8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 28, 2004

Bottomline Technologies (de), Inc.

(Exact name of registrant as specified in charter)

Delaware	000-25259	02-0433294
(State or other jurisdiction of incorporation	(Commission File Number)	(IRS Employer Identification No.)

325 Corporate Drive, Portsmouth, New Hampshire	03801
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (603) 436-0700

Not Applicable.

(Former name or former address, if changed since last report)

Item 12. Results of Operations and Financial Condition

On January 28, 2004, Bottomline Technologies (de), Inc. announced its financial results for the quarter ended December 31, 2003. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: January 28, 2004	BOTTOMLINE TECHNOLOGIES (de), INC.
	By:	/s/    Robert A. Eberle
		Robert A. Eberle Chief Operating Officer, Chief Financial Officer and Secretary

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release dated January 28, 2004.

EX-99.1

Exhibit 99.1

Contact: Irena Mroz

Bottomline Technologies

781-693-1802

imroz@bottomline.com

Bottomline Technologies Reports Second Quarter Results

Revenue Growth and Operating Performance Highlight Quarter

PORTSMOUTH, N.H.—January 28, 2004—Bottomline Technologies (NASDAQ: EPAY), a leading global technology provider of Financial Resource Management (FRM) software and services, today reported financial results for the second quarter ended December 31, 2003.

Revenues for the second quarter were $21.3 million compared with $17.7 million in the second quarter of last year and $16.9 million in the first quarter of this year, an increase of 20% year over year and 26% sequentially. The increase in revenue is attributable to the revenue contribution from the Create!form acquisition, higher sales of the company’s other software products and services and foreign exchange rates. The net loss for the second quarter was $449,000, or a net loss per share of $0.03, compared with a net loss of $4.2 million and a net loss per share of $0.27 in the second quarter of last year.

During the second quarter, operating expenses of $12.3 million included net acquisition-related charges of $900,000, which represented amortization of intangible assets of approximately $891,000 and a stock compensation expense of $9,000 associated with stock options assumed in a prior acquisition. Excluding these acquisition-related items, pro forma net income for the second quarter was $451,000, or pro forma net income per share of $0.03, compared with a pro forma net loss per share of $0.12 in the second quarter of last year.

“Positive results were recorded in the quarter across all key metrics while backlog increased by over $7.5 million sequentially,” said Joe Mullen, President and CEO of Bottomline. “Higher software revenues drove increased gross margins which resulted in improved operating results. We see the opportunity for continued growth in our market.”

Revenues for the six months ended December 31, 2003 were $38.1 million compared with $34.0 million in the same period of last year. The net loss for the six months ended December 31, 2003 was $2.6 million, or a net loss per share of $0.16, compared with a net loss of $23.8 million and a net loss per share of $1.53 in the six months ended December 31, 2002.

The results for the six months ended December 31, 2002 included the cumulative effect of an accounting change in the amount of $13.8 million, which 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 this accounting change was $10.1 million, or a net loss per share of $0.65.

During the six months ended December 31, 2003, operating expenses of $23.6 million included net acquisition-related charges of $3.3 million, which represented a charge for in-process research and development of $789,000 associated with the acquisition of Create!form International, Inc., amortization of intangible assets of approximately $2.5 million and a stock compensation expense of $22,000 associated with stock options assumed in a prior acquisition. Excluding these acquisition-related items, pro forma net income for the six months ended December 31, 2003 was $719,000, or pro forma net income per share of $0.04, compared with a pro forma net loss per share of $0.36 in the same period of last year.

Bottomline has presented non GAAP financial measures in the form of pro forma results as part of this earnings release since such information excludes certain non-cash items and management believes it is a more accurate measurement of Bottomline’s overall operating performance. Management believes that presenting financial measures exclusive of certain non-cash items helps identify trends in the company’s business and the company uses these measures to establish budgets and operational goals, to manage its business and to evaluate the performance of the company. The presentation of this information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of the GAAP net loss to the pro forma results for the periods ending December 31 is as follows:

	Three Months Ended December 31,						Six Months Ended December 31,
	(in thousands)
	2003			2002			2003			2002
GAAP Net Loss	$	(449	)	$	(4,205	)	$	(2,594	)	$	(23,831	)
Cumulative Effect of Accounting Change		—			—			—			13,764
In-process Research and Development		—			—			789			—
Amortization of Intangible Assets		891			2,243			2,502			4,425
Stock Compensation Expense		9			26			22			63
Pro forma Net Income (Loss)	$	451		$	(1,936	)	$	719		$	(5,579	)

Customer Highlights:

• Leading companies such as Heinz, Metropolitan Life, Sungard Securities, Prudential Assurance and Caterpillar chose Bottomline to deliver financial resource management solutions.

• Western Asset Management, a subsidiary of Legg Mason, selected Bottomline’s WebSeries software for their shared service center to facilitate global electronic payments.

• Bottomline’s new Legal eXchange platform was well received with several new customer contracts during the quarter.

• Bottomline added several new customers for output management solutions including Worldwide Wresting Entertainment (WWE), Metaldyne, Michael Kors, and the University of Washington.

• Bottomline’s customer, RBC Global Services, a division of Royal Bank of Canada, captured two prestigious industry awards for its Viewfinder^® web portal built using Bottomline’s WebSeries eBanking platform.

• Bottomline signed several new distributors, expanding the distribution channel for the company’s products in France, the Netherlands, Italy, Asia, and the Americas.

Corporate and Product Highlights:

• Announced the availability of the latest version of our payments software solution, PayBase 7.0. In addition to US check and NACHA-compliant electronic payment types, the system now supports over 35 foreign draft types as well as BACSTEL-IP.

