Exhibit 99.1
FUNDTECH CONTACT:
Yoram Bibring
Fundtech Ltd.
Tel: 1-201-946-1100
yoramb@fundtech.com
- -------------------
FOR IMMEDIATE RELEASE
---------------------
FUNDTECH REPORTS THIRD QUARTER 2003 RESULTS
Key Financial Highlights:
*Revenue of $12.0 million, 3% sequential growth, 20% growth
vs. Q3 2002
*GAAP EPS of 2 cents
*Adjusted EPS of 6 cents
*(See Schedule A Attached to this Press Release - Reconciliation to GAAP)
JERSEY CITY, N.J.,-- October 29, 2003,-- Fundtech Ltd. (NASDAQ: FNDT), a leading
provider of global electronic payments, settlement and cash management
solutions, announced today its financial results for the third quarter ending
September 30, 2003.
Revenues for the third quarter of 2003 were $12.0 million, 3% higher than the
second quarter of 2003 and 20% higher than the third quarter of 2002. Compared
to the second quarter of 2003, service revenues increased by $400,000 and
maintenance revenues increased by $300,000, while license revenues declined by
$300,000.
On a GAAP basis, net income for the third quarter of 2003 was $247,000, or $0.02
per share, compared with a net loss of $230,000, or $0.02 per share for the
second quarter of 2003 and net loss of approximately $4.8 million or $0.33 per
share in the third quarter of 2002.
Excluding amortization of intangibles and amortization of capitalized software
costs, the adjusted net profit for the third quarter of 2003 was approximately
$900,000, or $0.06 per share, compared to approximately $400,000, or $0.03 per
share, in the second quarter of 2003 and a net loss of approximately $2.6
million, or $0.18 per share, in the third quarter of 2002. (See Schedule A
Attached to this Press Release -- Reconciliation to GAAP)
"We are continuing to grow and improve our operating results. This quarter we
have reached another important milestone, net profit, and we will work hard to
continue to grow and improve profitability in the future," said Reuven Ben
Menachem, CEO of Fundtech. " While general market conditions have remained
unchanged, we are now beginning to capitalize on our investments in our suite of
next generation products. Since the beginning of 2003, we are also witnessing
momentum in the ASP market in the US. This trend bodes well for Fundtech and if
it continues, we expect our recurring revenue base to continue to increase in
the years to come."
Additional Third quarter highlights:
o Closed a CLS system sale to a European bank.
o Closed 37 new deals and added 5 new bank customers.
o Closed ASP and disaster recovery services transactions, which are expected
to generate $2.2 million of revenues over the next 3 to 5 years.
o Closed two new sales for our next generation cash management product,
CASHplus.
o Announced the launch of a SwiftNet service bureau for Nordic Region
together with BGC.
Q4 2003 Guidance
Fundtech expects revenues in the fourth quarter of 2003 to be in the range of
$12.0 to $12.5 million and expects earnings per share before all anticipated
amortization expense to be in the range of 6 cents to 8 cents. Including all
anticipated amortization expenses, Fundtech expects GAAP earnings per share to
be between 2 cents and 4 cents. Amortization expenses are estimated to be 4
cents per share in the fourth quarter of 2003. (This forecast assumes
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 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.
# # #
FUNDTECH LTD. AND ITS SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In Thousands)
September 30, December 31,
2003 2002
---- ----
ASSETS
- ------
Current assets:
Cash & cash equivalents $ 18,496 $ 26,571
Marketable securities - short term 15,466 15,925
Trade receivables, net 15,038 13,386
Other accounts receivable, prepaid expenses
and inventories 1,835 1,256
--------- ---------
Total current assets 50,835 57,138
Marketable securities - long term 9,359 --
Long term trade receivables, net 1,029 1,497
Severance pay fund 682 474
Long term deposits 910 1,027
Property and equipment, net 6,559 7,265
Goodwill, net 10,523 10,523
Other assets, net 9,570 11,456
--------- ---------
Total assets $ 89,467 $ 89,380
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Trade payables $ 1,313 $ 1,221
Deferred revenues 6,052 4,959
Accrued restructuring expenses 649 1,523
Employee and payroll accruals 1,604 1,496
Other accounts payable and accrued expenses 3,085 3,309
--------- ---------
Total current liabilities 12,703 12,508
Accrued severance pay 743 527
Accrued restructuring and other expenses 830 1,179
--------- ---------
Total liabilities 14,276 14,214
--------- ---------
Shareholders' equity:
Share capital 43 43
Additional paid-in capital 140,337 139,851
Accumulated other comprehensive income (loss) (455) (602)
Accumulated deficit (64,646) (64,038)
Treasury stock, at cost (88) (88)
--------- ---------
Total shareholders' equity 75,191 75,166
--------- ---------
Total liabilities and shareholders' equity $ 89,467 $ 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 Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
---- ---- ---- ----
Revenues:
Software license fees $ 3,292 $ 2,668 $ 9,873 $ 6,944
Maintenance 3,811 3,079 10,822 9,075
Services [a] 4,919 4,168 13,754 12,809
Hardware sales 7 103 283 386
------------ ----------- ----------- ----------
Total Revenues 12,029 10,018 34,732 29,214
------------ ----------- ----------- ----------
Operating expenses:
Software licenses costs 124 132 344 405
Maintenance and services costs [a] 4,487 4,391 13,246 13,117
Hardware costs 5 82 237 300
Software development 2,328 3,534 7,274 11,715
