JERSEY CITY, N.J.--(BUSINESS WIRE)--Oct. 27, 1999--Fundtech, Ltd.
(Nasdaq: FNDT.O), a leading provider of e-payments and Internet banking
solutions, today announced its financial results for the third quarter
and nine months ended September 30, 1999. The Company reported revenue
of $7.2 million, a 3% increase from the $7.0 million reported for the
third quarter of 1998.
Adjusted net loss for the quarter, excluding acquisition-related
amortization charges was $1.0 million, or a loss of $0.07 per diluted
share, as compared to a gain of $1.8 million, or $0.16 per diluted
share, for the year-ago quarter. Including acquisition-related costs,
consisting of $417,000 in amortization charges, net loss for the
quarter was $1.4 million, or a loss of $0.10 per diluted share, and
was in line with management's preliminary estimate disclosed on
October 6, 1999.
Software license fees for the quarter were $3.8 million, a
decrease of 10% from $4.3 million for the three months ended September
30, 1998. Maintenance and services revenue was $3.0 million, a 31%
increase over $2.3 million in the year-ago quarter. Hardware sales
were $296,000 for the quarter, as compared to $396,000 for the quarter
ended September 30, 1998.
"We are disappointed with our third quarter results. As the Year
2000 has approached, financial institutions have become increasingly
cautious in making decisions affecting their mission critical
systems. This has resulted in the delaying of customer purchase
decisions, even of Y2K-compliant systems. We expect this Y2K-related
caution among potential customers to result in a slowdown in our
sales cycle until the Y2K market pressures dissipate," said Reuven
Ben-Menachem, Chairman and Chief Executive Officer.
"During the third quarter we have remained focused on long term
objectives and we have been able to achieve several important
strategic goals. We have gained approximately 350 new bank
customers through the Sterling cash management acquisition, and have
further rounded out our cash management product offering by adding
their Internet banking solution. We have also introduced a range of
new products into the marketplace targeted at high-end financial
institutions, including high-volume payment solutions based on Tandem
and UNIX platforms, which should significantly expand our market
reach," added Ben-Menachem. "We have expanded our international
sales force to allow us to compete in new markets. We have also
continued to invest heavily in developing technologies, such as our
Internet applications, which we believe will be critical for success
in this industry in the future. We believe that these achievements
have improved Fundtech's competitive position going forward."
Revenue for the nine months ended September 30, 1999 was $24.1
million, 57% higher than the $15.4 million reported over the prior
year period. Adjusted net income and net income per share, excluding
acquisition-related charges, were $3.4 million and $0.25,
respectively, for the nine months ended September 30, 1999, compared
to $3.1 million and $0.30 for the prior year period. Including
acquisition-related amortization charges, net loss and net loss per
share for the nine months ended September 30, 1999 were ($108,000) and
($0.01) respectively.
Fundtech is a leading provider of software solutions that
facilitate e-commerce and e-banking by enabling businesses and their
banks to electronically manage cash, process payments and transfer
funds. The Company's client/server and Internet software products
automate the process of transferring funds among corporations, banks
and clearance systems and enable businesses to manage global cash
positions efficiently and in real-time.
Certain statements contained herein, including statements regarding
the development of the company's services, markets, product
functionality and year 2000 compliance and future demand for the
company's product services and other statements regarding matters that
are not historical facts, are forward-looking statements. Such
statements include risks and uncertainties: consequently, actual
results may differ materially from those expressed or implied thereby.
Factors that could cause actual results to differ materially include,
but are not limited to, variability of quarterly operating results,
dependence on key personnel, ability to effectively manage growth,
risks associated with rapid technological advances and possible
acquisitions, any integration of those acquisitions into the company's
present business, risk associated with the company's strategic
partnerships, various project associated risks, including Internet
projects, substantial competition, risks associated with intellectual
operations and other risk factors listed from time to time in the
company's filing reports.
A conference call to discuss this announcement will be held on
Thursday, October 28, 1999 at 8:30 am Eastern Standard Time. The
call-in number is (212) 699-6810. There will be a replay available
for one week by dialing (303) 590-3000. The reservation number for
both calls is 633334.
