Exhibit 99.1
FOR IMMEDIATE RELEASE
---------------------
FUNDTECH REPORTS SECOND QUARTER 2003 RESULTS
Key Financial Highlights:*Revenue of $11.7 million, 6% sequential
growth, 21% growth vs. Q2 2002
*GAAP loss per share of 2 cents
*Adjusted EPS of 3 cents (See Schedule A
Attached to this Press Release -- Reconciliation to GAAP)
JERSEY CITY, N.J., -- July 30, 2003,-- Fundtech Ltd. (NASDAQ:
FNDT), a leading provider of global electronic payments,
settlement and cash management solutions, announced today its
financial results for the second quarter ended June 30, 2003.
Revenues for the second quarter were $11.7 million, 6% higher
than the first quarter of 2003, and 21% higher than the second
quarter of 2002. Compared to the first quarter, license revenues
increased by $500,000, service revenues increased by $200,000 and
maintenance revenues increased by $100,000. Hardware revenues
decreased by $200,000.
On a GAAP basis, net loss for the second quarter was
approximately $230,000, or $0.02 per share, compared with a net
loss of approximately $625,000, or $0.04 per share, for the first
quarter of 2003 and net loss of
approximately $3.9 million, or $0.27 per share, in the second
quarter of 2002.
Excluding amortization of intangibles and amortization of
capitalized software costs, the adjusted net profit for the
second quarter was $399,000, or $0.03 per share, compared to
$0.00 in the first quarter of 2003 and a loss of $0.23 per share
in the second quarter of 2002.
"We are continuing to grow and improve our operating results.
This quarter we have positive adjusted EPS, for the first time
since the year 2000," said Reuven Ben Menachem, CEO of Fundtech.
" While market conditions have remained unchanged, we see that
our next generation products are gaining traction in the
marketplace and our services organization has improved its
effectiveness. We expect these trends to continue to result in
improved operating performance."
Additional Second quarter highlights:
o Citibank went into production in London with our flagship Global PAYplus
product.
o Closed 39 new deals and added 8 new bank customers.
o Closed ASP and disaster recovery services transactions, which are expected
to generate $3.4 million of revenues over the next 3 to 5 years.
o Received two orders from European banks for Global PAYplus.
o Closed 2 new sales for our next generation cash management product,
CASHplus.
Q3 2003 Guidance
Fundtech expects revenues in the third quarter of 2003 to be in
the range of $11.7 to $12.0 million and expects earnings per
share before all amortization expenses to be in the range of 3
cents to 5 cents. Including all anticipated amortization
expenses, Fundtech expects GAAP earnings per share to be between
a loss of 1 cent and a profit of 1 cent. Amortization
expenses are expected to be 4 cents per share in the third
quarter of 2003. (Assuming amortization of approximately $629,000
for the quarter.)
About Fundtech
Fundtech (www.fundtech.com) is a leading provider of software
solutions and services that facilitate payments, settlement and
cash management by enabling businesses and their banks to
electronically manage cash, process payments and transfer funds.
The Company's client-server and Internet software products
automate the process of transferring funds among corporations,
banks and clearance systems and enable businesses to manage
global cash positions efficiently and in real-time. Its solutions
have been sold to hundreds of financial institutions around the
globe.
Forward Looking Statements:
Statements included in this Release may contain forward-looking
statements. Such forward-looking statements are made pursuant to
the safe-harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such statements may relate, but are not
limited, to projections of revenues, income or loss, capital
expenditures, plans for growth and future operations, competition
and regulation as well as assumptions relating to the foregoing.
Forward-looking statements are inherently subject to risks and
uncertainties, many of which cannot be predicted or quantified.
When used in this Release, the words, "estimates," "expects,"
"anticipates," "believes," "plans," "intends," and variations of
such words and similar expressions are intended to identify
forward-looking statements that involve risks and uncertainties.
