Fundtech Ltd. (NASDAQ: FNDT), a leading provider of global electronic payment, settlement and cash management solutions, today announced financial results for the third quarter ended September 30, 2006. Fundtech posted quarterly revenues of $21.5 million, a 12% increase year-over-year, compared to third quarter revenue of $19.1 million in 2005, and unchanged compared to second quarter 2006 revenue of $21.5.
On a GAAP (Generally Accepted Accounting Principles) basis, the Company reported net income of $1,185,000 or $0.08 per diluted share, for the third quarter of 2006 compared with net income of $1,374,000, or $0.09 per diluted share, in the third quarter of 2005, and net income of $770,000, or $0.05 per diluted share, in the second quarter of 2006.
Excluding stock-based compensation, amortization of intangibles and amortization of capitalized software costs, Fundtech's adjusted non-GAAP net income for the third quarter of 2006 was $2.5 million, or $0.16 per diluted share, compared with $2.0 million, or $0.13 per diluted share, in the third quarter of 2005 and $2.2 million, or $0.14 per diluted share, in the second quarter of 2006. (See Schedule A attached to this news release -- Reconciliation to GAAP).
"I am extremely pleased by the pace of our progress in adding customers to our hosting business for both our cash management and payments solutions," said CEO Reuven Ben Menachem. "This means that we are building backlog of revenues for the future while still meeting our short-term financial goals. We are also witnessing increased interest in our advanced payment solutions at the high end of the market, particularly in Europe. I believe that over the next twelve months we will be able to accelerate our growth in this segment of the market as well."
Other operational highlights:
- During the third quarter Fundtech closed 50 new deals and added 8 new bank customers.
- During the third quarter Fundtech closed 11 new system sales: four PAYplus USA, one CASHplus, two Global Liquidity Management, three new customers for our Swiss gateway business, and one new global bank that licensed our CLS system.
- In the U.S.; Year-to-date we have closed ASP and related transactions which are expected to generate $15 million over five years, 36% higher than the equivalent business booked in all of 2005.
Guidance
The financial guidance provided is current as of today only and the Company undertakes no obligation to update its estimates.
For the fourth quarter of 2006 we expect revenues of between $21.5 million and $22.5 million, GAAP earnings per diluted share of between $0.05 and $0.11 and adjusted non-GAAP earnings per diluted share, before all amortization expenses and stock compensation expenses, are expected to be in the range of $0.13 to $0.19.
For fiscal 2006, we expect revenues of between $83.9 million and $84.9 million, GAAP earnings per diluted share of between $0.18 and $0.24 and adjusted non-GAAP earnings per diluted share, before all amortization expenses and stock compensation expenses, are expected to be in the range of $0.51 to $0.57.
We estimate that amortization expenses for the fourth quarter of 2006 will be approximately $710,000 and that stock compensation expenses will be approximately $580,000.
The company's guidance for the fourth quarter of 2006 and full-year 2006 assumes no change in the calculation of the Company's tax provision, which currently assumes a full valuation allowance against the Company's deferred tax assets.