EX-99.1 2 ex991.htm PRESS RELEASE - FOURTH QUARTER FINANCIAL RESULTS ex991.htm

Exhibit 99.1
Bottomline Technologies Reports Fourth Quarter Results

Strong Financial Performance Highlights Quarter and Fiscal Year

PORTSMOUTH, N.H. – August 7, 2008 – Bottomline Technologies (NASDAQ: EPAY), a leading provider of collaborative payment, invoice and document automation solutions, today reported financial results for the fourth quarter and fiscal year ended June 30, 2008.
 
Revenues for the fourth quarter were $36.0 million, an increase of 11%, or $3.7 million, from the fourth quarter of last year.  The growth in revenues included a 22% increase in subscription and transaction revenues to $8.3 million in the fourth quarter from $6.8 million in the fourth quarter of last year.
 
Gross margin for the fourth quarter was $19.5 million, an increase of $2.0 million from the fourth quarter of last year.  Net loss for the fourth quarter was $3.4 million, or net loss per share of $0.14.  During the fourth quarter, operating expenses of $22.8 million included amortization of intangible assets of $3.4 million, acquisition-related expenses of $0.2 million and stock-based compensation expense of $2.4 million.  Excluding these acquisition-related and stock compensation items, non-GAAP net income for the fourth quarter was $2.6 million, or non-GAAP net income per share of $0.11.
 
 “Bottomline had a strong fourth quarter, completing a year in which EBITDA increased 72% year over year and non-GAAP operating income more than doubled with a 104% increase from the prior year,” said Rob Eberle, President and CEO of Bottomline Technologies.  “During the fourth quarter, we entered into a significant strategic relationship with a large global financial institution, signed a top insurer to our Legal eXchange and booked record orders of $45 million.  We continue to drive growth of our subscription and transaction revenues, which at $8.3 million was up 22% year over year.  With this success, we enter the new fiscal year confident in our continued ability to execute against our strategic plan.”
 
Revenues for the year ended June 30, 2008 increased 11% to $131.2 million as compared with $118.3 million in the same period last year.  Net loss for the fiscal year ended June 30, 2008 was $5.3 million, or net loss per share of $0.22.  Excluding amortization of intangible assets of $11.4 million, acquisition-related expenses of $0.3 million and stock compensation expense of $8.8 million, non-GAAP net income for the fiscal year ended June 30, 2008 was $15.2 million, an increase of 49% from the fiscal year ended June 30, 2007.  Non-GAAP net income per share for the fiscal year ended June 30, 2008 was $0.63 as compared with $0.43 per share in the same period last year.

 
 
 


Fourth Quarter Customer Highlights

·  
Entered into a new strategic relationship with a major global financial institution.

·  
Signed a multi-year contract with one of the nation’s 15 largest mutual insurance companies for Legal eXchange™, Bottomline’s Software as a Service (SaaS) solution for legal spend management.

·  
Added significant new customers, including City of Santa Fe, Educational Testing Service, Emerson Canada, Marathon Equipment Company, Metropolitan Airports Commission of Minneapolis, Motorola Networks, Pioneer Road Services, Standard Furniture, The Upper Deck Company and WireCo WorldGroup, who selected Bottomline’s solutions to increase the efficiency of accounts payable and other transactional business processes.

·  
The Home Depot, Oracle Corporation, Target Corporation, Alpharma, Google, Schlumberger, Harvard Business School Publishing, UniCredit Group, United Technologies Corporation, U.S. Air Force Services Agency, Loomis, Sayles & Company and DePuy International, a Johnson & Johnson company, signed new or expanded agreements for Bottomline’s payments and document process automation solutions.

·  
Increased adoption of Bottomline’s healthcare document and payment process automation solutions among hospitals, including Albany Medical Center, Catholic Healthcare Partners, Caritas Good Samaritan Medical Center, Excela Health, Inova Loudoun Hospital, San Joaquin General Hospital, Singing River Hospital, St. Luke’s Regional Medical Center, St. Vincent’s Hospital & Medical Center and Sutter Health.

