Exhibit 99.1
N E W S
R E L E A S E
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
FOURTH QUARTER OF 2008 AND FULL YEAR 2008
- Quarterly Revenues Grow 1% Year-over-Year to $29.8 Million
- GAAP EPS (14) Cents Loss
- Non GAAP EPS 5 Cents
- Full Year Revenues Increase 16% to $121.0 Million
- Elects Chairman of the Board of Directors
JERSEY CITY, N.J. —February 18, 2009, — Fundtech Ltd. (NASDAQ: FNDT), a leading provider of global electronic payment, settlement and cash management solutions, today announced financial results for the fourth quarter and full year ended December 31, 2008. Fundtech posted quarterly revenues of $29.8 million, a 1% increase year-over-year, compared to fourth quarter revenues of $29.4 million in 2007, and a 5% decline compared to third quarter 2008 revenues of $31.5 million.
On a GAAP (Generally Accepted Accounting Principles) basis, Fundtech reported a net loss of ($2.2) million or ($0.14) per diluted share, for the fourth quarter of 2008 compared with net income of $2.7 million, or $0.16 per diluted share, in the fourth quarter of 2007, and net income of $1.5 million, or $0.09 per diluted share, in the third quarter of 2008.
-more-
Excluding stock-based compensation, amortization of intangibles, impairment of goodwill and other intangible assets, impairment of marketable securities, and deferred taxes Fundtech’s adjusted net income for the fourth quarter of 2008 was $0.8 million, or $0.05 per diluted share, compared with $3.6 million, or $0.22 per diluted share, in the fourth quarter of 2007 and $3.3 million, or $0.20 per diluted share, in the third quarter of 2008 (See Schedule A attached to this news release -- Reconciliation to GAAP).
For the year ended December 31, 2008, revenues increased 16% to $121.0 million from $104.6 million in 2007. GAAP net income in 2008 was $1.2 million, or $0.08 per diluted share, compared with net income of $7.1 million or $0.43 per diluted share, in 2007. Excluding stock-based compensation, amortization of intangibles, impairment of goodwill and other intangible assets, impairment of marketable securities, and deferred taxes Fundtech’s non GAAP net income for 2008 was $8.9 million, or $0.54 per diluted share, compared to $11.5 million, or $0.69 per diluted share, in 2007. (See Schedule A Attached to this Press Release - -- Reconciliation to GAAP).
“Despite the uncertain market conditions and the slow down in the fourth quarter we posted double digit revenue growth in 2008 and generated cash flow from operations of $13.7 million” said CEO Reuven Ben Menachem. “Looking towards 2009, we believe that the slow down will continue at least during the first six months of the year. Despite the weakness with the global banks we continue to have good success selling Global PAYplus to large regional banks. We have also taken steps to control costs and I believe that we are well positioned for renewed growth when market conditions improve.”
Other highlights:
| · | During the fourth quarter excluding Accountis Fundtech closed 98 new deals and added 7 new bank customers. |
| · | During the fourth quarter Fundtech closed 10 new system sales including 6 US Payments, 1 Global CASHplus, 1 CLS and 2 at BBP. |
| · | During the quarter Fundtech closed a sale of Global PAYplus system to a large European bank. |
| · | During the fourth quarter Fundtech recorded financial expenses of approximately $800,000 due to a decline in the value of balances of cash and accounts receivables denominated in non-dollar currencies. |
| · | During the fourth quarter Fundtech recorded a $2 million one time charge due to the impairment of goodwill and other intangible assets recorded in connection with the acquisition of Radius Partners. |
Fundtech today also announced the election of Avi Fischer to the position of Chairman of the Board of Directors. Mr. Fischer is the Deputy Chairman of the IDB Group, Israel's largest holding group, and Co-Chief Executive Officer of Clal Industries and Investments (TASE: CII). Mr. Fischer is also the Chairman of Clal Bio Technologies (TASE: CBI) and serves on the boards of numerous Israeli and International companies. In addition, Mr. Fischer serves as Co-Chairman of "Matan – Your Way to Give" - Israel’s largest Philanthropic organization.
