel our future growth in 2007 and beyond”.
Other operational highlights:
| · | During the first quarter Fundtech closed 63 new deals and added 8 new bank customers |
| · | During the first quarter Fundtech closed 9 new system sales: including 1 Global Liquidity Manager to a large European bank, 1 CLS system, PAYplus USA, and 5 IGT plus at bbp. |
| · | During the first quarter Fundtech also closed 1 Faster Payment sub-system sale and 2 SEPA subsystems sales with existing Global PAYplus customers. |
Reconciliation of GAAP results to non-GAAP results
Fundtech provides adjusted 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 the Company 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 and amortization of capitalized software costs .
A detailed reconciliation of GAAP net income to non-GAAP net income is included in the attached Schedule A, Reconciliation to GAAP.
Guidance
The financial guidance provided is current as of today only and the Company undertakes no obligation to update its estimates.
For the second quarter of 2007 we expect revenues of between $24.7 million and $25.2 million, GAAP earnings per diluted share of between $0.08 and $0.10 and adjusted non-GAAP earnings per diluted share, before all amortization expenses and stock compensation expenses, are expected to be in the range of $0.15 to $0.17.
For fiscal 2007 we are increasing our guidance from the guidance we provided in February 2007 for both revenues and earnings per share. We
now expect revenues of between $99.0 million and $101.0 million, GAAP earnings per diluted share of between $0.37 and $0.43 and adjusted non-GAAP earnings per diluted share, before all amortization expenses and stock compensation expenses, are expected to be in the range of $0.63 to $0.70.
We estimate that for 2007 our income tax expenses will be approximately $1.3 million while net interest income will be approximately $1.8 million.
We estimate that amortization expenses for the second quarter of 2007 will be approximately $280,000 and that stock compensation expenses will be approximately $630,000.
We estimate that amortization expenses for 2007 will be approximately $1.8 million and that stock compensation expenses will be approximately $2.6 million.
The Company’s guidance for the second quarter of 2007 and full-year 2007 assumes no change in the calculation of the Company’s tax provision, which currently assumes a full valuation allowance against the Company’s deferred tax assets.
Company to Host Conference Call
The senior management of Fundtech will host a conference call at 08:30 a.m. (ET) today, Monday, May 7, to discuss the Company’s first-quarter as well as 2007 financial guidance, and to answer questions from the investment community.
To participate, please call (800)-599-9816 or 617-847-8705 and ask for the Fundtech Call.
A replay of the conference call will be available for playback from 10:30am (ET) May 7, until 11:59pm (ET) May 14. The replay may be accessed by dialing (888) 286-8010 or 617-801-6888, passcode 67134429.
This call will also be web cast live on: http://www.fundtech.com. An online replay will be available until May 31.
About Fundtech
Fundtech Ltd is a leading provider of software solutions and services to financial institutions around the world. The Company develops and sells a broad array of products across the “financial supply chain” that enable banks to automate their corporate banking activities in order to improve efficiency, while providing their customers with more choices, more convenience and more control. Fundtech offers products in four major categories: cash management, payments, settlements and financial messaging. Fundtech has recently expanded its product line with a securities post-trade settlement processing system.
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 second-quarter revenues; second-quarter GAAP earnings per share; second-quarter adjusted non-GAAP earnings per share; full-year 2007 revenues; full-year 2007 GAAP earnings per share; and full-year 2007 adjusted 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: a downturn in the financial services industry; 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, 2005. 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) |
| | | March 31, | | | December 31, | |
| | | 2007 | | | 2006 | |
ASSETS | | | | | | |
| | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 29,172 | | | $ | 28,616 | |
| Short term investments | | | 3,932 | | | | -- | |
| Marketable securities - short term | | | 18,502 | | | | 18,551 | |
| Trade receivables, net | | | 26,977 | | | | 25,058 | |
| Other accounts receivable, prepaid expenses and inventories | | | 3,781 | | | | 2,608 | |
| | | | | | | | | |
| Total current assets | | | 82,364 | | | | 74,833 | |
| | | | | | | | | |
