Bottomline Technologies Reports Second Quarter Results; Sequential Increase in Revenue and Backlog Highlight Quarter.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)--Jan. 28, 2003 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 second quarter of fiscal 2003. Revenues for the second quarter were $17.7 million compared with $16.3 million in the first quarter of the current fiscal year and $20.3 million in the second quarter of last year. The net loss for the second quarter was $4.2 million, or a net loss per share of $0.27, compared with a net loss of $9.1 million and a net loss per share of $0.66 in the second quarter of last year. During the second 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 $2.3 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.2 million and amortization of stock compensation charges of $26,000 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 second quarter was $1.9 million, or a pro forma net loss per share of $0.12. Revenues for the six months ended December December: see month. 31, 2002 were $34.0 million. The net loss for the six months ended December 31, 2002 was $23.8 million, or a net loss per share of $1.53. The results for the six months ended December 31, 2002 include the cumulative effect of an accounting change in the amount of $13.8 million related to a goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge recorded by the company in connection with the transition to FASB Statement FASB Statement A standard set by the Financial Accounting Standards Board regarding a financial accounting and reporting method. Essentially, FASB statements determine the acceptable accounting practices that Certified Public Accountants use in reporting 142. The net loss before the cumulative effect of the accounting change was $10.1 million, or a $0.65 net loss per share. During the six months ended December 31, 2002, operating expenses included acquisition-related charges of $4.5 million, which represented amortization of intangible assets of approximately $4.4 million and amortization of stock compensation charges of $63,000 associated with stock options assumed in the acquisitions. Excluding these acquisition-related charges and before the cumulative effect of the accounting change, the pro forma net loss for the six months ended December 31, 2002 was $5.6 million, or a pro forma net loss per share of $0.36. A reconciliation of the GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). loss before cumulative effect of accounting change to pro forma loss for the second quarter and year to date period is as follows:
Three Months Ended Six Months Ended
December 31, December 31,
2002 2001 2002 2001
GAAP Net Loss $(4,205) $(9,106) $(23,831) $(19,389)
Cumulative Effect of Accounting
Change 13,764
Amortization of Intangible
Assets 2,243 8,366 4,425 16,719
Stock Compensation Expense 26 104 63 204
Pro forma Loss $(1,936) $(636) $(5,579) $(2,466)
"During the second quarter, we continued to execute on our commitment to achieve pro-forma break-even or better results by the March quarter and profitability thereafter, moving from a pro forma loss of $3.6 million in the first quarter (GAAP loss of $19.6 million) to a pro forma loss this quarter of $1.9 million, a reduction of 47%. The combination of our increased 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. , $28.0 million at the end of December which represents a $2.7 million increase from September September: see month. , and continued expense reduction initiatives put us in position to achieve this goal," 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. "Also in the quarter, we signed a multi-million dollar agreement with a large financial institution, bringing our total of such deals to three in the fiscal year. At the outset of the fiscal year we set an annual goal of securing agreements with three large financial institutions. With this order, we have achieved our annual goal in the first six months of the fiscal year." Customer Highlights: -- During the second quarter, Bottomline's market leadership for financial resource management solutions was reinforced by sales to major financial institutions, including ABN Amro, Standard Chartered Bank, ING Bank, Citibank, Bank of Scotland (Ireland) and National City Bank. -- Bottomline won significant deals with new and existing customers that purchased Bottomline systems. These customers include: GMAC Commercial Holding, University of Pittsburgh, PacifiCare Health System, Federal Reserve - Atlanta and The United Nations. -- Bottomline Europe Transactional Services was awarded multi-year contracts by Cogent, Invesco, Thames Water and Blackpool Borough Council. -- Bottomline Europe experienced continued success with PayBase sales during the quarter and also began to sell the WebSeries product to the UK marketplace. Corporate and Product Highlights: -- John Barter John Wilfred Barter (6 October 1917 – 17 December 1983) was a British Labour Party politician. He was Member of Parliament for Ealing North from 1955 until he retired from the House of Commons at the 1964 general election. was named to the Board of Directors and Chair of the Audit Committee. Mr. Barter barter: see exchange. barter Direct exchange of goods or services without the use of money or any other intervening medium of exchange. Barter is conducted either according to established rates of exchange or by bargaining. has previously held several senior leadership roles at Allied Signal and is currently a Director and member of the Audit Committee of BMC Software BMC Software, Inc. NYSE: BMC, is an American enterprise management software provider, focusing on IT infrastructure applications. BMC was founded in 1980 and is headquartered in