EX-99.1 2 ex991.htm PRESS RELEASE - SECOND QUARTER FINANCIAL RESULTS ex991.htm
Exhibit 99.1
Bottomline Technologies Reports Second Quarter Results

26% Growth in Year over Year Orders Highlights Quarter

PORTSMOUTH, N.H. – January 22, 2009 – Bottomline Technologies (NASDAQ: EPAY), a leading provider of collaborative payment, invoice and document automation solutions, today reported financial results for the second quarter ended December 31, 2008.
 
Revenues for the second quarter were $34.3 million, an increase of $2.5 million from the second quarter of last year.  Revenues for the second quarter were impacted by $3.3 million on a year over year basis as a result of declines in foreign exchange rates.
 
Gross margin for the second quarter was $19.0 million, an increase of $1.0 million from the second quarter of last year.  Net loss for the second quarter was $2.9 million, or net loss per share of $0.12.  During the second quarter, operating expenses of $22.0 million included acquisition-related amortization of intangible assets of $3.9 million and stock-based compensation expense of $2.2 million.  Excluding these acquisition-related and stock compensation items, non-GAAP net income for the second quarter was $3.3 million, or non-GAAP net income per share of $0.14.
 
“Our business continues to execute and grow despite unprecedented challenges in the economy,” said Rob Eberle, President and CEO of Bottomline Technologies.  “In the second quarter we recorded revenue of $34.3 million, which represents year over year growth of 18% on a consistent currency basis.  Our other financial metrics were also strong with EBITDA increasing 19% from last quarter, non-GAAP EPS of $0.14 and cash and investments of $34.8 million which is up $4.4 million from the prior quarter.  Of equal significance is order activity of $43.7 million in the quarter which evidences the continued broad-based demand for our offerings, and when combined with our significant backlog, positions us well for future success.”
 
Revenues for the six months ended December 31, 2008 increased 11% to $69.8 million as compared with $63.2 million in the same period last year.  Net loss for the six months ended December 31, 2008 was $6.7 million, or net loss per share of $0.28.  Excluding acquisition-related amortization of intangible assets of approximately $8.4 million and stock compensation expense of $4.4 million, non-GAAP net income for the six months ended December 31, 2008 was $6.1 million, or non-GAAP net income per share of $0.25.


 
 
 


 
Second Quarter Customer Highlights
 
  •  Signed a multi-year contract with Frank Winston Crum Insurance for Legal eXchange™, Bottomline’s Software as a Service (SaaS) solution for legal spend management.
  • Added significant new customers, including AGA Medical Corporation, Chicago Bridge & Iron, Dermalogica, Golden State Foods, Mouchel, Peet’s Coffee & Tea, Stryker Spine, Timberland, Wells Fargo Insurance Services, WestJet and a leading international hospitality company which selected Bottomline solutions to increase the security, efficiency, visibility and control of transactional processes.
  • Expanded existing deployments of Bottomline’s award-winning payments and document process automation solutions at Acme Brick, AT&T Mobility, Edwards Lifesciences, Esurance, Calpine, Ingersoll Rand, Hays Specialist Recruitment, the Ministry of Justice, Mizuno, Nassau County (New York), Related Companies and SG Hambros.
  • Increased adoption of the company’s advanced capabilities for document process automation within the global Microsoft Dynamics® AX community with orders from companies such as CountryMark, Gundle/SLT Environmental and RMD Metal Products.
  • Broadened its presence in the healthcare vertical among hospitals and healthcare providers as Abington Memorial Hospital, Southside Regional Medical Center, West Jefferson Medical Center and Wishard Health Services extended their use of Bottomline’s payment and medical forms automation solutions.
 
Second Quarter Strategic Highlights
 
  • Announced the successful completion of a SAS 70 audit for Legal eXchange, representing an independent, third-party expert validation of the internal and external controls established by the company to operate its legal spend management solution.
  • Ranked by American Banker and Financial Insights as one of the top 100 global technology providers to the banking and financial services industry in the annual FinTech 100 ranking.
  • Extended its domain expertise within the ERP market by signing a partnership agreement with QAD, allowing Bottomline to offer its solutions for transactional document automation to thousands of QAD customers in North America.
  • Bottomline’s Chief Technology Officer, Eric Campbell, was named one of the most influential people in the global financial services community as part of Global Finance magazine’s Who’s Who in International Treasury and Cash Management.
  • Recognized as a 2008 ‘Best Company to Work For’ by Business NH Magazine.
 
