Exhibit 99.1
FUNDTECH
Expect more.
NEWS RELEASE
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FUND CONTACT:
Yoram Bibring
Fundtech Ltd.
Tel: 1-201-946-1100
yoramb@fundtech.com
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FOR IMMEDIATE RELEASE
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FUNDTECH REPORTS FINANCIAL RESULTS FOR THE FOURTH
QUARTER AND FULL YEAR 2003
- Quarterly Revenues of $12.9 Million, 7% sequential growth, 21%
vs. Q4 2002
- GAAP EPS of 4 cents
- Adjusted EPS of 9 cents
- Full-year Revenues Increase 20% to $47.6 Million
JERSEY CITY, N.J., -- February 17, 2004,-- Fundtech Ltd.
(NASDAQ: FNDT), a leading provider of global electronic
payment, settlement and cash management solutions, today
announced its financial results for the fourth quarter
and year ended December 31, 2003.
Revenues for the fourth quarter of 2003 increased to $12.9
million, up 7% sequentially from $12.0 million and 21%
higher than $10.6 million in the fourth quarter of 2002. On
a sequential basis, service revenues increased $600,000,
maintenance revenues were up $100,000, license revenues grew
$100,000, and hardware revenues increased $100,000.
On a GAAP (Generally Accepted Accounting Principles) basis,
net income for the fourth quarter was $675,000 or $0.04 per
diluted share, compared with $247,000, or $0.02 per diluted
share, for the third quarter of 2003 and net loss of $(4.1)
million, or $(0.29) per share, in the fourth quarter of
2002.
Excluding amortization of intangibles and amortization of
capitalized software costs, the adjusted net profit for the
fourth quarter of 2003 was $1,300,000, or $0.09 per diluted
share, compared with $900,000, or $0.06 per diluted share,
in the third quarter of 2003 and a loss of $(900,000), or
$(0.06) per share, in the fourth quarter of 2002, which also
excluded non-recurring expenses. (See Schedule A Attached to
this Press Release -- Reconciliation to GAAP).
"Our cash management and payment solutions products are fast
becoming mission-critical technology for financial
institutions worldwide, and that momentum is reflected in
our fourth quarter performance," said Fundtech CEO Reuven
Ben Menachem. "We enjoyed a strong year in 2003, highlighted
by higher revenues, steadily increasing gross margins and
improved operating efficiencies. We expect to capitalize on
our market position to expand our business even further in
2004, with a focus on continuing to grow our recurring
revenue base."
For the 12 months ended December 31, 2003, revenues
increased 20% to $47.6 million from $39.8 million in 2002.
GAAP net income in 2003 was $67,000, or $0.00 per diluted
share, compared with 2002 net loss of $(16.6) million, or
$(1.16) per share. Excluding amortization of intangibles and
amortization of capitalized software costs, the adjusted net
profit for 2003 was $2.6 million, or $0.17 per diluted
share, compared to a loss of $(10.4) million, or $(0.73) per
share, in 2002 which also excluded non-recurring expenses.
(See Schedule A Attached to this Press Release --
Reconciliation to GAAP).
During the fourth quarter of 2003 cash and marketable
securities increased by $3.0 million to $46.4 million. For
the year cash and short and long term marketable securities
increased by $3.9 million.
Additional fourth quarter highlights:
o Closed a Global PAYplus system sale to a European bank.
o Closed 33 new deals and added 8 new bank customers.
o In the U.S., the Company closed ASP and disaster recovery
services transactions, which are expected to generate
$1.0 million of revenues over the next three to five
years.
o Closed five new sales for its next generation products in
the US, four new PAYplus USA sales and one new CASHplus
sale.
2004 Guidance
The financial guidance provided is current as of today only
and the Company undertakes no obligation to update its
estimates.
For the full 12 months of 2004, Fundtech expects revenues to
be between $52.8 million to $54.3 million and, Operating
profit to be between $1.0 million and $2.2 million .
Operating profit before all amortization expenses is
expected to be between $3.5 million and $4.7 million, and
earnings per share, before all amortization expenses, in the
range of $0.22 to $0.31. Including all amortization
expenses, Fundtech expects GAAP earnings per share to be
between $0.06 and $0.15. Amortization expenses for 2004 are
estimated to be $0.16 per share. (This forecast assumes
annual amortization of $2.5 million for 2004.)
To support its continued growth, Fundtech is currently
adding personnel and increasing quarterly expenses by up to
$500,000 in the first quarter of 2004 and by an additional
$500,000 in the second quarter. Fundtech expects its
expenses to remain stable in the third and fourth quarter.
