Bottomline Technologies Reports First Quarter Results; New Orders Contribute to Increased Backlog.Business Editors/High-Tech Writers PORTSMOUTH Portsmouth, city, England Portsmouth, city (1991 pop. 174,218) and district, Hampshire, S England, on Spithead Channel. The district includes Portsea (naval station), Southsea (residential district and resort), and the old town of Portsmouth proper. , N.H.--(BUSINESS WIRE)--Oct. 30, 2002 Bottomline Technologies(R) (Nasdaq: EPAY), a leading global technology provider of Financial Resource Management (FRM FRM From FRM Form FRM Fixed-Rate Mortgage FRM Financial Risk Manager (GARP) FRM Fondation pour la Recherche Médicale FRM Financial Resource Management FRM Final Rulemaking FRM Fiber-Reinforced Metal FRM Federal Reference Methods ) software and services, today reported financial results for the first quarter of fiscal 2003. Revenues for the first quarter were $16.3 million compared with $18.2 million in the first quarter of last year. The net loss for the first quarter was $5.9 million, or a net loss per share of $0.38, compared with a net loss of $10.3 million and a net loss per share of $0.75 in the quarter ended September September: see month. 30, 2001. During the quarter, operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. included acquisition-related charges of $2.2 million, which represented amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. of approximately $2.2 million and amortization of stock compensation charges of $37,000 associated with stock options assumed in the acquisitions. Excluding these acquisition-related charges, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net loss for the first quarter was $3.6 million, or a pro forma net loss per share of $0.23. A reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). loss to pro forma loss for the first quarter is as follows:
Three Months Ended
September 30,
2002 2001
GAAP Pre-tax Loss $(5,847) $(10,223)
Amortization of Intangible Assets 2,182 8,353
Stock Compensation Expense 37 100
Income Tax Provision (15) (60)
Pro forma Loss $(3,643) $(1,830)
"During the first quarter, we maintained our strong financial position with cash and investments of $24.4 million and no meaningful debt at quarter's end. We remain committed to achieving pro forma profitability by the March quarter. The expense reduction initiatives which negatively impacted this quarter's results are an important component of ensuring profitability," said Joe Mullen Joseph Mullen (born February 26, 1957 in New York, NY) is a retired American professional ice hockey player who played 17 seasons in the National Hockey League with the St. , president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of Bottomline Technologies. "In addition to our strong financial position, we are very pleased about being selected as the vendor of choice for our WebSeries Electronic Banking solution by two large financial institutions during the quarter. These new orders helped increase our backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. by $2.8 million, to $25.3 million at September 30th." Customer Highlights -- The WebSeries Electronic Banking product continues to gain market acceptance as indicated by significant new orders from two large financial institutions. -- Bottomline expanded relationships through new system and application sales to existing customers including State Street Bank, GMAC Commercial Holding Corporation, Morgan Stanley Dean Witter and Standard Chartered Bank. -- Bottomline Europe experienced continued success with 49 PayBase sales during the quarter bringing the total number of PayBase sales to 152 in the last twelve months. -- Bottomline Europe won new payment outsourcing arrangements with Teachers Pensions and nPower. Corporate and Product Highlights: -- The Board of Directors named Joe Mullen as Bottomline's president and CEO, culminating a two-year succession plan. Dan McGurl will continue as Chairman of the Board. -- Bottomline formed a global alliance with PwC Consulting(TM), which was recently acquired by IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) , to market and implement Bottomline's financial resource management products to joint clients. -- Bottomline became a member of the Euro Banking Association (EBA EBA Eisenbahn-Bundesamt (German) EBA Euro Banking Association EBA Emergency Brake Assistance EBA Enterprise Bargaining Agreement (Australia) EBA Elite Beat Agents (video game) ), which manages how banks make euro denominated payments to each other and their business customers around the world. The EBA plans to draw on Bottomline's expertise to help deploy a pan-European Automated Clearing House See ACH. (ACH (Automated Clearing House) A system of the U.S. Federal Reserve Bank that provides electronic funds transfer (EFT) between banks. It is used for all kinds of fund transfer transactions, including direct deposit of paychecks and monthly debits for routine payments to ) payment system. -- Bottomline was named to the Software 500, Software Magazine's list of the world's foremost software and services providers. -- The company announced feature enhancements to its electronic invoice An itemized statement or written account of goods sent to a purchaser or consignee by a vendor that indicates the quantity and price of each piece of merchandise shipped. A consular invoice is one used in foreign trade. presentment presentment: see indictment. and payment platform, NetTransact. The system improvements enable paying companies to streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. their invoice payment processes. Bottomline will host a conference call to discuss its financial results beginning at 5:00 p.m. on October October: see month. 