Fourth Quarter Corporate and Product Highlights

·  
Completed the acquisition of Optio Software, which further extends Bottomline’s leadership position as a provider of advanced capabilities for transactional document automation and adds a significant customer base as well as a strong vertical presence in the healthcare industry.

·  
Introduced new functionality for automating business-critical transactional document processes within Microsoft Dynamics® AX 2009, enabling the growing number of organizations standardized on this popular ERP system to increase efficiency, reduce costs and respond with greater agility to changing regulatory demands.

·  
Named to the 2008 Insurer’s Choice, an annual ranking recognizing the top technology providers serving the insurance industry. Bottomline was identified by insurers as a preferred vendor in six of the survey’s nine categories, including analytics, workflow, financials and operations.

·  
The Board of Directors authorized the repurchase of up to $10 million of the company’s common stock for use in connection with Bottomline’s stock plans and for other corporate purposes.

·  
Hosted third annual European Customer Conference, bringing together senior-level executives from leading corporations, public sector organizations and financial institutions to discuss innovation in payments, invoice and document processing.
 
 

 
 

 
Bottomline has presented supplemental non-GAAP financial measures and statements as part of this earnings release. The non-GAAP financial measures and statements exclude certain non-cash items, specifically amortization of intangible assets, stock-based compensation and acquisition-related expenses. 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 and statements 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. A reconciliation of the GAAP results to the non-GAAP results for the three month periods and fiscal years ended June 30 is as follows:
   
Three Months Ended
June 30,
    
Fiscal Years Ended
June 30,
  
   
(in thousands)
    
(in thousands)
  
   
2008
    
2007
    
2008
    
2007
  
GAAP net loss
   $ (3,439 )   $ (1,560 )   $ (5,261 )   $ (7,030 )
Amortization of intangible assets
     3,440       2,750       11,399       9,324  
Acquisition-related expenses
     175       -       269       -  
Stock compensation expense
     2,400       2,054       8,803       7,945  
Non-GAAP net income
   $ 2,576     $ 3,244     $ 15,210     $ 10,239  


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 and transactions involving global payments, invoice approval, purchase-to-pay, collections, cash management and document process automation. 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, Legal eXchange and the BT logo are trademarks of Bottomline Technologies, Inc. which may be 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. 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 Quarterly Reports on Form 10-Q for the quarters ended September 30, 2007, December 31, 2007 and March 31, 2008 on file with the SEC. 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
  
   
June 30,
  
   
2008
    
2007
  
Revenues:
            
   Software licenses
   $ 4,043     $ 4,097  
   Subscriptions and transactions
     8,286       6,791  
   Service and maintenance
     20,320       18,032  
   Equipment and supplies
     3,366       3,428  
Total revenues
     36,015       32,348  
                 
Cost of revenues:
                
   Software licenses
     282       184  
   Subscriptions and transactions
     4,065       3,681  
   Service and maintenance (1)
     9,685       8,382  
   Equipment and supplies
     2,528       2,640  
Total cost of revenues
     16,560       14,887  
                 
Gross profit
     19,455       17,461  
                 
Operating expenses:
                
     Sales and marketing (1)
     8,962       8,764  
     Product development and engineering (1)
     4,909       3,969  
     General and administrative (1)
     5,496       4,764  
     Amortization of intangible assets
     3,440       2,750  
Total operating expenses
     22,807       20,247  
                 
Loss from operations
     (3,352 )     (2,786 )
                 
Other income, net
     292       756  
                 
Loss before provision (benefit) for income taxes
     (3,060 )     (2,030 )
Provision (benefit) for income taxes
     379       (470 )
                 
Net loss
   $ (3,439 )   $ (1,560 )
                 
Basic and diluted net loss per share
   $ (0.14 )   $ (0.07 )
                 
Shares used in computing basic and diluted net loss per share:
     23,884       23,573  
                 
