Bottomline Technologies Reports Third Quarter Results; Operating Results Highlight Quarter.Business Editors 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)--April 29, 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 third quarter of fiscal 2003. Revenues for the third quarter were $18.6 million compared with $17.7 million in the second quarter of the current fiscal year and $18.0 million in the third quarter of last year. The net loss for the third quarter was $2.2 million, or a net loss per share of $0.14, compared with a net loss of $9.1 million and a net loss per share of $0.59 in the third quarter of last year, reflecting a decrease in the 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. during the current quarter. During the third 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 of approximately $2.2 million and amortization of stock compensation charges of $31,000 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 income for the third quarter was $41,000, or a pro forma net income per share of $0.00. "During the March quarter, we achieved the goal we established at the beginning of the fiscal year of pro-forma break-even results by the third quarter. Our goal has been improvement. We are encouraged with the progress achieved in the quarter with respect to profit, revenues and margins. We also were named an 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) Advanced Business Partner and signed the first outsourced payments contract in 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. with a three year commitment," 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. "The quarter's results indicate our ability to manage expenses to sustainable revenues while at the same time investing in new markets and growth opportunities." Revenues for the nine months ended March 31, 2003 were $52.6 million. The net loss for the nine months ended March 31, 2003 was $26.1 million, or a net loss per share of $1.67. The results for the nine months ended March 31, 2003 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 $12.3 million, or a net loss per share of $0.79. During the nine months ended March 31, 2003, operating expenses included acquisition-related charges of $6.8 million, which represented amortization of intangible assets of approximately $6.7 million and amortization of stock compensation charges of $95,000 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 nine months ended March 31, 2003 was $5.5 million, or a pro forma net loss per share of $0.36. Bottomline has presented non GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). financial measures in the form of pro forma results as part of this earnings release since management believes it is a more accurate measurement of Bottomline's overall operating performance. A reconciliation of the GAAP net loss to the pro forma results for the third quarter and year to date period is as follows:
Three Months
Ended Nine Months Ended
March 31, March 31,
2003 2002 2003 2002
GAAP Net Loss $(2,225) $(9,056) $(26,056) $(28,445)
Cumulative Effect of Accounting
Change - - 13,764 -
Amortization of Intangible Assets 2,235 8,297 6,660 25,016
Stock Compensation Expense 31 103 95 307
Pro forma Income (Loss) $41 $(656) $(5,537) $(3,122)
Customer Highlights: -- Bottomline sold financial resource management solutions to new and existing customer organizations, including Sisters of Providence Providence, city (1990 pop. 160,728), state capital and seat of Providence co., NE R.I., a port at the head of Providence Bay; founded by Roger Williams 1636, inc. as a city 1832. Health Systems, Circuit City Stores, Commonwealth of Massachusetts Massachusetts (măsəch  `sĭts), most populous of the New England states of the NE United States. , Christies, Sainsbury's, Hitachi Hitachi (hētä`chē), city (1990 pop. 202,141), Ibaraki prefecture, E central Honshu, Japan, on the Kashima Sea. The city is a leading producer of Japan's electrical equipment.
Semiconductor, Walt Disney Noun 1. Walt Disney - United States film maker who pioneered animated cartoons and created such characters as Mickey Mouse and Donald Duck; founded Disneyland (1901-1966) Disney, Walter Elias Disney Company and Boston College Boston College, main campus at Chestnut Hill, Mass.; coeducational; Jesuit; est. and opened 1863. Actually a university, the school's Chestnut Hill campus comprises colleges of arts and sciences and business administration, the graduate school, and schools of nursing . -- Bottomline North America signed its first outsourced payments contract. This multi-year contract with delaTerra Capital streamlines payments by automating the settlement and electronic payment for agricultural goods. Bottomline's outsourced services platform met delaTerra's requirement for a fully supported, highly robust solution delivered on a monthly subscription basis. -- Safeco Safeco Corporation (NYSE: SAF) is a major American national insurance company. It has naming rights to the Seattle Mariners' baseball stadium, Safeco Field. Safeco was founded in Seattle, Washington in 1923 by Hawthorne K. signed on to utilize Bottomline's Legal Billing service with their law firms This list of the world's largest law firms by revenue is taken from The Lawyer and The American Lawyer and is ordered by 2006 revenue:[1]
their legal billing. Bottomline's Legal Billing group implemented several hundred law firms during the quarter in support of the rollout, which follows a highly successful regional pilot program. -- 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). was selected by one of the largest global