Future events and actual results could differ materially from
those set forth in, contemplated by or underlying the
forward-looking statements. The factors that could cause actual
results to differ materially from those discussed or identified
from time to time in Fundtech's public filings, including general
economic and market conditions, changes in regulations and taxes
and changes in competition in pricing environment. Undo reliance
should not be placed on these forward-looking statements, which
are applicable only as of the date hereof. 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.
# # #
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 net
income (loss) as contained in the company's press release:
Three Months Ended
June 30,
--------
2003 2002
---- ----
Reconciliation of net loss to adjusted net loss:
Net income (loss) $ (230)(a) $ (3,858)(a)
Amortization of capitalized software development costs 394 394
Amortization of other intangible assets 235 225
-------- ---------
Adjusted net income (loss) $ 399 $ (3,239)
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Adjusted net income (loss) per share $ 0.03 $ (0.23)
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Shares used in computing adjusted net income
(loss) per share 14,574,079 14,283,342
* (a) Net loss for the second quarter was approximately $0.02 per share, net
loss for the second quarter of 2002 was $0.27 per share.
FUNDTECH LTD. AND ITS SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In Thousands)
June 30, December 31,
2003 2002
---- ----
ASSETS
- ------
Current assets:
Cash & cash equivalents $ 29,649 $ 26,571
Marketable securities 15,511 15,925
Trade receivables, net 14,983 13,386
Other accounts receivable, prepaid expenses
and inventories 1,902 1,256
--------- ---------
Total current assets 62,045 57,138
Long term trade receivables, net 1,202 1,497
Severance pay fund 551 474
Long term deposits 929 1,027
Property and equipment, net 6,857 7,265
Goodwill, net 10,523 10,523
Other assets, net 10,199 11,456
--------- ---------
Total assets $ 92,306 $ 89,380
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LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Trade payables $ 1,412 $ 1,221
Deferred revenues 9,141 4,959
Accrued restructuring expenses 750 1,523
Employee and payroll accruals 1,516 1,496
Other accounts payable and accrued expenses 3,465 3,309
--------- ---------
Total current liabilities 16,284 12,508
Accrued severance pay 606 527
Accrued restructuring and other expenses 910 1,179
--------- ---------
Total liabilities 17,800 14,214
--------- ---------
Shareholders' equity:
Share capital 43 43
Additional paid-in capital 139,977 139,851
Accumulated other comprehensive income (loss) (533) (602)
Accumulated deficit (64,893) (64,038)
Treasury stock, at cost (88) (88)
--------- ---------
Total shareholders' equity 74,506 75,166
--------- ---------
Total liabilities and shareholders' equity $ 92,306 $ 89,380
========= =========
Note: Certain prior year amounts have been reclassified to conform to current
year presentation.
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,
2003 2002 2003 2002
---- ---- ---- ----
Revenues:
Software license fees $ 3,561 $ 1,778 $ 6,581 $ 4,276
Maintenance 3,535 3,003 7,011 5,996
Services [a] 4,536 4,805 8,835 8,641
Hardware sales 32 61 276 283
------------ ------------ ------------ ------------
Total Revenues 11,664 9,647 22,703 19,196
------------ ------------ ------------ ------------
Operating expenses:
Software licenses costs 110 27 220 273
Maintenance and services costs [a] 4,419 4,370 8,759 8,726
Hardware costs 28 31 232 218
Software development 2,475 3,896 4,946 8,181
Selling and marketing, net 2,623 2,673 4,983 4,978
General and administrative 1,657 1,866 3,326 3,734
Amortization of capitalized software development costs 394 394 788 394
Amortization of other intangible assets 235 225 470 446
Provision for doubtful accounts 50 125 50 249
Restructuring and related expenses -- -- -- 3
------------ ------------ ------------ ------------
Total operating expenses 11,991 13,607 23,774 27,202
------------ ------------ ------------ ------------