Non-GAAP (excludes amortization of intangible assets, acquisition-related expenses and stock compensation expense):(2)
                
Net income
   $ 2,576     $ 3,244  
Diluted net income per share (3)
   $ 0.11     $ 0.14  
                 
(1)         Stock-based compensation is allocated as follows:
                
Cost of revenues: service and maintenance
   $ 248     $ 235  
Sales and marketing
     744       771  
Product development and engineering
     188       183  
General and administrative
     1,220       865  
    $  2,400     $  2,054  
(2) Non-GAAP presentation excludes charges for amortization of intangible assets of $3,440 and $2,750, acquisition-related expenses of $175 and zero, and stock compensation expense of $2,400 and $2,054, for the three months ended June 30, 2008 and 2007, respectively.
 
(3) Shares used in computing non-GAAP diluted net income per share were 24,172 and 23,849 for the three months ended June 30, 2008 and 2007, respectively.
                
 
 
 
Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)

   
Fiscal Years Ended
  
   
June 30,
  
   
2008
    
2007
  
Revenues:
            
   Software licenses
   $ 13,949     $ 14,102  
   Subscriptions and transactions
     29,693       26,767  
   Service and maintenance
     74,446       63,887  
   Equipment and supplies
     13,153       13,579  
Total revenues
     131,241       118,335  
                 
Cost of revenues:
                
   Software licenses
     880       744  
   Subscriptions and transactions
     15,789       12,138  
   Service and maintenance (1)
     33,189       30,009  
   Equipment and supplies
     9,551       10,168  
Total cost of revenues
     59,409       53,059  
                 
Gross profit
     71,832       65,276  
                 
Operating expenses:
                
     Sales and marketing (1)
     31,739       31,654  
     Product development and engineering (1)
     17,376       16,069  
     General and administrative (1)
     19,197       19,320  
     Amortization of intangible assets
     11,399       9,324  
Total operating expenses
     79,711       76,367  
                 
Loss from operations
     (7,879 )     (11,091 )
                 
Other income, net
     3,082       3,177  
                 
Loss before provision (benefit) for income taxes
     (4,797 )     (7,914 )
Provision (benefit) for income taxes
     464       (884 )
                 
Net loss
   $ (5,261 )   $ (7,030 )
                 
Basic and diluted net loss per share
   $ (0.22 )   $ (0.30 )
                 
Shares used in computing basic and diluted net loss per share:
     23,825       23,539  
                 
Non-GAAP (excludes amortization of intangible assets, acquisition-related expenses and stock compensation expense):(2)
                
Net income
   $ 15,210     $ 10,239  
Diluted net income per share (3)
   $ 0.63     $ 0.43  
                 
(1)         Stock-based compensation is allocated as follows:
                
Cost of revenues: service and maintenance
   $ 987     $ 755  
Sales and marketing
     2,841       2,893  
Product development and engineering
     780       761  
General and administrative
     4,195       3,536  
    $  8,803     $  7,945  
(2) Non-GAAP presentation excludes charges for amortization of intangible assets of $11,399 and $9,324, acquisition-related expenses of $269 and zero, and stock compensation expense of $8,803 and $7,945, for the fiscal years ended June 30, 2008 and 2007, respectively.
 
(3) Shares used in computing non-GAAP diluted net income per share were 24,294 and 23,814 for the fiscal years ended June 30, 2008 and 2007, respectively.
                

 
 
 

Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)

   
June 30,
    
June 30,
  
   
2008
    
2007
  
             
Assets
            
Current assets:
            
   Cash, cash equivalents and short-term investments
   $ 35,373     $ 65,873  
   Accounts receivable
     28,747       24,169  
   Other current assets
     6,157       5,402  
Total current assets
     70,277       95,444  
                 
Property and equipment, net
     11,840       8,270  
Intangible assets, net
     115,414       84,296  
Other assets
     3,915       1,784  
Total assets
   $ 201,446     $ 189,794  
                 
Liabilities and stockholders' equity
                
Current liabilities:
                
