- Published: 10 August 2012
- Written by Editor
Bottomline Technologies Reports Fourth Quarter Results
64% Growth in Subscription & Transaction Revenues Highlights Fourth Quarter
Bottomline Technologies (EPAY), a leading provider of cloud-based payment, invoice and banking solutions, today reported financial results for the fourth quarter and year ended June 30, 2012.
Revenues for the fourth quarter were $61.4 million, an increase of $7.1 million, or 13%, from the fourth quarter of last year. Subscription and transaction revenues, which are primarily related to the company’s banking, legal spend management and Paymode-X cloud-based applications, increased 64% from the fourth quarter of last year to $28.0 million.
Gross margin for the fourth quarter was $33.5 million, an increase of $4.7 million from the fourth quarter of last year. Net loss for the fourth quarter was $1.2 million, or net loss per share of $0.03.
Core net income for the fourth quarter was $9.1 million. Core net income excludes acquisition-related expenses, including amortization of intangible assets, of $5.7 million, restructuring expenses of $1.0 million and equity-based compensation of $3.5 million. Core earnings per share was $0.26.
“We are pleased to report a very good fourth quarter which completed a truly transformational year for Bottomline,” said Rob Eberle, President and CEO of Bottomline Technologies. “During the quarter we accelerated the execution against our strategic plan to deliver more of our capabilities via the Cloud and drive a higher portion of our revenues through a subscription and transaction revenue model. The results of that significant ongoing effort were evidenced by 64% growth in subscription and transaction revenues during the fourth quarter. We enter fiscal 2013 with a compelling product set, a powerful and leveragable business model, a significant backlog and strong pipeline, and importantly, a clear conviction that the path we are on will drive increasingly positive results and shareholder value in the fiscal year ahead and beyond.”
Revenues for the year ended June 30, 2012 increased 18% to $224.3 million as compared with $189.4 million last year. Subscription and transaction revenues increased 54% to $85.0 million in the fiscal year. Net income for the year ended June 30, 2012 was $1.7 million, or $0.05 per share.
Core net income for the year ended June 30, 2012 was $34.8 million after excluding acquisition-related expenses of $17.7 million, restructuring expenses of $1.6 million and equity-based compensation of $13.8 million. Core earnings per share was $0.99 for the year ended June 30, 2012.
Fourth Quarter Customer Highlights
- Chosen by eight leading insurance companies and corporations, including Carolina Casualty Insurance Company, CC Services Inc., CPC Logistics, Guarantee Fund Management Solutions, Illinois Casualty Company, Philadelphia Insurance Co. and Texas Mutual Insurance Co., to provide Bottomline's SaaS-based legal spend management solutions to automate, manage and control their legal spend.
- Leading organizations, such as Ally Financial, AXA Financial, Cigna Corp., E.I. DuPont De Nemours, Fairfax County Public Schools, Franklin Templeton Companies, Graycor Services, Happy State Bank, ING Financial Services, International Financial Data Services, J.M. Huber Corporation, Jack in the Box, Inc., Liberty Mutual Insurance Co., Marriott International, Massachusetts State Treasury, Reliance Steel & Aluminum Co., Sears Canada, Sears Roebuck & Company, State of North Carolina, State of Vermont/SHI, Sun Life Financial, Tower Insurance Company, Verizon Corp., Vodafone Ltd. and Wells Fargo Securities, chose Bottomline’s payment automation solutions.
- Selected for SWIFT connectivity and expertise by leading organizations including Transocean, Inc. and National Grid UK Ltd.
- Deepened relationships in the healthcare vertical with customers including Baptist Health System, CHI Catholic Healthcare Initiatives, Children's Hospital of Pittsburgh of UPMC, Frederick Memorial Hospital, Louisiana Heart Hospital, Northeast Medical Center, Northwest Community Healthcare, Noven Pharmaceuticals Inc., Raritan Bay Medical Center, Summa Health System, San Joaquin General Hospital and West Georgia Health System Inc.
