Attached files

file filename
8-K - 8-K - BOTTOMLINE TECHNOLOGIES INCd33209d8k.htm

Exhibit 99.1

 

LOGO

Bottomline Technologies Reports First Quarter Results

Record Subscription and Transaction Revenue Highlights First Quarter

PORTSMOUTH, N.H. – October 29, 2015 – Bottomline Technologies (NASDAQ: EPAY), a leading provider of cloud-based payment, invoice and digital banking solutions, today reported financial results for the first quarter ended September 30, 2015.

Subscription and transaction revenues, which are primarily related to the company’s cloud platforms, increased 15% on a constant currency basis from the first quarter of last year to $46.2 million. Revenues overall for the first quarter were $82.9 million, an increase of $1.5 million, or 5% on a constant currency basis, from the first quarter of last year.

Gross margin for the first quarter was $47.5 million, an increase of $0.5 million from the first quarter of last year. Net loss for the first quarter was $4.3 million compared to $3.3 million for the first quarter of last year. Net loss per share was $0.11 in the first quarter compared to $0.09 in the first quarter of last year.

Core net income for the first quarter was $14.2 million. Core net income excludes certain items as discussed in the “Non-GAAP Financial Measures” section that follows. Core earnings per share was $0.37.

“We are pleased with the results for the first quarter and our progress against our strategic plan”, said Rob Eberle, President and CEO of Bottomline Technologies. “The market reception to our new innovations has been very positive. Our pipeline for these new products is very strong and as we convert that pipeline to new customer contracts, we will be driving future subscription and transaction revenues. We are executing against our strategic plan and are confident our efforts will produce increased shareholder value in the years to come.”


First Quarter Customer Highlights

 

    Twenty-four leading institutions selected Paymode-X, Bottomline’s leading cloud-based payments automation platform.

 

    Signed BNY Mellon as a new bank channel partner for Paymode-X.

 

    Chosen by five leading organizations, including Magna Carta Companies and Pacific Specialty Insurance Company, to provide Bottomline’s cloud-based legal spend management solutions to automate, manage and control their legal spend.

 

    Signed seven new Digital Banking deals, enabling banks to grow revenues and relationships by deploying innovative digital capabilities.

 

    Companies such as Lloyds Banking Group, Atom Bank and Weatherbys Bank Limited selected Bottomline’s Financial Messaging solution to improve operating efficiencies and optimize the effectiveness of their financial transactions by utilizing the SWIFT global network.

 

    Organizations such as Genworth Mortgage, Indiana University and State of Nevada chose Bottomline’s payment automation solutions to extend their payments capabilities and improve efficiencies.

First Quarter Strategic Corporate Highlights

 

    Named a top 100 global provider of financial technology on the 2015 IDC Financial Insights FinTech Rankings.

 

    Introduced PartnerSelect. Leveraging a secure network, this SaaS based platform strengthens the working relationships between insurance carriers and their law firm partners, streamlines the process of selecting outside counsel and assigning legal matters and improves case outcomes by ensuring that the right attorneys are chosen for every case.


Non-GAAP Financial Measures

We have presented supplemental non-GAAP financial measures as part of this earnings release. The presentation of this non-GAAP financial information should not be considered in isolation from, or as a substitute for, our financial results presented in accordance with GAAP. Core net income, core earnings per share and constant currency information are non-GAAP financial measures.

Core net income and core earnings per share exclude certain items, specifically amortization of intangible assets, equity-based compensation, acquisition and integration-related expenses, restructuring related costs, non-cash pension expenses, non-core charges associated with our convertible notes, global ERP system implementation costs and other non-core or non-recurring gains or losses that arise from time to time.

Non-core charges associated with our convertible notes consist of non-cash interest expense. Acquisition and integration-related expenses include legal and professional fees and other direct transaction costs associated with our business and asset acquisitions, costs associated with integrating acquired businesses, including costs for transitional employees or services, integration related professional services costs and other incremental charges we incur as a direct result of our acquisition and integration efforts. Global enterprise resource planning (ERP) system implementation costs relate to direct and incremental costs incurred in connection with our implementation of a new, global ERP solution and the related technology infrastructure.

Periodically, such as in periods that include significant foreign currency volatility, we present certain metrics on a “constant currency” basis, to show the impact of period to period results normalized for the impact of foreign currency rate changes. We calculate constant currency information by translating prior period financial results using current period foreign exchange rates.

We believe 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, including more meaningful comparisons of financial results to historical periods and to the financial results of less acquisitive peer and competitor companies. Our 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 our board of directors with respect to our core 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. In computing diluted core earnings per share, we exclude the effect of shares issuable under our convertible notes to the extent that any such dilution would be offset by our note hedges; the note hedges would be considered an anti-dilutive security under GAAP.


Non-GAAP Financial Measures (Continued)

A reconciliation of our GAAP results to our non-GAAP results for the three months ended September 30, 2015 and 2014 is as follows:

 

     Three Months Ended
September 30, (in
thousands)
 
     2015      2014  

GAAP net loss

   $ (4,253    $ (3,268

Amortization of intangible assets

     7,279         7,184   

Equity-based compensation

     7,588         6,331   

Acquisition and integration-related expenses

     110         427   

Restructuring expenses

     20         286   

Global ERP system implementation costs

     257         —     

Non-cash pension expense (benefit)

     36         (3

Non-cash interest expense

     3,161         2,965   
  

 

 

    

 

 

 

Core net income

   $ 14,198       $ 13,922   
  

 

 

    

 

 

 

The table below is a comparative summary of our total revenues and our subscription and transaction revenues shown with a constant currency growth rate:

 

     Three Months Ended
September 30,
     % Increase  
     2015      2014      GAAP     Constant
Rates(1)
 
     (in thousands)               

Subscription and Transaction Revenues

   $ 46,197       $ 40,871         13     15

Total Revenues

     82,881         81,343         2     5

 

1)  Constant currency information compares results between periods assuming exchange rates had remained constant period-over-period. We calculate constant currency information by translating prior- period results using current-year GAAP foreign exchange rates.


