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| 8-K - FORM 8-K - BOTTOMLINE TECHNOLOGIES INC | d8k.htm |
Exhibit 99.1
Bottomline Technologies Reports Third Quarter Results
Strong Growth in Revenue and Orders Highlight Third Quarter Results
PORTSMOUTH, N.H. – April 28, 2011 – Bottomline Technologies (NASDAQ: EPAY), a leading provider of collaborative payment, invoice and document automation solutions, today reported financial results for the third quarter ended March 31, 2011.
Revenues for the third quarter were $48.8 million, an increase of $9.0 million, or 23%, from the third quarter of last year. Subscriptions and transactions revenue increased 25% from the third quarter of last year to $13.5 million.
Gross margin for the third quarter was $25.6 million, an increase of $3.3 million from the third quarter of last year. Net income for the third quarter was $1.1 million, or net income per share of $0.03.
Core net income for the third quarter was $8.7 million. Core net income increased $2.2 million, or 34%, from the third quarter of last year. Core net income excludes acquisition-related expenses of $3.6 million, restructuring expenses of $0.7 million and equity-based compensation of $3.3 million. Core earnings per share was $0.26.
“We executed operationally and advanced the business strategically during the quarter,” said Rob Eberle, President and CEO of Bottomline Technologies. “Strong revenue growth of 23% drove financial performance exceeding expectations in every key metric. We continued to launch exciting and innovative new products highlighted by a major new release of our WebSeries® Global Cash Management platform in March. Strategically, the combination of Allegient Systems and Bottomline creates the clear legal spend management leader in an immediately accretive transaction. The strong financial performance, new product release and acquisitions position Bottomline for continued growth and margin expansion.”
During the third quarter, Bottomline announced the acquisition of Allegient Systems, a provider of advanced capabilities for legal e-billing, bill review and analytics. Allegient’s proprietary Software as a Service (SaaS) platform and value-added turnkey solutions will complement and extend Bottomline’s Legal eXchange® portfolio, offering the combined customer base of well over 100 leading insurers unparalleled capabilities to effectively manage their legal expenses. The transaction closed on April 1st and will be immediately accretive to core net income.
Third Quarter Customer Highlights
| • | Chosen by three organizations, including one of North America’s largest property and casualty insurers and a leading life insurer in Canada, to provide invoice automation with Bottomline’s SaaS-based solution for legal spend management, Legal eXchange. |
| • | Expanded relationships with existing payments, invoicing and document automation customers 20th Century Fox, Avery Dennison, BNP Paribas, British Telecom, Cigna, DST Systems, Forest City Enterprises, JC Bamford Excavators, Marathon Oil, McKesson, Praxair, Related Companies, UK Power Networks and Travelex. |
| • | Increased penetration into the healthcare vertical by adding and expanding relationships with Baxter Healthcare, Baptist Health, Catholic Health Services, Johnson and Johnson Medical Limited, Presbyterian Intercommunity Hospital and United Health Group. |
| • | A major global bank went live with WebSeries Global Cash Management, launching their next generation treasury solution to be used by multiple markets and verticals. |
Third Quarter Strategic Corporate Highlights
| • | Announced the acquisition of Allegient Systems, a provider of advanced technology and services for legal e-billing, bill review and analytics. The SaaS-based platform and value-added turnkey solutions will complement and extend Bottomline’s Legal eXchange solution, growing the combined customer base to more than 100 leading insurers. |
| • | Acquired Direct Debit Limited (DDL), a London-based provider of payments automation software for direct debits and receivables management for corporations, banks, financial institutions and government organizations. The addition of DDL extends Bottomline’s global payments capabilities and portfolio of white-labeled transaction banking solutions. |
| • | Expanded our presence in Australia with the acquisition of Business Information Technology Group (BITG), a leading Australia-based distributor and channel partner. |