- Selected by Avery Dennison Corporation, Avon Products, Inc., Chivas Bros. Ltd., The Dixie Group, Inc., Fox Entertainment, The Ministry of Justice (UK), Layne Christensen Company, Ralcorp Holdings, Inc., Recology, Inc., Royal Carribean Weston, SAS Institute, Scholastic, Inc., Symmons Industries, Inc., Time Warner Cable and Trinity Mirror Shared Services Ltd to provide transaction document automation solutions.
Fourth Quarter Strategic Corporate Highlights
- Authorized a $20 million stock repurchase program.
- Announced that Paymode-X®, Bottomline’s business-to-business settlement network, has surpassed 185,000 vendors.
- Awarded our customer Cigna Global Health Benefits our 2012 “Think Green” award, which recognizes organizations that use Bottomline solutions to drive environmentally-friendly business practices.
- Announced the appointment of Jennifer M. Gray to the company’s Board of Directors. Ms. Gray is the founder and CEO of Market Street Talent, an information technology staffing and consulting business serving innovative technology clients throughout the continental US and Canada.
Non-GAAP Financial Measures
We have presented supplemental non-GAAP financial measures as part of this earnings release. The presentation of this non-GAAP financial information should not be considered in isolation from, or as a substitute for, our financial results presented in accordance with GAAP. Core net income and core earnings per share are non-GAAP financial measures. These non-GAAP financial measures exclude certain items, specifically amortization of intangible assets, impairment losses on equity investments, equity-based compensation, acquisition-related expenses (including acquisition-related earn-outs) and restructuring related costs. Acquisition-related expenses include legal and professional fees and other transaction costs associated with business and asset acquisitions, costs associated with integrating acquired businesses, including costs for transitional employees or services, integration related professional services costs and other charges we incur as a direct result of our acquisition and integration efforts. We believe 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, including more meaningful comparisons of financial results to historical periods and to the financial results of less acquisitive peer and competitor companies. Our executive management team uses these same non-GAAP financial measures internally to assess the ongoing performance of the company. Additionally, the same non-GAAP information is used for planning purposes, including the preparation of operating budgets, and in communications with our board of directors in respect of financial performance. 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 twelve month periods ended June 30, 2012 and 2011 is as follows:
|
Three Months Ended
June 30, |
Year Ended
June 30, |
|||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||
| GAAP net (loss) income | $ | (1,168 | ) | $ | 30,058 | $ | 1,705 | $ | 35,893 | |||||||||||
|
Release of US deferred tax asset valuation
allowance |
- | (27,394 | ) | - | (27,394 | ) | ||||||||||||||
| Amortization of intangible assets | 4,702 | 4,089 | 15,753 | 12,662 | ||||||||||||||||
| Equity-based compensation | 3,511 | 2,702 | 13,768 | 11,467 | ||||||||||||||||
| Acquisition-related expenses | 980 | 105 | 1,987 | 1,677 | ||||||||||||||||
| Restructuring expenses | 1,049 | 358 | 1,609 | 1,111 | ||||||||||||||||
| Core net income | $ | 9,074 | $ | 9,918 | $ | 34,822 | $ | 35,416 | ||||||||||||
About Bottomline Technologies
