Exhibit 99.1
Investors contact: | Media contact: |
Tamar Gerber | Jim Maxwell |
Vice President, Investor Relations | Manager, Public Relations |
646.348.6706 | 402.390.8906 |
FOR IMMEDIATE RELEASE
ACI Worldwide, Inc. Reports Financial
Results for Quarter Ended June 30, 2007 and Updates Guidance
KEY QUARTERLY HIGHLIGHTS
· Generated strong operating free cash flow of $11.7 million versus $2.2 million in June 2006 quarter.
· Continued sequential growth of $26 million in 60-month backlog to $1.270 billion versus $1.244 billion in the March quarter of 2007.
· Signed a multi product contract with a large European bank to install BASE24-eps™ , ACI Proactive Risk Manager debit and credit on the IBM Z-Series platform and also expanded our direct distribution network in Asia with the acquisition of Stratasoft Sdn Bhd.
|
| Quarter Ended |
| Current Guidance |
| |||||||
|
| June 30, |
| Better / (Worse) |
| Better / (Worse) |
| Calendar Year |
| |||
Operating Free Cash Flow ($ Mil) |
| $ | 11.7 |
| $ | 9.4 |
| 410 | % | $ | 50 to $55 |
|
60 month Backlog ($Bil) |
| $ | 1.270 |
| $ | 0.192 |
| 18 | % | $ | 1.290 to $1.310 |
|
Revenues ($ Mil) |
| $ | 98.1 |
| $ | 13.3 |
| 16 | % | $ | 390 to $400 |
|
GAAP EPS (diluted) |
| $ | (0.07 | ) | ($0.66 | ) | (110 | %) | $ | 0.20 to $0.40 |
| |
Adj. Non-GAAP EPS (diluted) |
| $ | 0.10 |
| ($0.21 | ) | (69 | %) | $ | 0.82 to $1.02 |
|
(NEW YORK — September 19, 2007) — ACI Worldwide, Inc. (NASDAQ:ACIW), a leading international provider of software for electronic payment systems, today announced financial results for the period ending June 30, 2007. We will hold a conference call on September 20, 2007 at 8:30 am EDT to discuss this information. Interested persons may also access a real-time audio broadcast of the teleconference at www.aciworldwide.com/investors.
“We believe that the continued growth in operating free cash flow underscores our effort to build and deliver long-term economic value in our business,” stated Chief Executive Officer Philip G. Heasley. “Our results in the June quarter demonstrated the progress of our strategic emphasis upon cross-selling products to our existing accounts and we were encouraged by the growth of multi-product users within the quarter. In the March and June quarterly results, we demonstrated growth in both our backlog and in our deferred revenue compared to last year. In pursuit of the growth and expansion of our Asian direct distribution network we purchased Stratasoft in Malaysia, a long time ACI partner.”
Notable new business during the quarter included:
· A multi-product contract signed with a bank in Brazil for ACI Proactive Risk Manager, and ACI Automated Case Management systems.
· A BASE24-eps™ capacity contract signed with a top 40 global bank.
· Seven new customers signed; including new users of ACI Enterprise Banker On Demand and of Proactive Risk Manager.
· Thirty one new applications added to existing customer relationships ranging from ACI Retail Commerce Server to PRM Enterprise Risk and Simulation Services for Enterprise Testing.
FINANCIAL SUMMARY
Operating Free Cash Flow
Operating free cash flow was $11.7 million compared to $2.3 million for the June 2006 quarter. The drivers of our operating free cash flow were solid contracting, billings and collections.
Backlog
As of June 30, 2007, our estimated 60-month backlog was $1.270 billion, compared to $1.244 billion as of March 31, 2007 and compared to $1.078 billion as of June 30, 2006. As of June 30, 2007, our 12-month backlog was $317 million, as compared to $307 million for the quarter ended March 31, 2007 and $257 million for the quarter ended June 30, 2006. The sequential growth of $26 million in our 60-month backlog was comprised of ACI organic growth of $23 million and $3 million from our acquired companies.