 
 
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 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 and six month periods ended December 31, 2008 and 2007 is as follows:
   
Three Months Ended
December 31,
    
Six Months Ended
December 31,
  
   
(in thousands)
    
(in thousands)
  
   
2008
    
2007
    
2008
    
2007
  
GAAP net loss
   $ (2,869 )   $ (674 )   $ (6,718 )   $ (1,475 )
Amortization of intangible assets
     3,948       2,682       8,384       5,330  
Acquisition-related expenses
     -       -       35       -  
Stock compensation expense
     2,203       2,102       4,413       4,028  
Non-GAAP net income
   $ 3,282     $ 4,110     $ 6,114     $ 7,883  


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 involving payments, global cash management, transactional documents and invoice approval. 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 (de), 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 on Form 10-Q for the quarter ended September 30, 2008 and the Company’s Annual Report on Form 10-K for the year ended June 30, 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
  
   
December 31,
  
   
2008
    
2007
  
Revenues:
            
   Software licenses
   $ 3,597     $ 3,393  
   Subscriptions and transactions
     7,744       7,342  
   Service and maintenance
     20,527       18,083  
   Equipment and supplies
     2,466       3,014  
Total revenues
     34,334       31,832  
                 
Cost of revenues:
                
   Software licenses
     207       237  
   Subscriptions and transactions
     3,743       3,913  
   Service and maintenance (1)
     9,562       7,556  
   Equipment and supplies
     1,824       2,091  
Total cost of revenues
     15,336       13,797  
Gross profit
     18,998       18,035  
                 
Operating expenses:
                
     Sales and marketing (1)
     8,150       7,847  
     Product development and engineering (1)
     5,238       4,226  
     General and administrative (1)
     4,619       4,727  
     Amortization of intangible assets
     3,948       2,682  
Total operating expenses
     21,955       19,482  
Loss from operations
     (2,957 )     (1,447 )
Other income, net
     615       896  
Loss before income taxes
     (2,342 )     (551 )
Provision for income taxes
     527       123  
Net loss
   $ (2,869 )   $ (674 )
Basic and diluted net loss per share
   $ (0.12 )   $ (0.03 )
Shares used in computing basic and diluted net loss per share:
     24,033       23,887  
                 
Non-GAAP (excludes amortization of intangible assets, acquisition-related expenses and stock compensation expense):(2)
                
Net income
   $ 3,282     $ 4,110  
Diluted net income per share (3)
   $ 0.14     $ 0.17  
                 
(1)        Stock-based compensation is allocated as follows:
                
Cost of revenues: service and maintenance
   $ 261     $ 236  
Sales and marketing
     648       686  
Product development and engineering
     197       200  
General and administrative
     1,097       980  
    $  2,203     $  2,102  
(2) Non-GAAP presentation excludes charges for amortization of intangible assets of $3,948 and $2,682, and stock compensation expense of $2,203 and $2,102, for the three months ended December 31, 2008 and 2007, respectively.
                
 
(3) Shares used in computing non-GAAP diluted net income per share were 24,120 and 24,614 for the three months ended December 31, 2008 and 2007, respectively.
                

 
 
 

Bottomline Technologies
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)

   
Six Months Ended
  
   
December 31,
  
   
2008
    
2007
  
Revenues:
            
   Software licenses
   $ 7,203     $ 6,758  
   Subscriptions and transactions
     15,973       14,184  
   Service and maintenance
     41,676       35,768  
   Equipment and supplies
     4,988       6,484  
Total revenues
     69,840       63,194  
                 
Cost of revenues:
                
   Software licenses
     407       425  
   Subscriptions and transactions
     7,860       7,884  
   Service and maintenance (1)
     19,434       15,388  
   Equipment and supplies
     3,679       4,614  
Total cost of revenues
     31,380       28,311  
Gross profit
     38,460       34,883  
                 
Operating expenses:
                
     Sales and marketing (1)
     16,788       15,366  
     Product development and engineering (1)
     10,660       8,452  
     General and administrative (1)
     9,792       9,185  
     Amortization of intangible assets
     8,384       5,330  
Total operating expenses
     45,624       38,333  
Loss from operations
     (7,164 )     (3,450 )
Other income, net
     763       1,793  
Loss before income taxes
     (6,401 )     (1,657 )
Provision (benefit) for income taxes
     317       (182 )
Net loss
   $  (6,718 )   $ (1,475 )
Basic and diluted net loss per share
   $ (0.28 )   $ (0.06 )
Shares used in computing basic and diluted net loss per share:
     23,958       23,745  
                 
Non-GAAP (excludes amortization of intangible assets, acquisition-related expenses and stock compensation expense):(2)
                
Net income
   $ 6,114     $ 7,883  
Diluted net income per share (3)
   $ 0.25     $ 0.32  
                 
(1)        Stock-based compensation is allocated as follows:
                
Cost of revenues: service and maintenance
   $ 521     $  468  
Sales and marketing
     1,343       1,297  
Product development and engineering
     400       383  
General and administrative
     2,149       1,880  
    $  4,413     $  4,028  
(2) Non-GAAP presentation excludes charges for amortization of intangible assets of $8,384 and $5,330, acquisition-related expenses of $35 and zero, and stock compensation expense of $4,413 and $4,028, for the six months ended December 31, 2008 and 2007, respectively.
                
