Bottomline (EPAY) 8-K Bottomline Technologies Reports Fourth Quarter Results

Exhibit 99.1

Contact: Suzanne Hurt Bottomline Technologies 603-501-5203 shurt@bottomline.com

Bottomline Technologies Reports Fourth Quarter Results

Company Concludes Year of Significant Progress

with Improved Operating Results

PORTSMOUTH, N.H. – August 12, 2003 –Bottomline Technologies^® (Nasdaq: EPAY), a leading global technology provider of Financial Resource Management (FRM) software and services, today reported financial results for the fourth quarter and fiscal year ended June 30, 2003.

Revenues for the fourth quarter were $18.6 million compared with $17.5 million in the fourth quarter of last year. The net loss for the fourth quarter was $1.8 million, or a net loss per share of $0.11, compared with a net loss of $10.3 million and a net loss per share of $0.66 in the fourth quarter of last year, reflecting a decrease in the amortization of intangible assets and the overall reduction of operating expenses during the fiscal year.

During the fourth quarter, operating expenses included net acquisition-related charges of $2.1 million, which represented amortization of intangible assets of approximately $2.2 million and a benefit of $24,000 associated with the forfeiture of unvested stock options assumed in the acquisitions. Excluding these acquisition-related items, pro forma net income for the fourth quarter was $349,000, or pro forma net income per share of $0.02.

“We completed a year of significant progress, transitioning from quarterly losses to the latest quarter’s profitability before acquisition-related items,” said Joe Mullen, president and CEO of Bottomline Technologies. “We are encouraged by the continued improvement in the operating results of the Company. In addition to the quarter’s financial achievement, we were named as the first accredited web solution for the new UK electronic payment marketplace which we expect will create new customer opportunities for the upcoming fiscal year.”

Revenues for the twelve months ended June 30, 2003 were $71.3 million. The net loss for the twelve months ended June 30, 2003 was $27.9 million, or a net loss per share of $1.78.

The results for the twelve months ended June 30, 2003 include the cumulative effect of an accounting change in the amount of $13.8 million related to a goodwill impairment charge recorded by the Company in connection with the transition to FASB Statement 142. The net loss before the cumulative effect of the accounting change was $14.1 million, or a net loss per share of $0.90.

- more -

During the twelve months ended June 30, 2003, operating expenses included acquisition-related charges of $8.9 million, which represented amortization of intangible assets of approximately $8.8 million and amortization of stock compensation charges of $71,000 associated with stock options assumed in the acquisitions. Excluding these acquisition-related charges and before the cumulative effect of the accounting change, the pro forma net loss for the twelve months ended June 30, 2003 was $5.2 million, or a pro forma net loss per share of $0.33.

Bottomline has presented non GAAP financial measures in the form of pro forma results as part of this earnings release since management believes it is a more accurate measurement of Bottomline’s overall operating performance. A reconciliation of the GAAP net loss to the pro forma results for the fourth quarter and fiscal year is as follows:

	Three Months Ended June 30,						Twelve Months Ended June 30,
	2003			2002			2003			2002
GAAP Net Loss	$	(1,797	)	$	(10,344	)	$	(27,854	)	$	(38,789	)
Cumulative Effect of Accounting Change		—			—			13,764			—
Amortization of Intangible Assets		2,170			8,618			8,830			33,634
Stock Compensation (Benefit) Expense		(24	)		104			71			411
Pro forma Income (Loss)	$	349		$	(1,622	)	$	(5,189	)	$	(4,744	)

Customer Highlights:

• Sold financial resource management solutions to new and existing customer organizations, including Travelex, Morgan Stanley Dean Witter, Fahnestock & Co., Inc., State Compensation Fund of Arizona, GMAC Residential Corp., National City Corporation, United Nations, and Nissan North America.

• Safeco Insurance Company of America completed its rollout of Bottomline’s Legal e-Billing service allowing it to streamline the legal invoice review process for its nationwide network of claims adjustors.

• Cargo Net Services Corporation is now in production through Citibank e-Billing, representing a biller network with over 4,000 users.

• Continued the successful migration of US technology to Europe by selling WebSeries solutions to AVIVA, Europe’s largest insurance company, Eversheds, the UK’s largest law firm, and British Airways.

• Deutsche Bank selected Bottomline to provide a fully managed multi-currency check and draft service. The new service is an extension of the bank’s global cash management services to corporate and financial institution customers.

• Selected by AMP, a leading international financial services business with approximately 8 million customers worldwide, for financial process outsourcing of its multi-currency check service.

- more -

Corporate and Product Highlights:

• Bottomline’s WebSeries Payment Platform became the first UK thin client, web enabled, electronic payment solution to be accredited for BACSTEL-IP connection by BACS Limited, the UK’s clearing house for electronic payments.

• Selected by SAP as the preferred supplier of BACSTEL-IP software for the SAP Business One solution.

• For the second consecutive year, members of the SAP user community named Bottomline’s multi-payment platform as one of the top tools that complemented and extended their SAP business solution platform.

• HSBC extended its strategic partnership with Bottomline for an additional 3 years under which Bottomline will support the bank’s advance check and bill issuance service.

• The acquisition of certain assets of A1 Group of Companies, Ltd., a BACS service provider offering outsourced BACS payments, was completed.

Bottomline will host a conference call to discuss its financial results beginning at 5:00 p.m. today. Please see the corresponding advisory issued August 5, 2003 for information on the call. The call will also be broadcast live at www.bottomline.com and a replay will be available on the website following the call.