Revenues
Revenue was $98.1 million in the quarter ended June 2007, an increase of $13.3 million or 16 percent over the prior year period revenue of $84.8 million. $13.0 million of the increase was due to acquired companies’ revenue while $0.3 million was attributable to ACI’s organic business. Sequentially, our deferred revenue increased slightly at $1.1 million compared to a sequential decrease of $5.2 million in the June 2006 quarter, reflecting the business’ emphasis on selling longer term products and services to both new and existing customers, thus resulting in lengthier revenue recognition cycles.
Operating Expenses
Excluding expenses of $15.5 million related to acquisitions, $4.7 million related to the review of historical stock option practices and vested share option settlement, and $1.3 million related to non-recurring employee costs, organic operating expenses for the quarter rose $2.5 million on a year over year basis. The rise in operating expense was primarily driven by a $1.4 million swing in deferred expenses and $0.7 million related to investments in Ireland and in Romania. Including the impact of these items, operating expenses were $93.2 million in the June 2007 quarter compared to $69.2 million in the June 2006 quarter.
Other Income and Expense
Other expense for the quarter was $2.0 million, compared to other income of $1.4 million in the June 2006 quarter. The decrease in other income resulted from the following factors: a loss on foreign exchange, a reduction of cash and cash equivalents due to the funding of the share repurchase program which also impacted interest income received, and interest expense paid on the outstanding credit facility.
Taxes
The elongation of our revenue recognition cycle, combined with several non-recurring charges, has resulted in lower pre-tax earnings. Consequently, the impact of the $0.5 million fixed charge related to the transfer of intellectual property rights to Ireland combined with geographic profit mix led to an effective tax rate of 195 percent for the period ending June 30, 2007. The equivalent period ending June 30, 2006 had a one-time rate of (33.1) percent due to a $12.6 million tax benefit during the period.
Net Income (Loss) and Diluted Earnings Per Share
Net loss for the quarter was $2.7 million, compared to net income of $22.5 million during the same period last year.
Earnings per share for the quarter ended June 2007 was $(0.07) per diluted share compared to $0.59 per diluted share during the same period last year. The year-over-year quarterly variance is primarily due to the following factors: change in tax rate $(0.48), dilutive impact of acquisitions $(0.04), expense related to the review of historical stock options and expense related to the settlement of vested options $(0.08), employee related costs $(0.02), investment in global offices and change in deferred costs $(0.03).
Shares Outstanding
Total weighted average diluted shares outstanding were 37.1 million as of June 30, 2007 as compared to 38.5 million shares outstanding as of June 30, 2006. Shares repurchased in the quarter totaled 463,100
shares at an average price of $33.90 or $15.7 million. Year to date we have repurchased 1,373,720 shares at an average price of $30.41.
Adjusted Non-GAAP Earnings Per Share
Adjusted Non-GAAP earnings for the quarter were $0.10 per diluted share, compared to $0.31 per diluted share during the same period last year. The variance is due primarily to the following factors: variance in taxes paid $(0.16), investment in Ireland and in Romania and change in deferred costs $(0.03).
Calendar Year Guidance Update
We have modified our assumptions on calendar year guidance predicated on the performance of the operating business as well as the impact of all expenses related to the options review charge of $4.7 million and non-recurring employee exit costs of approximately $6.5 to $7.5 million. Operating free cash flow is expected to be in the range of $50 million to $55 million with 60-month backlog of $1.290 billion to $1.310 billion. Revenue for calendar year 2007 is expected to be in the range of $390 million to $400 million. Currently we anticipate GAAP earnings per share for calendar year 2007 to be $0.20 to $0.40 per fully diluted share. Non-GAAP earnings per share, adjusted by adding expenses associated with amortization of intangible assets from acquisitions and non-cash, stock-based compensation (see Adjusted Non-GAAP Financial Measure below), is expected to be $0.82 to $1.02. In estimating earnings per share guidance for calendar 2007, we assume an average effective tax rate of 37 percent and 37.4 million shares outstanding.
About ACI Worldwide, Inc.