30, 2002. Please see the corresponding advisory issued October 23, 2002, for information on the call. The call will also be broadcast live at www.bottomline.com and a replay will be available on the website following the call. About Bottomline Technologies Bottomline Technologies (Nasdaq: EPAY) is a leading global technology provider of Financial Resource Management (FRM) software and services. Bottomline's comprehensive set of FRM offerings enables businesses and financial institutions to more effectively manage their critical financial transactions, cash decisions and trading partner relationships, leveraging the Web. FRM applications include Electronic Payments and Cash Management, Electronic Invoice Receipt and Management, Electronic Invoice Presentment and Payment (EIPP EIPP Electronic Invoice Payment and Presentment EIPP Electronic Invoice Presentment and Payment ), Electronic Banking and Information Reporting. Founded in 1989, Bottomline maintains its corporate headquarters in Portsmouth, NH and international headquarters in Reading, England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. . For more information, visit Bottomline on the Web at www.bottomline.com, or dial (800) 243-2528 or (603) 436-0700. Cautionary Language This announcement contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, including statements regarding our ability to reduce expenses, achieve profitability, realize expected revenues from our backlog and expected benefits of use of the Company's products and future growth or results. Actual results may differ materially from the results predicted and reported results should not be considered as an indication of future performance. More information about potential factors that could affect the company's business and financial results is included in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. including (without limitation) under the captions, "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations," and "Factors That May Affect Future Results", which is on file with the Securities and Exchange Commission (http://www.sec.gov See .gov and GovNet. (networking) gov - The top-level domain for US government bodies. ). The accompanying condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. statements of operations and balance sheets are an integral part of this announcement.
Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended
September 30,
2002 2001
Revenues:
Software licenses $2,740 $3,806
Service and maintenance 9,286 9,457
Equipment and supplies 4,254 4,938
Total revenues 16,280 18,201
Cost of revenues:
Software licenses 406 396
Service and maintenance 5,026 4,548
Equipment and supplies 3,163 3,489
Total cost of revenues 8,595 8,433
Gross profit 7,685 9,768
Operating expenses:
Sales and marketing 4,976 4,572
Product development and engineering:
Product development and engineering 3,572 3,450
Stock compensation expense 37 100
General and administrative 2,936 3,184
Amortization of intangible assets 2,182 8,353
Total operating expenses 13,703 19,659
Loss from operations (6,018) (9,891)
Other income (expense), net 171 (332)
Loss before provision for income taxes (5,847) (10,223)
Provision for income taxes 15 60
Net loss $(5,862) $(10,283)
Net loss per share:
Basic and diluted $(0.38) $(0.75)
Shares used in computing net loss per share:
Basic and diluted 15,545 13,776
Pro forma (excluding acquisition-related
charges):(1)
Net loss $(3,643) $(1,830)
Basic and diluted net loss per share $(0.23) $(0.13)
(1) Pro forma presentation excludes amortization of intangible assets
and amortization of stock compensation expense, net of tax.
Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
September 30, June 30,
2002 2002
Assets
Current assets:
Cash, cash equivalents and short term
investments $24,353 $25,931
Accounts receivable 12,240 15,242
Other current assets 4,300 3,960
Total current assets 40,893 45,133
Property and equipment 6,627 6,955
Intangible assets 42,281 43,540
Other assets 1,793 1,689
Total assets $91,594 $97,317
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $5,128 $5,154
Accrued expenses 5,442 5,574
Deferred revenue and deposits 12,916 13,452
Current portion of long-term debt 253 253
Total current liabilities 23,739 24,433
Long-term debt 253 253
Total liabilities 23,992 24,686
Stockholders' equity
Common stock 16 16
Additional paid-in-capital 163,513 164,022
Deferred compensation (398) (474)
Accumulated other comprehensive income 1,188 182
Treasury stock (4,278) (4,538)
Retained deficit (92,439) (86,577)
Total stockholders' equity 67,602 72,631
Total liabilities and stockholders' equity $91,594 $97,317
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