Gideon Argov will remain in the company as Vice Chairman.
The Audit Committee and Board of Directors of Fundtech have approved compensation for Mr. Fischer in an amount not to exceed the compensation paid to any other director of the company. Under Israel's Companies Law, this compensation will take effect provided that the company does not receive written notices of objection from shareholders holding 1% or more of the company's shares, in the aggregate, during the 14 days following publication of this announcement.
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, impairment of goodwill and other intangible assets, Impairment of marketable securities, and deferred taxes.
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 guidance only for the first and second quarter of 2009.
For the first quarter of 2009 we expects revenues of between $25.5 million and $26.5 million, GAAP earnings per diluted share of between a (loss) of ($0.14) and loss of $(0.06) and non-GAAP earnings per diluted share, before all amortization expenses and stock-based compensation expenses, of between a loss of ($0.06) to net income of $0.02.
For the second quarter of 2009 we expects revenues of between $27.7 million and $29.2 million, GAAP earnings per diluted share of between a (loss) of ($0.06) and net income of $0.02 and non-GAAP earnings per diluted share, before all amortization expenses and stock-based compensation expenses, of between $0.02 to $0.10
Fundtech estimates that quarterly amortization expenses for the first two quarters of 2009 will be approximately $500,000 and that stock-based compensation expenses will be approximately $750,000 per quarter.
Fundtech’s guidance for the first and second quarters 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 08:30 a.m. (EDT) today, Wednesday, February 18, to discuss the Company’s fourth-quarter and full year results as well as 2009 financial guidance, and to answer questions from the investment community.
To participate, please call (800)-798-2864 or 617-614-6206 and ask for the Fundtech call.
A replay of the conference call will be available for playback from 11:30am (EDT) February 18, until 11:59pm (EDT) February 25. The replay may be accessed by dialing (888) 286-8010 or 617-801-6888, pass code 58823591.
This call will also be web cast live on: http://www.fundtech.com. An online replay will be available until March 13.
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. 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 first and second 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: a 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, 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) | ||||||||
| December 31, | December 31, | |||||||
| 2008 | 2007 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 29,642 | $ | 31,612 | ||||
| Short term deposits | 1,117 | 1,765 | ||||||
| Marketable securities - short term | 9,563 | 8,624 | ||||||
| Trade receivables, net | 28,264 | 22,387 | ||||||
| Defer Tax Asset | 1,022 | 658 | ||||||
| Other accounts receivable, prepaid expenses and inventories | 3,957 | 2,942 | ||||||
| - | ||||||||
| Total current assets | 73,565 | 67,988 | ||||||
| Marketable securities - Long term | 2,204 | 12,847 | ||||||
| Severance pay fund | 1,394 | 1,197 | ||||||
| Long term lease deposits | 1,301 | 778 | ||||||
| Prepaid expenses | 2,797 | 2,434 | ||||||