Houston, Texas. . -- Bottomline North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. expanded its product offerings with the addition of an 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, payment program. The new program, similar to the successful offering by Bottomline Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , enables organizations to realize immediate savings oncapital and human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. by employing an outsourced financial resource management platform. -- Bottomline enhanced its Legal e-Billing (Electronic-billing) Paying bills by mail. See EBPP. solution with a Web-based reporting analysis module. The new reporting capabilities give corporate legal departments access to vital historical data, enabling better management of total legal dollars spent. Bottomline will host a conference call to discuss its financial results beginning at 5:00 p.m. today. Please see the corresponding advisory issued January January: see month. 21, 2003 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(R) (Nasdaq: EPAY) is a leading global technology provider of Financial Resource Management (FRM) solutions. 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 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. Receipt and Management, Electronic Invoice Presentment presentment: see indictment. 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. Among the important factors which could cause actual results to differ materially from those in the 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. 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. and Quarterly Report on Form 10-Q Form 10-Q See 10-Q. 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 ac·com·pa·ny v. ac·com·pa·nied, ac·com·pa·ny·ing, ac·com·pa·nies v.tr. 1. To be or go with as a companion. 2. 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
December 31,
2002 2001
Revenues:
Software licenses $3,359 $4,461
Service and maintenance 9,969 10,183
Equipment and supplies 4,396 5,681
Total revenues 17,724 20,325
Cost of revenues:
Software licenses 449 268
Service and maintenance 5,627 5,314
Equipment and supplies 3,329 4,178
Total cost of revenues 9,405 9,760
Gross profit 8,319 10,565
Operating expenses:
Sales and marketing 4,414 4,916
Product development and engineering:
Product development and engineering 3,029 3,666
Stock compensation expense 26 104
General and administrative 2,908 2,667
Amortization of intangible assets 2,243 8,366
Total operating expenses 12,620 19,719
Loss from operations (4,301) (9,154)
Other income, net 111 78
Loss before provision for income taxes (4,190) (9,076)
Provision for income taxes 15 30
Net loss $(4,205) $(9,106)
Net loss per share:
Basic and diluted $(0.27) $(0.66)
Shares used in computing net loss per share:
Basic and diluted 15,567 13,822
Pro forma (excluding acquisition-related
charges):(1)
Net loss $(1,936) $(636)
Basic and diluted net loss per share $(0.12) $(0.05)
(1) Pro forma presentation excludes amortization of intangible
assets and amortization of stock compensation expense, net of
tax.
Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Six Months Ended
December 31,
2002 2001
Revenues:
Software licenses $6,099 $8,267
Service and maintenance 19,255 19,640
Equipment and supplies 8,650 10,619
Total revenues 34,004 38,526
Cost of revenues:
Software licenses 854 664
Service and maintenance 10,654 9,862
Equipment and supplies 6,492 7,667
Total cost of revenues 18,000 18,193
Gross profit 16,004 20,333
Operating expenses:
Sales and marketing 9,390 9,488
Product development and engineering:
Product development and engineering 6,602 7,116
Stock compensation expense 63 204
General and administrative 5,844 5,851
Amortization of intangible assets 4,425 16,719
Total operating expenses 26,324 39,378
Loss from operations (10,320) (19,045)
Other income (expense), net 283 (254)
Loss before provision for income taxes and
cumulative effect of accounting change (10,037) (19,299)
Provision for income taxes 30 90
Net loss before cumulative effect of accounting
change (10,067) (19,389)
Cumulative effect of accounting change (13,764) -
Net loss $(23,831) $(19,389)
Basic and diluted:
Loss per share before cumulative effect of
accounting change $(0.65) $(1.41)
Cumulative effect of accounting change $(0.88) -
Net loss per share $(1.53) $(1.41)
Shares used in computing basic and diluted net
loss per share: 15,556 13,799
Pro forma:(1)
Net loss $(5,579) $(2,466)
Basic and diluted net loss per share $(0.36) $(0.18)
(1) Pro forma presentation is before the cumulative effect of
accounting change and excludes amortization of intangible assets
and amortization of stock compensation expense, net of tax.
Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
December 31, June 30,
2002 2002
Assets
Current assets:
Cash and cash equivalents $24,222 $25,931
Accounts receivable 12,965 15,242
Other current assets 3,639 3,960
Total current assets 40,826 45,133
Property and equipment 6,233 6,955
Intangible assets 26,248 43,540
Other assets 1,758 1,689
Total assets $75,065 $97,317
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $4,154 $5,154
Accrued expenses 6,304 5,574
Deferred revenue and deposits 14,656 13,452
Current portion of long-term debt 253 253
Total current liabilities 25,367 24,433
Long-term debt 253 253
Total liabilities 25,620 24,686
Stockholders' equity
Common stock 16 16
Additional paid-in-capital 163,543 164,022
Deferred compensation (235) (474)
Accumulated other comprehensive income 1,210 182
Treasury stock (4,681) (4,538)
Retained deficit (110,408) (86,577)
Total stockholders' equity 49,445 72,631
Total liabilities and stockholders'
equity $75,065 $97,317
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