EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

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

Bottomline Technologies Reports Second Quarter Results

Record Revenues Highlight Quarter

PORTSMOUTH, N.H. – January 24, 2007 – Bottomline Technologies (NASDAQ: EPAY), a leading provider of collaborative payment and invoice automation solutions, today reported financial results for the second quarter ended December 31, 2006.

Revenues for the second quarter were $29.7 million as compared with $26.1 million in the second quarter of last year. The growth in revenue includes a 32% increase in subscription and transaction revenue to $6.7 million for the second quarter of fiscal 2007 as compared to $5.1 million for the same period last year.

Recurring revenues, consisting of subscription and transaction, maintenance and supplies revenue was $18.1 million as compared with $15.1 million in the second quarter of last year. New Annual Recurring Revenue (ARR) was $3.4 million as compared with $2.3 million and $1.7 million in the prior two quarters. ARR represents the expected one-year revenue value from new subscription and transaction sales during the quarter as well as the one-year maintenance value on new software license sales.

Net loss for the second quarter was $2.1 million, or net loss per share of $0.09. During the second quarter, operating expenses of $20.4 million included acquisition-related amortization of intangible assets of $2.4 million and stock-based compensation expense of $2.1 million. Excluding these acquisition-related and stock compensation items, non-GAAP net income for the second quarter was $2.4 million, equating to non-GAAP net income per share of $0.10.

“We are pleased with our second quarter results,” said Rob Eberle, President and CEO of Bottomline Technologies. “We exceeded all of our key financial metrics during the quarter and our order flow and sales pipeline has grown. We have had good market acceptance of our newer offerings resulting in an increase in Annual Recurring Revenue booked in the quarter which we believe will deliver future revenue growth. As a result of our second quarter operating performance and our pipeline, we expect a strong second half of our fiscal year.”

Revenues for the six months ended December 31, 2006 were $54.9 million as compared with $50.8 million in the same period last year. Net loss for the six months ended December 31, 2006 was $3.6 million, or net loss per share of $0.15.

During the six months ended December 31, 2006, the company incurred acquisition-related amortization of intangible assets of approximately $3.9 million and stock compensation expense of $3.9 million. Excluding these items, non-GAAP net income for the six months ended December 31, 2006 was $4.2 million, or non-GAAP net income per share of $0.18.

Customer Highlights:

 

•   Leading organizations, including AstraZeneca, Rogers Corporation and a major online merchant signed multi-year agreements for Bottomline’s accounts payable automation solution.

 

•   New customers such as CVS Corporation, Wis-Pak, Inc., Playtex Products, The Economist Group and Warner Bros. chose Bottomline’s payments and document process automation platforms.

 

•   Organizations such as Land O’Lakes, Wellmark Blue Cross & Blue Shield, Lockheed Martin (UK) and Deutsche Bank AG London expanded existing deployments of Bottomline’s payments and document process automation platforms.

 

•   Property & casualty insurers ACUITY and Capitol Indemnity Corporation each selected Legal eXchange™, Bottomline’s Web-based legal spend management solution, further increasing its adoption within the sector.

Corporate and Product Highlights:

 

•   Named among the top 100 technology providers to the financial services industry for 2006 by American Banker and Financial Insights in their annual FinTech 100 ranking.

 

•   Received a top ranking in Global Finance magazine’s Best Treasury and Cash Management Banks and Providers 2007. Bottomline was awarded the top honor in the Best Accounts Payable Services category for the third consecutive year.

 

•   In an independent vendor evaluation conducted by research firm Celent, Bottomline’s Web-based cash management platform received the highest score for advanced technology, including overall security, scalability and performance.

 

•   Acquired FormScape Group Ltd. to expand Bottomline’s document process automation offerings worldwide, add leading organizations to Bottomline’s customer base, and capitalize on existing channel relationships across North America and Europe.

 

•   Elected Mike Curran to the Board of Directors. Mr. Curran most recently served as executive vice president of Bank of America Global Treasury Services where he was responsible for Global Corporate Banking Sales. His unit had offices across the United States as well as in Canada, Europe, Latin America and Asia, and generated approximately $2 billion in revenue. He was a Corporate Band 1 Executive and a member of the company’s management operating committee.

Bottomline has presented supplemental non-GAAP financial measures as part of this earnings release. The non-GAAP financial measures exclude certain non-cash items, specifically amortization of intangible assets and stock compensation expense. The presentation of this information should not be considered in isolation to, 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 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. A reconciliation of the GAAP results to the non-GAAP results for the three and six month periods ending December 31 is as follows:

 

    

Three Months Ended

December 31,

(in thousands)

   

Six Months Ended

December 31,

(in thousands)

     2006     2005    2006     2005

GAAP Net Income (Loss)

    $ (2,116 )   $ 1,069    $ (3,596 )   $ 1,215

Amortization of Intangible Assets

      2,412       774      3,873       1,661

Stock Compensation Expense

      2,104       1,743      3,940       3,401
                             

Non-GAAP Net Income

    $ 2,400     $ 3,586    $ 4,217     $ 6,277
                             

About Bottomline Technologies

Bottomline Technologies (NASDAQ: EPAY) provides collaborative payment and invoice 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 registered 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 Report or Form 10-Q for the quarter ended September 30, 2006, 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.

