8-K

UNITED STATES

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 26, 2005

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)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On January 26, 2005, Bottomline Technologies (de), Inc. announced its financial results for the quarter ended December 31, 2004. 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.

Item 9.01. Financial Statements and Exhibits

(c) Exhibits

The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed:

99.1 Press Release issued by the company on January 26, 2005.

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.

	BOTTOMLINE TECHNOLOGIES (de), INC.
Date: January 26, 2005	By:	/s/ Joseph L. Mullen
		Joseph L. Mullen Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release issued by the company on January 26, 2005

EX-99.1

Exhibit 99.1

Contact:	Kevin Donovan
	Bottomline Technologies
	603-501-5240
	kdonovan@bottomline.com

Bottomline Technologies Reports Second Quarter Results

Continued Growth in Revenue and Profit

PORTSMOUTH, N.H. – January 26, 2005 – Bottomline Technologies (NASDAQ: EPAY), a leading global technology provider of financial Business Process Management (fBPM) software and services, today reported financial results for the second quarter and six months ended December 31, 2004.

Revenues for the second quarter were $23.9 million compared with $21.3 million in the second quarter of last year. Net income for the second quarter was $1.2 million, or net income per share of $0.07, compared with a net loss of $449,000 and a net loss per share of $0.03 in the second quarter of last year, representing a $1.6 million growth in net income.

During the second quarter, operating expenses of $12.8 million included net acquisition-related charges of $762,000, which represented amortization of intangible assets of approximately $756,000, and stock compensation expense of $6,000 associated with stock options assumed in a prior acquisition. Excluding these acquisition-related items, pro forma net income for the second quarter was $2.0 million, or pro forma net income per share of $0.11, compared with pro forma net income of $451,000, or pro forma net income per share of $0.03 in the second quarter of last year. The second quarter pro forma operating results represent a $1.6 million growth in pro forma net income from the prior year.

“I am pleased that the business continues to execute on its strategy,” said Joe Mullen, CEO of Bottomline. “Customer response to our leading offerings has driven this quarter’s financial performance. We continue to see strength in our pipeline for our offerings in both the UK and US. The outlook going forward remains strong.”

Revenues for the six months ended December 31, 2004 were $45.7 million compared with $38.1 million in the same period last year. Net income for the six months ended December 31, 2004 was $1.9 million, or net income per share of $0.10, compared with a net loss of $2.6 million and a net loss per share of $0.16 in the same period last year, representing a $4.5 million growth in net income.

During the six months ended December 31, 2004, operating expenses of $24.6 million included net acquisition-related charges of $1.7 million, which represented amortization of intangible assets of approximately $1.6 million and stock compensation expense of $14,000 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, 2004 was $3.6 million, or pro forma net income per share of $0.19, compared with pro forma net income of $719,000, or pro forma net income per share of $0.04 in the same period of last year. The six-month pro forma operating results represent a $2.9 million growth in pro forma net income from the same period last year.

-more-

Bottomline has presented non-GAAP financial measures in the form of pro forma results as part of this earnings release since this 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 same measures internally 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 to, or as a substitute for, the results presented in accordance with GAAP. A reconciliation of the GAAP net income (loss) to the pro forma results for the periods ending December 31 is as follows:

	Three Months Ended December 31, (in thousands)					Six Months Ended December 31, (in thousands)
	2004		2003			2004		2003
GAAP Net Income (Loss)	$	1,240	$	(449	)	$	1,919	$	(2,594	)
In-process Research and Development		—		—			—		789
Amortization of Intangible Assets		756		891			1,642		2,502
Stock Compensation Expense		6		9			14		22
Pro forma Net Income	$	2,002	$	451		$	3,575	$	719

Customer Highlights:

• Major North American organizations such as First Trust Corporation, Metropolitan Life Insurance, Pacificare Health Systems and SEI Investments selected Bottomline’s WebSeries® global enterprise payment platform.

• Received 177 new orders during the quarter for Bottomline’s BACSTEL-IP software solutions from leading UK-based organizations such as ADP Limited, Tyco International, UnumProvident Corporation and Virgin Atlantic Airways. BACSTEL-IP is the new electronic payment standard for the UK and businesses are required to upgrade to this new standard by the end of 2005.

• Received more than 600 orders for Bottomline’s BACSTEL-IP subscription service and further extended Bottomline’s position as the UK’s market leader for payment solutions. Bottomline’s subscription service is new to the UK and allows small-to medium-size companies to pay for BACSTEL-IP on a monthly basis. It encourages many new organizations to use BACSTEL-IP and helps expand the market for direct-submitting BACS solutions.

• Major North American organizations such as Dole Foods, Rubbermaid, Fox Television and the University of Washington selected Bottomline’s document management products, a component of our financial Business Process Management solutions.

• Selected by Fifth Third Bancorp to provide the WebSeries electronic banking platform to support wire origination and Web-services based check management.

-more-

Corporate and Product Highlights:

• Promoted to Certified Partner in the Oracle® PartnerNetwork. As a Certified Partner, Bottomline will provide solutions that extend the capabilities of its fBPM solutions to thousands of Oracle customers worldwide. Oracle has validated Bottomline’s suite of fBPM solutions including PayBase®, WebSeries and Create!form® for use with Oracle.

• Delivered a new WebSeries module for Bottomline’s Electronic Banking platform which combines international electronic payment functionality with an extensive range of domestic capabilities to provide enhanced payment management across global enterprises.

• Signed a UK partnership agreement with CODA Group, a finance systems specialist. The partnership agreement means that CODA’s customers will have access to Bottomline’s range of approved BACSTEL-IP payment and collection solutions and services.