Bottomline Technologies (EPAY) provides cloud-based payment, invoice and banking solutions to corporations, financial institutions and banks around the world. The company’s solutions are used to streamline, automate and manage processes involving payments, invoicing, global cash management, supply chain finance and transactional documents. Organizations trust Bottomline 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, Paymode-X 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, including statements reflecting our expectations about our backlog and pipeline and the ability of our strategic plan to drive increasingly positive results and shareholder value. Any statements that are not statements of historical fact (including but not limited to statements containing the words “will”, “believes,” “plans,” “anticipates,” “expects,” “look forward”, “estimates” and similar expressions) should be considered to be forward-looking statements. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors including, among others, 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 Form 10-K for the fiscal year ended June 30, 2011 and any subsequently filed Form 10-Q’s and Form 8-K’s or amendments thereto. 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 | |||||||||||
| June 30, | |||||||||||
| 2012 | 2011 | ||||||||||
| Revenues: | |||||||||||
| Subscriptions and transactions | $ | 27,983 | $ | 17,081 | |||||||
| Software licenses | 4,969 | 4,845 | |||||||||
| Service and maintenance | 26,440 | 29,806 | |||||||||
| Equipment and supplies | 2,006 | 2,517 | |||||||||
| Total revenues | 61,398 | 54,249 | |||||||||
| Cost of revenues: | |||||||||||
| Subscriptions and transactions | 12,909 | 9,146 | |||||||||
| Software licenses | 462 | 479 | |||||||||
| Service and maintenance | 12,896 | 13,726 | |||||||||
| Equipment and supplies | 1,630 | 2,060 | |||||||||
| Total cost of revenues | 27,897 | 25,411 | |||||||||
| Gross profit | 33,501 | 28,838 | |||||||||
| Operating expenses: | |||||||||||
| Sales and marketing | 14,180 | 11,094 | |||||||||
| Product development and engineering | 9,327 | 5,207 | |||||||||
| General and administrative | 5,990 | 5,095 | |||||||||
| Amortization of intangible assets | 4,702 | 4,089 | |||||||||
| Total operating expenses | 34,199 | 25,485 | |||||||||
| Income (loss) from operations | (698 | ) | 3,353 | ||||||||
| Other income, net | 7 | 110 | |||||||||
| Income (loss) before income taxes | (691 | ) | 3,463 | ||||||||
| Provision (benefit) for income taxes(1) | 477 | (26,595 | ) | ||||||||
| Net income (loss) | $ | (1,168 | ) | $ | 30,058 | ||||||
| Basic net income (loss) per share attributable to common stockholders | $ | (0.03 | ) | $ | 0.92 | ||||||
| Diluted net income (loss) per share attributable to common stockholders | $ | (0.03 | ) | $ | 0.87 | ||||||
| Shares used in computing basic net income (loss) per share: | 34,744 | 32,539 | |||||||||
| Shares used in computing diluted net income (loss) per share: | 34,744 | 34,433 | |||||||||
| Core net income (excludes amortization of intangible assets, acquisition-related expenses, restructuring expenses and stock compensation expense):(2) | |||||||||||
| Net income | $ | 9,074 | $ | 9,918 | |||||||
| Diluted net income per share(3) | $ | 0.26 | $ | 0.29 | |||||||
| (1) | The income tax benefit for the three months ended June 30, 2011 includes a benefit of $27,394 associated with the release of a US deferred tax asset valuation allowance. | |
| (2) | Core net income excludes the release of a US deferred tax asset valuation allowance of zero and $27,394, charges for amortization of intangible assets of $4,702 and $4,089, acquisition-related expenses of $980 and $105, restructuring expenses of $1,049 and $358 and equity-based compensation of $3,511 and $2,702, for the three months ended June 30, 2012 and 2011, respectively. | |
| (3) | Shares used in diluted core net income per share were 35,438 and 34,433 for the three months ended June 30, 2012 and 2011, respectively. | |
| Bottomline Technologies | ||||||||||
| Unaudited Condensed Consolidated Statements of Operations | ||||||||||
| (in thousands, except per share amounts) | ||||||||||
| Year Ended | ||||||||||
| June 30, | ||||||||||
| 2012 | 2011 | |||||||||
| Revenues: | ||||||||||
| Subscriptions and transactions | $ | 85,005 | $ | 55,133 | ||||||
| Software licenses | 17,562 | 16,547 | ||||||||
| Service and maintenance | 113,832 | 108,930 | ||||||||
| Equipment and supplies | 7,885 | 8,771 | ||||||||
| Total revenues | 224,284 | 189,381 | ||||||||
| Cost of revenues: | ||||||||||
