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| 8-K - RESULTS OF OPERATIONS AND FINANCIAL CONDITION - BOTTOMLINE TECHNOLOGIES INC | q4fy10earnings.htm |
Bottomline Technologies Reports Fourth Quarter Results
19% Revenue Growth and Strong Fourth Quarter Results Complete Successful Year
PORTSMOUTH, N.H. – August 12, 2010 – Bottomline Technologies (NASDAQ: EPAY), a leading provider of collaborative payment, invoice and document automation solutions, today reported financial results for the fourth quarter ended June 30, 2010.
Revenues for the fourth quarter were $41.5 million, an increase of $6.6 million, or 19%, from the fourth quarter of last year. Subscriptions and transactions revenue increased 54% from the fourth quarter of last year to $11.9 million.
Gross margin for the fourth quarter was $23.0 million, an increase of $3.2 million from the fourth quarter of last year. Net income for the fourth quarter was $1.1 million, or diluted net income per share of $0.04.
Core net income for the fourth quarter was $6.8 million after excluding acquisition-related and restructuring expenses of $3.3 million and equity-based compensation of $2.3 million. Core net income increased $1.5 million, or 28%, from the fourth quarter of last year. Core earnings per share was $0.24 as compared with $0.22 in the fourth quarter of last year.
“Revenue growth of 19% highlighted a very strong quarter capping a very successful fiscal year,” said Rob Eberle, President and CEO of Bottomline Technologies. “The quarter’s strong financial performance demonstrates our focus on customer needs and our execution against our strategic plan. Our revenue growth, and in particular our strong growth in recurring revenues, helped drive core net income levels to almost double the prior fiscal year. In addition, with a larger cash balance we are well positioned to pursue strategic acquisitions to drive additional incremental growth. As we enter fiscal 2011, we are excited about the prospects for Bottomline Technologies.”
Revenues for the twelve months ended June 30, 2010 increased to $158.0 million as compared with $138.0 million in the same period last year. Net income for the twelve months ended June 30, 2010 was $4.0 million, or net income per share of $0.15.
Core net income for the twelve months ended June 30, 2010 was $26.7 million after excluding acquisition-related and restructuring expenses of $13.7 million and equity-based compensation of $9.0 million. Core net income increased $11.8 million or 79% from the twelve months ended June 30, 2009. Core earnings per share was $0.99 for the twelve months ended June 30, 2010 as compared with $0.62 in the same period last year.
Fourth Quarter Customer Highlights
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Deepened existing relationships and added new customers utilizing Bottomline solutions to reduce their paper usage and associated environmental impact and to gain greater efficiency, reduce cost and improve control in their payment and document automation processes, including: 1-800-FLOWERS.COM, Accenture, AstraZeneca, Blackrock Financial Management, Capital One Bank, Dell Computers, Estee Lauder, Gucci Group, Hertz Europe Service Center, Hyundai Motor Company, IBM, Marks & Spencer, Motorola, PriceWaterhouseCoopers, Rawlings Sporting Goods and Tesco.
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Signed five new Legal eXchange customers, including Riverport Insurance and Berkley Risk Administration Co. Legal eXchange enables increased control, analysis and reporting on legal spend management and vendor management while reducing use of paper and increasing efficiency.
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Expanded our portfolio of healthcare customers with Bottomline solutions from both new customers and expanding relationships at Advocate Condell Medical Center, Bon Secours Health System, DuBois Regional Medical Center, Elmore Medical Center, Ivinson Memorial Hospital, Montefiore Medical Center, Russell County Hospital, Sharp HealthCare, Sinai Health System, Thomas Jefferson University Hospitals and Wray Community District Hospital and Clinic.
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A leading Australian bank went live with an upgrade of WebSeries® Global Cash Management, enhancing the solution used by thousands of the bank’s business customers.
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Fourth Quarter Strategic Corporate Highlights
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Completed a follow-on offering raising net proceeds of approximately $57.5 million through the issuance of 4.2 million shares during the quarter putting the company in a strong position to pursue future growth, including through potential acquisitions.
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Launched Paymode-X™, an electronic order-to-pay network for business. The new Paymode-X offering represents the combination of Bottomline’s electronic settlement network (formerly PayMode®) and electronic invoicing solution (formerly Bottomline Business eXchange™). The Paymode-X supplier network encompasses more than 100,000 companies and is the largest and fastest-growing network of its kind.
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Awarded two patents during the quarter, evidencing Bottomline’s continued innovation and further extending its portfolio of intellectual property.
