Exhibit 99.1
Fundtech Contact:
Yoram Bibring
Fundtech Ltd.
Tel: 1-201-946-1100
yoram.bibring@fundtech.com
georger@fundtech.com
Ruder Finn, Inc., New York
Justine Schneider
(212) 583-2750
schneiderj@ruderfinn.com
FOR IMMEDIATE RELEASE
FUNDTECH REPORTS FINANCIAL RESULTS FOR THE
SECOND QUARTER OF 2008
- Quarterly Revenues Grow 25% Year-over-Year to $31.6 Million
JERSEY CITY, N.J. —August 13, 2008, — Fundtech Ltd. (NASDAQ: FNDT), a leading provider of global electronic payment, settlement and cash management solutions, today announced financial results for the second quarter ended June 30, 2008. Fundtech posted quarterly revenues of $31.6 million, a 25% increase year-over-year, compared to second quarter revenues of $25.4 million in 2007, and 13% increase compared to first quarter 2008 revenues of $28.1 million.
On a GAAP (Generally Accepted Accounting Principles) basis, the Company reported net income of $1.7 million or $0.10 per diluted share, for the second quarter of 2008 compared with net income of $1.7 million, or $0.10 per diluted share, in the second quarter of 2007, and net income of $300,000 , or $0.02 per diluted share, in the first quarter of 2008.
-more-
Excluding
Excluding stock-based compensation and amortization of intangibles Fundtech’s adjusted net income for the second quarter of 2008 was $2.9 million, or $0.18 per diluted share, compared with $2.8 million, or $0.11 per diluted share, in the second quarter of 2007 and $1.6 million, or $0.10 per diluted share, in the first quarter of 2008 (See Schedule A attached to this news release -- Reconciliation to GAAP).
“Our strong organic revenue growth of 21% (compared to second quarter 2007) demonstrates that we are executing on our growth strategy,” said CEO Reuven Ben Menachem. “Our revenue growth catalyst continues to be Global PAYplus®, which has increased 34% compared to the second quarter of 2007. Our leadership in this market is evident by the closing of another deal with a major UK bank and I believe that we will continue to experience good growth at the high end of the market in the second half of 2008 and beyond”.
Other operational highlights:
| · | During the second quarter excluding Accountis Fundtech closed 61 new deals and added 7 new bank customers. |
| | |
| · | During the second quarter Fundtech closed 13 new system sales including 8 US Payments and 4 at BBP. |
| | |
| · | During the second quarter Fundtech closed a Global PAYplus transaction with a major UK bank. |
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 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.
Guidance
The financial guidance provided is current as of today only and the Company undertakes no obligation to update its estimates.
For the third quarter of 2008 the Company expects revenues of between $31 million and $32.0 million, GAAP earnings per diluted share of between $0.10 and $0.14 and Non-GAAP earnings per diluted share, before all amortization expenses and stock-based compensation expenses, of between $0.18 to $0.22.
The Company estimates that amortization expenses for the third quarter of 2008 will be approximately $550,000 and that stock-based compensation expenses will be approximately $750,000.
For fiscal 2008, the Company is changing its revenue guidance from the previous range of $123.5 million and $126.0 million to a range of $123.0 million and $125 million.
The Company estimates that amortization expenses for 2008 will be approximately $2.1 million and that stock-based compensation expenses will be approximately $3.1 million.
For fiscal 2008 the Company is changing its earnings per share estimates and currently estimates GAAP earnings per diluted share at a range between $0.40 and $0.46 (prior estimate was $0.39 to $0.49) and estimate that non-GAAP earnings per diluted share, before all amortization expenses and stock-based compensation expenses, will be between $0.70 and $0.76 (prior estimate was $0.70 to $0.80).
The Company’s guidance for the third quarter of 2008 and full-year 2008 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 the Company’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 08:30 a.m. (EDT) today, Thursday, August 14, to discuss the Company’s second-quarter results as well as 2008 financial guidance, and to answer questions from the investment community.