Every second of every day, ACI Worldwide solutions are at work processing electronic payments, managing risk, automating back office systems and providing application infrastructure services. ACI is a leading international provider of solutions for banking, retail and cross-industry systems. ACI serves more than 800 customers in 84 countries including many of the world’s largest financial institutions, retailers and payment processors. Visit ACI Worldwide at www.aciworldwide.com.
Non GAAP Financial Measures
This press release includes operating free cash flow, and earnings per share on an adjusted, non-GAAP basis. ACI is presenting these non-GAAP guidance measures to provide more transparency to its earnings, focusing on operations before selected non-cash items, operating free cash flow.
We believe that providing earnings per share on an adjusted, non-GAAP basis is useful to our investors as an operating measure because it allows investors to more accurately compare our ongoing performance from period to period. However, earnings per share on an adjusted non-GAAP basis, is limited because it excludes expenses associated with amortization of intangible assets from acquisitions and non-cash stock based compensation. ACI is also presenting operating free cash flow, which is defined by our net cash provided by operating activities, adjusted for one-time items, minus capital expenditures. We utilize this non-GAAP financial measure, and believe it is useful to investors, as an indicator of cash flow available for debt repayment and other investing activities, such as capital investments and acquisitions. We utilize operating free cash flow as a further indicator of operating performance and for planning investing activities. A limitation of operating free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. This measure also does not exclude mandatory debt service obligations and therefore does not represent the residual cash flow available for discretionary expenditures.
Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of the non-GAAP financial measures only in addition to and in conjunction with results presented in accordance with GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These non-GAAP measures should be considered as a supplement to, and not a substitute for, or superior to, loss from operations and net loss per share calculated in accordance with GAAP. Due to the forward-looking nature of free operating cash flows and earnings per share or an adjusted, non-GAAP basis for future periods, information to reconcile such non-GAAP financial measures to the most directly comparable GAAP financial measure is not available at this time as the Company is unable to forecast any special items for future periods.
Table 1: Reconciliation of Operating Free Cash Flow (millions)
|
| Quarter Ended June 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
Net cash provided by operating activities |
| $ | 11.0 |
| $ | 4.5 |
|
Non-recurring items: |
|
|
|
|
| ||
Net after-tax cash payments associated with stock option |
| 1.9 |
| — |
| ||
Less capital expenditures |
| -1.2 |
| -2.2 |
| ||
Operating Free Cash Flow |
| $ | 11.7 |
| $ | 2.3 |
|
Table 2: Reconciliation of Adjusted Non-GAAP earnings per share (millions)
|
| Quarter Ended |
| ||||||||||
|
| June 30, |
| ||||||||||
|
| 2007 |
| 2006 |
| ||||||||
GAAP earnings per share |
| ($0.07 | ) | ($2.7 | ) | $ | 0.59 |
| $ | 22.5 |
| ||
Cost of stock options review |
| 0.08 |
| $ | 2.9 |
| — |
| — |
| |||
Employee related costs |
| 0.02 |
| $ | 0.8 |
| — |
| — |
| |||
|
|
|
|
|
|
|
|
|
| ||||
Foreign Tax Credits |
| — |
| — |
| (0.32 | ) | ($12.6 | ) | ||||
Adj. earnings per share after selected non-recurring items |
| $ | 0.03 |
| $ | 1.0 |
| $ | 0.27 |
| $ | 9.9 |
|
Amortization of acquisition-related intangibles |
| 0.05 |
| $ | 1.8 |
| 0.01 |
| $ | 0.5 |
| ||
Non-cash equity-based compensation |
| 0.02 |
| $ | 0.9 |
| 0.03 |
| $ | 1.0 |
| ||
Adjusted Non-GAAP earnings per share |
| $ | 0.10 |
| $ | 3.7 |
| $ | 0.31 |
| $ | 11.4 |
|
Table 3: Backlog 60-Month (millions)
|
| Quarter Ended |
| ||||||||||
|
| June 30, |
| March 31, |