Bottomline Technologies

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

    

Three Months Ended

December 31,

     2006     2005

Revenues:

     

Software licenses

    $ 4,082     $ 3,615

Subscriptions and transactions

      6,743       5,121

Service and maintenance

      15,492       13,476

Equipment and supplies

      3,334       3,906
              

Total revenues

      29,651       26,118

Cost of revenues:

     

Software licenses

      186       375

Subscriptions and transactions

      2,633       1,802

Service and maintenance (1)

      7,191       6,013

Equipment and supplies

      2,470       3,115
              

Total cost of revenues

      12,480       11,305
              

Gross profit

      17,171       14,813

Operating expenses:

     

Sales and marketing (1)

      7,929       6,195

Product development and engineering (1)

      4,220       2,803

General and administrative (1)

      5,813       4,495

Amortization of intangible assets

      2,412       774
              

Total operating expenses

      20,374       14,267
              

Income (loss) from operations

      (3,203 )     546

Other income, net

      770       867
              

Income (loss) before provision for income taxes

      (2,433 )     1,413

Provision (benefit) for income taxes

      (317 )     344
              

Net income (loss)

    $ (2,116 )   $ 1,069

Basic and diluted net income (loss) per share

    $ (0.09 )   $ 0.05
              

Shares used in computing net income (loss) per share:

     

Basic

      23,622       22,687

Diluted

      23,622       22,988
              

Non-GAAP (excludes acquisition-related amortization and stock compensation expense):(2)

     

Net income

    $ 2,400     $ 3,586
              

Diluted net income per share (3)

    $ 0.10     $ 0.16
              
     

(1)      Stock based compensation is allocated as follows:

     

Cost of revenues: service and maintenance

    $ 164     $ 119

Sales and marketing

      705       582

Product development and engineering

      198       209

General and administrative

      1,037       833
              
   $ 2,104     $ 1,743
              
(2) Non-GAAP presentation excludes charges for amortization of intangible assets of $2,412 and $774 and stock compensation expense of $2,104 and $1,743 for the three months ended December 31, 2006 and 2005, respectively.  
(3) Shares used in computing non-GAAP diluted net income per share were 23,807 and 22,988 for the three months ended December 31, 2006 and 2005, respectively.  

Bottomline Technologies

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

    

Six Months Ended

December 31,

     2006     2005

Revenues:

     

Software licenses

    $ 5,933     $ 6,872

Subscriptions and transactions

      13,227       10,001

Service and maintenance

      28,998       26,132

Equipment and supplies

      6,714       7,792
              

Total revenues

      54,872       50,797

Cost of revenues:

     

Software licenses

      383       680

Subscriptions and transactions

      5,085       3,217

Service and maintenance (1)

      13,367       12,135

Equipment and supplies

      4,997       6,175
              

Total cost of revenues

      23,832       22,207
              

Gross profit

      31,040       28,590

Operating expenses:

     

Sales and marketing (1)

      14,236       12,540

Product development and engineering (1)

      7,972       5,317

General and administrative (1)

      10,611       8,708

Amortization of intangible assets

      3,873       1,661
              

Total operating expenses

      36,692       28,226
              

Income (loss) from operations

      (5,652 )     364

Other income, net

      1,739       1,505
              

Income (loss) before provision for income taxes

      (3,913 )     1,869

Provision (benefit) for income taxes

      (317 )     654
              

Net income (loss)

    $ (3,596 )   $ 1,215

Basic and diluted net income (loss) per share

    $ (0.15 )   $ 0.05
              

Shares used in computing net income (loss) per share:

     

Basic

      23,526       22,424

Diluted

      23,526       23,115
              

Non-GAAP (excludes acquisition-related amortization and stock compensation expense):(2)

     

Net income

    $ 4,217     $ 6,277
              

Diluted net income per share (3)

    $ 0.18     $ 0.27
              
     

(1)      Stock based compensation is allocated as follows:

     

Cost of revenues: service and maintenance

    $ 272     $ 246

Sales and marketing

      1,368       1,160

Product development and engineering

      397       438

General and administrative

      1,903       1,557
              
   $ 3,940     $ 3,401
              
(2) Non-GAAP presentation excludes charges for amortization of intangible assets of $3,873 and $1,661 and stock compensation expense of $3,940 and $3,401 for the six months ended December 31, 2006 and 2005, respectively.  
(3) Shares used in computing non-GAAP diluted net income per share were 23,728 and 23,115 for the six months ended December 31, 2006 and 2005, respectively.  

Bottomline Technologies

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

    

December 31,

2006

    

June 30,

2006

  

Assets

     

Current assets:

     

Cash, cash equivalents and short-term investments

    $ 64,408     $ 80,497  

Accounts receivable

      23,474       21,043  

Other current assets

      4,955       4,864  
                

Total current assets

      92,837       106,404  

Property and equipment

      7,755       7,106  

Intangible assets

      89,263       61,077  

Other assets

      1,838       1,247  
                

Total assets

    $ 191,693     $ 175,834  
                

Liabilities and stockholders’ equity

     

Current liabilities:

     

Accounts payable

    $ 5,446     $ 5,990  

Accrued expenses

      11,077       8,660  

Deferred revenue and deposits

      22,961       19,880  
                

Total current liabilities

      39,484       34,530  

Deferred revenue and deposits, non current

      2,140       1,249  

Deferred income taxes

      6,987       2,985  

Other liabilities

      538       462  
                

Total liabilities

      49,149       39,226  

Stockholders’ equity

     

Common stock

      24       23  

Additional paid-in-capital

      256,674       246,543  

Accumulated other comprehensive income

      6,889       3,585  

Treasury stock

      (4,652 )     (748 )

Retained deficit

      (116,391 )     (112,795 )
                

Total stockholders’ equity

      142,544       136,608  
                

Total liabilities and stockholders’ equity

    $ 191,693     $ 175,834