• Released Create!form^® Version 3.0 for use with PeopleSoft EnterpriseOne. Certified by PeopleSoft, the release includes many significant new features and enhancements, and is an important addition to the company’s complementary output management products for PeopleSoft EnterpriseOne users.

Bottomline will host a conference call to discuss its financial results beginning at 5:00 p.m. today. Please see the corresponding advisory issued January 20, 2004 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 and services. 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 future revenue growth, market opportunities and expected financial performance. 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 most recent 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 is on file with the Securities and Exchange Commission (http://www.sec.gov). The accompanying unaudited condensed statements of operations and balance sheets are an integral part of this announcement. The forward-looking statements contained herein represent the judgment of Bottomline as of the date of this announcement. We disclaim any obligation to update any forward-looking statement.

Bottomline Technologies

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

	Three Months Ended December 31,
	2003			2002
Revenues:
Software licenses	$	4,513		$	3,359
Service and maintenance		12,492			9,969
Equipment and supplies		4,249			4,396
Total revenues		21,254			17,724
Cost of revenues:
Software licenses		584			449
Service and maintenance		5,400			5,627
Equipment and supplies		3,446			3,329
Total cost of revenues		9,430			9,405
Gross profit		11,824			8,319
Operating expenses:
Sales and marketing		5,792			4,704
Product development and engineering:
Product development and engineering		2,659			2,739
Stock compensation expense		9			26
General and administrative		2,932			2,908
Amortization of intangible assets		891			2,243
Total operating expenses		12,283			12,620
Loss from operations		(459	)		(4,301	)
Other income, net		42			111
Loss before provision for income taxes		(417	)		(4,190	)
Provision for income taxes		32			15
Net loss	$	(449	)	$	(4,205	)
Basic and diluted net loss per share	$	(0.03	)	$	(0.27	)
Shares used in computing basic and diluted net loss per share:		16,621			15,567
Pro forma (excluding acquisition-related charges):(1)
Net income (loss)	$	451		$	(1,936	)
Basic and diluted net income (loss) per share (2)	$	0.03		$	(0.12	)

(1) Pro forma presentation excludes amortization of intangible assets of $891 and $2,243 and amortization of stock compensation expense of $9 and $26, net of tax for the three months ended December 31, 2003 and 2002, respectively.

(2) Shares used in computing pro forma diluted net income per share were 17,373 and 15,567 for the three months ended December 31, 2003 and 2002 respectively.

Bottomline Technologies

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

	Six Months Ended December 31,
	2003			2002
Revenues:
Software licenses	$	7,142		$	6,099
Service and maintenance		22,939			19,255
Equipment and supplies		8,044			8,650
Total revenues		38,125			34,004
Cost of revenues:
Software licenses		854			854
Service and maintenance		9,848			10,654
Equipment and supplies		6,465			6,492
Total cost of revenues		17,167			18,000
Gross profit		20,958			16,004
Operating expenses:
Sales and marketing		10,011			10,013
Product development and engineering:
Product development and engineering		4,972			5,979
In-process research and development		789			—
Stock compensation expense		22			63
General and administrative		5,306			5,844
Amortization of intangible assets		2,502			4,425
Total operating expenses		23,602			26,324
Loss from operations		(2,644	)		(10,320	)
Other income, net		97			283
Loss before provision for income taxes and cumulative effect of accounting change		(2,547	)		(10,037	)
Provision for income taxes		47			30
Net loss before cumulative effect of accounting change		(2,594	)		(10,067	)
Cumulative effect of accounting change		—			(13,764	)
Net loss	$	(2,594	)	$	(23,831	)
Basic and diluted:
Loss per share before cumulative effect of accounting change	$	(0.16	)	$	(0.65	)
Cumulative effect of accounting change		—			(0.88	)
Net loss per share	$	(0.16	)	$	(1.53	)
Shares used in computing basic and diluted net loss per share:		16,333			15,556
Pro forma (excluding acquisition-related charges):(1)
Net income (loss)	$	719		$	(5,579	)
Basic and diluted net income (loss) per share(2)	$	0.04		$	(0.36	)

(1) Pro forma presentation is before the cumulative effect of accounting change and excludes in-process research and development of $789 and $0, amortization of intangible assets of $2,502 and $4,425 and amortization of stock compensation expense of $22 and $63, net of tax for the six months ended December 31, 2003 and 2002, respectively.

(2) Shares used in computing pro forma diluted net income per share were 17,019 and 15,556 for the six months ended December 31, 2003 and 2002, respectively.

Bottomline Technologies

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	December 31, 2003			June 30, 2003
Assets
Current assets:
Cash and cash equivalents	$	23,036		$	25,802
Accounts receivable		16,300			13,281
Other current assets		4,253			4,148
Total current assets		43,589			43,231
Property and equipment		6,591			6,447
Intangible assets		30,555			22,660
Other assets		920			1,024
Total assets	$	81,655		$	73,362
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,916		$	5,712
Accrued expenses		7,067			6,005
Deferred revenue and deposits		16,780			13,697
Current portion of long-term debt		253			253
Total current liabilities		30,016			25,667
Long-term debt		—			—
Total liabilities		30,016			25,667
Stockholders’ equity
Common stock		17			17
Additional paid-in-capital		169,969			164,809
Deferred compensation		(33	)		(78	)
Accumulated other comprehensive income		2,821			1,628
Treasury stock		(4,110	)		(4,250	)
Retained deficit		(117,025	)		(114,431	)
Total stockholders’ equity		51,639			47,695
Total liabilities and stockholders’ equity	$	81,655		$	73,362