| June 30, |
| March 31, |
| ||||
|
| 2007 |
| 2007 |
| 2006 |
| 2006 |
| ||||
Americas |
| $ | 653 |
| $ | 643 |
| $ | 529 |
| $ | 521 |
|
EMEA |
| 485 |
| 474 |
| 424 |
| 393 |
| ||||
Asia/Pacific |
| 133 |
| 127 |
| 125 |
| 126 |
| ||||
Backlog 60-Month |
| $ | 1,270 |
| $ | 1,244 |
| $ | 1,078 |
| $ | 1,040 |
|
|
|
|
|
|
|
|
|
|
| ||||
Backlog breakout |
|
|
|
|
|
|
|
|
| ||||
ACI Organic |
| $ | 1,095 |
| $ | 1,072 |
| $ | 1,050 |
| $ | 1,031 |
|
Acquisitions |
| 175 |
| 172 |
| 20 |
| 0 |
| ||||
Divestitures |
| 0 |
| 0 |
| 8 |
| 9 |
| ||||
Backlog 60-Month |
| $ | 1,270 |
| $ | 1,244 |
| $ | 1,078 |
| $ | 1,040 |
|
Table 4: Revenues by Channel
|
| Quarter Ended |
| ||||
|
| June 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
Revenues: |
|
|
|
|
| ||
United States |
| $ | 33.0 |
| $ | 29.3 |
|
Americas International |
| 19.6 |
| 17.7 |
| ||
Americas |
| $ | 52.6 |
| $ | 47.0 |
|
EMEA |
| 36.5 |
| 29.7 |
| ||
Asia/Pacific |
| 9.0 |
| 8.0 |
| ||
Revenues |
| $ | 98.1 |
| $ | 84.8 |
|
Table 5: Monthly Recurring Revenue (mils)
|
| Quarter Ended |
| ||||
|
| June 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
|
|
|
|
|
| ||
Monthly license fees |
| $ | 15.5 |
| $ | 17.7 |
|
Maintenance fees |
| 31.3 |
| 26.0 |
| ||
Processing Services |
| 7.8 |
| 3.4 |
| ||
Monthly Recurring Revenue |
| $ | 54.6 |
| $ | 47.1 |
|
Table 6: Deferred Revenue (mils)
|
| Quarter Ended |
| ||||||||||
|
| June 30, |
| March 31, |
| June 30, |
| March 31, |
| ||||
|
| 2007 |
| 2007 |
| 2006 |
| 2006 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Acquisitions |
| $ | 9.8 |
| $ | 6.0 |
| $ | 0.5 |
| $ | 0.0 |
|
ACI Organic |
| 87.3 |
| 90.4 |
| 78.3 |
| 80.1 |
| ||||
Short Term Deferred Revenue |
| $ | 97.1 |
| $ | 96.4 |
| $ | 78.8 |
| $ | 80.1 |
|
|
|
|
|
|
|
|
|
|
| ||||
Acquisitions |
| $ | 3.0 |
| $ | 5.5 |
| $ | 0.0 |
| $ | 0.0 |
|
ACI Organic |
| 22.7 |
| 19.8 |
| 16.6 |
| 20.4 |
| ||||
Long Term Deferred Revenue |
| $ | 25.7 |
| $ | 25.3 |
| $ | 16.6 |
| $ | 20.4 |
|
|
|
|
|
|
|
|
|
|
| ||||
Total Deferred Revenue |
| $ | 122.8 |
| $ | 121.7 |
| $ | 95.4 |
| $ | 100.6 |
|
Table 7: Deferred Expenses (mils)
|
| Quarter Ended |
| ||||||||||
|
| June 30, |
| March 31, |
| June 30, |
| March 31, |
| ||||
|
| 2007 |
| 2007 |
| 2006 |
| 2006 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Acquisitions |
| $ | 0.1 |
| $ | 0.2 |
| $ | 0.0 |
| $ | 0.0 |
|
ACI Organic |
| 13.8 |
| 14.4 |
| 5.9 |
| 5.2 |
| ||||
Total Deferred Expenses |
| $ | 13.9 |
| $ | 14.6 |
| $ | 5.9 |
| $ | 5.2 |
|
Table 8: Organic versus Acquisition Comparisons (mils)
|
| Year over Year |
| Year over Year |
| Mar-Jun y-o-y |
| Mar-Jun y-o-y |
| ||||
2006 Quarter |
| $ | 84.8 |
| $ | 69.2 |
| ($5.2 | ) | $ | 0.7 |
| |
|
|
|
|
|
|
|
|
|
| ||||
Organic |
| $ | 0.3 |
| $ | 2.5 |
| $ | 5.6 |
| ($1.4 | ) | |
Acquisitions |
| 13.0 |
| 12.5 |
| 0.7 |
| 0.0 |
| ||||
Intangible Amortization |
| — |
| 3.0 |
| — |
| — |
| ||||
Employee Related Costs |
| — |
| 1.3 |
| — |
| — |
| ||||
Stock Options |
| — |
| 4.7 |
| — |
| — |
| ||||
Net Change |
| $ | 13.3 |
| $ | 24.0 |
| $ | 6.3 |
| ($1.4 | ) | |
|
|
|
|
|
|
|
|
|
| ||||
2007 Quarter |
| $ | 98.1 |
| $ | 93.2 |
| $ | 1.1 |
| ($0.7 | ) | |
Table 9: Share Repurchase Program (millions)
|
| 14-Sep-07 |
| |
Repurchase authorization |
| $ | 210.00 |
|
Shares repurchased since inception |
| 4.2 |
| |
Authorization remaining as of June 30, 2007 |
| $ | 92.4 |
|
Forward-Looking Statements
This press release contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as the Company “believes,” “will,” “expects,” “looks forward to” and words and phrases of similar impact.
The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, but are not limited to, statements regarding the:
· Company’s belief that the continued growth in operating free cash flow underscores our effort to build and deliver long-term economic value in our business;
· Company’s pursuit of the growth and expansion of its Asian direct distribution network;
· Company’s assumptions underlying our calendar year guidance;
· Company’s revenues, earnings per share, adjusted earnings per share, operating free cash flow, and 60-month backlog estimates for calendar year 2007;