To participate, please call (800)-901-5218 or 617-786-4511 and ask for the Fundtech call.
A replay of the conference call will be available for playback from 10:30am (EDT) August 14, until 11:59pm (EDT) August 22. The replay may be accessed by dialing (888) 286-8010 or 617-801-6888, pass code 61716645.
This call will also be web cast live on: http://www.fundtech.com. An online replay will be available until September 30.
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 is a leader in SWIFT services, operating one of the world’s largest SWIFT service bureaus in the world. Fundtech offers an extensive line of financial supply chain applications including electronic invoice presentment and supply trade financing and is 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 revenues; third-quarter GAAP earnings per share; third-quarter Non-GAAP earnings per share; full-year 2008 revenues; full-year 2008 GAAP earnings per share; and full-year 2008 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, 2007. 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, | |
| | | 2008 | | | 2007 | |
| ASSETS | | | | | | |
| | | | | | | |
| Current assets: | | | | | | |
| Cash and cash equivalents | | $ | 36,274 | | | $ | 31,612 | |
| Short term deposits | | | 1,960 | | | | 1,765 | |
| Marketable securities - short term | | | 7,862 | | | | 8,624 | |
| Trade receivables, net | | | 26,041 | | | | 22,387 | |
| Defer Tax Asset | | | -- | | | | -- | |
| Other accounts receivable, prepaid expenses and inventories | | | 4,424 | | | | 2,942 | |
| | | | - | | | | - | |
Total current assets | | | 76,561 | | | | 67,330 | |
| | | | | | | | | |
| Marketable securities - Long term | | | 6,944 | | | | 12,847 | |
| Severance pay fund | | | 1,487 | | | | 1,197 | |
| Long term lease deposits | | | 1,029 | | | | 778 | |
| Prepaid expenses | | | 2,516 | | | | 2,434 | |
| Property and equipment, net | | | 14,823 | | | | 14,070 | |
| Goodwill, net | | | 32,886 | | | | 26,802 | |
| Defer Tax Asset | | | 658 | | | | 658 | |
| Other assets, net | | | 6,649 | | | | 2,156 | |
| | | | - | | | | - | |
Total assets | | $ | 143,553 | | | $ | 128,272 | |
| | | | | | | |
| | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | |
| | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Trade payables | | $ | 2,339 | | | $ | 1,079 | |
| Deferred revenues | | | 15,970 | | | | 6,143 | |
| Accrued restructuring expenses | | | -- | | | | 62 | |
| Employee and payroll accruals | | | 6,161 | | | | 6,298 | |
| Other accounts payable and accrued expenses | | | 6,686 | | | | 8,591 | |
| | | | - | | | | - | |
Total current liabilities | | | 31,156 | | | | 22,173 | |
| | | | | | | | | |
| Accrued severance pay | | | 1,855 | | | | 1,518 | |
| Accrued restructuring and other expenses | | | -- | | | | -- | |
| Deferred taxes | | | 968 | | | | 878 | |
| Other long term liabilities | | | 3,225 | | | | 1,571 | |
| | | | - | | | | - | |
Total liabilities | | | 37,204 | | | | 26,140 | |
| | | | - | | | | - | |
| Shareholders' equity: | | | | | | | | |
| Share capital | | | 47 | | | | 47 | |
| Additional paid-in capital | | | 153,273 | | | | 151,547 | |
| Accumulated other comprehensive income (loss) | | | 1,007 | | | | 506 | |
| Accumulated deficit | | | (44,720 | ) | | | (46,710 | ) |
| Treasury stock, at cost | | | (3,258 | ) | | | (3,258 | ) |
| | | | - | | | | - | |
Total shareholders' equity | | | 106,349 | | | | 102,132 | |