Operating income (loss) (327) (3,960) (1,071) (8,006)
Impairment and realized losses
on available for sale marketable securities -- (43) -- (56)
Financial income, net 142 188 321 394
Income taxes (45) (43) (105) (78)
------------ ------------ ------------ ------------
Net income (loss) $ (230) $ (3,858) $ (855) $ (7,746)
============ ============ ============ ============
Net income (loss) per share:
Net income (loss) used in computing income per share $ (230) $ (3,858) $ (855) $ (7,746)
Basic income (loss) per share $ (0.02) $ (0.27) $ (0.06) $ (0.54)
Diluted income (loss) per share $ (0.02) $ (0.27) $ (0.06) $ (0.54)
Shares used in computing:
Basic income (loss) per share 14,344,359 14,283,342 14,332,969 14,280,824
Diluted income (loss) per share 14,344,359 14,283,342 14,332,969 14,280,824
Adjusted net income (loss) per share:
Adjusted net income (loss) used in computing income per share $ 399 $ (3,239) $ 403 $ (6,903)
Adjusted net income (loss) per share $ 0.03 $ (0.23) $ 0.03 $ (0.48)
Shares used in computing adjusted net income (loss) per share 14,574,079 14,283,342 14,478,663 14,280,824
Reconciliation of net loss to adjusted net income (loss):
Net income (loss) $ (230) $ (3,858) $ (855) $ (7,746)
Restructuring and related expenses -- -- -- 3
Amortization 629 619 1,258 840
------------ ------------ ------------ ------------
Adjusted net income (loss) $ 399 $ (3,239) $ 403 $ (6,903)
============ ============ ============ ============
Note: Certain prior year amounts have been reclassified to
conform to current year presentation.
[a] Includes costs invoiced to customers of $268 and $324 for the three months
and $461 and $700 for the six months ended June 30, 2003 and 2002,
respectively.
FUNDTECH LTD. AND ITS SUBSIDIARIES
Consolidated Statement of Cash Flows
(In Thousands)
Six Months Ended Three Months Ended
June 30, June 30,
-------- --------
2003 2002 2003
---- ---- ----
CASH FLOWS FROM OPERATIONS:
Net income (loss) $ (855) $ (7,746) $ (230)
Adjustments to reconcile net income to net cash used
in operating activities:
Depreciation and amortization 2,852 2,612 1,443
Impairment and realized losses on available for sale
marketable securities -- 46 --
Capital loss on sales of property and equipment 36 10 36
Provision for doubtful accounts -- 249 --
Decrease (increase) in trade receivables and long
term-trade receivables (1,283) (205) (3,030)
Increase in other accounts receivable, prepaid expenses
and inventories (641) (713) (492)
Increase (decrease) in trade payables 190 (831) (30)
Increase in deferred revenues 4,108 5,828 (2,734)
Decrease in employee and payroll accruals 6 (105) 289
(Decrease) increase in other payables and accrued expenses (903) 468 (871)
Increase in accrued non-recurring expenses -- (595) --
Increase (decrease) in accrued severance pay, net 2 (26) (1)
Decrease in accrued interest on marketable securities 38 -- 29
-------- -------- --------
Net cash provided by (used in) operations 3,550 (1,008) (5,591)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in held to maturity marketable securities, net 376 -- (4,510)
Proceeds from sale of available for sale marketable
securities -- 1,830 --
Purchase of property and equipment (1,191) (676) (322)
Reduction (investment) in long-term lease
deposits 98 (54) (2)
Proceeds from sale of property and equipment 2 24 2
-------- -------- --------
Net cash provided by (used in) investing activities (715) 1,124 (4,832)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of share capital and
exercise of stock options and warrants, net 126 65 126
Investment in treasury stock, at cost -- (88) --
-------- -------- --------
Net cash provided by financing activities 126 (23) 126
-------- -------- --------
Effect of exchange rate on cash and cash equivalents 117 494 (4)
-------- -------- --------
Increase (decrease) in cash and cash equivalents 3,078 587 (10,301)
Cash and cash equivalents at the beginning of the period 26,571 39,923 39,950
-------- -------- --------
Cash and cash equivalents at the end of the period $ 29,649 $ 40,510 $ 29,649
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