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Hosted Bottomline’s Insights Exchange for a group of customers, prospects and thought leaders to focus on industry trends and challenges affecting global banks, financial institutions and corporations. Trends in treasury, global cash management, financial supply chain automation and industry collaboration were discussed throughout the three day event, a partial list of organizations attending included Bank of America, SWIFT, Lloyds Banking Group, Barclays, Bain & Company, Treasury Strategies and Franklin Templeton Investments.
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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 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. 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 twelve month periods ended June 30, 2010 and 2009 is as follows:
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Three Months Ended
June 30,
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Twelve Months Ended
June 30,
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(in thousands)
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(in thousands)
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2010
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2009
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2010
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2009
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GAAP net income (loss)
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$ | 1,128 | $ | (3,600 | ) | $ | 3,954 | $ | (12,288 | ) | ||||||
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Amortization of intangible assets
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3,265 | 3,590 | 13,214 | 15,563 | ||||||||||||
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Equity-based compensation
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2,287 | 3,201 | 8,956 | 9,498 | ||||||||||||
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Acquisition-related expenses
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77 | 545 | 585 | 581 | ||||||||||||
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Restructuring expenses
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- | 1,548 | (52 | ) | 1,548 | |||||||||||
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Core net income
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$ | 6,757 | $ | 5,284 | $ | 26,657 | $ | 14,902 | ||||||||
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, 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 year ended June 30, 2009, and any subsequently filed Form 10-Q’s, 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)
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Three Months Ended
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June 30,
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2010
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2009
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Revenues:
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||||||||
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Software licenses
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$ | 3,200 | $ | 2,869 | ||||
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Subscriptions and transactions
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11,877 | 7,728 | ||||||
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Service and maintenance
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24,426 | 21,946 | ||||||
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Equipment and supplies
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1,989 | 2,340 | ||||||
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Total revenues
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41,492 | 34,883 | ||||||
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Cost of revenues:
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||||||||
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Software licenses
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289 | 225 | ||||||
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Subscriptions and transactions (1)
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5,916 | 3,631 | ||||||
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Service and maintenance (1)
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10,726 | 9,418 | ||||||
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Equipment and supplies
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1,524 | 1,774 | ||||||
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Total cost of revenues
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18,455 | 15,048 | ||||||
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Gross profit
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23,037 | 19,835 | ||||||
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Operating expenses:
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Sales and marketing (1)
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8,657 | 8,281 | ||||||
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Product development and engineering (1)
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5,056 | 4,694 | ||||||
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General and administrative (1)
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4,050 | 6,779 | ||||||
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Amortization of intangible assets
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3,265 | 3,590 | ||||||
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Total operating expenses
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21,028 | 23,344 | ||||||
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Income (loss) from operations
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2,009 | (3,509 | ) | |||||
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Other expense, net
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(265 | ) | (265 | ) | ||||
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Income (loss) before income taxes
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1,744 | (3,774 | ) | |||||
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Provision (benefit) for income taxes
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616 | (174 | ) | |||||
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Net income (loss)
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$ | 1,128 | $ | (3,600 | ) | |||
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Basic net income (loss) per share attributable to common stockholders
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$ | 0.04 | $ | (0.15 | ) | |||
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Diluted net income (loss) per share attributable to common stockholders
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$ | 0.04 | $ | (0.15 | ) | |||
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Shares used in computing basic net income (loss) per share:
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27,052 | 24,212 | ||||||
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Shares used in computing diluted net income (loss) per share:
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28,608 | 24,212 | ||||||
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Core net income (excludes amortization of intangible assets, acquisition-related expenses, restructuring expenses and stock compensation expense):(2)
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Net income
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$ | 6,757 | $ | 5,284 | ||||
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Diluted net income per share (3)
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$ | 0.24 | $ | 0.22 | ||||
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(1) Stock-based compensation is allocated as follows:
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Cost of revenues: subscriptions and transactions
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$ | 90 | $ | 53 | ||||
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Cost of revenues: service and maintenance
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376 | 256 | ||||||
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Sales and marketing
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827 | 617 | ||||||
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Product development and engineering
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277 | 154 | ||||||
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General and administrative
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717 | 2,121 | ||||||
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(2) Core net income excludes charges for amortization of intangible assets of $3,265 and $3,590, acquisition-related expenses of $77 and $545, restructuring expenses of zero and $1,548, and stock compensation expense of $2,287 and $3,201, for the three months ended June 30, 2010 and 2009, respectively.
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(3) Shares used in computing diluted core net income per share were 28,608 and 24,237 for the three months ended June 30, 2010 and 2009, respectively.