| Severance pay fund | | | 1,289 | | | | 1,221 | |
| Long term lease deposits | | | 635 | | | | 639 | |
| Prepaid expenses | | | 2,129 | | | | 1,821 | |
| Property and equipment, net | | | 12,371 | | | | 11,944 | |
| Goodwill, net | | | 22,253 | | | | 18,979 | |
| Other assets, net | | | 3,748 | | | | 2,626 | |
| | | | | | | | | |
| Total assets | | $ | 124,789 | | | $ | 112,063 | |
| | | | | | | |
| | | | | | | | | |
LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Trade payables | | $ | 1,538 | | | $ | 2,444 | |
| Deferred revenues | | | 16,776 | | | | 7,567 | |
| Accrued restructuring expenses | | | 185 | | | | 185 | |
| Employee and payroll accruals | | | 4,614 | | | | 4,483 | |
| Other accounts payable and accrued expenses | | | 7,166 | | | | 5,360 | |
| | | | | | | | | |
| Total current liabilities | | | 30,279 | | | | 20,039 | |
| | | | | | | | | |
| Accrued severance pay | | | 1,576 | | | | 1,399 | |
| Accrued restructuring and other expenses | | | 15 | | | | 62 | |
| Other long term liabilities | | | 1,233 | | | | 777 | |
| | | | | | | | | |
| Total liabilities | | | 33,103 | | | | 22,277 | |
| | | | | | | | | |
| Shareholders' equity: | | | | | | | | |
| Share capital | | | 46 | | | | 46 | |
| Additional paid-in capital | | | 147,731 | | | | 146,611 | |
| Accumulated other comprehensive income (loss) | | | 156 | | | | (196 | ) |
| Accumulated deficit | | | (52,989 | ) | | | (53,417 | ) |
| Treasury stock, at cost | | | (3,258 | ) | | | (3,258 | ) |
| | | | | | | | | |
| Total shareholders' equity | | | 91,686 | | | | 89,786 | |
| | | | - | | | | - | |
| Total liabilities and shareholders' equity | | $ | 124,789 | | | $ | 112,063 | |
| | | | | | | |
| FUNDTECH LTD. AND ITS SUBSIDIARIES | |
Consolidated Statements of Operations | |
| (In Thousands, Except Share and Per Share Data) | |
| | | | | | | |
| | | Three Months Ended | |
| | | March 31, | |
| | | 2007 | | | 2006 | |
| Revenues: | | | | | | |
| Software license | | $ | 4,007 | | | $ | 2,796 | |
| Software hosting | | | 3,439 | | | | 3,027 | |
| Maintenance | | | 6,036 | | | | 5,484 | |
| Services | | | 9,689 | | | | 8,101 | |
| | | | | | | | | |
| Total revenues | | | 23,171 | | | | 19,408 | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | |
| Software licenses costs | | | 22 | | | | 134 | |
| Amortization of capitalized software development costs | | | 394 | | | | 394 | |
| Amortization of other intangible assets | | | 409 | | | | 319 | |
Maintenance, hosting and services costs [1] | | | 10,200 | | | | 8,201 | |
Software development [1] | | | 4,683 | | | | 3,697 | |
Selling and marketing [1] | | | 4,231 | | | | 3,715 | |
General and administrative [1] | | | 3,109 | | | | 2,853 | |
| | | | | | | | | |
| Total operating expenses | | | 23,048 | | | | 19,313 | |
| | | | | | | | | |
| | | | | | | | | |
| Operating income | | | 123 | | | | 95 | |
| Financial income, net | | | 441 | | | | 440 | |
| Income taxes | | | (136 | ) | | | (374 | ) |
| | | | | | | | | |
| Net income | | $ | 428 | | | $ | 161 | |
| | | | | | | | | |
| | | | | | | | | |
| Net income per share: | | | | | | | | |
| Net income used in computing income per share | | $ | 428 | | | $ | 161 | |
| Basic income per share | | $ | 0.03 | | | $ | 0.01 | |
| Diluted income per share | | $ | 0.03 | | | $ | 0.01 | |
| Shares used in computing: | | | | | | | | |
| Basic income per share | | | 15,068,837 | | | | 14,999,808 | |
| Diluted income per share | | | 16,193,264 | | | | 16,029,209 | |
| | | | | | | | | |
Adjusted non-GAAP[2] net income per share: | | | | | | | | |
Adjusted non-GAAP[2] net income used in computing income per share | | $ | 1,896 | | | $ | 1,436 | |
Adjusted non-GAAP[2] net income per share | | $ | 0.12 | | | $ | 0.09 | |
Shares used in computing adjusted non-GAAP[2] net income per share | | | 16,193,264 | | | | 16,029,209 | |
| | | | | | | | | |
Reconciliation of net income to adjusted non-GAAP[2] net income: | | | | | | | | |
| Net income | | $ | 428 | | | $ | 161 | |
| Amortization | | | 803 | | | | 713 | |
| Stock-based compensation | | | 665 | | | | 562 | |
| | | | | | | | | |
Adjusted non-GAAP[2] net income | | $ | 1,896 | | | $ | 1,436 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
[1] Includes charges for stock-based compensation in 2007 and 2006 | | | | | | | | |
[2] See Reconciliation to GAAP | | | | | | | | |
| FUNDTECH LTD. AND ITS SUBSIDIARIES | |
Consolidated Statement of Cash Flows | |
| (In Thousands) | |
| | | | | | | |
| | | Three Months Ended | |
| | | March 31, | |
| | | 2007 | | | 2006 | |
| CASH FLOWS FROM OPERATIONS: | | | | | | |
| Net income | | $ | 428 | | | $ | 161 | |
| Adjustments to reconcile net income to net cash | | | | | | | | |
| provided by (used in) operating activities: | | | | | | | | |
| Depreciation and amortization | | | 1,853 | | | | 1,583 | |
