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[FUNDTECH LOGO]
CONTACTS:
GM Stetter Claudia Gatlin
Fundtech Ltd. CMG International
Tel: 1-201-946-1100 Tel: 1-212-830-9080
Email: gmstetter@fundtech.com Email: cmginternational@msn.com
FUNDTECH REPORTS SECOND QUARTER RESULTS
JERSEY CITY, N.J. -- JULY 19, 2001, -- Fundtech Ltd. (NASDAQ: FNDT), a leading
provider of e-payments and Internet banking solutions, announced today its
financial results for the second quarter and six months ended June 30, 2001.
Revenue for the second quarter was $11.1 million, about even with the second
quarter of 2000, and down 15 percent from the first quarter of 2001.
The adjusted net loss for the quarter, which excludes non-recurring expenses of
approximately $3.5 million and acquisition-related amortization charges, was
$2.9 million, or $0.20 per diluted share, compared with an adjusted net profit
of $1.7 million, or $0.12 per diluted share, in the second quarter of 2000.
Including the non-recurring expenses and amortization of acquisition-related
goodwill, the net loss for the second quarter was $7.0 million, or $0.49 per
diluted share, compared with a net profit of $1.1 million, or $0.08 per diluted
share, in the same period of 2000.
Software license revenue decreased 41% to $4.0 million, or 36% of total revenue,
from $6.8 million in the second quarter of 2000. Maintenance and service revenue
was up 66% to $7.0 million, or 63% of total revenue, versus the $4.2 million
reported in the same period a year ago.
The non-recurring expenses of $3.5 million in this quarter reflect the costs
associated with the Company's reduction in headcount, losses on exiting office
leases and the write-off of the Company's investments in certain discontinued
projects.
-more-
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FUNDTECH REPORTS SECOND QUARTER RESULTS/2
"Despite the lengthening sales cycles and deferred purchases that are
responsible for the current weakness in license revenue, we remain very
optimistic about our competitive position and our long term prospects," said
Reuven Ben Menachem, Chairman and CEO of Fundtech. "We are completing major
investments in new product development that will ensure that we have the most
advanced products in the industry. Meanwhile, we are taking appropriate action
to streamline our operations, focus on areas with the most profit potential,
reduce costs, and enable the Company to achieve operating breakeven in the
fourth quarter assuming no near term improvement in market conditions. The
Company is positioning itself to solidify its leadership position and gain
additional market share once order patterns return to more normal levels."
Areas of continued strength in the quarter included:
- - Ongoing progress on large global payments and cash management projects;
- - Two additional CLS contract wins;
- - New payments deal in the far east with OUB Bank;
- - Strong performance by Biveroni's outsourcing operation, which is
profitable and continues to grow;
- - Strong demand for outsourcing services in the U.S. through the ASP
model, including National Penn Bank and Synovus Financial Corp.
ABOUT FUNDTECH
Fundtech (www.fundtech.com) is a leading provider of software solutions and
services that facilitate e-payments and e-banking by enabling businesses through
their banks to electronically manage cash, process payments and transfer funds.
The Company's client-server and Internet software products and services 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 more than 700 financial institutions
around the globe.
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FUNDTECH REPORTS SECOND QUARTER RESULTS/2
# # #
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 Connect is a trademark of Fundtech Corporation. All other trademarks
and service marks are properties of their respective owners.