| • | Released additional mobile capabilities for the banking, legal and healthcare industries, expanding Bottomline’s ability to support global business requirements with the most innovative technology. These solutions provide elegant, intuitive and easy access to solutions that help position our customers for market leadership today and tomorrow. |
| • | Announced new personalization and usability features that dramatically enhance the user experience within the WebSeries Global Cash Management platform, enabling banks to serve multiple markets, verticals and geographies with a single integrated platform. |
| • | Recognized by Global Finance magazine as a recipient of their annual awards highlighting the “World’s Best Treasury and Cash Management Providers for 2011”. |
Bottomline has presented supplemental non-GAAP financial measures as part of this earnings release. Core net income and core earnings per share are non-GAAP financial measures. The non-GAAP financial measures exclude certain items, specifically amortization of intangible assets, impairment losses on equity investments, equity-based compensation, acquisition-related expenses (including acquisition-related earn-outs) and restructuring related costs. The presentation of this non-GAAP financial information should not be considered in isolation from, or as a substitute for, the financial results presented in accordance with GAAP. Bottomline believes that these supplemental non-GAAP financial measures are useful to investors because they allow 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 financial measures internally to assess the ongoing performance of the company. Additionally, the same non-GAAP information is used for planning purposes including the preparation of operating budgets and in communications with the board of directors in respect of financial performance. Since this information is not a GAAP measurement of financial performance, there are material limitations to its usefulness on a stand-alone basis, including the lack of comparability of this presentation to the GAAP financial results of other companies. Shares used in computing core earnings per share are calculated using the treasury stock method, which assumes full exercise of in-the-money stock options and warrants and full vesting of restricted stock. A reconciliation of the GAAP results to the non-GAAP results for the three and nine month periods ended March 31, 2011 and 2010 is as follows:
| Three Months Ended March 31, |
Nine Months Ended March 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| GAAP net income |
$ | 1,095 | $ | 950 | $ | 5,835 | $ | 2,826 | ||||||||
| Amortization of intangible assets |
2,786 | 3,282 | 8,572 | 9,949 | ||||||||||||
| Equity-based compensation |
3,344 | 2,361 | 8,766 | 6,669 | ||||||||||||
| Acquisition-related expenses |
822 | (21 | ) | 1,572 | 508 | |||||||||||
| Restructuring expenses |
693 | (52 | ) | 753 | (52 | ) | ||||||||||
| Core net income |
$ | 8,740 | $ | 6,520 | $ | 25,498 | $ | 19,900 | ||||||||
About Bottomline Technologies
Bottomline Technologies (NASDAQ: EPAY) provides collaborative payment, invoice and document automation solutions to corporations, financial institutions and banks around the world. The company’s solutions are used to streamline, automate and manage processes involving payments, invoicing, global cash management, supply chain finance and transactional documents. Organizations trust these solutions to meet their needs for cost reduction, competitive differentiation and optimization of working capital. Headquartered in the United States, Bottomline also maintains offices in Europe and Asia-Pacific. For more information, visit www.bottomline.com.
Bottomline Technologies, WebSeries, Legal eXchange, Allegient Systems, Paymode-X and the BT logo are trademarks of Bottomline Technologies (de), Inc. which may be registered in certain jurisdictions. All other brand/product names may be trademarks of their respective owners.
Cautionary Language
This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act 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 and general economic conditions. For additional discussion of factors that could impact Bottomline Technologies’ financial results, refer to the Company’s Form 10-K for the fiscal year ended June 30, 2010 and any subsequently filed Form 10-Q’s and Form 8-K’s or amendments thereto. 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.
