Bottomline Technologies Reports Second Quarter Results; Revenue Growth Continues to Drive Profit.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. -- Bottomline Technologies (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : EPAY), a leading provider of payments and 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. automation software and services, today reported financial results for the second quarter and six months ended December December: see month. 31, 2005. Revenues for the second quarter were $26.1 million compared with $23.9 million in the second quarter of last year. Net income for the second quarter was $1.1 million, or net income per share of $0.05, compared with a net income of $1.2 million, or net income per share of $0.07 in the second quarter of last year. The fiscal 2006 second quarter net income reflects the expense impact associated with stock-based compensation as a result of accounting rules that Bottomline adopted on July July: see month. 1, 2005. During the second quarter of fiscal 2006, the company incurred acquisition-related 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $774,000, and stock compensation expense of $1.7 million. Excluding these acquisition related and stock compensation items, non-GAAP net income for the second quarter was $3.6 million, or non-GAAP net income per share of $0.16, compared with non-GAAP net income of $2.0 million, or non-GAAP net income per share of $0.11, in the second quarter of last year. The operating results represent a $1.6 million increase in non-GAAP net income from the second quarter last year. "We continue to deliver both customer value and business plan results. From a financial perspective, we were especially pleased with the increase in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ," 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. , 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. "We have also recently announced two acquisitions. The purchase of Visibillity adds to our strong position in the growing legal spend management market. The acquisition of Tranmit, which was announced yesterday, extends our product set in the invoice management and payables Payables Related: Accounts payable solutions market. Looking forward, we believe we have more value to offer both our large customer base and new clients." Revenues for the six months ended December 31, 2005 were $50.8 million compared with $45.7 million in the same period last year. Net income for the six months ended December 31, 2005 was $1.2 million, or net income per share of $0.05, compared with a net income of $1.9 million, or net income per share of $0.10, in the same period last year. Net income for the six months ended December 31, 2005 reflects the expense impact associated with stock-based compensation as a result of accounting rules that Bottomline adopted on July 1, 2005. During the six months ended December 31, 2005, the company incurred acquisition-related amortization of intangible assets of approximately $1.7 million and stock compensation expense of $3.4 million. Excluding these items, non-GAAP net income for the six months ended December 31, 2005 was $6.3 million, or non-GAAP net income per share of $0.27, compared with non-GAAP net income of $3.6 million, or non-GAAP net income per share of $0.19, in the same period of last year. The six-month operating results represent a $2.7 million increase in non-GAAP net income from the same period last year. Bottomline has presented supplemental non-GAAP financial measures as part of this earnings release. The non-GAAP financial measures exclude certain non-cash items, specifically amortization of intangible assets and stock compensation expense. The presentation of this information should not be considered in isolation to, or as a substitute for, the financial results presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . Bottomline believes that these supplemental non-GAAP financial measures are useful to investors because it allows for an evaluation of the company with a focus on the performance of its core operations. Bottomline's executive management team uses these same non-GAAP measures internally to assess the ongoing performance of the company. Since this information is not a GAAP measurement of financial performance, there are material limitations to its usefulness on a stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." basis, including the lack of comparability of this presentation to the GAAP financial results of other companies. A reconciliation of the GAAP results to the non-GAAP results for the three and six month periods ending December 31 is as follows:
Three Months Ended Six Months Ended
December 31, December 31,
(in thousands) (in thousands)
------------------- ------------------
2005 2004 2005 2004
-------- -------- -------- -------
GAAP Net Income $ 1,069 $ 1,240 $ 1,215 $ 1,919
Amortization of Intangible
Assets 774 756 1,661 1,642
Stock Compensation Expense 1,743 6 3,401 14
-------- -------- -------- -------
Non-GAAP Net Income $ 3,586 $ 2,002 $ 6,277 $ 3,575
-------- -------- -------- -------