About Bottomline Technologies

Bottomline Technologies (NASDAQ: EPAY) powers mission-critical business transactions. We help our customers optimize financially-oriented operations and build deeper customer and partner relationships by providing a trusted and easy-to-use set of cloud-based digital banking, fraud prevention, payment, financial document, insurance, and healthcare solutions. Over 10,000 corporations, financial institutions, and banks benefit from Bottomline solutions. Headquartered in the United States, Bottomline also maintains offices in Europe and Asia-Pacific. For more information, visit www.bottomline.com.

Bottomline Technologies, Paymode-X and the BT logo are trademarks of Bottomline Technologies (de), Inc. which are registered in certain jurisdictions. All other brand/product names are trademarks of their respective holders.

Cautionary Language

This press release may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements reflecting our expectations about our ability to execute on our strategic plans, achieve future growth and profitability, expand margins and increase shareholder value. Any statements that are not statements of historical fact (including but not limited to statements containing the words “believes,” “plans,” “anticipates,” “expects,” “look forward”, “confident”, “estimates” and similar expressions) should be considered to be forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors including, among others, 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’ operational and financial results, refer to our Form 10-K for the fiscal year ended June 30, 2015 and the 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:

Rick Booth

Bottomline Technologies

603-501-6270 rbooth@bottomline.com


Bottomline Technologies

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

     Three Months Ended
September 30,
 
     2015     2014  

Revenues:

    

Subscriptions and transactions

   $ 46,197      $ 40,871   

Software licenses

     4,115        5,658   

Service and maintenance

     30,784        32,960   

Other

     1,785        1,854   
  

 

 

   

 

 

 

Total revenues

     82,881        81,343   

Cost of revenues:

    

Subscriptions and transactions

     20,734        19,328   

Software licenses

     288        395   

Service and maintenance

     12,978        13,284   

Other

     1,335        1,306   
  

 

 

   

 

 

 

Total cost of revenues

     35,335        34,313   
  

 

 

   

 

 

 

Gross profit

     47,546        47,030   

Operating expenses:

    

Sales and marketing

     20,155        19,202   

Product development and engineering

     11,260        11,681   

General and administrative

     8,823        8,277   

Amortization of intangible assets

     7,279        7,184   
  

 

 

   

 

 

 

Total operating expenses

     47,517        46,344   
  

 

 

   

 

 

 

Income from operations

     29        686   

Other expense, net

     (3,671     (3,647
  

 

 

   

 

 

 

Loss before income taxes

     (3,642     (2,961

Provision for income taxes

     611        307   
  

 

 

   

 

 

 

Net loss

   $ (4,253   $ (3,268

Basic and diluted net loss per share

   $ (0.11   $ (0.09
  

 

 

   

 

 

 

Shares used in computing basic and diluted net loss per share:

     38,004        37,647   
  

 

 

   

 

 

 

Core net income (1)

   $ 14,198      $ 13,922   
  

 

 

   

 

 

 

Diluted core net income per share(2)

   $ 0.37      $ 0.37   
  

 

 

   

 

 

 

 

1)  Core net income excludes charges for amortization of intangible assets of $7,279 and $7,184, acquisition and integration-related expenses of $110 and $427, restructuring expenses of $20 and $286, equity-based compensation of $7,588 and $6,331, non-cash pension expense (benefit) of $36 and ($3), global ERP system implementation costs of $257 and $0 and non-core charges associated with our convertible notes of $3,161 and $2,965 for the three months ended September 30, 2015 and 2014, respectively.

 

2)  Shares used in computing diluted core earnings per share were 38,519 and 38,069 for the three months ended September 30, 2015 and 2014, respectively. In computing diluted core earnings per share, we exclude the effect of shares issuable under our convertible notes to the extent that any such dilution would be offset by our note hedges; the note hedges would be considered an anti-dilutive security under GAAP.


Bottomline Technologies

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

     September 30,
2015
    June 30,
2015
 

Assets

    

Current assets:

    

Cash, cash equivalents and marketable securities

   $ 128,296      $ 144,388   

Accounts receivable

     60,584        65,140   

Other current assets

     20,150        19,713   
  

 

 

   

 

 

 

Total current assets

     209,030        229,241   

Property and equipment, net

     50,008        47,579   

Goodwill and intangible assets, net

     385,561        400,650   

Other assets

     11,810        11,014   
  

 

 

   

 

 

 

Total assets

   $ 656,409      $ 688,484   
  

 

 

   

 

 

 

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 11,259      $ 11,623   

Accrued expenses

     22,835        24,436   

Deferred revenue

     62,527        70,383   
  

 

 

   

 

 

 

Total current liabilities

     96,621        106,442   

Convertible senior notes

     162,626        159,760   

Deferred revenue, non-current

     18,127        17,624   

Deferred income taxes

     34,203        35,542   

Other liabilities

     19,328        20,578   
  

 

 

   

 

 

 

Total liabilities

     330,905        339,946   

Stockholders’ equity

    

Common stock

     41        40   

Additional paid-in-capital

     568,013        560,083   

Accumulated other comprehensive loss

     (19,972     (13,511

Treasury stock

     (54,418     (34,167

Accumulated deficit

     (168,160     (163,907
  

 

 

   

 

 

 

Total stockholders’ equity

     325,504        348,538   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 656,409      $ 688,484