Contact: Kevin Donovan
Bottomline Technologies
603-501-5240
kdonovan@bottomline.com
Bottomline Technologies Reports First Quarter Results
Revenue Growth Drives Results
PORTSMOUTH, N.H. – October 25, 2007 – Bottomline Technologies (NASDAQ: EPAY), a leading provider of collaborative payment and invoice automation solutions, today reported financial results for the first fiscal quarter ended September 30, 2007.
Revenues for the first quarter were $31.4 million, a 24% increase from revenues of $25.2 million in the first quarter of last year. The growth in revenues was highlighted by an increase in software license revenues to $3.4 million in the current quarter from $1.9 million in the first quarter of last year. Subscription and transaction revenue and service and maintenance revenue also increased on a year-over-year basis.
Net loss for the first quarter was $0.8 million, or net loss per share of $0.03. During the first quarter, operating expenses of $18.9 million included acquisition-related amortization of intangible assets of $2.6 million and stock-based compensation expense of $1.9 million.
Excluding these acquisition-related and stock compensation items, non-GAAP net income for the first quarter was $3.8 million, a $2.0 million, or 108% increase in non-GAAP net income from the first quarter of last year. Non-GAAP net income per share doubled from $0.08 a year ago to $0.16 in the current quarter.
Cash and short-term investments on hand as of September 30, 2007 were $64.9 million. During the first quarter, the company spent $3.7 million toward the repurchase of 281,000 shares of its common stock at an average repurchase price of $13.14.
“Bottomline had a good first quarter and a strong start to the new fiscal year,” said Rob Eberle, President and CEO of Bottomline Technologies. “Our results were well ahead of expectations. We are beginning to see the earnings capability of the model we have been working to create with non-GAAP net income of $3.8 million which is double the same period a year ago. This reflects a focused effort to prioritize and align our offerings towards the greatest opportunities for revenue growth and margin expansion. We expect this effort, which will be ongoing, to yield even greater earnings potential in the future.”
Customer Highlights
| · | Bottomline’s WebSeries® Global Cash Management platform was selected by one of the world’s largest publicly owned providers of health care, disability, life and accident insurance benefits to enhance compliance and control over payment and cash management processes across the organization. |
| · | New customers, including Dentsply International, Healthcare REIT, Lindt & Sprüngli, London Overground Rail Operations, Midwest Insurance and Sbarro, chose Bottomline’s solutions to accelerate the transition from paper- to electronic-based payment and transactional document processes. |
| · | Hyatt Hotels extended the value of their Oracle® e-Business Suite with Bottomline’s accounts payable automation solution for streamlined electronic invoice processing and automated, electronic transactional document creation. |
| · | Westchester County Medical Center, the academic medical center of New York Medical College, signed a multi-year contract for Legal eXchange™, Bottomline’s Software as a Service (SaaS) for legal spend management. |
Corporate and Product Highlights
| · | Formed a strategic global partnership with Wipro Technologies to provide corporate payments and cash management solutions to customers based on Bottomline’s WebSeries platform. |
| · | Announced that the company received three payments security-related technology patents from the United States Patent and Trademark Office, further strengthening Bottomline’s market position and competitive differentiators within corporate payments and banking. |
| · | Introduced advanced functionality for payments workflow and expanded support for Service Oriented Architecture (SOA) within Bottomline’s Global Cash Management platform. Through SOA, banks and financial institutions can seamlessly integrate WebSeries’ advanced payment and reporting capabilities into other applications for corporate, small business and retail banking, and trust and securities services. |
Bottomline has presented supplemental non-GAAP financial measures as part of this earnings release. The non-GAAP financial measures exclude certain non-cash items, specifically amortization of intangible assets and stock-based compensation expense. The presentation of this information should not be considered in isolation from, or as a substitute for, the financial results presented in accordance with GAAP. Bottomline believes that these supplemental 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. Bottomline’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. A reconciliation of the GAAP results to the non-GAAP results for the three month period ending September 30 is as follows:
| | | Three Months Ended September 30, | |
| | | (in thousands) | |
| | | 2007 | | | 2006 | |
| GAAP Net Loss | | $ | (801 | ) | | $ | (1,480 | ) |
| Amortization of Intangible Assets | | | 2,647 | | | | 1,461 | |
| Stock Compensation Expense | | | 1,927 | | | | 1,836 | |
| Non-GAAP Net Income | | $ | 3,773 | | | $ | 1,817 | |
About Bottomline Technologies
Bottomline Technologies (NASDAQ: EPAY) provides collaborative payment and invoice automation solutions to corporations, financial institutions and banks around the world. The company's solutions are used to streamline, automate and manage processes and transactions involving global payments, invoice approval, purchase-to-pay, collections, cash management and document process automation. Organizations trust these solutions to meet their needs for cost reduction, competitive differentiation and optimization of working capital. Headquartered in the United States, Bottomline also maintains offices in Europe and Asia-Pacific. For more information, visit www.bottomline.com.
Bottomline Technologies, WebSeries, Legal eXchange and the BT logo are trademarks of Bottomline Technologies, Inc. which may be registered in certain jurisdictions. All other brand/product names are trademarks of their respective holders.
Cautionary Language
This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are competition, market demand, technological change, strategic relationships, recent acquisitions, international operations and general economic conditions. For additional discussion of factors that could impact Bottomline Technologies' financial results, refer to the Company's Annual Report on Form 10-K for the year ended June 30, 2007, on file with the SEC. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We do not assume any obligation to update any forward-looking statements.
Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
| | | Three Months Ended | |
| | | September 30, | |
| | | 2007 | | | 2006 | |
| Revenues: | | | | | | |
| Software licenses | | $ | 3,365 | | | $ | 1,851 | |
| Subscriptions and transactions | | | 6,842 | | | | 6,484 | |
| Service and maintenance | | | 17,685 | | | | 13,507 | |
| Equipment and supplies | | | 3,470 | | | | 3,380 | |
| | | | | | | | | |
| Total revenues | | | 31,362 | | | | 25,222 | |
| | | | | | | | | |
| Cost of revenues: | | | | | | | | |
| Software licenses | | | 188 | | | | 197 | |
| Subscriptions and transactions | | | 3,971 | | | | 2,606 | |
Service and maintenance (1) | | | 7,831 | | | | 6,362 | |
| Equipment and supplies | | | 2,524 | | | | 2,526 | |
| | | | | | | | | |
| Total cost of revenues | | | 14,514 | | | | 11,691 | |
| | | | | | | | | |
| Gross profit | | | 16,848 | | | | 13,531 | |
| | | | | | | | | |
| Operating expenses: | | | | | | | | |
Sales and marketing (1) | | | 7,519 | | | | 6,591 | |
Product development and engineering (1) | | | 4,226 | | | | 3,708 | |
General and administrative (1) | | | 4,459 | | | | 4,219 | |
| Amortization of intangible assets | | | 2,647 | | | | 1,461 | |
| | | | | | | | | |
| Total operating expenses | | | 18,851 | | | | 15,979 | |
| | | | | | | | | |
| Loss from operations | | | (2,003 | ) | | | (2,448 | ) |
| | | | | | | | | |
| Other income, net | | | 897 | | | | 969 | |
| | | | | | | | | |
| Loss before provision for income taxes | | | (1,106 | ) | | | (1,479 | ) |
| Provision (benefit) for income taxes | | | (305 | ) | | | 1 | |
| | | | | | | | | |
| Net loss | | $ | (801 | ) | | $ | (1,480 | ) |
| | | | | | | | | |
| Basic and diluted net loss per share | | $ | (0.03 | ) | | $ | (0.06 | ) |
| | | | | | | | | |
| Shares used in computing basic and diluted net loss per share: | | | 23,602 | | | | 23,430 | |
| | | | | | | | | |
Non-GAAP (excludes acquisition-related amortization and stock compensation expense):(2) | | | | | | | | |
| Net income | | $ | 3,773 | | | $ | 1,817 | |
Diluted net income per share (3) | | $ | 0.16 | | | $ | 0.08 | |
| | | | | | | | | |
(1) Stock-based compensation is allocated as follows: | | | | | | | | |
| Cost of revenues: service and maintenance | | $ | 232 | | | $ | 118 | |
| Sales and marketing | | | 612 | | | | 695 | |
| Product development and engineering | | | 183 | | | | 198 | |
| General and administrative | | | 900 | | | | 825 | |
| | | $ | 1,927 | | | $ | 1,836 | |
(2) Non-GAAP presentation excludes charges for amortization of intangible assets of $2,647 and $1,461, and stock compensation expense of $1,927 and $1,836 for the three months ended September 30, 2007 and 2006, respectively. (3) Shares used in computing non-GAAP diluted net income per share were 24,150 and 23,649 for the three months ended September 30, 2007 and 2006, respectively. | | | | | | | | |
Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
| | | September 30, | | | June 30, | |
| | | 2007 | | | 2007 | |
| | | | | | | |
| Assets | | | | | | |
| Current assets: | | | | | | |
| Cash, cash equivalents and short-term investments | | $ | 64,942 | | | $ | 65,873 | |
| Accounts receivable | | | 26,277 | | | | 24,359 | |
| Other current assets | | | 5,018 | | | | 5,402 | |
| | | | | | | | | |
| Total current assets | | | 96,237 | | | | 95,634 | |
| | | | | | | | | |
| Property and equipment, net | | | 8,159 | | | | 8,270 | |
| Intangible assets, net | | | 82,191 | | | | 84,296 | |
| Other assets | | | 1,736 | | | | 1,784 | |
| | | | | | | | | |
| Total assets | | $ | 188,323 | | | $ | 189,984 | |
| | | | | | | | | |
| Liabilities and stockholders' equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 6,205 | | | $ | 6,650 | |
| Accrued expenses | | | 7,909 | | | | 8,475 | |
| Deferred revenue and deposits | | | 24,784 | | | | 25,188 | |
| | | | | | | | | |
| Total current liabilities | | | 38,898 | | | | 40,313 | |
| | | | | | | | | |
| Deferred revenue and deposits, non current | | | 1,980 | | | | 2,498 | |
| Deferred income taxes | | | 5,676 | | | | 6,258 | |
| Other liabilities | | | 753 | | | | 479 | |
| | | | | | | | | |
| Total liabilities | | | 47,307 | | | | 49,548 | |
| | | | | | | | | |
| Stockholders' equity | | | | | | | | |
| Common stock | | | 25 | | | | 25 | |
| Additional paid-in-capital | | | 266,665 | | | | 263,229 | |
| Accumulated other comprehensive income | | | 9,363 | | | | 8,292 | |
| Treasury stock | | | (14,505 | ) | | | (11,285 | ) |
| Accumulated deficit | | | (120,532 | ) | | | (119,825 | ) |
| | | | | | | | | |
| Total stockholders' equity | | | 141,016 | | | | 140,436 | |
| | | | | | | | | |
| Total liabilities and stockholders' equity | | $ | 188,323 | | | $ | 189,984 | |