Media Contact:
Kevin Donovan
Bottomline Technologies
603-501-5240
kdonovan@bottomline.com
Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
| Three Months Ended March 31, |
||||||||
| 2011 | 2010 | |||||||
| Revenues: |
||||||||
| Software licenses |
$ | 4,060 | $ | 3,657 | ||||
| Subscriptions and transactions |
13,486 | 10,794 | ||||||
| Service and maintenance |
29,120 | 23,043 | ||||||
| Equipment and supplies |
2,145 | 2,326 | ||||||
| Total revenues |
48,811 | 39,820 | ||||||
| Cost of revenues: |
||||||||
| Software licenses |
444 | 253 | ||||||
| Subscriptions and transactions (1) |
7,668 | 5,598 | ||||||
| Service and maintenance (1) |
13,416 | 9,921 | ||||||
| Equipment and supplies |
1,665 | 1,779 | ||||||
| Total cost of revenues |
23,193 | 17,551 | ||||||
| Gross profit |
25,618 | 22,269 | ||||||
| Operating expenses: |
||||||||
| Sales and marketing (1) |
10,441 | 8,649 | ||||||
| Product development and engineering (1) |
6,167 | 4,959 | ||||||
| General and administrative (1) |
5,127 | 3,795 | ||||||
| Amortization of intangible assets |
2,786 | 3,282 | ||||||
| Total operating expenses |
24,521 | 20,685 | ||||||
| Income from operations |
1,097 | 1,584 | ||||||
| Other income, net |
134 | 45 | ||||||
| Income before income taxes |
1,231 | 1,629 | ||||||
| Provision for income taxes |
136 | 679 | ||||||
| Net income |
$ | 1,095 | $ | 950 | ||||
| Basic net income per share attributable to common stockholders |
$ | 0.03 | $ | 0.04 | ||||
| Diluted net income per share attributable to common stockholders |
$ | 0.03 | $ | 0.03 | ||||
| Shares used in computing basic net income per share: |
32,017 | 25,664 | ||||||
| Shares used in computing diluted net income per share: |
34,142 | 27,440 | ||||||
| Core net income (excludes amortization of intangible assets, acquisition-related expenses, restructuring expenses and stock compensation expense):(2) |
||||||||
| Net income |
$ | 8,740 | $ | 6,520 | ||||
| Diluted net income per share (3) |
$ | 0.26 | $ | 0.24 | ||||
|
(1) Stock-based compensation is allocated as follows: |
||||||||
| Cost of revenues: subscriptions and transactions |
$ | 160 | $ | 70 | ||||
| Cost of revenues: service and maintenance |
531 | 434 | ||||||
| Sales and marketing |
1,397 | 837 | ||||||
| Product development and engineering |
470 | 296 | ||||||
| General and administrative |
786 | 724 | ||||||
| (2) | Core net income excludes charges for amortization of intangible assets of $2,786 and $3,282, acquisition-related expenses of $822 and ($21), restructuring expenses of $693 and ($52) and stock compensation expense of $3,344 and $2,361, for the three months ended March 31, 2011 and 2010, respectively. |
| (3) | Shares used in computing diluted core net income per share were 34,142 and 27,457 for the three months ended March 31, 2011 and 2010, respectively. |
Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
| Nine Months Ended March 31, |
||||||||
| 2011 | 2010 | |||||||
| Revenues: |
||||||||
| Software licenses |
$ | 11,702 | $ | 10,408 | ||||
| Subscriptions and transactions |
38,051 | 29,543 | ||||||
| Service and maintenance |
79,124 | 69,953 | ||||||
| Equipment and supplies |
6,255 | 6,594 | ||||||
| Total revenues |
135,132 | 116,498 | ||||||
| Cost of revenues: |
||||||||
| Software licenses |
873 | 792 | ||||||
| Subscriptions and transactions (1) |
20,789 | 14,636 | ||||||
| Service and maintenance (1) |
34,249 | 30,047 | ||||||
| Equipment and supplies |
4,820 | 4,991 | ||||||
| Total cost of revenues |
60,731 | 50,466 | ||||||
| Gross profit |