| Property and equipment, net | 15,898 | 14,070 | ||||||
| Goodwill, net | 34,520 | 26,802 | ||||||
| Other assets, net | 5,995 | 2,156 | ||||||
| Total assets | $ | 137,674 | $ | 128,272 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Trade payables | $ | 2,908 | $ | 1,079 | ||||
| Deferred revenues | 9,910 | 6,143 | ||||||
| Accrued restructuring expenses | -- | 62 | ||||||
| Employee and payroll accruals | 6,807 | 6,298 | ||||||
| Other accounts payable and accrued expenses | 6,256 | 8,591 | ||||||
| - | ||||||||
| Total current liabilities | 25,881 | 22,173 | ||||||
| Accrued severance pay | 1,734 | 1,518 | ||||||
| Accrued restructuring and other expenses | -- | -- | ||||||
| Deferred taxes | 970 | 878 | ||||||
| Other long term liabilities | 2,278 | 1,571 | ||||||
| Total liabilities | 30,863 | 26,140 | ||||||
| Shareholders' equity: | ||||||||
| Share capital | 49 | 47 | ||||||
| Additional paid-in capital | 155,976 | 151,547 | ||||||
| Accumulated other comprehensive income (loss) | 164 | 506 | ||||||
| Accumulated deficit | (45,470 | ) | (46,710 | ) | ||||
| Treasury stock, at cost | (3,908 | ) | (3,258 | ) | ||||
| Total shareholders' equity | 106,811 | 102,132 | ||||||
| Total liabilities and shareholders' equity | $ | 137,674 | $ | 128,272 | ||||
| FUNDTECH LTD. AND ITS SUBSIDIARIES | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (In Thousands, Except Share and Per Share Data) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Revenues: | ||||||||||||||||
| Software license | $ | 3,555 | $ | 6,236 | $ | 16,488 | $ | 19,741 | ||||||||
| Software hosting | 5,169 | 4,446 | 19,889 | 15,384 | ||||||||||||
| Maintenance | 9,590 | 8,102 | 34,506 | 27,570 | ||||||||||||
| Services | 11,500 | 10,641 | 50,154 | 41,939 | ||||||||||||
Total revenues | 29,814 | 29,425 | 121,037 | 104,634 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Software licenses costs | -- | 342 | 291 | 590 | ||||||||||||
| Amortization of capitalized software development costs | -- | -- | -- | 394 | ||||||||||||
| Amortization of other intangible assets | 592 | 281 | 2,167 | 1,387 | ||||||||||||
| Impairment of goodwill and other intangible assets | 2,018 | -- | 2,018 | -- | ||||||||||||
Maintenance, hosting and services costs [1] | 12,786 | 12,787 | 53,730 | 45,578 | ||||||||||||
Software development [1] | 5,520 | 5,354 | 21,849 | 19,348 | ||||||||||||
Selling and marketing [1] | 5,881 | 4,363 | 20,883 | 17,667 | ||||||||||||
General and administrative [1] | 4,621 | 3,807 | 17,115 | 13,553 | ||||||||||||
Total operating expenses | 31,418 | 26,934 | 118,053 | 98,517 | ||||||||||||
| Operating income (Loss) | (1,604 | ) | 2,491 | 2,984 | 6,117 | |||||||||||
| Impairment of & loss on Investments | (92 | ) | -- | (692 | ) | -- | ||||||||||
| Financial (expense) / income, net | (506 | ) | 638 | 48 | 2,197 | |||||||||||
| Income taxes | (19 | ) | (423 | ) | (1,100 | ) | (1,207 | ) | ||||||||
Net income (Loss) | $ | (2,221 | ) | $ | 2,706 | $ | 1,240 | $ | 7,107 | |||||||
| Net income per share: | ||||||||||||||||
| Net income (Loss) used in computing income per share | $ | (2,221 | ) | $ | 2,706 | $ | 1,240 | $ | 7,107 | |||||||
| Basic income per share | $ | (0.14 | ) | $ | 0.17 | $ | 0.08 | $ | 0.46 | |||||||
| Diluted income per share | $ | (0.14 | ) | $ | 0.16 | $ | 0.08 | $ | 0.43 | |||||||
| Shares used in computing: | ||||||||||||||||
| Basic income per share | 15,890,060 | 15,501,400 | 15,769,588 | 15,322,515 | ||||||||||||
