Exhibit 99.1
Contact:Kevin Donovan
Bottomline Technologies
603-501-5240
kdonovan@bottomline.com
Bottomline Technologies Reports Fourth Quarter and Fiscal Year Results
Increase in Revenues and Profit Highlights Quarter
PORTSMOUTH, N.H. – August 10, 2005 –Bottomline Technologies (NASDAQ: EPAY), a leading provider of payments and invoice automation software and services, today reported financial results for the fourth quarter and fiscal year ended June 30, 2005.
Revenues for the fourth quarter were $26.3 million compared with $22.4 million in the fourth quarter of last year. Net income for the fourth quarter was $2.2 million, or net income per share of $0.11, compared with a net income of $417,000 and a net income per share of $0.02 in the fourth quarter of last year, representing a $1.8 million increase in net income.
During the fourth quarter of 2005, operating expenses were $13.1 million compared to $12.1 million for the same period the prior year. Included in operating expenses for the quarters ended June 30, 2005 and 2004 were acquisition-related expenses of $869,000 and $972,000 respectively. Excluding the acquisition-related expenses, non-GAAP net income for the fourth quarter was $3.1 million, or non-GAAP net income per share of $0.16, compared with non-GAAP net income of $1.4 million, or non-GAAP net income per share of $0.08 in the fourth quarter of last year. The fourth quarter non-GAAP operating results represent an increase of $1.7 million.
“The solid performance in our fourth quarter underscores the results we achieved for the entire year, highlighted by full year revenue growth of 17% and a three times improvement in earnings,” said Joe Mullen, CEO of Bottomline. “In addition to good current results, the business improved its future outlook with an increased backlog from strong customer order activity and a successful secondary stock offering. Bottomline enters the first quarter of the current fiscal year from a position of both opportunity and strength.”
Revenues for the year ended June 30, 2005 were $96.5 million compared with $82.1 million last year. Net income for the year ended June 30, 2005 was $5.9 million, or net income per share of $0.31, compared with a net loss of $2.4 million and a net loss per share of $0.15 last year, representing a $8.3 million improvement in net income.
During the year ended June 30, 2005, operating expenses of $49.8 million included net acquisition-related charges of $3.2 million. Excluding these acquisition-related items, non-GAAP net income for the year ended June 30, 2005 was $9.1 million, or non-GAAP net income per share of $0.48, compared with non-GAAP net income of $2.7 million, or non-GAAP net income per share of $0.16 in the same period of last year. This year’s non-GAAP operating results represent a $6.4 million increase from the prior year.
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, stock compensation expense and in-process research and development charges. 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. Bottomline believes that these supplemental non-GAAP financial measures are useful to investors because it allows 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 net income (loss) to the non-GAAP results for the periods ending June 30 is as follows:
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| | | Three Months
Ended
June 30,
| | Years Ended June 30,
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| | | 2005
| | 2004
| | 2005
| | 2004
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| | | (in thousands) | |
GAAP Net Income (Loss) | | $ | 2,204 | | $ | 417 | | $ | 5,888 | | $ | (2,418 | ) |
In-process Research and Development | | | — | | | 53 | | | — | | | 842 | |
Amortization of Intangible Assets | | | 869 | | | 910 | | | 3,217 | | | 4,277 | |
Stock Compensation Expense | | | — | | | 9 | | | 14 | | | 41 | |
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Non-GAAP Net Income | | $ | 3,073 | | $ | 1,389 | | $ | 9,119 | | $ | 2,742 | |
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Customer Highlights:
| | • | | Major North American organizations such as GMAC Residential Capital, Feld Entertainment (parent of Ringling Brothers and Barnum & Bailey Circus), American Hospital Association, Hard Rock Casino and Nautilus selected Bottomline’s platforms to automate and enhance financial processes. |
| | • | | Bottomline’s payments solutions continued to gain broad adoption across the banking industry, adding UMB Bank (United Missouri Bank) and Colonial Bank to its growing list of global customers during the quarter, and expanding the relationship with Fifth Third Bank. |
| | • | | Received 191 new orders during the quarter for Bottomline’s BACSTEL-IP software solutions from leading UK-based organizations such as Bank of America, British Airways, Co-Op Group Insurance and Accenture HR. |
| | • | | Signed a major utility company and a regional insurance carrier during the quarter to Legal eXchange®, Bottomline’s Web-based legal spend management solution. |
Company and Product Highlights:
| | • | | Completed a secondary offering of common stock in July 2005, resulting in the sale of 3,560,000 new shares of its common stock generating proceeds of approximately $47 million. Including the offering proceeds, Bottomline’s cash and investment position at June 30th would have been approximately $83 million. |
| | • | | Acquired HMSL Group Ltd, a UK-based accounts payable automation services firm, in April 2005. HMSL’s customers include Gillette, 3M, Nestlé, Arla Foods and Bank of Ireland. |
| | • | | Signed a software license agreement with Oracle, enabling Bottomline to embed Oracle® Database 10g in current versions of its payments automation products. Through this agreement, Bottomline will be able to take advantage of new opportunities created by the growing demand for Oracle 10g Database and lower total cost of ownership for customers. |
Bottomline will host a conference call to discuss its financial results beginning at 5:00 p.m. EST today. Please see the corresponding advisory issued August 3, 2005 for information on the call. The call will
also be broadcast live atwww.bottomline.com and a replay will be available on the Web site following the call.