About Bottomline Technologies

Bottomline Technologies^® (Nasdaq: EPAY) is a leading global technology provider of Financial Resource Management (FRM) solutions. Bottomline’s comprehensive set of FRM offerings enables businesses and financial institutions to more effectively manage their critical financial transactions, cash decisions and trading partner relationships, leveraging the Web. FRM applications include Electronic Payments and Cash Management, Electronic Invoice Receipt and Management, Electronic Invoice Presentment and Payment (EIPP), Electronic Banking and Information Reporting. Founded in 1989, Bottomline maintains its corporate headquarters in Portsmouth, NH and international headquarters in Reading, England. For more information, visit Bottomline on the Web at www.bottomline.com, or dial (800) 243-2528 or (603) 436-0700.

# # #

Cautionary Language

This announcement contains forward-looking statements that involve risks and uncertainties, including statements regarding future market opportunities. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements are competition, market demand, technological change, strategic relationships, recent acquisitions, international operations and general economic conditions. More information about potential factors that could affect the company’s business and financial results is included in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q including (without limitation) under the captions, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Factors That May Affect Future Results”, which are on file with the Securities and Exchange Commission (http://www.sec.gov). The accompanying condensed statements of operations and balance sheets are an integral part of this announcement.

Bottomline Technologies

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

	Three Months Ended June 30,
	2003			2002
Revenues:
Software licenses	$	3,324		$	3,525
Service and maintenance		11,022			9,441
Equipment and supplies		4,271			4,502
Total revenues		18,617			17,468
Cost of revenues:
Software licenses		657			517
Service and maintenance		4,709			4,525
Equipment and supplies		3,529			3,360
Total cost of revenues		8,895			8,402
Gross profit		9,722			9,066
Operating expenses:
Sales and marketing		3,681			5,288
Product development and engineering:
Product development and engineering		3,035			3,408
Stock compensation expense		(24	)		104
General and administrative		2,583			2,406
Amortization of intangible assets		2,170			8,618
Total operating expenses		11,445			19,824
Loss from operations		(1,723	)		(10,758	)
Other income (expense), net		(59	)		271
Loss before provision (benefit) for income taxes		(1,782	)		(10,487	)
Provision (benefit) for income taxes		15			(143	)
Net loss	$	(1,797	)	$	(10,344	)
Net loss per share:
Basic and diluted	$	(0.11	)	$	(0.66	)
Shares used in computing net loss per share:
Basic and diluted		15,938			15,665
Pro forma (excluding acquisition-related charges):(1)
Net income (loss)	$	349		$	(1,622	)
Basic and diluted net income (loss) per share(2)	$	0.02		$	(0.10	)

(1) Pro forma presentation excludes amortization of intangible assets and amortization of stock compensation expense, net of tax.

(2) Shares used in computing pro forma diluted net income per share for the three months ended June 30, 2003 were 16,442.

Bottomline Technologies

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

	Twelve Months Ended June 30,
	2003			2002
Revenues:
Software licenses	$	13,021		$	16,023
Service and maintenance		40,865			38,169
Equipment and supplies		17,379			19,794
Total revenues		71,265			73,986
Cost of revenues:
Software licenses		1,936			1,455
Service and maintenance		20,358			18,506
Equipment and supplies		13,615			14,457
Total cost of revenues		35,909			34,418
Gross profit		35,356			39,568
Operating expenses:
Sales and marketing		17,084			19,504
Product development and engineering:
Product development and engineering		12,124			13,795
Stock compensation expense		71			411
General and administrative		11,088			11,016
Amortization of intangible assets		8,830			33,634
Total operating expenses		49,197			78,360
Loss from operations		(13,841	)		(38,792	)
Other income (expense), net		(189	)		63
Loss before provision for income taxes and cumulative effect of accounting change		(14,030	)		(38,729	)
Provision for income taxes		60			60
Net loss before cumulative effect of accounting change		(14,090	)		(38,789	)
Cumulative effect of accounting change		(13,764	)		—
Net loss	$	(27,854	)	$	(38,789	)
Basic and diluted:
Loss per share before cumulative effect of accounting change	$	(0.90	)	$	(2.63	)
Cumulative effect of accounting change		(0.88	)		—
Net loss per share	$	(1.78	)	$	(2.63	)
Shares used in computing basic and diluted net loss per share:		15,667			14,725
Pro forma (excluding acquisition-related charges):(1)
Net loss	$	(5,189	)	$	(4,744	)
Basic and diluted net loss per share	$	(0.33	)	$	(0.32	)

(1) Pro forma presentation is before the cumulative effect of accounting change and excludes amortization of intangible assets and amortization of stock compensation expense, net of tax.

Bottomline Technologies

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	June 30, 2003			June 30, 2002
Assets
Current assets:
Cash and cash equivalents	$	25,802		$	25,931
Accounts receivable		13,281			15,242
Other current assets		4,148			4,213
Total current assets		43,231			45,386
Property and equipment		6,447			6,955
Intangible assets		22,660			43,540
Other assets		1,024			1,689
Total assets	$	73,362		$	97,570
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,712		$	5,310
Accrued expenses		6,005			5,671
Deferred revenue and deposits		13,697			13,452
Current portion of long-term debt		253			253
Total current liabilities		25,667			24,686
Long-term debt		—			253
Total liabilities		25,667			24,939
Stockholders’ equity
Common stock		17			16
Additional paid-in-capital		164,809			164,022
Deferred compensation		(78	)		(474	)
Accumulated other comprehensive income		1,628			182
Treasury stock		(4,250	)		(4,538	)
Retained deficit		(114,431	)		(86,577	)
Total stockholders’ equity		47,695			72,631
Total liabilities and stockholders’ equity	$	73,362		$	97,570