| Diluted income per share | 16,252,964 | 16,720,994 | 16,433,763 | 16,593,283 | ||||||||||||
Adjusted non-GAAP[2] net income per share: | ||||||||||||||||
Adjusted non-GAAP[2] net income used in computing income per share | $ | 833 | $ | 3,626 | $ | 8,931 | $ | 11,484 | ||||||||
Adjusted non-GAAP[2] net income per share | $ | 0.05 | $ | 0.22 | $ | 0.54 | $ | 0.69 | ||||||||
Shares used in computing adjusted non-GAAP[2] net income per share | 16,252,964 | 16,720,994 | 16,433,763 | 16,593,283 | ||||||||||||
Reconciliation of net income to adjusted non-GAAP[2] net income: | ||||||||||||||||
| Net income (Loss) | $ | (2,221 | ) | $ | 2,706 | $ | 1,240 | $ | 7,107 | |||||||
| Amortization | 592 | 281 | 2,167 | 1,781 | ||||||||||||
| Impairment of goodwill and other intangible assets | 2,018 | -- | 2,018 | -- | ||||||||||||
| Stock-based compensation | 746 | 639 | 3,007 | 2,596 | ||||||||||||
| Impairment of & loss on Investments | -- | -- | 600 | -- | ||||||||||||
| Deferred taxes | (302 | ) | -- | (101 | ) | -- | ||||||||||
Adjusted non-GAAP[2] net income | $ | 833 | $ | 3,626 | $ | 8,931 | $ | 11,484 | ||||||||
[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) | ||||||||||||
| Twelve Months Ended | Three Months Ended | |||||||||||
| December 31 | December 31, | |||||||||||
| 2008 | 2007 | 2008 | ||||||||||
| CASH FLOWS FROM OPERATIONS: | ||||||||||||
| Net income (loss) | $ | 1,240 | $ | 7,107 | $ | (2,221 | ) | |||||
| Adjustments to reconcile net income to net cash (loss) | ||||||||||||
| provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 10,121 | 6,581 | 4,158 | |||||||||
Decrease (Increase) in trade receivables | (6,259 | ) | 3,853 | 1,919 | ||||||||
Decrease (Increase) in prepaid expenses, other accounts receivable and inventories | (925 | ) | (835 | ) | 440 | |||||||
Increase (Decrease) in trade payables | 1,296 | (1,441 | ) | 1,867 | ||||||||
Increase (Decrease) in deferred revenues | 4,608 | (1,309 | ) | (213 | ) | |||||||
Increase in employee and payroll accruals | 346 | 1,494 | 729 | |||||||||
Decrease in other accounts payable and accrued expenses | (360 | ) | (431 | ) | (1,595 | ) | ||||||
Decrease in accrued restructuring expenses | (62 | ) | (185 | ) | -- | |||||||
Increase (Decrease) in accrued severance pay, net | 19 | 143 | (21 | ) | ||||||||
Increase (Decrease) in accrued interest on marketable securities | 122 | (170 | ) | 40 | ||||||||
Decrease in Deferred taxes | (101 | ) | (120 | ) | (302 | ) | ||||||
Losses on disposition of fixed assets | -- | 38 | -- | |||||||||
Stock-based compensation | 3,007 | 2,596 | 746 | |||||||||
Impairment of Marketable securities | 692 | -- | 92 | |||||||||
Decrease in LT other liabilities | (32 | ) | -- | -- | ||||||||
Net cash provided by operations | 13,712 | 17,321 | 5,639 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Investment in held-to-maturity marketable securities | (5,362 | ) | (25,841 | ) | (328 | ) | ||||||
| Proceeds from held-to-maturity marketable securities | 14,252 | 37,090 | 2,377 | |||||||||
| Investment in long term of held of maturity marketable securities | -- | (12,696 | ) | -- | ||||||||
| Proceeds from long term held of maturity marketable securities | -- | -- | -- | |||||||||
| (Investment in) maturity of short term deposits | 614 | (1,765 | ) | (1,117 | ) | |||||||
| Purchase of property and equipment | (6,604 | ) | (6,745 | ) | (1,960 | ) | ||||||