| | | | - | | | | - | |
Total liabilities and shareholders' equity | | $ | 143,553 | | | $ | 128,272 | |
| | | | | | | |
| | | | | | | | | | | | | |
| 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, | | | | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Revenues: | | | | | | | | | | | | |
| Software license | | $ | 4,061 | | | $ | 5,400 | | | $ | 8,926 | | | $ | 9,407 | |
| Software hosting | | | 5,067 | | | | 3,534 | | | | 9,734 | | | | 6,973 | |
| Maintenance | | | 8,435 | | | | 6,063 | | | | 16,381 | | | | 12,099 | |
| Services | | | 14,061 | | | | 10,396 | | | | 24,637 | | | | 20,085 | |
| | | | | | | | | | | | | | | | | |
Total revenues | | | 31,624 | | | | 25,393 | | | | 59,678 | | | | 48,564 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses: | | | | | | | | | | | | | | | | |
| Software licenses costs | | | 112 | | | | 101 | | | | 144 | | | | 123 | |
| Amortization of capitalized software development costs | | | -- | | | | -- | | | | -- | | | | 394 | |
| Amortization of other intangible assets | | | 554 | | | | 416 | | | | 1,028 | | | | 825 | |
Maintenance, hosting and services costs [1] | | | 14,321 | | | | 10,831 | | | | 27,592 | | | | 21,031 | |
Software development [1] | | | 5,584 | | | | 4,448 | | | | 10,796 | | | | 9,131 | |
Selling and marketing [1] | | | 5,163 | | | | 4,631 | | | | 9,994 | | | | 8,862 | |
General and administrative [1] | | | 4,344 | | | | 3,279 | | | | 8,287 | | | | 6,388 | |
| | | | | | | | | | | | | | | | | |
Total operating expenses | | | 30,078 | | | | 23,706 | | | | 57,841 | | | | 46,754 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Operating income | | | 1,546 | | | | 1,687 | | | | 1,837 | | | | 1,810 | |
| Financial income, net | | | 438 | | | | 525 | | | | 837 | | | | 966 | |
| Income taxes | | | (323 | ) | | | (482 | ) | | | (684 | ) | | | (618 | ) |
| | | | | | | | | | | | | | | | | |
Net income | | $ | 1,661 | | | $ | 1,730 | | | $ | 1,990 | | | $ | 2,158 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Net income per share: | | | | | | | | | | | | | | | | |
| Net income used in computing income per share | | $ | 1,661 | | | $ | 1,730 | | | $ | 1,990 | | | $ | 2,158 | |
| Basic income per share | | $ | 0.11 | | | $ | 0.11 | | | $ | 0.13 | | | $ | 0.14 | |
| Diluted income per share | | $ | 0.10 | | | $ | 0.10 | | | $ | 0.12 | | | $ | 0.13 | |
| Shares used in computing: | | | | | | | | | | | | | | | | |
| Basic income per share | | | 15,667,084 | | | | 15,213,331 | | | | 15,666,789 | | | | 15,168,094 | |
| Diluted income per share | | | 16,712,889 | | | | 16,489,597 | | | | 16,663,137 | | | | 16,404,892 | |
| | | | | | | | | | | | | | | | | |
Adjusted non-GAAP[2] net income per share: | | | | | | | | | | | | | | | | |
Adjusted non-GAAP[2] net income used in computing income per share | | $ | 2,945 | | | $ | 2,812 | | | $ | 4,553 | | | $ | 4,708 | |
Adjusted non-GAAP[2] net income per share | | $ | 0.18 | | | $ | 0.17 | | | $ | 0.27 | | | $ | 0.29 | |
Shares used in computing adjusted non-GAAP[2] net income per share | | | 16,712,889 | | | | 16,489,597 | | | | 16,663,137 | | | | 16,404,892 | |
| | | | | | | | | | | | | | | | | |
Reconciliation of net income to adjusted non-GAAP[2] net income: | | | | | | | | | | | | | | | | |
| Net income | | $ | 1,661 | | | $ | 1,730 | | | $ | 1,990 | | | $ | 2,158 | |
| Amortization | | | 554 | | | | 416 | | | | 1,028 | | | | 1,219 | |
