Fundtech (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, 2007.
Fundtech posted quarterly revenues of $26.6 million, a 24% increase year-over-year, compared to third quarter revenues of $21.5 million in 2006 and 5% higher than second quarter 2007 revenues of $25.4 million.
On a GAAP (Generally Accepted Accounting Principles) basis, the Company reported net income of $2.2 million or $0.13 per diluted share, for the third quarter of 2007, compared with net income of $1.2 million, or $0.08 per diluted share, in the third quarter of 2006, and net income of $1.7 million, or $0.10 per diluted share, in the second quarter of 2007.
Excluding stock-based compensation and amortization of intangibles, Fundtech's adjusted non-GAAP net income for the third quarter of 2007 was $3.1 million, or $0.19 per diluted share, compared with $2.5 million, or $0.16 per diluted share, in the third quarter of 2006 and $2.8 million, or $0.17 per diluted share, in the second quarter of 2007. The adjusted non-GAAP net income for the third quarter of 2006 also excluded amortization of capitalized software costs (See Schedule A attached to this news release -- Reconciliation to GAAP).
"During the third quarter we continued to post strong organic growth as our revenues increased organically by 20% compared to the third quarter of 2006." said CEO Reuven BenMenachem. "Looking ahead to 2008 I believe that our growth will continue to be strong. I believe that our large customers will expand their business with us as they seek to enhance the functionality and scope of their Global PAYplus implementations and I also believe that our leadership position in the global payments market will make us the preferred solution for other large banks that are seeking to overhaul their payments infrastructure."
Other operational highlights: -- During the third quarter Fundtech closed 77 new deals and added 6 new bank customers. -- During the third quarter Fundtech closed 11 new system sales including 1 Global PAYplus, CASHplus, 1 WebACCESS, 3 PAYplus USA, 4 IGT plus , and 1 Transact CashIn. -- The Global PAYplus deal and one of the IGT plus deals were with a major bank in the Pacific Rim that will implement both systems. -- To support the current and expected growth of Global PAYplus revenues Fundtech has recruited approximately 30 technical people over the last six months and expects to add additional 25 before the end of 2007. Reconciliation of GAAP results to non-GAAP results
Fundtech provides adjusted non-GAAP operating results as a supplement to its GAAP financial results. The presentation of this information should not be considered in isolation to, or as a substitute for, the financial results presented in accordance with GAAP. Management believes that 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. Fundtech's executive management team uses these same non-GAAP measures 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.
Fundtech's non-GAAP results exclude stock-based compensation, and amortization of intangibles and for the quarters prior to the second quarter of 2007 also excluding amortization of capitalized software costs.
A detailed reconciliation of GAAP net income to non-GAAP net income is included in Schedule A, Reconciliation to GAAP which is attached to this news release.
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 2007 we expect revenues of between $29 million and $30 million, GAAP earnings per diluted share of between $0.13 and $0.18 and adjusted non-GAAP earnings per diluted share, before all amortization expenses and stock compensation expenses, are expected to be in the range of $0.19 to $0.24.
For fiscal 2007 we are increasing our revenue guidance and earnings per share guidance. We currently expect revenues of between $104.2 million and $105.2 million up from the previous guidance of $100.0 million to $101.5 million.
We expect GAAP earnings per diluted share of between $0.39 and $0.44 compared to our previous guidance of $0.37 and $0.43 and expect adjusted non-GAAP earnings per diluted share, before all amortization expenses and stock compensation expenses, are expected to be in the range of $0.66 to $0.71 up from our previous guidance of $0.63 to $0.70.
We estimate that for 2007 our income tax expenses will be approximately $1.3 million while net interest income will be approximately $2.0 million.
We estimate that amortization expenses for 2007 will be approximately $1.8 million and that stock compensation expenses will be approximately $2.7 million.
The Company's guidance for the fourth quarter of 2007 and full-year 2007 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.
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