74,401 | 66,032 | ||||||
| Operating expenses: |
||||||||
| Sales and marketing (1) |
28,251 | 25,356 | ||||||
| Product development and engineering (1) |
16,655 | 13,802 | ||||||
| General and administrative (1) |
14,408 | 12,334 | ||||||
| Amortization of intangible assets |
8,572 | 9,949 | ||||||
| Total operating expenses |
67,886 | 61,441 | ||||||
| Income from operations |
6,515 | 4,591 | ||||||
| Other income, net |
448 | 173 | ||||||
| Income before income taxes |
6,963 | 4,764 | ||||||
| Provision for income taxes |
1,128 | 1,938 | ||||||
| Net income |
$ | 5,835 | $ | 2,826 | ||||
| Basic net income per share attributable to common stockholders |
$ | 0.19 | $ | 0.11 | ||||
| Diluted net income per share attributable to common stockholders |
$ | 0.18 | $ | 0.11 | ||||
| Shares used in computing basic net income per share: |
31,367 | 25,052 | ||||||
| Shares used in computing diluted net income per share: |
33,127 | 26,061 | ||||||
| Core net income (excludes amortization of intangible assets, acquisition-related expenses, restructuring expenses and stock compensation expense):(2) |
||||||||
| Net income |
$ | 25,498 | $ | 19,900 | ||||
| Diluted net income per share (3) |
$ | 0.77 | $ | 0.75 | ||||
|
(1) Stock-based compensation is allocated as follows: |
||||||||
| Cost of revenues: subscriptions and transactions |
$ | 385 | $ | 184 | ||||
| Cost of revenues: service and maintenance |
1,414 | 1,183 | ||||||
| Sales and marketing |
3,240 | 2,324 | ||||||
| Product development and engineering |
1,248 | 828 | ||||||
| General and administrative |
2,479 | 2,150 | ||||||
| (2) | Core net income excludes charges for amortization of intangible assets of $8,572 and $9,949, acquisition-related expenses of $1,572 and $508, restructuring expenses of $753 and ($52) and stock compensation expense of $8,766 and $6,669, for the nine months ended March 31, 2011 and 2010, respectively. |
| (3) | Shares used in computing diluted core net income per share were 33,127 and 26,407 for the nine months ended March 31, 2011 and 2010, respectively. |
Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
| March 31, 2011 |
June 30, 2010 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash, cash equivalents and short-term investments |
$ | 147,441 | $ | 122,809 | ||||
| Accounts receivable |
36,625 | 26,019 | ||||||
| Other current assets |
8,566 | 8,910 | ||||||
| Total current assets |
192,632 | 157,738 | ||||||
| Property and equipment, net |
13,996 | 14,561 | ||||||
| Intangible assets, net |
115,927 | 95,466 | ||||||
| Other assets |
623 | 1,617 | ||||||
| Total assets |
$ | 323,178 | $ | 269,382 | ||||
| Liabilities and stockholders’ equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 8,622 | $ | 5,857 | ||||
| Accrued expenses |
14,732 | 9,715 | ||||||
| Deferred revenue |
40,506 | 37,461 | ||||||
| Total current liabilities |
63,860 | 53,033 | ||||||
| Deferred revenue, non-current |
2,970 | 2,738 | ||||||
| Deferred income taxes |
4,473 | 1,432 | ||||||
| Other liabilities |
2,000 | 1,788 | ||||||
| Total liabilities |
73,303 | 58,991 | ||||||
| Stockholders’ equity |
||||||||
| Common stock |
34 | 32 | ||||||
| Additional paid-in-capital |
402,573 | 375,700 | ||||||
| Accumulated other comprehensive loss |
(4,462 | ) | (9,358 | ) | ||||
| Treasury stock |
(20,779 | ) | (22,657 | ) | ||||
| Accumulated deficit |
(127,491 | ) | (133,326 | ) | ||||
| Total stockholders’ equity |
249,875 | 210,391 | ||||||
| Total liabilities and stockholders’ equity |
$ | 323,178 | $ | 269,382 | ||||