Fundtech, a supplier of global payments and cash management solutions, is revising its revenue forceasts for the third quarter, as a result of deals that were delayed in the aftermath of the 11 September attacks, and several CLS contracts that were pushed-out after the Continuous Link Settlement Bank announced the delay of the go-live date until the second quarter of 2002.
The New Jersey-based firm says that it expects revenues for the third quarter ending 30 September, 2001 to be $10.5 million to $11.2 million, compared with its earlier guidance of $11-$12 million. Loss per share, after exceptions for goodwill and non-cash charges, has more than doubled, from $0.12 per share to between $0.25 and $0.35. Net loss after provisions will be closer to $0.75 per share.
The larger than expected loss is attributed to the dip in revenues aligned with higher software development costs and accruals in expenses.
Reuven Ben Menachem, chairman and CEO of Fundtech, says the company added six new banks during the third quarter and closed 18 major deals. The company also booked an additional $1.6 million of ASP business, which will be recognised in quarterly installments. "However, the tragic events of September 11th have increased the level of uncertainty," he says. "Therefore, we believe it is prudent to be conservative in our financial judgments. This conservatism is reflected in higher accruals and an increase in the reserve for doubtful accounts."
He says the company balance sheet is in good shape, with over $50 million in cash and equivalents as of 30 September. Cost reduction measures will come through in the fourth quarter, he adds.