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Fundtech Ltd. and its Subsidiaries
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
------- ------ ------- ------
Revenues
Software licenses $3,844 $4,267 $13,998 $9,211
Maintenance and services fees 3,011 2,291 8,803 4,759
Hardware sales 296 396 1,283 1,412
------ ------ ------- ------
Total Revenues 7,1516,954 24,084 15,382
------ ------ ------- ------
Cost of revenues
Software licenses costs 164 40 472 198
Maintenance and services costs 2,054 1,427 5,707 2,883
Hardware costs 213 322 980 1,160
------ ------ ------- ------
Total cost of revenues 2,431 1,789 7,159 4,241
------ ------ ------- ------
Gross profit 4,720 5,165 16,925 11,141
Operating expenses:
Software development 3,824 2,002 8,741 4,861
Selling and marketing, net 2,087 881 4,486 2,090
Amortization of acquisition-
related intangible assets 417 77 660 129
General and administrative 1,155 635 2,641 1,482
In-process R&D write-off 0 0 2,802 16,600
------ ------ ------- ------
Total Operating Costs 7,483 3,595 19,330 25,162
------ ------ ------- ------
Operating Income (loss) (2,763) 1,570 (2,405) (14,021)
Financial Income 1,320 166 2,297 412
------ ------ ------- ------
Net Income (loss) ($1,443) $1,736 ($108)($13,609)
====== ====== ======= =======
Net income (loss) per share:
Basic income (loss) per share ($0.10) $ 0.16 ($0.01) ($1.37)
Diluted income (loss) per share ($0.10) $ 0.16 ($0.01) ($1.37)
Diluted income (loss) per share
excluding in-process R&D
write-off ($0.10) $ 0.16 $ 0.20 $ 0.29
shares used in computing :
Basic income (loss) per share 13,935,399 10,751,000 12,485,490 9,912,000
Diluted income (loss)
per share 13,935,399 11,195,000 12,485,490 9,912,000
Diluted income ( loss)
per share excluding
in-process R&D write-off 13,935,399 11,195,000 13,168,690 10,435,000
Adjusted net income
per share ( a ) :
Adjusted net income (loss)
used in computing net
income (loss) per share (1,026) ($1,813) $ 3,354 $3,120
Diluted adjusted net income
(loss) per share ($0.07) $ 0.16 $ 0.25 $ 0.30
shares used in computing :
Diluted income (loss)
per share 13,935,399 11,195,000 13,168,690 10,435,000
(a) Adjusted net income and adjusted net income per share exclude the
pre-tax effects of the line items "Amortization of
acquisition-related intangible assets" and "In-process R&D
write-off", listed above.
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Fundtech Ltd. and its Subsidiaries
Consolidated Balance Sheets (unaudited)
(in thousands, except per share data)
As of As of
Sept. 30, Dec. 31,
1999 1998
-----------------------
ASSETS
CURRENT ASSETS
CASH & CASH EQUIVALENTS 46,552 13,019
SHORT-TERM INVESTMENTS 41,895 0
TRADE RECEIVABLES, NET 12,799 12,040
OTHER CURRENT ASSETS 1,915 579
------- -------
TOTAL CURRENT ASSETS 103,161 25,638
LONG TERM TRADE RECEIVABLES 742 244
FIXED ASSETS, NET 7,508 3,759
OTHER ASSETS, NET 20,092 2,963
------- -------
TOTAL ASSETS 131,503 32,604
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
TRADE PAYABLES 1,905 1,386
DEFERRED REVENUES AND ACCRUED EXPENSE 8,631 6,112
------- -------
TOTAL CURRENT LIABILITIES 10,536 7,498
------- -------
ILITIES 47 58
SHAREHOLDERS' EQUITY
SHARE CAPITAL 41 34
ADDITIONAL PAID-IN CAPITAL 137,672 41,664
ACCUMULATED OTHER COMPREHENSIVE LOSS (92) 0
DEFERRED COMPENSATION (162) (219)
ACCUMULATED DEFICIT (16,539) (16,431)
------- -------
TOTAL SHAREHOLDERS' EQUITY 120,920 25,048
------- -------
------- -------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 131,503 32,604
======= =======
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--30--jl/ny*
CONTACT: Fundtech Ltd.
Michael Carus
Executive Vice President - COO & CFO
201-946-1100
KEYWORD: NEW JERSEY
INDUSTRY KEYWORD: SOFTWARE BANKING E-COMMERCE EARNINGS
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