· Company’s 12-month and 60-month backlog estimates; and
· Company’s calculation of recurring and non-recurring backlog.
Any or all of the forward-looking statements may turn out to be wrong. They can be affected by the judgments and estimates underlying such assumptions or by known or unknown risks and uncertainties. Consequently, no forward-looking statement can be guaranteed. In addition, the Company disclaims any obligation to update any forward-looking statement after the date of this release.
All of the foregoing forward-looking statements are expressly qualified by the risk factors discussed in the Company’s filings with the Securities and Exchange Commission. For a detailed discussion of these risk factors, parties that are relying on the forward-looking statements should review the Company’s filings with the Securities and Exchange Commission, including the Company’s Form 10-K filed on May 11, 2007, the Company’s Form 10-Q filed on June 29, 2007 and the Company’s Form 10-Q filed on August 10, 2007 and, specifically, the sections entitled “Factors That May Affect the Company’s Future Results or the Market Price of the Company’s Common Stock.”
The risks identified in the Company’s filings with the Securities and Exchange Commission include:
· Risks associated with the restatement of the Company’s financial statements;
· Risks associated with not having current financial information available, one result of which is that the Company will be limited in its ability to register its securities for offer and sale until the Company is deemed a current filer with the SEC;
· Risks associated with the delays in filing its periodic reports, including the need to obtain additional extensions from lenders in the future in order to comply with the financial reporting requirements of the Company’s bank debt, which failure to do so could have a material adverse effect on the Company’s business, liquidity and financial conditions;
· Risks associated with the Company’s noncompliance with NASDAQ marketplace rules, including the risk of being delisted;
· Risks inherent in making an estimate of the Company’s backlogs which may not be accurate and may not generate the predicted revenue;
· Risks associated with tax positions taken by the Company which require substantial judgment and with which taxing authorities may not agree;
· Risks associated with the Company’s performance which could be materially adversely affected by a general economic downturn or lessening demand in the software sector;
· Risks associated with the complexity of the Company’s software products;
· Risks associated with consolidation in the financial services industry which may adversely impact the number of customers and the Company’s revenues in the future;
· Risks associated with the Company’s stock price which may be volatile;
· Risks associated with conducting international operations;
· Risks regarding the Company’s newly introduced BASE24-eps product which may prove to be unsuccessful in the marketplace;
· Risks associated with the Company’s future profitability which depends on demand for its products; lower demand in the future could adversely affect the Company’s business;
· Risks associated with the Company’s software products which may contain undetected errors or other defects, which could damage its reputation with customers, decrease profitability, and expose the Company to liability;
· Risks associated with future acquisitions and investments which could materially adversely affect the Company;
· Risks associated with the Company’s ability to protect its intellectual property and technology and that the Company may be subject to increasing litigation over its intellectual property rights;
· Risks associated with litigation that could materially adversely affect the Company’s business financial condition and/or results of operations;
· Risks associated with new accounting standards or revised interpretations or guidance regarding existing standards; and
· Risks associated with the material weaknesses in the Company’s internal controls over financial reporting.