| Increase in trade receivables | | | (1,089 | ) | | | (2,885 | ) |
| Increase in prepaid expenses, other accounts receivable and inventories | | | (1,462 | ) | | | (75 | ) |
| Decrease in trade payables | | | (911 | ) | | | (625 | ) |
| Increase in deferred revenues | | | 9,311 | | | | 7,192 | |
| Decrease in employee and payroll accruals | | | (48 | ) | | | (356 | ) |
| (Decrease) increase in other accounts payable and accrued expenses | | | 231 | | | | 133 | |
| (Decrease) in accrued restructuring expenses | | | (47 | ) | | | (51 | ) |
| Increase in accrued severance pay, net | | | 109 | | | | 26 | |
| Decrease in accrued interest on marketable securities | | | 34 | | | | 88 | |
| Losses on disposition of fixed assets | | | (7 | ) | | | (1 | ) |
| Stock-based compensation | | | 665 | | | | 562 | |
| Increase in other long term payables | | | -- | | | | 31 | |
| | | | | | | | | |
| Net cash provided by operations | | | 9,067 | | | | 5,783 | |
| | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | |
| Investment in held-to-maturity marketable securities | | | (7,777 | ) | | | (9,864 | ) |
| Proceeds from held-to-maturity marketable securities | | | 8,865 | | | | 4,677 | |
| Maturity of (investment in) short term deposits | | | (3,932 | ) | | | 216 | |
| Purchase of property and equipment | | | (1,406 | ) | | | (836 | ) |
| Increase (decrease) in long-term lease deposits and prepaid expenses | | | 4 | | | | (12 | ) |
| Investments in subsidiaries | | | (5,019 | ) | | | -- | |
| Proceeds from sale of fixed assets | | | 24 | | | | 1 | |
| | | | | | | | | |
| Net cash used in investing activities | | | (9,241 | ) | | | (5,818 | ) |
| | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
| Proceeds from the issuance of share capital and | | | | | | | | |
| exercise of stock options and warrants, net | | | 455 | | | | 461 | |
| Increase in long-term other assets | | | -- | | | | (75 | ) |
| Investment in treasury stock, at cost | | | -- | | | | -- | |
| | | | | | | | | |
| Net cash provided by financing activities | | | 455 | | | | 386 | |
| | | | | | | | | |
| | | | | | | | | |
| Effect of exchange rate on cash and cash equivalents | | | 275 | | | | 42 | |
| | | | | | | | | |
| | | | | | | | | |
| Increase in cash and cash equivalents | | | 556 | | | | 393 | |
| Cash and cash equivalents at the beginning of the period | | | 28,616 | | | | 30,807 | |
| | | | | | | | | |
| Cash and cash equivalents at the end of the period | | $ | 29,172 | | | $ | 31,200 | |
| | | | | | | |
Appendix A | | | | | | | | |
Investment in Subsidiaries | | | | | | | | |
| Working Capital | | $ | 689 | | | $ | -- | |
| Long term assets | | | 1,999 | | | | -- | |
| Long term liabilities | | | -- | | | | -- | |
| Goodwill | | | 2,331 | | | | -- | |
| | | | | | | | | |
| | | $ | 5,019 | | | $ | -- | |
| | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
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 | | | | |
| | | March 31, | | | December 31, 2006 | |
| | | 2007 | | | | | | 2006 | | | | | | 2006 | | | | |
| | | | | | | | | | | | | | | | | | | |
Reconciliation of net income (loss) to adjusted non-GAAP net income: | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 428 | [1] | | | | | | $ | 161 | [1] | | | | | | $ | 1,635 | [1] | | | | |
| Amortization of capitalized | | | | | | | | | | | | | | | | | | | | | | | | |
| software development costs | | | 394 | | | | | | | | 394 | | | | | | | | 394 | | | | | |
| Amortization of other intangible assets | | | 409 | | | | | | | | 319 | | | | | | | | 318 | | | | | |
| Stock-based compensation charged as follows: | | | | | | | | | | | | | | | | | | | | | | | | |
| Maintenance, hosting and services costs | | | 72 | | | | | | | | 57 | | | | | | | | 52 | | | | | |
| Software development | | | 61 | | | | | | | | 37 | | | | | | | | 40 | | | | | |
| Selling and marketing | | | 150 | | | | | | | | 124 | | | | | | | | 137 | | | | | |
| General and administrative | | | 382 | | | | | | | | 344 | | | | | | | | 406 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted non-GAAP net income | | $ | 1,896 | | | | | | | $ | 1,436 | | | | | | | $ | 2,982 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted non-GAAP net income per share | | $ | 0.12 | | | | | | | $ | 0.09 | | | | | | | $ | 0.19 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Shares used in computing | | | | | | | | | | | | | | | | | | | | | | | | |
| adjusted non-GAAP net income per share | | | 16,193,264 | | | | | | | | 16,029,209 | | | | | | | | 15,963,751 | | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
[1] Net income per share (diluted) was approximately $0.03, $0.01 and $0.10 for the three months ended March 31, 2007 and 2006 and the three months ended December 31, 2006, respectively. | | | | | | | | | | |