   Accounts payable
   $ 8,856     $ 6,650  
   Accrued expenses
     10,997       8,475  
   Deferred revenue
     30,621       24,998  
Total current liabilities
     50,474       40,123  
                 
Deferred revenue, non-current
     3,856       2,498  
Deferred income taxes
     6,859       6,258  
Other liabilities
     1,992       479  
Total liabilities
     63,181       49,358  
                 
Stockholders' equity
                
   Common stock
     26       25  
   Additional paid-in-capital
     277,660       263,229  
   Accumulated other comprehensive income
     7,766       8,292  
   Treasury stock
     (22,195 )     (11,285 )
   Accumulated deficit
     (124,992 )     (119,825 )
                 
Total stockholders' equity
     138,265       140,436  
                 
Total liabilities and stockholders' equity
   $ 201,446     $ 189,794  


 

 
Non-GAAP Financial Statements

Bottomline has presented supplemental non-GAAP statements of operations as part of this earnings release. The non-GAAP statements of operations exclude certain non-cash items, specifically amortization of intangible assets, stock-based compensation and acquisition-related expenses.  The presentation of this 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 statements of operations 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 statements internally to assess the ongoing performance of the company. Since this information is not in accordance with GAAP, 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.  All amounts are in thousands, except per share amounts.


   
Non-GAAP
  
   
Three Months Ended
  
   
June 30,
  
   
2008
    
2007
  
Revenues:
            
   Software licenses
   $ 4,043     $ 4,097  
   Subscriptions and transactions
     8,286       6,791  
   Service and maintenance
     20,320       18,032  
   Equipment and supplies
     3,366       3,428  
Total revenues
     36,015       32,348  
                 
Cost of revenues:
                
   Software licenses
     282       184  
   Subscriptions and transactions
     4,065       3,681  
   Service and maintenance
     9,434       8,147  
   Equipment and supplies
     2,528       2,640  
Total cost of revenues
     16,309       14,652  
                 
Gross profit
     19,706       17,696  
                 
Operating expenses:
                
     Sales and marketing
     8,184       7,993  
     Product development and engineering
     4,717       3,786  
     General and administrative
     4,142       3,899  
Total operating expenses
     17,043       15,678  
                 
Non-GAAP income from operations
     2,663       2,018  
                 
Other income, net
     292       756  
                 
Non-GAAP income before provision (benefit) for income taxes
     2,955       2,774  
Provision (benefit) for income taxes
     379       (470 )
                 
Non-GAAP net income
   $ 2,576     $ 3,244  
                 
Diluted non-GAAP net income per share
   $ 0.11     $ 0.14  
                 


 
 
 



   
Non-GAAP
  
   
Fiscal Years Ended
  
   
June 30,
  
   
2008
    
2007
  
Revenues:
            
   Software licenses
   $ 13,949     $ 14,102  
   Subscriptions and transactions
     29,693       26,767  
   Service and maintenance
     74,446       63,887  
   Equipment and supplies
     13,153       13,579  
Total revenues
     131,241       118,335  
                 
Cost of revenues:
                
   Software licenses
     880       744  
   Subscriptions and transactions
     15,786       12,138  
   Service and maintenance
     32,180       29,254  
   Equipment and supplies
     9,551       10,168  
Total cost of revenues
     58,397       52,304  
                 
Gross profit
     72,844       66,031  
                 
Operating expenses:
                
     Sales and marketing
     28,832       28,761  
     Product development and engineering
     16,581       15,308  
     General and administrative
     14,839       15,784  
Total operating expenses
     60,252       59,853  
                 
Non-GAAP income from operations
     12,592       6,178  
                 
Other income, net
     3,082       3,177  
                 
Non-GAAP income before provision (benefit) for income taxes
     15,674       9,355  
Provision (benefit) for income taxes
     464       (884 )
                 
Non-GAAP net income
   $ 15,210     $ 10,239  
                 
Diluted non-GAAP net income per share
   $ 0.63     $ 0.43