Estimates of future financial results are inherently unreliable. The Company’s backlog estimates require substantial judgment and are based upon a number of assumptions as described in the Company’s Form 10-Q filed on August 10, 2007 in the section entitled “Backlog” under Item 2. — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. These assumptions may turn out to be inaccurate or wrong, including for reasons outside of management’s control. For example, customers may attempt to renegotiate or terminate their contracts for a number of reasons, including mergers, changes in their financial condition, or general changes in economic conditions in the customer’s industry or geographic location, or the Company may experience delays in the development or delivery of products or services specified in customer contracts which may cause the actual renewal rates and amounts to differ from historical experiences. Changes in foreign currency exchange rates may also impact the amount of revenue actually recognized in future periods. Accordingly, there can be no assurance that contracts included in backlog estimates will actually generate the specified revenues or that the actual revenues will be generated within the corresponding 12-month or 60-month period. Additionally, because backlog estimates are operating metrics, the estimates are not subject to the same level of internal review or controls as a GAAP financial measure.
ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
|
| June 30, |
| March 31, |
| June 30, |
| March 31, |
| ||||
|
| 2007 |
| 2007 |
| 2006 |
| 2006 |
| ||||
ASSETS |
| (unaudited) |
| (unaudited) |
| (unaudited) |
| (unaudited) |
| ||||
Current assets |
|
|
|
|
|
|
|
|
| ||||
Cash and cash equivalents |
| $ | 89,965 |
| $ | 95,963 |
| $ | 108,365 |
| $ | 113,539 |
|
Marketable securities |
| 2,500 |
| 2,500 |
| 67,725 |
| 76,182 |
| ||||
Billed receivables, net of allowances |
| 73,226 |
| 75,068 |
| 62,324 |
| 59,110 |
| ||||
Accrued receivables |
| 13,777 |
| 11,332 |
| 9,992 |
| 8,547 |
| ||||
Deferred income taxes, net |
| 5,830 |
| 4,575 |
| 3,103 |
| 4,509 |
| ||||
Recoverable income taxes |
| 2,956 |
| 5,825 |
| — |
| — |
| ||||
Other current assets |
| 16,986 |
| 15,167 |
| 13,740 |
| 11,959 |
| ||||
Total current assets |
| 205,240 |
| 210,430 |
| 265,249 |
| 273,846 |
| ||||
Property, plant and equipment, net |
| 18,926 |
| 18,869 |
| 9,234 |
| 9,642 |
| ||||
Software, net |
| 33,118 |
| 32,760 |
| 11,044 |
| 4,275 |
| ||||
Goodwill |
| 202,974 |
| 201,360 |
| 88,411 |
| 66,248 |
| ||||
Other intangible assets, net |
| 40,846 |
| 41,050 |
| 17,985 |
| 12,481 |
| ||||
Deferred income taxes, net |
| 15,935 |
| 16,126 |
| 29,246 |
| 21,886 |
| ||||
Other assets |
| 12,543 |
| 12,791 |
| 6,288 |
| 2,737 |
| ||||
TOTAL ASSETS |
| $ | 529,582 |
| $ | 533,386 |
| $ | 427,457 |
| $ | 391,115 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
| ||||
Current liabilities |
|
|
|
|
|
|
|
|
| ||||
Current portion of debt - financing agreements |
| $ | — |
| $ | — |