 
(3) Shares used in computing non-GAAP diluted net income per share were 24,210 and 24,382 for the six months ended December 31, 2008 and 2007, respectively.
                

 
 
 

Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)

   
December 31,
    
June 30,
  
   
2008
    
2008
  
             
Assets
            
Current assets:
            
   Cash, cash equivalents and short-term investments
   $ 34,759     $ 35,373  
   Accounts receivable
     26,798       28,747  
   Other current assets
     4,501       6,157  
Total current assets
     66,058       70,277  
Property and equipment, net
     10,721       11,840  
Intangible assets, net
     93,752       115,414  
Other assets
     2,757       1,235  
Total assets
   $ 173,288     $ 198,766  
                 
Liabilities and stockholders' equity
                
Current liabilities:
                
   Accounts payable
   $ 6,095     $ 8,856  
   Accrued expenses
     9,040       10,997  
   Deferred revenue
     31,520       30,621  
Total current liabilities
     46,655       50,474  
Deferred revenue, non-current
     7,281       3,856  
Deferred income taxes
     2,386       4,179  
Other liabilities
     1,606       1,992  
Total liabilities
     57,928       60,501  
                 
Stockholders' equity
                
   Common stock
     26       26  
   Additional paid-in-capital
     282,405       277,660  
   Accumulated other comprehensive (loss) income
     (11,143 )     7,766  
   Treasury stock
     (24,218 )     (22,195 )
   Accumulated deficit
     (131,710 )     (124,992 )
Total stockholders' equity
     115,360       138,265  
Total liabilities and stockholders' equity
   $ 173,288     $ 198,766  










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 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
  
   
December 31,
  
   
2008
    
2007
  
Revenues:
            
   Software licenses
   $ 3,597     $ 3,393  
   Subscriptions and transactions
     7,744       7,342  
   Service and maintenance
     20,527       18,083  
   Equipment and supplies
     2,466       3,014  
Total revenues
     34,334       31,832  
                 
Cost of revenues:
                
   Software licenses
     207       237  
   Subscriptions and transactions
     3,743       3,913  
   Service and maintenance
     9,301       7,320  
   Equipment and supplies
     1,824       2,091  
Total cost of revenues
     15,075       13,561  
Gross profit
     19,259       18,271  
                 
Operating expenses:
                
     Sales and marketing
     7,502       7,161  
     Product development and engineering
     5,041       4,026  
     General and administrative
     3,522       3,747  
Total operating expenses
     16,065       14,934  
Non-GAAP income from operations
     3,194       3,337  
Other income, net
     615       896  
Non-GAAP income before income taxes
     3,809       4,233  
Provision for income taxes
     527       123  
Non-GAAP net income
   $ 3,282     $ 4,110  
                 
Diluted non-GAAP net income per share
   $ 0.14     $ 0.17  
                 


 
 
 



   
Non-GAAP
  
   
Six Months Ended
  
   
December 31,
  
   
2008
    
2007
  
Revenues:
            
   Software licenses
   $ 7,203     $ 6,758  
   Subscriptions and transactions
     15,973       14,184  
   Service and maintenance
     41,676       35,768  
   Equipment and supplies
     4,988       6,484  
Total revenues
     69,840       63,194  
                 
Cost of revenues:
                
   Software licenses
     407       425  
   Subscriptions and transactions
     7,860       7,884  
   Service and maintenance
     18,913       14,920  
   Equipment and supplies
     3,679       4,614  
Total cost of revenues
     30,859       27,843  
Gross profit
     38,981       35,351  
                 
Operating expenses:
                
     Sales and marketing
     15,445       14,069  
     Product development and engineering
     10,260       8,069  
     General and administrative
     7,608       7,305  
Total operating expenses
     33,313       29,443  
Non-GAAP income from operations
     5,668       5,908  
Other income, net
     763       1,793  
Non-GAAP income before income taxes
     6,431       7,701  
Provision (benefit) for income taxes
     317       (182 )
Non-GAAP net income
   $ 6,114     $ 7,883  
                 
Diluted non-GAAP net income per share
   $ 0.25     $ 0.32