| Net change in long-term lease deposits and prepaid expenses | (575 | ) | (111 | ) | (319 | ) | ||||||
| Investments in subsidiaries | (18,265 | ) | (7,465 | ) | (5,814 | ) | ||||||
| Proceeds from sale of fixed assets | -- | 14 | -- | |||||||||
Net cash used in investing activities | (15,940 | ) | (17,519 | ) | (7,161 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Proceeds from the issuance of share capital and | ||||||||||||
| exercise of stock options and warrants, net | 1,424 | 2,341 | 42 | |||||||||
| Increase (Decrease) in long-term other liabilities | 140 | (61 | ) | 142 | ||||||||
| Investment in treasury stock, at cost | (650 | ) | -- | (650 | ) | |||||||
Net cash provided by (used in) financing activities | 914 | 2,280 | (466 | ) | ||||||||
| Effect of exchange rate on cash and cash equivalents | (656 | ) | 914 | 1,057 | ||||||||
| Increase (decrease) in cash and cash equivalents | (1,970 | ) | 2,996 | (931 | ) | |||||||
| Cash and cash equivalents at the beginning of the period | 31,612 | 28,616 | 30,573 | |||||||||
| Cash and cash equivalents at the end of the period | $ | 29,642 | $ | 31,612 | $ | 29,642 | ||||||
| Appendix A | ||||||||||||
| Investment in Subsidiaries | ||||||||||||
| Working Capital | $ | (1,210 | ) | $ | 1,016 | $ | (395 | ) | ||||
| Long term assets | 7,870 | 1,385 | 2,315 | |||||||||
| Long term liabilities | (39 | ) | (394 | ) | -- | |||||||
| Goodwill and other intangible assets | 11,644 | 5,458 | 3,894 | |||||||||
| $ | 18,265 | $ | 7,465 | $ | 5,814 | |||||||
| 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 | Twelve Months Ended | |||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||||||||||
Reconciliation of net income (loss) to adjusted non-GAAP net income: | ||||||||||||||||||||||||
| Net income (Loss) | $ | (2,221 | ) | [1] | $ | 2,706 | [1] | $ | 1,240 | [1] | $ | 7,107 | [1] | |||||||||||
| Amortization of capitalized | ||||||||||||||||||||||||
| software development costs | -- | -- | -- | 394 | ||||||||||||||||||||
| Amortization of other intangible assets | 592 | 281 | 2,167 | 1,387 | ||||||||||||||||||||
Impairment of goodwill and other intangible assets | 2,018 | -- | 2,018 | -- | ||||||||||||||||||||
| Impairment of & loss on Investments | -- | -- | 600 | -- | ||||||||||||||||||||
| Deferred taxes | (302 | ) | -- | (101 | ) | -- | ||||||||||||||||||
| Stock-based compensation charged as follows: | ||||||||||||||||||||||||
| Maintenance, hosting and services costs | 134 | 79 | 575 | 308 | ||||||||||||||||||||
| Software development | 59 | 98 | 261 | 358 | ||||||||||||||||||||
| Selling and marketing | 167 | 121 | 643 | 514 | ||||||||||||||||||||
| General and administrative | 386 | 341 | 1,528 | 1,416 | ||||||||||||||||||||
| Adjusted non-GAAP net income | $ | 833 | $ | 3,626 | $ | 8,931 | $ | 11,484 | ||||||||||||||||
| Adjusted non-GAAP net income per share | $ | 0.05 | $ | 0.22 | $ | 0.54 | $ | 0.69 | ||||||||||||||||
| Shares used in computing | ||||||||||||||||||||||||
| adjusted non-GAAP net income per share | 16,252,964 | 16,720,994 | 16,433,763 | 16,593,283 | ||||||||||||||||||||
[1] Net income (Loss) per share (diluted) was approximately $(0.14) and $0.16 for the three months ended December 31, 2008 and 2007, respectively. Net Income per share (diluted) was approximately $0.08 and $0.43 for the twelve months ended December 31, 2008 and 2007, respectively. | ||||||||||||||||||||||||