| Stock-based compensation | | | 730 | | | | 666 | | | | 1,535 | | | | 1,331 | |
| | | | | | | | | | | | | | | | | |
Adjusted non-GAAP[2] net income | | $ | 2,945 | | | $ | 2,812 | | | $ | 4,553 | | | $ | 4,708 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
[1] Includes charges for stock-based compensation in 2008 and 2007 | | | | | | | | | | | | | |
[2] See Reconciliation to GAAP | | | | | | | | | | | | | | | | |
| | | | | | | | | | |
| FUNDTECH LTD. AND ITS SUBSIDIARIES | |
| Consolidated Statement of Cash Flows | |
| (In Thousands) | |
| | | | | | | | | | |
| | Six Months Ended | | | | | Three Months Ended | |
| | | June 30, | | | | | | June 30, | |
| | | 2008 | | | 2007 | | | 2008 | |
| CASH FLOWS FROM OPERATIONS: | | | | | | | | | |
| Net income | | $ | 1,990 | | | $ | 2,158 | | | $ | 1,661 | |
| Adjustments to reconcile net income to net cash | | | | | | | | | | | | |
| provided by (used in) operating activities: | | | | | | | | | | | | |
| Depreciation and amortization | | | 3,919 | | | | 3,411 | | | | 2,036 | |
| (Increase) Decrease in trade receivables | | | (3,542 | ) | | | 4,460 | | | | 997 | |
| (Increase) Decrease in prepaid expenses, other accounts receivable and inventories | | | (1,344 | ) | | | (1,329 | ) | | | 374 | |
| Increase in trade payables | | | 830 | | | | 63 | | | | 163 | |
| Increase (Decrease) in deferred revenues | | | 11,210 | | | | 6,091 | | | | (4,156 | ) |
| (Decrease) Increase in employee and payroll accruals | | | (476 | ) | | | (511 | ) | | | 659 | |
| Decrease in other accounts payable and accrued expenses | | | (290 | ) | | | (3,098 | ) | | | (1,625 | ) |
| Decrease in accrued restructuring expenses | | | (62 | ) | | | (93 | ) | | | (15 | ) |
| Increase in accrued severance pay, net | | | 47 | | | | 101 | | | | 21 | |
| Increase (Decrease) in accrued interest on marketable securities | | | 56 | | | | (14 | ) | | | -- | |
| Increase in Deferred taxes | | | 35 | | | | -- | | | | 18 | |
| Losses on disposition of fixed assets | | | -- | | | | (8 | ) | | | -- | |
| Stock-based compensation | | | 1,535 | | | | 1,331 | | | | 730 | |
| | | | | | | | | | | | | |
| Net cash provided by operations | | | 13,908 | | | | 12,562 | | | | 863 | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | | | | | |
| Investment in held-to-maturity marketable securities | | | (3,812 | ) | | | (11,404 | ) | | | (21 | ) |
| Proceeds from held-to-maturity marketable securities | | | 10,475 | | | | 12,406 | | | | 2,200 | |
| (Investment in) maturity of short term deposits | | | (56 | ) | | | (2,832 | ) | | | 1,981 | |
| Purchase of property and equipment | | | (3,456 | ) | | | (3,332 | ) | | | (1,813 | ) |
| (Increase) Decrease in long-term lease deposits and prepaid expenses | | | (252 | ) | | | 23 | | | | (263 | ) |
| Investments in subsidiaries | | | (12,475 | ) | | | (5,150 | ) | | | (195 | ) |
| Proceeds from sale of fixed assets | | | -- | | | | 38 | | | | -- | |
| | | | | | | | | | | | | |
| Net cash used in investing activities | | | (9,576 | ) | | | (10,251 | ) | | | 1,889 | |
| | | | | | | | | | | | | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | | | | | |
| Proceeds from the issuance of share capital and | | | | | | | | | | | | |
| exercise of stock options and warrants, net | | | 191 | | | | 1,300 | | | | 83 | |
| Decrease in long-term other liabilities | | | -- | | | | (62 | ) | | | -- | |
| | | | | | | | | | | | | |