Fundtech expects first quarter revenues to be between $12.6
million to $12.9 million with earnings per share, before all
anticipated amortization expenses, in the range of $0.04 to
$0.06. Including all anticipated amortization expenses,
Fundtech expects GAAP earnings per share to be between
breakeven and $0.02. Amortization expenses are estimated to
be $0.04 per share in the first quarter of 2004. (This
forecast assumes amortization of approximately $629,000 for
the first quarter.)
Company to Host Conference Call
Fundtech management will host a conference call at 8:30 a.m.
(ET) today to discuss its fourth-quarter and full-year 2003
results and to answer questions from the investment
community.
To participate, please call 866-500-4964 or 888-269-0005 and
ask for the Fundtech Call. From Israel, please dial (03)
925-5910.
A replay of the conference call will be available for
playback from noon (ET) today until 12:00 a.m. (ET) Tuesday,
February 24. The replay may be accessed by dialing
866-500-4953 or 972 (3) 9255934.
This call will also be webcast live on:
http://www.fundtech.com. An online replay will be available
until February 24, 2004.
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 it's Annual Report on Form 20-F for the year
ending December 31, 2002, 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)
December 31, December 31,
2003 2002
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ASSETS
Current assets:
Cash & cash equivalents $ 28,900 $ 26,571
Marketable securities - short term 9,028 15,925
Trade receivables, net 13,009 13,386
Other accounts receivable, prepaid expenses and
inventories 1,936 1,256
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Total current assets 52,873 57,138
Marketable securities - long term 8,436 --
Long term trade receivables, net 1,031 1,497
Severance pay fund 520 474
Long term deposits 860 1,027
Property and equipment, net 6,375 7,265
Goodwill, net 10,523 10,523
Other assets, net 8,942 11,456
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Total assets $ 89,560 $ 89,380
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
Trade payables $ 932 $ 1,221
Deferred revenues 5,112 4,959
Accrued restructuring expenses 581 1,523
Employee and payroll accruals 2,015 1,496
Other accounts payable and accrued expenses 3,050 3,309
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Total current liabilities 11,690 12,508
Accrued severance pay 586 527
Accrued restructuring and other expenses 750 1,179
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Total liabilities 13,026 14,214
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Shareholders' equity:
Share capital 43 43
Additional paid-in capital 140,730 139,851
Accumulated other comprehensive income (loss) (180) (602)
Accumulated deficit (63,971) (64,038)
Treasury stock, at cost (88) (88)
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Total shareholders' equity 76,534 75,166
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Total liabilities and shareholders' equity $ 89,560 $ 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 Twelve Months Ended
December 31, December 31,
2003 2002 2003 2002
---- ---- ---- ----
Revenues:
Software license fees $ 3,363 $ 3,124 $ 13,236 $ 10,068
Maintenance 3,949 3,484 14,771 12,559
Services [a] 5,486 3,987 19,240 16,796
Hardware sales 84 19 367 405
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Total Revenues 12,882 10,614 47,614 39,828
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Operating expenses:
Software licenses costs 149 298 493 703
Amortization of capitalized software development costs 394 394 1,576 1,182
Amortization of other intangible assets 235 234 940 911
Maintenance and services costs [a] 4,657 4,495 17,903 17,612
Hardware costs 69 17 306 317
Software development 2,416 2,810 9,690 14,525
Selling and marketing, net 2,557 2,031 9,998 9,453
General and administrative 1,583 1,671 6,676 7,230
Provision for doubtful accounts 200 27 350 475
Loss recognized on receivable settlement -- 860 -- 860
Restructuring and related expenses -- 1,738 -- 3,252
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Total operating expenses 12,260 14,575 47,932 56,520
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Operating income (loss) 622 (3,961) (318) (16,692)
Impairment and realized losses on available for sale
marketable securities -- (111) -- (281)
Financial income, net 217 170 671 691
Income taxes (164) (240) (286) (365)
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Net income (loss) $ 675 $ (4,142) $ 67 $ (16,647)
============ ============ ============ ============
Net income (loss) per share:
Net income (loss) used in computing income per share $ 675 $ (4,142) $ 67 $ (16,647)
Basic income (loss) per share $ 0.05 $ (0.29) $ 0.00 $ (1.16)
Diluted income (loss) per share $ 0.04 $ (0.29) $ 0.00 $ (1.16)
Shares used in computing:
Basic income (loss) per share 14,479,646 14,305,377 14,426,655 14,290,317
Diluted income (loss) per share 15,258,014 14,305,377 14,837,468 14,290,317
Adjusted net income (loss) per share:
Adjusted net income (loss) used in computing income per share $ 1,304 $ (916) $ 2,583 $ (10,442)
Adjusted net income (loss) per share $ 0.09 $ (0.06) $ 0.17 $ (0.73)
Shares used in computing adjusted net income (loss) per share 15,258,014 14,305,377 14,837,468 14,290,317
Reconciliation of net loss to adjusted net income (loss):
Net income (loss) $ 675 $ (4,142) $ 67 $ (16,647)
Amortization 629 628 2,516 2,093
Restructuring and related expenses -- 1,738 -- 3,252
Loss recognized on receivable settlement -- 860 -- 860
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Adjusted net income (loss) $ 1,304 $ (916) $ 2,583 $ (10,442)
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Note: Certain prior year amounts have been reclassified to conform to current
year presentation.
[a] Includes costs invoiced to customers of $235 and $111 for the three months
and $999 and $1140 for the twelve months ended December 31, 2003 and 2002,
respectively.
FUNDTECH LTD. AND ITS SUBSIDIARIES
Consolidated Statement of Cash Flows
(In Thousands)
Year Ended Three Months Ended
December 31, December 31,
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2003 2002 2003
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CASH FLOWS FROM OPERATIONS:
Net income (loss) $ 67 $(16,647) $ 675
Adjustments to reconcile net income to net cash used
in operating activities:
Depreciation and amortization 5,656 5,580 1,518
Impairment and realized losses on available for sale
marketable securities -- 281 --
Capital loss on sales of property and equipment 38 39 2
Provision for doubtful accounts 350 1,335 200
Decrease (increase) in trade receivables and long
term-trade receivables 571 4,737 1,867
(Increase) decrease in other accounts receivable,
prepaid expenses and inventories (615) 52 (62)
Decrease in deferred income taxes, net -- 109 --
(Decrease) increase in trade payables (300) (1,059) (389)
(Decrease) increase in deferred revenues (56) 3,537 (1,055)
Increase (decrease) in employee and payroll accruals 450 (20) 370
(Decrease) increase in other payables and accrued expenses (282) (908) (52)
(Decrease) increase in accrued non-recurring expenses (1,371) 1,540 (148)
Increase (decrease) in accrued severance pay, net 13 (40) 5
Decrease (increase) in accrued interest on marketable
securities 8 (196) 106
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Net cash provided by (used in) operations 4,529 (1,660) 3,037
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from held to maturity marketable securities 6,822 -- 6,393
Investment in held to maturity marketable securities, net -- (15,729) --
(Investment in) proceeds from long term held-to-maturity
marketable securities (8,369) -- 862
Proceeds from sale of available for sale marketable securities -- 5,181 --
Purchase of property and equipment (2,108) (1,298) (594)
Reduction (increase) in long-term lease deposits 167 (365) 50
Proceeds from sale of property and equipment 6 60 4
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Net cash (used in) investing activities (3,482) (12,151) 6,715
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of share capital and
exercise of stock options and warrants, net 879 143 393
Investment in treasury stock, at cost -- (88) --
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Net cash provided by financing activities 879 55 393
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Effect of exchange rate on cash and cash equivalents 403 404 259
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Decrease in cash and cash equivalents 2,329 (13,352) 10,404
Cash and cash equivalents at the beginning of the period 26,571 39,923 18,496
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Cash and cash equivalents at the end of the period $ 28,900 $ 26,571 $ 28,900
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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
------------------------------------------ Twelve Months Ended
December 31, September 30, December 31,
------------------------ ------------ --------------------
2003 2002 2003 2003 2002
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Reconciliation of net loss to adjusted net loss:
Net income (loss) $ 675 [a] $ (4,142)[a] $ 247 [a] $ 67 [a] $ (16,647)[a]
Restructuring and related expenses -- 1,738 -- -- 3,252
Amortization of capitalized software development costs 394 394 394 1,576 1,182
Amortization of other intangible assets 235 234 235 940 911
Loss recognized on receivable settlement -- 860 -- -- 860
-------- -------- -------- -------- --------
Adjusted net income (loss) $ 1,304 $ (916) $ 876 $ 2,583 $(10,442)
======== ======== ======== ======== ========
Adjusted net income (loss) per share $ 0.09 $ (0.06) $ 0.06 $ 0.17 $ (0.73)
======== ======== ======== ======== ========
Shares used in computing adjusted net income
(loss) per share 15,258,014 14,305,377 14,972,275 14,837,468 14,290,317
[a] Net income per share (diluted) was approximateley $0.04 , $0.00 and $0.02
for the three months and twelve months ended December 31, 2003 and the
three months ended September 30, 2003, respectively, and net (loss) per
share was approximateley ($0.29) and ($1.16) for the three months and
twelve months ended December 31, 2002, respectively.