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Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
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Twelve Months Ended
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June 30,
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2010
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2009
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Revenues:
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Software licenses
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$ | 13,607 | $ | 13,309 | ||||
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Subscriptions and transactions
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41,421 | 31,196 | ||||||
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Service and maintenance
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94,379 | 84,220 | ||||||
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Equipment and supplies
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8,583 | 9,289 | ||||||
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Total revenues
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157,990 | 138,014 | ||||||
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Cost of revenues:
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Software licenses
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1,082 | 821 | ||||||
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Subscriptions and transactions (1)
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20,552 | 15,272 | ||||||
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Service and maintenance (1)
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40,772 | 37,873 | ||||||
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Equipment and supplies
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6,515 | 6,875 | ||||||
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Total cost of revenues
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68,921 | 60,841 | ||||||
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Gross profit
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89,069 | 77,173 | ||||||
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Operating expenses:
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Sales and marketing (1)
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34,013 | 32,517 | ||||||
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Product development and engineering (1)
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18,858 | 20,096 | ||||||
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General and administrative (1)
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16,383 | 20,915 | ||||||
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Amortization of intangible assets
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13,214 | 15,563 | ||||||
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Total operating expenses
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82,468 | 89,091 | ||||||
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Income (loss) from operations
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6,601 | (11,918 | ) | |||||
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Other (expense) income, net
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(93 | ) | 443 | |||||
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Income (loss) before income taxes
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6,508 | (11,475 | ) | |||||
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Provision for income taxes
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2,554 | 813 | ||||||
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Net income (loss)
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$ | 3,954 | $ | (12,288 | ) | |||
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Basic net income (loss) per share attributable to common stockholders
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$ | 0.15 | $ | (0.51 | ) | |||
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Diluted net income (loss) per share attributable to common stockholders
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$ | 0.15 | $ | (0.51 | ) | |||
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Shares used in computing basic net income (loss) per share:
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25,552 | 24,044 | ||||||
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Shares used in computing diluted net income (loss) per share:
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26,696 | 24,044 | ||||||
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Core net income (excludes amortization of intangible assets, acquisition-related expenses, restructuring expenses and stock compensation expense):(2)
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Net income
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$ | 26,657 | $ | 14,902 | ||||
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Diluted net income per share (3)
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$ | 0.99 | $ | 0.62 | ||||
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(1) Stock-based compensation is allocated as follows:
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Cost of revenues: subscriptions and transactions
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$ | 274 | $ | 227 | ||||
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Cost of revenues: service and maintenance
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1,559 | 878 | ||||||
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Sales and marketing
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3,151 | 2,489 | ||||||
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Product development and engineering
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1,106 | 718 | ||||||
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General and administrative
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2,866 | 5,186 | ||||||
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(2) Core net income excludes charges for amortization of intangible assets of $13,214 and $15,563, acquisition-related expenses of $585 and $581 restructuring expenses of $(52) and $1,548, and stock compensation expense of $8,956 and $9,498, for the twelve months ended June 30, 2010 and 2009, respectively.
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(3) Shares used in computing diluted core net income per share were 26,958 and 24,181 for the twelve months ended June 30, 2010 and 2009, respectively.
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Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
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June 30,
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June 30,
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2010
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2009
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Assets
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Current assets:
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Cash, cash equivalents and short-term investments
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$ | 122,809 | $ | 50,303 | ||||
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Accounts receivable
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26,019 | 23,118 | ||||||
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Other current assets
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8,910 | 5,531 | ||||||
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Total current assets
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157,738 | 78,952 | ||||||
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Property and equipment, net
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14,561 | 10,106 | ||||||
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Intangible assets, net
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95,466 | 89,589 | ||||||
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Other assets
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1,617 | 4,504 | ||||||
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Total assets
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$ | 269,382 | $ | 183,151 | ||||
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Liabilities and stockholders' equity
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Current liabilities:
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Accounts payable
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$ | 5,857 | $ | 5,955 | ||||
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Accrued expenses
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9,715 | 9,290 | ||||||
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Deferred revenue
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37,461 | 33,029 | ||||||
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Total current liabilities
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53,033 | 48,274 | ||||||
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Deferred revenue, non-current
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2,738 | 10,213 | ||||||
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Deferred income taxes
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1,432 | 2,263 | ||||||
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Other liabilities
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1,788 | 1,852 | ||||||
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Total liabilities
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58,991 | 62,602 | ||||||
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Stockholders' equity
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Common stock
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32 | 27 | ||||||
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Additional paid-in-capital
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375,700 | 287,082 | ||||||
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Accumulated other comprehensive loss
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(9,358 | ) | (4,920 | ) | ||||
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Treasury stock
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(22,657 | ) | (24,360 | ) | ||||
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Accumulated deficit
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(133,326 | ) | (137,280 | ) | ||||
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Total stockholders' equity
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210,391 | 120,549 | ||||||
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Total liabilities and stockholders' equity
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$ | 269,382 | $ | 183,151 | ||||