EX-99.1 3 dex991.htm PRESS RELEASE DATED APRIL,29,2003 PRESS RELEASE DATED APRIL,29,2003

 

Exhibit 99.1

 

Contact:       Suzanne Hurt  
Bottomline Technologies  
603-501-5203  
shurt@bottomline.com

 

 

Bottomline Technologies Reports Third Quarter Results

 

Operating Results Highlight Quarter

 

PORTSMOUTH, N.H.—April 29, 2003—Bottomline Technologies® (Nasdaq: EPAY), a leading global technology provider of Financial Resource Management (FRM) 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 during the current quarter.

 

During the third quarter, operating expenses 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 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 Advanced Business Partner and signed the first outsourced payments contract in North America with a three year commitment,” said Joe Mullen, president and CEO 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 charge recorded by the company in connection with the transition to FASB Statement 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.

 

- more -

 

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 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

March 31,

     

Nine Months Ended

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 Health Systems, Circuit City Stores, Commonwealth of Massachusetts, Christies, Sainsbury’s, Hitachi Semiconductor, Walt Disney Company and Boston College.

 

  ·   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 signed on to utilize Bottomline’s Legal Billing service with their law firms nationwide to streamline and consolidate 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 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.

 

- more -

 

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® technology platforms continues in the European 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 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 for business critical applications.

 

  ·   During the third quarter, Bottomline sold 270,000 shares of its common stock to General Atlantic Partners, LLC 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® (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 Receipt and Management, Electronic Invoice Presentment and Payment (EIPP), Electronic Banking and Information Reporting. Founded in 1989, Bottomline maintains its corporate headquarters in Portsmouth, NH and international headquarters in Reading, England. 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 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 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 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 and Quarterly Report on Form 10-Q including (without limitation) under the captions, “Management’s Discussion and Analysis 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). The accompanying condensed 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.

 

4

 

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.

 

5

 

Bottomline Technologies

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

    

March 31,
2003

     

June 30,
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

 

    
  

 

 

 

6