| $ | 78 |
| $ | 308 |
|
Accounts payable |
| 14,293 |
| 10,806 |
| 6,960 |
| 6,316 |
| ||||
Accrued employee compensation |
| 26,823 |
| 21,447 |
| 15,794 |
| 15,967 |
| ||||
Deferred revenue |
| 97,105 |
| 96,402 |
| 78,808 |
| 80,134 |
| ||||
Income taxes payable |
| — |
| — |
| 8,942 |
| 8,999 |
| ||||
Accrued and other current liabilities |
| 17,832 |
| 16,761 |
| 19,638 |
| 10,666 |
| ||||
Total current liabilities |
| 156,053 |
| 145,416 |
| 130,220 |
| 122,390 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Deferred revenue |
| 25,742 |
| 25,343 |
| 16,561 |
| 20,429 |
| ||||
Note payable under credit facility |
| 75,000 |
| 75,000 |
| — |
| — |
| ||||
Other noncurrent liabilities |
| 17,480 |
| 16,721 |
| 2,638 |
| 1,854 |
| ||||
Total liabilities |
| 274,275 |
| 262,480 |
| 149,419 |
| 144,673 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Commitments and contingencies |
|
|
|
|
|
|
|
|
| ||||
Stockholders’ equity |
|
|
|
|
|
|
|
|
| ||||
Preferred stock |
| — |
| — |
| — |
| — |
| ||||
Common stock |
| 204 |
| 204 |
| 204 |
| 204 |
| ||||
Treasury stock |
| (113,429 | ) | (97,768 | ) | (79,305 | ) | (82,251 | ) | ||||
Additional paid-in capital |
| 309,616 |
| 309,445 |
| 305,979 |
| 300,716 |
| ||||
Retained earnings |
| 61,841 |
| 64,564 |
| 59,697 |
| 37,168 |
| ||||
Accumulated other comprehensive loss |
| (2,925 | ) | (5,539 | ) | (8,537 | ) | (9,395 | ) | ||||
Total stockholders’ equity |
| 255,307 |
| 270,906 |
| 278,038 |
| 246,442 |
| ||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
| $ | 529,582 |
| $ | 533,386 |
| $ | 427,457 |
| $ | 391,115 |
|
ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited and in thousands, except per share amounts)
|
| Three Months Ended |
| ||||
|
| June 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
|
|
|
| (Restated) |
| ||
Revenues: |
|
|
|
|
| ||
Software license fees |
| $ | 40,920 |
| $ | 41,955 |
|
Maintenance fees |
| 31,287 |
| 25,989 |
| ||
Services |
| 25,902 |
| 16,820 |
| ||
Total revenues |
| 98,109 |
| 84,764 |
| ||
|
|
|
|
|
| ||
Expenses: |
|
|
|
|
| ||
Cost of software license fees |
| 9,932 |
| 7,895 |
| ||
Cost of maintenance and services |
| 26,789 |
| 19,385 |
| ||
Research and development |
| 13,422 |
| 10,191 |
| ||
Selling and marketing |
| 16,894 |
| 15,896 |
| ||
General and administrative |
| 26,190 |
| 15,877 |
| ||
Total expenses |
| 93,227 |
| 69,244 |
| ||
|
|
|
|
|
| ||
Operating income |
| 4,882 |
| 15,520 |
| ||
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
| ||
Interest income |
| 940 |
| 1,641 |
| ||
Interest expense |
| (1,431 | ) | (10 | ) | ||
Other, net |
| (1,533 | ) | (227 | ) | ||
Total other income (expense) |
| (2,024 | ) | 1,404 |
| ||
|
|
|
|
|
| ||
Income before income taxes |
| 2,858 |
| 16,924 |
| ||
Income tax provision |
| (5,581 | ) | 5,605 |
| ||
Net income (loss) |
| $ | (2,723 | ) | $ | 22,529 |
|
|
|
|
|
|
| ||
Earnings (loss) per share information |
|
|
|
|
| ||
Weighted average shares outstanding |
|
|
|
|
| ||
Basic |
| 37,075 |