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FUNDTECH LTD. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
AS OF JUNE 30, AS OF DECEMBER 31,
2001 2000
------------- ------------------
CURRENT ASSETS
CASH & CASH EQUIVALENTS $ 13,718 $ 18,116
SHORT-TERM BANK DEPOSIT 0 3,132
SHORT-TERM INVESTMENTS 41,764 42,067
TRADE RECEIVABLE, NET 26,353 24,375
OTHER CURRENT ASSETS 2,417 2,719
----------- ---------
TOTAL CURRENT ASSETS 84,252 90,409
LONG TERM TRADE RECEIVABLES 4,005 3,673
LONG TERM LEASE DEPOSIT 782 476
FIXED ASSETS, NET 10,368 11,038
OTHER ASSETS, NET 23,061 20,933
----------- ---------
TOTAL ASSETS $ 122,467 $ 126,529
=========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
TRADE PAYABLES $ 1,705 $ 3,090
DEFERRED REVENUES AND ACCRUED EXPENSES 11,165 3,457
----------- ---------
TOTAL CURRENT LIABILITIES 12,870 6,547
----------- ---------
OTHER LIABILITIES 184 268
SHAREHOLDERS' EQUITY
SHARE CAPITAL 44 42
ADDITIONAL PAID-IN CAPITAL 139,502 139,420
ACCUMULATED OTHER COMPREHENSIVE LOSS (6,753) (3,951)
DEFERRED COMPENSATION (20) (32)
ACCUMULATED DEFICIT (23,360) (15,765)
----------- ---------
TOTAL SHAREHOLDERS' EQUITY 109,413 119,714
----------- ---------
----------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 122,467 $ 126,529
=========== =========
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FUNDTECH LTD. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2001 2000 2001 2000
------------ ------------ ------------ ------------
REVENUES
Software licenses fees $ 4,006 $ 6,810 $ 10,782 $ 12,191
Maintenance and services fees 6,983 4,210 13,267 8,192
Hardware sales 129 295 216 936
------------ ------------ ------------ ------------
TOTAL REVENUES 11,118 11,315 24,265 21,319
------------ ------------ ------------ ------------
COST OF REVENUES
Software licenses costs 277 31 601 62
Maintenance and services costs 4,902 2,764 9,798 5,480
Hardware costs 104 243 173 750
------------ ------------ ------------ ------------
TOTAL COST OF REVENUES 5,283 3,038 10,572 6,292
------------ ------------ ------------ ------------
GROSS PROFIT 5,835 8,277 13,693 15,027
OPERATING EXPENSES:
Software Development 4,696 4,159 8,947 8,334
Selling and marketing 2,675 2,412 5,341 4,878
Amortization of acquisition-related
intangible assets 621 603 1,253 1,206
General and administrative 2,393 1,597 4,499 3,252
Impairment Charges 1,035 0 1,035 0
Non-recurring Expenses 2,438 0 2,438 0
------------ ------------ ------------ ------------
TOTAL OPERATING COSTS 13,858 8,771 23,513 17,670
------------ ------------ ------------ ------------
Operating loss (8,023) (494) (9,820) (2,643)
Financial Income 1,056 1,605 2,224 3,006
------------ ------------ ------------ ------------
NET INCOME (LOSS) ($ 6,967) $ 1,111 ($ 7,596) $ 363
============ ============ ============ ============
NET INCOME (LOSS) PER SHARE:
Net income (loss) used in computing
income per share ($ 6,967) $ 1,111 ($ 7,596) $ 363
Basic income (loss) per share ($ 0.49) $ 0.08 ($ 0.54) $ 0.03
Diluted income (loss) per share ($ 0.49) $ 0.08 ($ 0.54) $ 0.02
shares used in computing:
Basic income (loss) per share 14,202,319 14,058,822 14,194,002 14,025,604
Diluted income (loss) per share 14,202,319 14,793,100 14,194,002 14,820,336
ADJUSTED NET INCOME PER SHARE ( * ):
Adjusted net income (loss) used in
computing income (loss) per share ($ 2,874) $ 1,714 ($ 2,870) $ 1,569
Diluted adjusted income (loss) per share ($ 0.20) $ 0.12 ($ 0.20) $ 0.11
shares used in computing:
Diluted income (loss) per share 14,202,319 14,793,100 14,194,002 14,820,336
(*) THE ABOVE PRESENTATION OF ADJUSTED NET INCOME (LOSS) PER SHARE HAS BEEN
ADJUSTED TO EXCLUDE THE EFFECTS OF AMORTIZATION OF ACQUISITION-RELATED
INTANGIBLE ASSETS IN 2000 AND 2001 AND NON-RECURRING END IMPAIRMENT EXPENSES IN
2001.