Selling and marketing, net 2,458 2,444 7,441 7,422
General and administrative 1,767 1,825 5,093 5,559
Amortization of capitalized software development costs 394 394 1,182 788
Amortization of other intangible assets 235 231 705 677
Provision for doubtful accounts 100 199 150 448
Restructuring and related expenses -- 1,511 -- 1,514
------------ ----------- ----------- ----------
Total operating expenses 11,898 14,743 35,672 41,945
------------ ----------- ----------- ----------
Operating income (loss) 131 (4,725) (940) (12,731)
Impairment and realized losses
on available for sale marketable securities -- (114) -- (170)
Financial income, net 133 127 454 521
Income taxes (17) (47) (122) (125)
------------ ----------- ----------- ----------
Net income (loss) $ 247 $ (4,759) $ (608) $ (12,505)
============ =========== =========== ==========
Net income (loss) per share:
Net income (loss) used in computing income per share $ 247 $ (4,759) $ (608) $ (12,505)
Basic income (loss) per share $ 0.02 $ (0.33) $ (0.04) $ (0.88)
Diluted income (loss) per share $ 0.02 $ (0.33) $ (0.04) $ (0.88)
Shares used in computing:
Basic income (loss) per share 14,398,777 14,293,935 14,355,146 14,285,242
Diluted income (loss) per share 14,972,275 14,293,935 14,355,146 14,285,242
Adjusted net income (loss) per share:
Adjusted net income (loss) used in computing income per share $ 876 $ (2,623) $ 1,279 $ (9,526)
Adjusted net income (loss) per share $ 0.06 $ (0.18) $ 0.09 $ (0.67)
Shares used in computing adjusted net income (loss) per share 14,972,275 14,293,935 14,643,442 14,285,242
Reconciliation of net loss to adjusted net income (loss):
Net income (loss) $ 247 $ (4,759) $ (608) $ (12,505)
Restructuring and related expenses -- 1,511 -- 1,514
Amortization 629 625 1,887 1,465
------------ ----------- ----------- ----------
Adjusted net income (loss) $ 876 $ (2,623) $ 1,279 $ (9,526)
============ =========== =========== ==========
Note: Certain prior year amounts have been reclassified to conform
to current year presentation.
[a] Includes costs invoiced to customers of $303 and $329 for the three months
and $764 and $1029 for the nine months ended September 30, 2003
and 2002, respectively.
FUNDTECH LTD. AND ITS SUBSIDIARIES
Consolidated Statement of Cash Flows
(In Thousands)
Nine Months Ended Three Months Ended
September 30, September 30,
------------- -------------
2003 2002 2003
---- ---- ----
CASH FLOWS FROM OPERATIONS:
Net income (loss) $ (608) $ (12,505) $ 247
Adjustments to reconcile net income to net cash used
in operating activities:
Depreciation and amortization 4,138 4,131 1,286
Impairment and realized losses on available for sale marketable securities -- 171 --
Capital loss on sales of property and equipment 36 9 --
Provision for doubtful accounts 150 346 100
(Increase) decrease in trade receivables and long term-trade receivables (1,308) 2,097 25
(Increase) in other accounts receivable, prepaid expenses and inventories (569) (758) 72
Increase (decrease) in trade payables 88 (1,175) (102)
Increase (decrease) in deferred revenues 1,015 3,063 (3,093)
Increase in employee and payroll accruals 82 196 76
(Decrease) increase in other payables and accrued expenses (245) 51 (384)
(Decrease) increase in accrued non-recurring expenses (1,223) 325 (181)
Increase (decrease) in accrued severance pay, net 8 (35) 6
Decrease in accrued interest on marketable securities (99) -- (196)
---------- ----------- ---------
Net cash provided by (used in) operations 1,465 (4,084) (2,144)
---------- ----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of held to maturity marketable securities 430 -- 142
Investment in held to maturity marketable securities, net (9,231) -- (9,260)
Proceeds from sale of available for sale marketable securities -- 2,534 --
Investment in available for sale marketable securities -- (5,146) --
Purchase of property and equipment (1,514) (870) (323)
Reduction (investment) in long-term lease deposits 117 (59) 19
Proceeds from sale of property and equipment 2 32 --
---------- ----------- ---------
Net cash (used in) investing activities (10,196) (3,509) (9,422)
---------- ----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of share capital and
exercise of stock options and warrants, net 486 143 360
Investment in treasury stock, at cost -- (88) --
---------- ----------- ---------
Net cash provided by financing activities 486 55 360
---------- ----------- ---------
Effect of exchange rate on cash and cash equivalents 170 330 53
---------- ----------- ---------
Decrease in cash and cash equivalents (8,075) (7,208) (11,153)
Cash and cash equivalents at the beginning of the period 26,571 39,923 29,649
---------- ----------- ---------
Cash and cash equivalents at the end of the period $ 18,496 $ 32,715 $ 18,496
========== =========== ==========
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
September 30,
-------------------------
2003 2002
---------- ---------
Reconciliation of net income (loss)
to adjusted net income (loss):
Net income (loss) $ 247(a) $ (4,759)(a)
Restructuring and related expenses -- 1,511
Amortization of capitalized software
development costs 394 394
Amortization of other intangible assets 235 231
-------- --------
Adjusted net income (loss) $ 876 $ (2,623)
======= ========
Adjusted net income (loss) per share $ 0.06 $ (0.18)
======= ========
Shares used in computing adjusted
net income (loss) per share 14,972,275 14,293,935
*(a) Net income for the third quarter of 2003 was approximately $0.02 per share,
net loss for the third quarter of 2002 was, $0.33 per share.