banks under a multi-year arrangement to outsource the bank's corporate customers multi-currency check production. Corporate and Product Highlights: -- During the third quarter Bottomline was named an IBM Advanced Business Partner. Teamed together, Bottomline and IBM will provide customers with cash management and treasury software and services to help them lower their financial transaction costs, improve enterprise-wide processes and visibility, and enhance security and fiscal control. -- Demand for Bottomline's WebSeries and PayBase(R) technology platforms continues in the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. marketplace. Reaching new and existing customers, Bottomline Europe closed a total of 53 sales of these products during the third quarter. -- Bottomline North America became fully operational at an AT&T regional Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the Data Center, which serves as the primary hosting partner for Bottomline's Legal Billing and Outsourced Services offerings. Focusing on the needs of customers, Bottomline selected AT&T because it offers the industry's most reliable, secure and scaleable Web hosting service A web hosting service is a type of Internet hosting service that allows individuals and organizations to provide their own websites accessible via the World Wide Web. Web hosts are companies that provide space on a server they own for use by their clients as well as providing for business critical applications. -- During the third quarter, Bottomline sold 270,000 shares of its common stock to General Atlantic Partners, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control for $1.5 million. The proceeds will be used to facilitate Bottomline's domestic and international growth strategies. The sale of an additional 730,000 shares was provided for by the agreement with General Atlantic but will not be completed since the requisite clearance could not be obtained from Nasdaq to effect such sale without stockholder approval. Bottomline will host a conference call to discuss its financial results beginning at 5:00 p.m. today. Please see the corresponding advisory issued April 22, 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 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. and expected benefits of use of our 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 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. 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 are 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
March 31,
2003 2002
Revenues:
Software licenses $3,598 $4,231
Service and maintenance 10,588 9,088
Equipment and supplies 4,458 4,673
Total revenues 18,644 17,992
Cost of revenues:
Software licenses 425 274
Service and maintenance 4,996 4,119
Equipment and supplies 3,593 3,430
Total cost of revenues 9,014 7,823
Gross profit 9,630 10,169
Operating expenses:
Sales and marketing 4,014 4,728
Product development and engineering:
Product development and engineering 2,487 3,271
Stock compensation expense 31 103
General and administrative 2,661 2,759
Amortization of intangible assets 2,235 8,297
Total operating expenses 11,428 19,158
Loss from operations (1,798) (8,989)
Other income (expense), net (412) 46
Loss before provision for income taxes (2,210) (8,943)
Provision for income taxes 15 113
Net loss (2,225)$(9,056)
Net loss per share:
Basic and diluted $(0.14) $(0.59)
Shares used in computing net loss per share:
Basic and diluted 15,619 15,470
Pro forma (excluding acquisition-related charges):(1)
Net income (loss) $41 $(656)
Basic and diluted net income (loss) per share $0.00 $(0.04)
_______________
(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)
Nine Months Ended
March 31,
2003 2002
Revenues:
Software licenses $9,697 $12,498
Service and maintenance 29,843 28,728
Equipment and supplies 13,108 15,292
Total revenues 52,648 56,518
Cost of revenues:
Software licenses 1,279 938
Service and maintenance 15,649 13,981
Equipment and supplies 10,085 11,097
Total cost of revenues 27,013 26,016
Gross profit 25,635 30,502
Operating expenses:
Sales and marketing 13,403 14,216
Product development and engineering:
Product development and engineering 9,089 10,387
Stock compensation expense 95 307
General and administrative 8,505 8,610
Amortization of intangible assets 6,660 25,016
Total operating expenses 37,752 58,536
Loss from operations (12,117) (28,034)
Other expense, net (130) (208)
Loss before provision for income taxes and
cumulative effect of accounting change (12,247) (28,242)
Provision for income taxes 45 203
Net loss before cumulative effect of accounting
change (12,292) (28,445)
Cumulative effect of accounting change 13,764 -
Net loss $(26,056)$(28,445)
Basic and diluted:
Loss per share before cumulative effect of
accounting change $(0.79) $(1.98)
Cumulative effect of accounting change (0.88) -
Net loss per share $(1.67) $(1.98)
Shares used in computing basic and diluted net loss
per share: 15,577 14,356
Pro forma (excluding acquisition-related
charges):(1)
Net loss $(5,537) $(3,122)
Basic and diluted net loss per share $(0.36) $(0.22)
_______________
(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 consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. (in thousands)
March 31,June 30,
2003 2002
Assets
Current assets:
Cash and cash equivalents $23,879 $25,931
Accounts receivable 13,483 15,242
Other current assets 3,952 3,960
Total current assets 41,314 45,133
Property and equipment 6,203 6,955
Intangible assets 23,749 43,540
Other assets 1,349 1,689
Total assets $72,615 $97,317
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $4,698 $5,154
Accrued expenses 5,794 5,574
Deferred revenue and deposits 13,092 13,452
Current portion of long-term debt 253 253
Total current liabilities 23,837 24,433
Long-term debt - 253
Total liabilities 23,837 24,686
Stockholders' equity
Common stock 16 16
Additional paid-in-capital 164,809 164,022
Deferred compensation (203) (474)
Accumulated other comprehensive income 917 182
Treasury stock (4,128) (4,538)
Retained deficit (112,633)(86,577)
Total stockholders' equity 48,778 72,631
Total liabilities and stockholders' equity $72,615 $97,317
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