About Bottomline Technologies
Bottomline Technologies (NASDAQ: EPAY) provides payments and invoice automation software and services to organizations seeking more secure and efficient financial processes. The company remains at the forefront of delivering innovative solutions that complement and extend the value of existing financial processes, business relationships and back-office systems. These solutions have enabled the world’s leading corporations, banks and financial institutions to automate, manage and control processes involving payments and collections, invoice approval, cash flow, risk mitigation, reporting and document archive. For more information, please visitwww.bottomline.com.
Cautionary Language
This press release contains “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 and other risks described in our quarterly report on Form 10-Q for the quarter ended March 31, 2005. 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)
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| | | Three Months Ended
June 30, |
| | | 2005
| | 2004
|
Revenues: | | | | | | |
Software licenses | | $ | 5,139 | | $ | 3,626 |
Service and maintenance | | | 17,509 | | | 14,623 |
Equipment and supplies | | | 3,670 | | | 4,190 |
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Total revenues | | | 26,318 | | | 22,439 |
Cost of revenues: | | | | | | |
Software licenses | | | 427 | | | 368 |
Service and maintenance | | | 7,629 | | | 6,151 |
Equipment and supplies | | | 3,009 | | | 3,440 |
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Total cost of revenues | | | 11,065 | | | 9,959 |
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Gross profit | | | 15,253 | | | 12,480 |
Operating expenses: | | | | | | |
Sales and marketing | | | 6,516 | | | 5,577 |
Product development and engineering: | | | | | | |
Product development and engineering | | | 2,248 | | | 2,301 |
Stock compensation expense | | | — | | | 9 |
In-process research and development | | | — | | | 53 |
General and administrative | | | 3,451 | | | 3,219 |
Amortization of intangible assets | | | 869 | | | 910 |
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Total operating expenses | | | 13,084 | | | 12,069 |
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Income from operations | | | 2,169 | | | 411 |
Other income, net | | | 43 | | | 88 |
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Income before provision for income taxes | | | 2,212 | | | 499 |
Provision for income taxes | | | 8 | | | 82 |
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Net income | | $ | 2,204 | | $ | 417 |
Net income per share | | | | | | |
Basic | | $ | 0.12 | | $ | 0.02 |
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Diluted | | $ | 0.11 | | $ | 0.02 |
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Shares used in computing net income per share: | | | | | | |
Basic | | | 18,488 | | | 17,003 |
Diluted | | | 19,744 | | | 18,078 |
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Non-GAAP (excluding acquisition-related charges):(1) | | | | | | |
Net income | | $ | 3,073 | | $ | 1,389 |
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Diluted net income per share(2) | | $ | 0.16 | | $ | 0.08 |
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| (1) | Non-GAAP presentation excludes charges for amortization of intangible assets of $869 and $910 and amortization of stock compensation expense of $0 and $9 for the three months ended June 30, 2005 and 2004, respectively. The non-GAAP presentation also excludes $53 of expense associated with acquired in-process research and development for the three months ended June 30, 2004. |
| (2) | Shares used in computing non-GAAP diluted net income per share were 19,744 and 18,078 for the three months ended June 30, 2005 and 2004, respectively. |
Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
| | | | | | | |
| | | Years Ended June 30, | |
| | | 2005
| | 2004
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Revenues: | | | | | | | |
Software licenses | | $ | 18,789 | | $ | 14,366 | |
Service and maintenance | | | 62,233 | | | 51,364 | |
Equipment and supplies | | | 15,483 | | | 16,402 | |
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Total revenues | | | 96,505 | | | 82,132 | |
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Cost of revenues: | | | | | | | |
Software licenses | | | 2,295 | | | 1,678 | |
Service and maintenance | | | 26,656 | | | 22,363 | |