Bottomline will host a conference call to discuss its financial results beginning at 5:00 p.m. EST today. Please see the corresponding advisory issued January 19, 2005 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 Business Process Management (fBPM) solutions. Bottomline’s comprehensive set of fBPM offerings enables businesses and financial institutions to more effectively manage their critical financial transactions, cash decisions and trading partner relationships, leveraging the Web. fBPM applications include Electronic Payments and Cash Management, Electronic Invoice Receipt and Management, Electronic Invoice Presentment and Payment (EIPP), Electronic Banking, Information Reporting, and Document Output Management. 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 press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding expected benefits of use of Bottomline’s products and future growth and results. 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 and other risks described in Bottomline’s quarterly report on Form 10-Q for the quarter ended September 30, 2004. The forward-looking financial information provided by Bottomline in this press release represents Bottomline’s estimates as of date of this release. We anticipate that subsequent events and developments will cause Bottomline’s estimates to change. However, while Bottomline may elect to update this forward-looking financial information at some point in the future, Bottomline specifically disclaims any obligation to do so. This forward-looking information should not be relied upon as representing Bottomline’s estimates of its future financial performance as of any date subsequent to the date of this release.

Bottomline Technologies

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

	Three Months Ended December 31,
	2004		2003
Revenues:
Software licenses	$	5,359	$	4,513
Service and maintenance		14,560		12,492
Equipment and supplies		4,033		4,249
Total revenues		23,952		21,254
Cost of revenues:
Software licenses		663		584
Service and maintenance		6,282		5,632
Equipment and supplies		3,063		3,446
Total cost of revenues		10,008		9,662
Gross profit		13,944		11,592
Operating expenses:
Sales and marketing		6,272		5,792
Product development and engineering:
Product development and engineering		2,597		2,427
Stock compensation expense		6		9
General and administrative		3,202		2,932
Amortization of intangible assets		756		891
Total operating expenses		12,833		12,051
Income (loss) from operations		1,111		(459	)
Other income, net		236		42
Income (loss) before provision for income taxes		1,347		(417	)
Provision for income taxes		107		32
Net income (loss)	$	1,240	$	(449	)
Basic and diluted net income (loss) per share	$	0.07	$	(0.03	)
Shares used in computing net income (loss) per share:
Basic		17,914		16,621
Diluted		18,953		16,621
Pro forma (excluding acquisition-related charges):(1)
Net income	$	2,002	$	451
Diluted net income per share (2)	$	0.11	$	0.03

(1) Pro forma presentation excludes charges for amortization of intangible assets of $756 and $891 and amortization of stock compensation expense of $6 and $9 for the three months ended December 31, 2004 and 2003, respectively.

(2) Shares used in computing pro forma diluted net income per share were 18,953 and 17,373 for the three months ended December 31, 2004 and 2003, respectively.

Bottomline Technologies

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

	Six Months Ended December 31,
	2004		2003
Revenues:
Software licenses	$	9,021	$	7,142
Service and maintenance		29,184		22,939
Equipment and supplies		7,494		8,044
Total revenues		45,699		38,125
Cost of revenues:
Software licenses		1,375		854
Service and maintenance		12,096		10,287
Equipment and supplies		5,707		6,465
Total cost of revenues		19,178		17,606
Gross profit		26,521		20,519
Operating expenses:
Sales and marketing		11,794		10,011
Product development and engineering:
Product development and engineering		4,872		4,533
Stock compensation expense		14		22
In-process research and development		—		789
General and administrative		6,308		5,306
Amortization of intangible assets		1,642		2,502
Total operating expenses		24,630		23,163
Income (loss) from operations		1,891		(2,644	)
Other income, net		293		97
Income (loss) before provision for income taxes		2,184		(2,547	)
Provision for income taxes		265		47
Net income (loss)	$	1,919	$	(2,594	)
Net income (loss) per share:
Basic	$	0.11	$	(0.16	)
Diluted	$	0.10	$	(0.16	)
Shares used in computing net income (loss) per share:
Basic		17,727		16,333
Diluted		18,634		16,333
Pro forma (excluding acquisition-related charges):(1)
Net income	$	3,575	$	719
Diluted net income per share (2)	$	0.19	$	0.04

(1) Pro forma presentation excludes charges for amortization of intangible assets of $1,642 and $2,502 and amortization of stock compensation expense of $14 and $22 for the six months ended December 31, 2004 and 2003, respectively. The pro forma presentation also excludes $789 of expense associated with acquired in-process research and development for the six months ended December 31, 2003.

(2) Shares used in computing pro forma diluted net income per share were 18,634 and 17,019 for the six months ended December 31, 2004 and 2003, respectively.

Bottomline Technologies

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

	December 31, 2004			June 30, 2004
Assets
Current assets:
Cash, cash equivalents and short-term investments	$	32,680		$	25,015
Accounts receivable		20,805			18,530
Other current assets		4,466			4,533
Total current assets		57,951			48,078
Property and equipment		6,275			6,468
Intangible assets		34,081			34,686
Other assets		782			835
Total assets	$	99,089		$	90,067
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	4,861		$	5,327
Accrued expenses		8,626			7,901
Deferred revenue and deposits		20,609			17,586
Total current liabilities		34,096			30,814
Stockholders’ equity
Common stock		18			18
Additional paid-in-capital		177,119			177,205
Deferred compensation		—			(14	)
Accumulated other comprehensive income		4,213			3,026
Treasury stock		(1,427	)		(4,133	)
Retained deficit		(114,930	)		(116,849	)
Total stockholders’ equity		64,993			59,253
Total liabilities and stockholders’ equity	$	99,089		$	90,067