| 37,529 |
| ||
Diluted |
| 37,075 |
| 38,476 |
| ||
Earnings (loss) per share |
|
|
|
|
| ||
Basic |
| $ | (0.07 | ) | $ | 0.60 |
|
Diluted |
| $ | (0.07 | ) | $ | 0.59 |
|
22
ACI WORLDWIDE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in thousands)
|
| Three Months Ended |
| ||||
|
| June 30, |
| ||||
|
| 2007 |
| 2006 |
| ||
Cash flows from operating activities: |
|
|
|
|
| ||
Net income (loss) |
| $ | (2,723 | ) | $ | 22,529 |
|
Adjustments to reconcile net (loss) income to net cash flows from operating activities: |
|
|
|
|
| ||
Depreciation |
| 1,516 |
| 993 |
| ||
Amortization |
| 3,757 |
| 1,082 |
| ||
Tax expense of intellectual property transfer |
| 478 |
| — |
| ||
Amortization of debt financing cost |
| 84 |
| — |
| ||
Loss on disposal of assets |
| 4 |
| — |
| ||
Deferred income taxes |
| (1,001 | ) | (9,967 | ) | ||
Share-based compensation expense |
| 1,382 |
| 1,528 |
| ||
Tax benefit of stock options exercised |
| (6 | ) | 775 |
| ||
Changes in operating assets and liabilities, net of acquired balances: |
|
|
|
|
| ||
Billed and accrued receivables, net |
| 976 |
| (801 | ) | ||
Other current assets |
| (1,418 | ) | (1,077 | ) | ||
Other assets |
| (257 | ) | (3,015 | ) | ||
Accounts payable |
| 2,127 |
| (257 | ) | ||
Accrued employee compensation |
| 3,869 |
| (1,126 | ) | ||
Accrued liabilities |
| 181 |
| 943 |
| ||
Current income taxes |
| 3,067 |
| 128 |
| ||
Deferred revenue |
| (1,016 | ) | (7,264 | ) | ||
Other current and noncurrent liabilities |
| (49 | ) | 5 |
| ||
Net cash flows from operating activities |
| 10,971 |
| 4,476 |
| ||
|
|
|
|
|
| ||
Cash flows from investing activities: |
|
|
|
|
| ||
Purchases of property and equipment |
| (1,043 | ) | (84 | ) | ||
Purchases of software and distribution rights |
| (139 | ) | (2,146 | ) | ||
Purchases of marketable securities |
| — |
| (14,875 | ) | ||
Acquisition of business, net of cash acquired |
| (2,565 | ) | (13,080 | ) | ||
Sales of marketable securities |
| — |
| 23,335 |
| ||
Other |
| 6 |
| — |
| ||
Net cash flows from investing activities |
| (3,741 | ) | (6,850 | ) | ||
|
|
|
|
|
| ||
Cash flows from financing activities: |
|
|
|
|
| ||
Proceeds from issuance of common stock |
| — |
| 320 |
| ||
Proceeds from exercises of stock options |
| — |
| 4,553 |
| ||
Excess tax benefit of stock options exercised |
| — |
| 815 |
| ||
Purchases of common stock |
| (14,865 | ) | (10,710 | ) | ||
Payments on debt and capital leases |
| (443 | ) | (947 | ) | ||
Other |
| — |
| (137 | ) | ||
Net cash flows from financing activities |
| (15,308 | ) | (6,106 | ) | ||
Effect of exchange rate fluctuations on cash |
| 2,080 |
| 3,306 |
| ||
Net decrease in cash and cash equivalents |
| (5,998 | ) | (5,174 | ) | ||
Cash and cash equivalents, beginning of period |
| 95,963 |
| 113,539 |
| ||
Cash and cash equivalents, end of period |
| $ | 89,965 |
| $ | 108,365 |
|
|
|
|
|
|
| ||
Supplemental cash flow information: |
|
|
|
|
| ||
Income taxes paid |
| 3,311 |
| 2,384 |
| ||
Interest paid |
| 1,280 |
| 8 |
|
23