| Subscriptions and transactions | 41,964 | 29,935 | ||||||||
| Software licenses | 2,082 | 1,352 | ||||||||
| Service and maintenance | 51,559 | 47,975 | ||||||||
| Equipment and supplies | 6,280 | 6,880 | ||||||||
| Total cost of revenues | 101,885 | 86,142 | ||||||||
| Gross profit | 122,399 | 103,239 | ||||||||
| Operating expenses: | ||||||||||
| Sales and marketing | 49,204 | 39,345 | ||||||||
| Product development and engineering | 28,687 | 21,862 | ||||||||
| General and administrative | 21,495 | 19,502 | ||||||||
| Amortization of intangible assets | 15,753 | 12,662 | ||||||||
| Total operating expenses | 115,139 | 93,371 | ||||||||
| Income from operations | 7,260 | 9,868 | ||||||||
| Other income, net | 41 | 558 | ||||||||
| Income before income taxes | 7,301 | 10,426 | ||||||||
| Provision (benefit) for income taxes (1) | 5,596 | (25,467 | ) | |||||||
| Net income | $ | 1,705 | $ | 35,893 | ||||||
| Basic net income per share attributable to common stockholders | $ | 0.05 | $ | 1.13 | ||||||
| Diluted net income per share attributable to common stockholders | $ | 0.05 | $ | 1.07 | ||||||
| Shares used in computing basic net income per share: | 34,268 | 31,660 | ||||||||
| Shares used in computing diluted net income per share: | 35,244 | 33,453 | ||||||||
| Core net income (excludes amortization of intangible assets, acquisition-related expenses, restructuring expenses and stock compensation expense):(2) | ||||||||||
| Net income | $ | 34,822 | $ | 35,416 | ||||||
| Diluted net income per share(3) | $ | 0.99 | $ | 1.06 | ||||||
| (1) | The income tax benefit for the year ended June 30, 2011 includes a benefit of $27,394 associated with the release of a US deferred tax asset valuation allowance during the fourth quarter and $937 related to a discrete tax benefit during the first quarter. | |
| (2) | Core net income excludes the release of a US deferred tax asset valuation allowance of zero and $27,394, charges for amortization of intangible assets of $15,753 and $12,662, acquisition-related expenses of $1,987 and $1,677, restructuring expenses of $1,609 and $1,111 and equity-based compensation of $13,768 and $11,467, for the year ended June 30, 2012 and 2011, respectively. | |
| (3) | Shares used in computing diluted earnings per share were 35,244 and 33,453 for the year ended June 30, 2012 and 2011, respectively. | |
| Bottomline Technologies | |||||||||||
| Unaudited Condensed Consolidated Balance Sheets | |||||||||||
| (in thousands) | |||||||||||
| June 30, | June 30, | ||||||||||
| 2012 | 2011 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash, cash equivalents and short-term investments | $ | 124,862 | $ | 112,017 | |||||||
| Accounts receivable | 45,344 | 41,535 | |||||||||
| Other current assets | 15,465 | 15,308 | |||||||||
| Total current assets | 185,671 | 168,860 | |||||||||
| Property and equipment, net | 19,756 | 16,098 | |||||||||
| Intangible assets, net | 177,941 | 173,073 | |||||||||
| Other assets | 9,003 | 5,303 | |||||||||
| Total assets | $ | 392,371 | $ | 363,334 | |||||||
| Liabilities and stockholders' equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 8,841 | $ | 8,971 | |||||||
| Accrued expenses | 17,170 | 18,706 | |||||||||
| Deferred revenue | 41,304 | 40,510 | |||||||||
| Total current liabilities | 67,315 | 68,187 | |||||||||
| Deferred revenue, non-current | 7,072 | 5,438 | |||||||||
| Deferred income taxes | 1,641 | 2,208 | |||||||||
| Other liabilities | 2,157 | 1,827 | |||||||||
| Total liabilities | 78,185 | 77,660 | |||||||||
| Stockholders' equity | |||||||||||
| Common stock | 37 | 35 | |||||||||
| Additional paid-in-capital | 438,732 | 408,375 | |||||||||
| Accumulated other comprehensive loss | (6,564 | ) | (4,524 | ) | |||||||
| Treasury stock | (22,291 | ) | (20,779 | ) | |||||||
| Accumulated deficit | (95,728 | ) | (97,433 | ) | |||||||
| Total stockholders' equity | 314,186 | 285,674 | |||||||||
| Total liabilities and stockholders' equity | $ | 392,371 | $ | 363,334 | |||||||
Kevin Donovan, 603-501-5240
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