| Net cash provided by (used in) financing activities | | | 191 | | | | 1,238 | | | | 83 | |
| | | | | | | | | | | | | |
| Effect of exchange rate on cash and cash equivalents | | | 139 | | | | 216 | | | | 1,593 | |
| | | | | | | | | | | | | |
| Increase (decrease) in cash and cash equivalents | | | 4,662 | | | | 3,765 | | | | 4,428 | |
| Cash and cash equivalents at the beginning of the period | | | 31,612 | | | | 28,616 | | | | 31,846 | |
| | | | | | | | | | | | | |
| Cash and cash equivalents at the end of the period | | $ | 36,274 | | | $ | 32,381 | | | $ | 36,274 | |
| | | | | | | | | | |
| Appendix A | | | | | | | | | | | | |
| Investment in Subsidiaries | | | | | | | | | | | | |
| Working Capital | | $ | (815 | ) | | $ | 689 | | | $ | -- | |
| Long term assets | | | 5,555 | | | | 1,997 | | | | -- | |
| Long term liabilities | | | (39 | ) | | | -- | | | | -- | |
| Goodwill | | | 7,774 | | | | 2,464 | | | | 195 | |
| | | | | | | | | | | | - | |
| | | $ | 12,475 | | | $ | 5,150 | | | $ | 195 | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| 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 | | | | | | | Six Months Ended | | | |
| | | June 30, | | | | June 30, | | | June 30, | | | |
| | | 2008 | | | | 2007 | | | | 2007 | | | 2008 | | | | 2007 | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Reconciliation of net income (loss) to adjusted non-GAAP net income: | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 1,661 | [1] | | | $ | 1,730 | 1] | | | $ | 1,730 | [1] | | $ | 1,990 | [1] | | | $ | 2,158 | [1] | | | |
| Amortization of capitalized | | | | | | | | | | | | | | | | | | | | | | | | | | |
| software development costs | | | -- | | | | | -- | | | | | -- | | | | -- | | | | | 394 | | | | |
| Amortization of other intangible assets | | | 554 | | | | | 416 | | | | | 416 | | | | 1,028 | | | | | 825 | | | | |
| Stock-based compensation charged as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Maintenance, hosting and services costs | | | 129 | | | | | 79 | | | | | 79 | | | | 312 | | | | | 151 | | | | |
| Software development | | | 64 | | | | | 99 | | | | | 99 | | | | 146 | | | | | 160 | | | | |
| Selling and marketing | | | 156 | | | | | 124 | | | | | 124 | | | | 311 | | | | | 274 | | | | |
| General and administrative | | | 381 | | | | | 364 | | | | | 364 | | | | 766 | | | | | 746 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted non-GAAP net income | | $ | 2,945 | | | | $ | 2,812 | | | | $ | 2,812 | | | $ | 4,553 | | | | $ | 4,708 | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted non-GAAP net income per share | | $ | 0.18 | | | | $ | 0.17 | | | | $ | 0.17 | | | $ | 0.27 | | | | $ | 0.29 | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
| Shares used in computing | | | | | | | | | | | | | | | | | | | | | | | | | | |
| adjusted non-GAAP net income per share | | | 16,712,889 | | | | | 16,489,597 | | | | | 16,489,597 | | | | 16,663,137 | | | | | 16,404,892 | | | | |
| | | | | | | | | | | | | | | | | | | | | | |
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[1] Net income per share (diluted) was approximately $0.10 , $0.10 and $0.10 for the three months ended June 30, 2008 | | | | | | | | | |
| and 2007 and the three months ended March 31, 2008, respectively. Ner Income per share (diluted) was | | | | | | | | | |
| approximately $0.12 and $0.13 for the six months ended June 30, 2008 and 2007, respectively. | | | | | | | | | |
