Exhibit 99.1
Fundtech Contact:
Yoram Bibring
Fundtech Ltd.
Tel: 1-201-946-1100
yoram.bibring@fundtech.com
FOR IMMEDIATE RELEASE
FUNDTECH REPORTS FINANCIAL RESULTS FOR THE
SECOND QUARTER OF 2009
- GAAP EPS 3 Cents
- Non GAAP EPS 11 Cents
- Quarterly Revenues of $28.3 Million
-
JERSEY CITY, N.J. —August 4, 2009, — Fundtech Ltd. (NASDAQ: FNDT), 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.
-more-
Fundtech Corporation 30 Montgomery Street, Suite 501, Jersey City, NJ 07302, USA ■ Tel: +1-201-946-1100 ■ Fax: +1-210-946-1313
www.fundtech.com
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 Corporation 30 Montgomery Street, Suite 501, Jersey City, NJ 07302, USA ■ Tel: +1-201-946-1100 ■ Fax: +1-210-946-1313
www.fundtech.com
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 .
Fundtech Corporation 30 Montgomery Street, Suite 501, Jersey City, NJ 07302, USA ■ Tel: +1-201-946-1100 ■ Fax: +1-210-946-1313
www.fundtech.com
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.
Fundtech Corporation 30 Montgomery Street, Suite 501, Jersey City, NJ 07302, USA ■ Tel: +1-201-946-1100 ■ Fax: +1-210-946-1313
www.fundtech.com
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), 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 Corporation 30 Montgomery Street, Suite 501, Jersey City, NJ 07302, USA ■ Tel: +1-201-946-1100 ■ Fax: +1-210-946-1313
www.fundtech.com
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 | Three Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2009 | 2008 | 2009 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
| Net income (Loss) | $ | (342 | ) | $ | 1,990 | $ | 545 | |||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
| Depreciation and amortization | 4,312 | 3,919 | 2,223 | |||||||||
| Stock-based compensation | 1,513 | 1,535 | 688 | |||||||||
| Decrease in accrued interest on marketable securities | 49 | 56 | 42 | |||||||||
| Deferred income taxes | 87 | 35 | 168 | |||||||||
| Changes in assets and liabilities | ||||||||||||
| Decrease (Increase) in trade receivables | 1,202 | (3,542 | ) | (1,943 | ) | |||||||
| Decrease (Increase) in prepaid expenses, other accounts receivable | (1,287 | ) | (1,344 | ) | 342 | |||||||
| Increase (Decrease) in trade payables | (705 | ) | 830 | (22 | ) | |||||||
| Increase (Decrease) in deferred revenues | 11,052 | 11,210 | (996 | ) | ||||||||
| Decrease in employee and payroll accruals | (857 | ) | (476 | ) | (190 | ) | ||||||
| Increase (Decrease) in other accounts payable and accrued expenses | 259 | (290 | ) | (398 | ) | |||||||
| Decrease in accrued restructuring expenses | -- | (62 | ) | -- | ||||||||
| Increase in accrued severance pay, net | 102 | 47 | 78 | |||||||||
| Net cash provided by operations | 15,385 | 13,908 | 537 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||
| Investment in held-to-maturity marketable securities | (5,217 | ) | (3,812 | ) | (5,217 | ) | ||||||
| Realization of held-to-maturity marketable securities | 4,519 | 10,475 | 3,104 | |||||||||
| Investment in short term deposits | (367 | ) | (56 | ) | 326 | |||||||
| Purchase of property and equipment | (2,597 | ) | (3,456 | ) | (1,251 | ) | ||||||
| Net change in long term lease deposits and long term prepaid expenses | (284 | ) | (252 | ) | (221 | ) | ||||||
| Investments in subsidiaries | (5,497 | ) | (12,475 | ) | (3,836 | ) | ||||||
| Net cash used in investing activities | (9,443 | ) | (9,576 | ) | (7,095 | ) | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||
| Proceeds from issuance of share capital, | ||||||||||||
| Exercise of stock options and warrants, net | 73 | 191 | 68 | |||||||||
| Investment in treasury stock, at cost | (5,090 | ) | -- | (3,565 | ) | |||||||
| Net cash provided by (used in) financing activities | (5,017 | ) | 191 | (3,497 | ) | |||||||
| Effect of exchange rate on cash and cash equivalents | 436 | 139 | 693 | |||||||||
| Increase (Decrease) in cash and cash equivalents | 1,361 | 4,662 | (9,362 | ) | ||||||||
| Cash and cash equivalents at the beginning of the period | 29,642 | 31,612 | 40,365 | |||||||||
| Cash and cash equivalents at the end of the period | $ | 31,003 | $ | 36,274 | $ | 31,003 | ||||||
| Appendix A | ||||||||||||
| Investment in Subsidiaries | ||||||||||||
| Working Capital | $ | (167 | ) | $ | (815 | ) | $ | (167 | ) | |||
| Long term assets | 1,804 | 5,555 | 1,804 | |||||||||
| Long term liabilities | -- | (39 | ) | -- | ||||||||
| Goodwill | 3,860 | 7,774 | 2,199 | |||||||||
| $ | 5,497 | $ | 12,475 | $ | 3,836 | |||||||
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, | |||||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||||||
| Reconciliation of net income (loss) to adjusted non-GAAP net income: | ||||||||||||||||
| Net income (Loss) | $ | 545 | [1] | $ | 1,661 | [1] | $ | (342 | )[1] | $ | 1,990 | [1] | ||||
| Amortization of other intangible assets | 527 | 554 | 1,000 | 1,028 | ||||||||||||
| Stock-based compensation charged as follows: | ||||||||||||||||
| Maintenance, hosting and services costs | 130 | 129 | 272 | 312 | ||||||||||||
| Software development | 48 | 64 | 106 | 146 | ||||||||||||
| Selling and marketing | 165 | 156 | 408 | 311 | ||||||||||||
| General and administrative | 345 | 381 | 727 | 766 | ||||||||||||
| Adjusted non-GAAP net income | $ | 1,760 | $ | 2,945 | $ | 2,171 | $ | 4,553 | ||||||||
| Adjusted non-GAAP net income per share | $ | 0.11 | $ | 0.18 | $ | 0.14 | $ | 0.27 | ||||||||
| Shares used in computing adjusted non-GAAP net income per share | 15,800,079 | 16,712,889 | 15,609,889 | 16,663,137 | ||||||||||||
| [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. |