|Fundtech posted quarterly revenues of $28.1 million, a 21% increase year-over-year, compared to first quarter revenues of $23.2 million in 2007, and 5% decrease compared to fourth quarter 2007 revenues of $29.4 million. |
On a GAAP (Generally Accepted Accounting Principles) basis, the Company reported net income of $300,000 or $0.02 per diluted share, for the first quarter of 2008 compared with net income of $400,000, or $0.03 per diluted share, in the first quarter of 2007, and net income of $2.7 million, or $0.16 per diluted share, in the fourth quarter of 2007.
Excluding stock-based compensation and amortization of intangibles Fundtech's adjusted net income for the first quarter of 2008 was $1.6 million, or $0.10 per diluted share, compared with $1.9 million, or $0.12 per diluted share, in the first quarter of 2007 and $3.6 million, or $0.22 per diluted share, in the fourth quarter of 2007. The adjusted non-GAAP net income for the first quarter of 2007 also excluded amortization of capitalized software costs (See Schedule A attached to this news release -- Reconciliation to GAAP).
"We started the year on a positive note, meeting guidance and continuing to experience strong organic growth as revenues increased organically by 18% compared to the first quarter of 2007," said CEO Reuven Ben Menachem. "Global PAYplus is continuing to establish itself as the leading product in the market and we anticipate substantial revenue growth from Global PAYplus during the rest of the year. While we are starting to witness some signs of a slow down in the US market, we believe that our strength at the high end of the international market will have a larger impact on our revenues as evidenced by our increased revenue guidance for 2008.
I also see great potential with our recent acquisitions of Accountis and Troy ACH. Integrated into the Fundtech product line as ACHplus, it is an important addition to our currenmpor our currenmportant addition to our current service offering in the US and our sales and product management teams are actively introducing it to existing customers and new prospects. I see Accountis as an important strategic acquisition that can become very meaningful for Fundtech in the long term as part of our global Financial Supply Chain strategy."
Other operational highlights:
During the first quarter Fundtech closed 79 new deals and added 3 new bank customers.
During the first quarter Fundtech closed 3 new system sales: including 1 PAYplus USA and 2 at bbp.
During the first quarter Fundtech closed a multi year deal with Royal Bank of Scotland (RBS). RBS will resell Accountis' service bureau based Electronic Invoice Presentment and Payment offerings to its banking customers.
Reconciliation of GAAP results to non-GAAP results
Fundtech provides 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, amortization of intangibles and amortization of capitalized software costs.
A detailed reconciliation of GAAP net income to non-GAAP net income is included in the attached Schedule A.
The financial guidance provided is current as of today only and the Company undertakes no obligation to update its estimates.
For the second quarter of 2008 we expect revenues of between $30 million and $31.0 million, GAAP earnings per diluted share of between $0.04 and $0.09 and Non-GAAP earnings per diluted share, before all amortization expenses and stock-based compensation expenses, of between $0.12 to $0.17.
Including the impact of the Troy and Accountis acquisitions, we estimate that amortization expenses for the second quarter of 2008 will be approximately $500,000 and that stock-based compensation expenses will be approximately $800,000.
For fiscal 2008, we are increasing our revenue guidance from the previous range of $120.0 million and $122.5 million to a range of $123.5 million and $126 million.
Including the impact of the Troy and Accountis acquisitions we estimate that amortization expenses for 2008 will be approximately $2.1 million and that stock-based compensation expenses will be approximately $3.1 million.
Due to the increase in the annual amortization and stock-based compensation expenses we are reducing our guidance for GAAP earnings per diluted share to a range between $0.39 and $0.49 while keeping guidance for non-GAAP earnings per diluted share, before all amortization expenses and stock-based compensation expenses, unchanged between $0.70 and $0.80.
The Company's guidance for the second quarter of 2008 and full-year 2008 does not include the impact of deferred taxes and also does not include the impact of any future impairment of intangible assets, as these assets are periodically are being evaluated by the Company's management under evolving accounting standards which are incapable of assessment in advance.
Read the consolidated statements here: