Exhibit 99.1
FOR IMMEDIATE RELEASE
FUNDTECH REPORTS FINANCIAL RESULTS FOR THE
SECOND QUARTER OF 2004
- Quarterly Revenues Grow 6% sequentially and 17% Year-over-Year to $13.7
Million
- GAAP EPS of 3 cents
- Adjusted EPS of 7 cents
JERSEY CITY, N.J.,-- August 3, 2004,-- Fundtech Ltd.
(NASDAQ: FNDT), a leading provider of global electronic
payment, settlement and cash management solutions, today
announced its financial results for the second quarter ended
June 30, 2004.
Revenues for the second quarter of 2004 were $13.7 million,
up 6% sequentially from $12.9 million in the first quarter
of 2004 and 17% higher than $11.7 million in the second
quarter of 2003.
On a GAAP (Generally Accepted Accounting Principles) basis,
net income for the second quarter of 2004 increased to
$388,000, or $0.03 per diluted share, compared with net
income of $260,000, or $0.02 per diluted share, for the
first quarter of 2004 and a net loss of $(230,000), or
$(0.02) per share, in the second quarter of 2003.
Excluding amortization of intangibles and amortization of
capitalized software costs, Fundtech's adjusted net profit
for the second quarter of 2004 was $1.0 million, or $0.07
per diluted share, compared with $889,000, or $0.06 per
diluted share, in the first quarter of 2004 and $399,000, or
$0.03 per diluted share, in the second quarter of 2003. (See
Schedule A Attached to this Press Release -- Reconciliation
to GAAP).
"During the second quarter we continued to execute well
across our product lines, and met our revenue and
profitability guidance targets," said Fundtech CEO Reuven
Ben Menachem. "Conditions are improving at the high end of
the market, and we continue to generate healthy operating
cash flows as cash and equivalents increased by $6 million
on a trailing twelve months basis."
Additional second quarter highlights:
o Closed 35 new deals and added seven new bank customers.
o Closed seven new system sales; Four PAYplus USA, one
CASHplus, one Banker and one IGT Plus.
o Received an order from a large Swiss bank to implement
IGT Plus.
o In the U.S., closed ASP and disaster recovery services
transactions, which are expected to generate $7.0
million of revenues over the next five years.
For the six months ended June 30, 2004, revenues were $26.6
million, up 17% from $22.7 million for the same period in
2003.
On a GAAP basis, net income for the first six months of 2004
was $648,000, or $0.04 per diluted share, compared with a
net loss of $(855,000), or $(0.06) per share, for the first
six months of 2003.
Excluding amortization of intangibles and amortization of
capitalized software costs, Fundtech's adjusted net profit
for the first six months of 2004 was $1.9 million, or $0.12
per diluted share, compared with $403,000, or $0.03 per
diluted share, in the first six months of 2003. (See
Schedule A Attached to this Press Release -- Reconciliation
to GAAP).
Guidance
The financial guidance provided is current as of today only
and the Company undertakes no obligation to update its
estimates.
For the third quarter of 2004, Fundtech expects revenues of
between $13.7 million and $14.1 million, and GAAP earnings
per diluted share, including all amortization expenses, in
the range of $0.03 to $0.05. Adjusted earnings per diluted
share, excluding all amortization expenses, are expected to
be in the range of $0.07 to $0.09.
For the fourth quarter of 2004, Fundtech expects revenues to
be between $14.1 million and $14.8 million, and GAAP
earnings per diluted share, including all amortization
expenses, in the range of $0.04 to $0.07. Adjusted earnings
per diluted share, excluding all amortization expenses, are
expected to be in the range of $0.08 to $0.11.
Amortization expenses in each quarter are estimated to be
approximately $629,000, or $0.04 per share.
Based on improving business conditions, Fundtech is
increasing its top-line and bottom-line guidance for
full-year 2004. The Company currently forecasts 2004
revenues of $54.4 million to $55.5 million, compared with
previous guidance of $53.5 million to $54.5 million. The
range for GAAP earnings per diluted share has increased to
between $0.12 and $0.17 from prior guidance of between $0.10
and $0.16. Earnings per diluted share, before all
amortization expenses, are expected to be in the range of
$0.28 to $0.33, versus an earlier range of $0.26 to $0.32.
Company to Host Conference Call
Fundtech management will host a conference call at 8:30 a.m.
(ET) tomorrow, Wednesday August 4, to discuss its
second-quarter 2004 results and to answer questions from the
investment community.
To participate, please call 866-500-4964 or
011-972-3-925-5910 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 12 p.m (ET) August 4 until 12:00 p.m. (ET)
August 11. The replay may be accessed by dialing
877-332-1104 or 972 (3) 9255934.
This call will also be webcast live on:
http://www.fundtech.com.
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:
This news release contains forward-looking statements made
pursuant to the safe-harbor provisions of the Private
Securities Litigation Reform Act of 1995. Such statements
may include, but are not limited to, projections of
revenues, income or loss, capital expenditures, plans for
growth and future operations, competition and regulation.
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 its Annual Report on Form 20-F for the year ended
December 31, 2003, 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)
June 30, December 31,
2004 2003
---- ----
ASSETS
- ------
Current assets:
Cash & cash equivalents $ 28,945 $ 28,900
Marketable securities - short term 14,576 9,028
Trade receivables, net 12,301 13,009
Other accounts receivable, prepaid expenses
and inventories 3,084 1,936
--------- ---------
Total current assets 58,906 52,873
Marketable securities - long term 7,488 8,436
Long term trade receivables, net 476 1,031
Severance pay fund 493 520
Long term deposits 1,312 860
Property and equipment, net 7,109 6,375
Goodwill, net 10,523 10,523
Other assets, net 7,684 8,942
--------- ---------
Total assets $ 93,991 $ 89,560
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Trade payables $ 771 $ 932
Deferred revenues 9,567 5,112
Accrued restructuring expenses 531 581
Employee and payroll accruals 2,045 2,015
Other accounts payable and accrued expenses 2,695 3,050
--------- ---------
Total current liabilities 15,609 11,690
Accrued severance pay 558 586
Accrued restructuring and other expenses 458 750
--------- ---------
Total liabilities 16,625 13,026
--------- ---------
Shareholders' equity:
Share capital 43 43
Additional paid-in capital 140,915 140,730
Accumulated other comprehensive income (loss) (181) (180)
Accumulated deficit (63,323) (63,971)
Treasury stock, at cost (88) (88)
--------- ---------
Total shareholders' equity 77,366 76,534
--------- ---------
Total liabilities and shareholders' equity $ 93,991 $ 89,560
========= =========
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,
2004 2003 2004 2003
---- ---- ---- ----
Revenues:
Software license $ 4,216 $ 3,440 $ 7,669 $ 6,549
Software hosting 1,920 1,414 3,737 2,789
Maintenance 4,134 3,535 8,239 7,011
Services 3,401 3,243 6,901 6,078
Hardware sales 52 32 79 276
------------ ------------ ------------ ------------
Total Revenues 13,723 11,664 26,625 22,703
------------ ------------ ------------ ------------
Operating expenses:
Software licenses costs 170 110 320 220
Amortization of capitalized software
development costs 394 394 788 788
Amortization of other intangible assets 235 235 470 470
Maintenance, hosting and services costs 5,314 4,419 10,161 8,759
Hardware costs 42 28 61 232
Software development 2,767 2,475 5,307 4,946
Selling and marketing 2,761 2,623 5,504 4,983
General and administrative 1,729 1,707 3,509 3,376
------------ ------------ ------------ ------------
Total operating expenses 13,412 11,991 26,120 23,774
------------ ------------ ------------ ------------
Operating income (loss) 311 (327) 505 (1,071)
Financial income, net 166 142 345 321
Income taxes (89) (45) (202) (105)
------------ ------------ ------------ ------------
Net income (loss) $ 388 $ (230) $ 648 $ (855)
============ ============ ============ ============
Net income (loss) per share:
Net income (loss) used in computing income
per share $ 388 $ (230) $ 648 $ (855)
Basic income (loss) per share $ 0.03 $ (0.02) $ 0.04 $ (0.06)
Diluted income (loss) per share $ 0.03 $ (0.02) $ 0.04 $ (0.06)
Shares used in computing:
Basic income (loss) per share 14,553,616 14,344,359 14,543,140 14,332,969
Diluted income (loss) per share 15,221,711 14,344,359 15,276,927 14,332,969
Adjusted net income (loss) per share:
Adjusted net income (loss) used in computing
income per share $ 1,017 $ 399 $ 1,906 $ 403
Adjusted net income (loss) per share $ 0.07 $ 0.03 $ 0.12 $ 0.03
Shares used in computing adjusted net income
(loss) per share 15,221,711 14,344,359 15,276,927 14,332,969
Reconciliation of net loss to adjusted net income:
Net income (loss) $ 388 $ (230) $ 648 $ (855)
Amortization 629 629 1,258 1,258
------------ ------------ ------------ ------------
Adjusted net income $ 1,017 $ 399 $ 1,906 $ 403
============ ============ ============ ============
Note: Certain prior year amounts have been reclassified to conform to current
year presentation.
FUNDTECH LTD. AND ITS SUBSIDIARIES
Consolidated Statement of Cash Flows
(In Thousands)
Six Months Ended Three Months Ended
June 30, June 30,
2004 2003 2004
---- ---- ----
CASH FLOWS FROM OPERATIONS:
Net income (loss) $ 648 $ (855) $ 388
Adjustments to reconcile net income to net cash used
in operating activities:
Depreciation and amortization 2,609 2,852 1,294
Decrease (increase) in trade receivables and long-
term trade receivables 1,196 (1,333) 1,647
Increase in provision for doubtful accounts 50 50 50
(Increase) decrease in other accounts receivable, prepaid
expenses and inventories (1,145) (641) (379)
(Decrease) increase in trade payables (160) 190 (1,220)
(Decrease) increase in deferred revenues 4,412 4,108 (3,258)
Increase in employee and payroll accruals 43 6 657
(Decrease) increase in other payables and accrued expenses (363) 139 (1,134)
(Decrease) increase in accrued non-recurring expenses (342) (1,042) (203)
Increase (decrease) in accrued severance pay, net (1) 2 (9)
Decrease (increase) in accrued interest on marketable
securities 30 38 45
Loss on disposition of fixed assets 3 36 3
-------- -------- --------
Net cash provided by (used in) operations 6,980 3,550 (2,119)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from (investment in) held-to-maturity
marketable securities (5,548) 376 (9,617)
Proceeds from long term held-to-maturity marketable
securities 918 -- 6,494
Purchase of property and equipment (2,116) (1,191) (1,260)
Reduction (increase) in long-term lease deposits (452) 98 47
Proceeds from sale of fixed assets 9 2 9
-------- -------- --------
Net cash (used in) investing activities (7,189) (715) (4,327)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of share capital and
exercise of stock options and warrants, net 185 126 132
-------- -------- --------
Net cash provided by financing activities 185 126 132
-------- -------- --------
Effect of exchange rate on cash and cash equivalents 69 117 89
-------- -------- --------
Increase (decrease) in cash and cash equivalents 45 3,078 (6,225)
Cash and cash equivalents at the beginning of the period 28,900 26,571 35,170
-------- -------- --------
Cash and cash equivalents at the end of the period $ 28,945 $ 29,649 $ 28,945
======== ======== ========
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,
-----------------------------
2004 2003
---- ----
Reconciliation of net income (loss) to
adjusted net income:
Net income (loss) $ 388 [a] $ (230) [a]
Amortization of capitalized software
development costs 394 394
Amortization of other intangible assets 235 235
----------- -----------
Adjusted net income $ 1,017 $ 399
=========== ===========
Adjusted net income per share $ 0.07 $ 0.03
=========== ===========
Shares used in computing adjusted net income
per share 15,221,711 14,344,359
=========== ===========
[a] Net income per share (diluted) was approximately $0.03 for the three months
ended June 30, 2004 and net (loss) per share was approximately ($0.02) the
three months ended June 30, 2003.