Equipment and supplies | | | 11,980 | | | 13,312 | |
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Total cost of revenues | | | 40,931 | | | 37,353 | |
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Gross profit | | | 55,574 | | | 44,779 | |
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Operating expenses: | | | | | | | |
Sales and marketing | | | 24,323 | | | 21,062 | |
Product development and engineering: | | | | | | | |
Product development and engineering | | | 9,419 | | | 9,264 | |
Stock compensation expense | | | 14 | | | 41 | |
In-process research and development | | | — | | | 842 | |
General and administrative | | | 12,800 | | | 11,830 | |
Amortization of intangible assets | | | 3,217 | | | 4,277 | |
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Total operating expenses | | | 49,773 | | | 47,316 | |
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Income (loss) from operations | | | 5,801 | | | (2,537 | ) |
Other income, net | | | 444 | | | 288 | |
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Income (loss) before provision for income taxes | | | 6,245 | | | (2,249 | ) |
Provision for income taxes | | | 357 | | | 169 | |
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Net income (loss) | | $ | 5,888 | | | (2,418 | ) |
Net income (loss) per share: | | | | | | | |
Basic | | $ | 0.33 | | $ | (0.15 | ) |
Diluted | | $ | 0.31 | | $ | (0.15 | ) |
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Shares used in computing net income (loss) per share: | | | | | | | |
Basic | | | 18,030 | | | 16,514 | |
Diluted | | | 19,119 | | | 16,514 | |
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Non-GAAP (excluding acquisition-related charges):(1) | | | | | | | |
Net income | | $ | 9,119 | | $ | 2,742 | |
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Diluted net income per share(2) | | $ | 0.48 | | $ | 0.16 | |
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| (1) | Non-GAAP presentation excludes charges for amortization of intangible assets of $3,217 and $4,277 and amortization of stock compensation expense of $14 and $41 for the year ended June 30, 2005 and 2004, respectively. The non-GAAP presentation also excludes $842 of expense associated with acquired in-process research and development for the year ended June 30, 2004. |
| (2) | Shares used in computing non-GAAP diluted net income per share were 19,119 and 17,353 for the year ended June 30, 2005 and 2004, respectively. |
Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
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| | | June 30, | | | June 30, | |
| | | 2005
| | | 2004
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Assets | | | | | | | | |
Current assets: | | | | | | | | |
Cash, cash equivalents and short-term investments | | $ | 35,916 | | | $ | 25,015 | |
Accounts receivable | | | 22,956 | | | | 19,706 | |
Other current assets | | | 4,893 | | | | 4,533 | |
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Total current assets | | | 63,765 | | | | 49,254 | |
Property and equipment | | | 6,940 | | | | 6,468 | |
Intangible assets | | | 38,695 | | | | 34,686 | |
Other assets | | | 1,041 | | | | 835 | |
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Total assets | | $ | 110,441 | | | $ | 91,243 | |
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Liabilities and stockholders’ equity | | | | | | | | |
Current liabilities: | | | | | | | | |
Accounts payable | | $ | 6,094 | | | $ | 6,503 | |
Accrued expenses | | | 9,381 | | | | 7,901 | |
Deferred revenue and deposits | | | 20,738 | | | | 16,859 | |
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Total current liabilities | | | 36,213 | | | | 31,263 | |
Deferred revenue and deposits, non-current | | | 1,435 | | | | 727 | |
Total liabilities | | | 37,648 | | | | 31,990 | |
Stockholders’ equity | | | | | | | | |
Common stock | | | 19 | | | | 18 | |
Additional paid-in-capital | | | 182,534 | | | | 177,205 | |
Deferred compensation | | | — | | | | (14 | ) |
Accumulated other comprehensive income | | | 2,350 | | | | 3,026 | |
Treasury stock | | | (1,149 | ) | | | (4,133 | ) |
Retained deficit | | | (110,961 | ) | | | (116,849 | ) |
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Total stockholders’ equity | | | 72,793 | | | | 59,253 | |
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Total liabilities and stockholders’ equity | | $ | 110,441 | | | $ | 91,243 | |
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