Customer Highlights: --Continued market adoption of Legal eXchange(R), Bottomline's Web-based legal spend management solution, signing multi-year contracts with McKesson McKesson Corporation (NYSE: MCK) is a large United States-based corporation specializing in the distribution of health care systems, medical supplies and pharmaceutical products. Corporation, Erie Erie, indigenous people of North America Erie (ĭr`ē), indigenous people of North America of the Iroquoian branch of the Hokan-Siouan linguistic stock (see Native American languages). Insurance Company and a leading oil and gas company during the quarter. --Key banking customers, UMB (1) (Upper Memory Block) See UMA. (2) (Ultra Mobile Broadband) See 3GPP. 1. UMB - Upper Memory Block. 2. UMB - A university(?). Bank and Fifth Third Bancorp, broadened their investments in Bottomline's modular electronic banking and enterprise payment platforms. --Well-known organizations such as Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. , Budget Rent A Car, Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York Hospital, Campbell Soup Company Campbell Soup Company (NYSE: CPB) (also known as Campbell's) is a well-known American producer of canned soups and related products. Campbell's products are sold in 120 countries around the world. It is headquartered in Camden, New Jersey. , Forest City Enterprises and Yum Brands selected Bottomline's platforms to automate To turn a set of manual steps into an operation that goes by itself. See automation. and enhance financial processes. Company and Product Highlights: --Acquired Visibillity, Inc., a provider of legal e-billing (Electronic-billing) Paying bills by mail. See EBPP. solutions for the insurance industry. The acquisition further extends Bottomline's position as a leading provider of Web-based legal spend management services, and adds a number of significant clients to its growing customer base, including CNA (Certified NetWare Administrator) See Novell certification. Insurance, Employers Mutual Casualty Company and RiverStone Riverstone can mean several things:
--Acquired Tranmit Plc, a provider of Web-based purchase-to-pay automation solutions, on January January: see month. 24, 2006. The addition of Tranmit's invoice management capabilities further enhances the company's ability to provide global organizations with comprehensive hosted, licensed and outsourced Outsourced is a modern day comedy of cross-cultural conflict and romance, directed by John Jeffcoat, released in 2007. Synopsis Todd Anderson (Josh Hamilton) spends his days managing a customer call center for American Novelty Products in Seattle, until his job, solutions for improving the overall efficiency and productivity of the accounts payable function. --Announced Pan-European payments and reporting capabilities for the WebSeries(R) platform, enabling European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. corporate customers to consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. multiple banking connections and prepare for the advent of the new Single European Payments Area (SEPA SEPA® Soft enhancer of percutaneous absorption Therapeutics A technology that enhances transdermal drug delivery. See Transcutaneous therapy. ) standard. --Delivered to market Create!form(R) for Oracle E-Business Suite A group of integrated Internet-based applications from Oracle. Introduced in 2001 as Version 11i, it includes modules for CRM, finance, human resources, supply chain management as well as applications for business intelligence. Special Edition, providing small- and mid-sized Oracle SE business users with a framework from which electronic documents can be used to drive more complex, transactional process automation. About Bottomline Technologies Bottomline Technologies (NASDAQ: EPAY) provides payments and invoice automation software and services to organizations seeking more secure and efficient financial processes. The company remains at the forefront of delivering innovative solutions that complement and extend the value of existing financial processes, business relationships and back-office systems. These solutions have enabled industry-leading corporations, banks and financial institutions to automate, manage and control processes involving payments and collections, invoice approval, cash flow, risk mitigation MITIGATION. To make less rigorous or penal. 2. Crimes are frequently committed under circumstances which are not justifiable nor excusable, yet they show that the offender has been greatly tempted; as, for example, when a starving man steals bread to satisfy , reporting and document archive (1) A file that contains one or more compressed files. Most archive formats are also capable of storing folders in order to reconstruct the file/folder relationship when decompressed. See archive formats. . For more information, please visit www.bottomline.com. Bottomline Technologies, WebSeries, Create!form, Legal eXchange and the BT logo are trademarks of Bottomline Technologies, Inc. which may be registered in certain jurisdictions. All other brand/product names are trademarks of their respective holders. Cautionary Language This press release 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. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are competition, market demand, technological change, strategic relationships, recent acquisitions, international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and general economic conditions and other risks described in our 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. for the year ended June June: see month. 30, 2005. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We do not assume any obligation to update any forward-looking statements.
Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended
December 31,
2005 2004
---------- ----------
Revenues:
Software licenses $ 3,615 $ 5,359
Service and maintenance 18,597 14,560
Equipment and supplies 3,906 4,033
---------- ----------
Total revenues 26,118 23,952
Cost of revenues:
Software licenses 396 663
Service and maintenance (1) 7,794 6,282
Equipment and supplies 3,115 3,063
---------- ----------
Total cost of revenues 11,305 10,008
---------- ----------
Gross profit 14,813 13,944
Operating expenses:
Sales and marketing (1) 6,195 6,272
Product development and engineering (1) 2,803 2,603
General and administrative (1) 4,495 3,202
Amortization of intangible assets 774 756
---------- ----------
Total operating expenses 14,267 12,833
---------- ----------
Income from operations 546 1,111
Other income, net 867 236
---------- ----------
Income before provision for income taxes 1,413 1,347
Provision for income taxes 344 107
---------- ----------
Net income $ 1,069 $ 1,240
Basic and diluted net income per share $ 0.05 $ 0.07
---------- ----------
Shares used in computing net income per share:
Basic 22,687 17,914
Diluted 22,988 18,953
---------- ----------
Non-GAAP (excluding acquisition-related
amortization and stock compensation
expense):(2)
Net income $ 3,586 $ 2,002
---------- ----------
Diluted net income per share $ 0.16 $ 0.11
---------- ----------
(1) Stock based compensation is allocated as
follows:
Cost of revenues: service and
maintenance $ 119 $ -
Sales and marketing 582 -
Product development and engineering 209 6
General and administrative 833 -
---------- ----------
$ 1,743 $ 6
========== ==========
(2) Non-GAAP presentation excludes charges
for amortization of intangible assets of
$774 and $756 and stock compensation
expense of $1,743 and $6, for the three
months ended December 31, 2005 and 2004,
respectively.
Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Six Months Ended
December 31,
2005 2004
---------- ----------
Revenues:
Software licenses $ 6,872 $ 9,021
Service and maintenance 36,133 29,184
Equipment and supplies 7,792 7,494
---------- ----------
Total revenues 50,797 45,699
Cost of revenues:
Software licenses 701 1,375
Service and maintenance (1) 15,331 12,096
Equipment and supplies 6,175 5,707
---------- ----------
Total cost of revenues 22,207 19,178
---------- ----------
Gross profit 28,590 26,521
Operating expenses:
Sales and marketing (1) 12,540 11,794
Product development and engineering (1) 5,317 4,886
General and administrative (1) 8,708 6,308
Amortization of intangible assets 1,661 1,642
---------- ----------
Total operating expenses 28,226 24,630
---------- ----------
Income from operations 364 1,891
Other income, net 1,505 293
---------- ----------
Income before provision for income taxes 1,869 2,184
Provision for income taxes 654 265
---------- ----------
Net income $ 1,215 $ 1,919
Basic net income per share $ 0.05 $ 0.11
Diluted net income per share $ 0.05 $ 0.10
---------- ----------
Shares used in computing net income per share:
Basic 22,424 17,727
Diluted 23,115 18,634
---------- ----------
Non-GAAP (excluding acquisition-related
amortization and stock compensation
expense):(2)
Net income $ 6,277 $ 3,575
---------- ----------
Diluted net income per share $ 0.27 $ 0.19
---------- ----------
(1) Stock based compensation is
allocated as follows:
Cost of revenues: service and
maintenance $ 246 $ -
Sales and marketing 1,160 -
Product development and engineering 438 14
General and administrative 1,557 -
---------- ----------
$ 3,401 $ 14
========== ==========
(2) Non-GAAP presentation excludes charges for
amortization of intangible assets of
$1,661 and $1,642 and stock compensation
expense of $3,401 and $14, for the six
months ended December 31, 2005 and 2004,
respectively.
Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31, June 30,
2005 2005
----------- -----------
Assets
Current assets:
Cash, cash equivalents and short-term
investments $ 88,963 $ 35,916
Accounts receivable 22,559 22,956
Other current assets 4,154 4,893
----------- -----------
Total current assets 115,676 63,765
Property and equipment 7,219 6,940
Intangible assets 48,013 38,695
Other assets 778 1,041
----------- -----------
Total assets $ 171,686 $ 110,441
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 5,764 $ 6,094
Accrued expenses 8,909 9,381
Other current liabilities 11,500 -
Deferred revenue and deposits 18,024 20,738
----------- -----------
Total current liabilities 44,197 36,213
Deferred revenue and deposits, non current 1,104 1,435
----------- -----------
Total liabilities 45,301 37,648
Stockholders' equity
Common stock 23 19
Additional paid-in-capital 235,830 182,534
Accumulated other comprehensive income 1,153 2,350
Treasury stock (875) (1,149)
Retained deficit (109,746) (110,961)
----------- -----------
Total stockholders' equity 126,385 72,793
----------- -----------
Total liabilities and stockholders' equity $ 171,686 $ 110,441
=========== ===========
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