Fundtech Ltd. (NASDAQ: FNDT - News), a leading provider of global electronic payment, settlement and cash management solutions, today announced its financial results for the third quarter ended September 30, 2004.
Third quarter 2004 revenues increased 4% sequentially and 18% year-over-year to $14.2 million, from $13.7 million in the second quarter of 2004 and $12.0 million in the third quarter of 2003. Closed 38 new deals and added eight new bank customers. Closed nine new system sales: four PAYplus USA, two CASHplus and three interbank connectivity. Began providing services to a top five global bank in connection with a possible Global PAYplus transaction in 2005. Generated revenues in connection with our new initiative in the securities trading settlement market. In the U.S.: closed ASP and disaster recovery services transactions, which are expected to generate $1.2 million of revenues over the next five years.
On a GAAP (Generally Accepted Accounting Principles) basis, net income for the third quarter of 2004 increased to $710,000, or $0.05 per diluted share, compared with net income of $388,000, or $0.03 per diluted share, for the second quarter of 2004 and net income of $247,000, or $0.02 per share, in the third quarter of 2003.
Excluding amortization of intangibles and amortization of capitalized software costs, Fundtech's adjusted net profit for the third quarter of 2004 was $1.3 million, or $0.09 per diluted share, compared with $1.0 million, or $0.07 per diluted share, in the second quarter of 2004 and $876,000, or $0.06 per diluted share, in the third quarter of 2003. (See Schedule A attached to this news release - Reconciliation to GAAP).
"Fundtech achieved record revenues in the third quarter, driven by increased demand at the high end of the market," said CEO Reuven Ben Menachem. "During the quarter we added several new customers to our roster and secured new deals with a number of existing customers. Our continued success in demonstrating the value of Fundtech's electronic payment, settlement and cash management solutions has enabled us to build a strong foundation for growth in 2005 and beyond."
On October 1, 2004 Fundtech's Swiss subsidiary, bbp, completed the acquisition of Datasphere, a provider of interbank clearing and securities settlement systems in Europe with a client base of more than 70 financial institutions. Datasphere, based in Geneva, Switzerland, offers products for SWIFT, Swiss Franc clearing (SIC) and electronic securities clearing (SECOM).
As the operator of the world's largest SWIFTNet service bureau, bbp expects to realize numerous synergies with Datasphere. The companies have complementary geographic coverage in European markets; provide complementary hardware platform technologies; and expect to combine their product offerings to create unmatched breadth and depth.
Additional third quarter highlights:
For the nine months ended September 30, 2004, revenues were $40.8 million, up 18% from $34.7 million for the same period in 2003.
On a GAAP basis, net income for the first nine months of 2004 was $1.4 million, or $0.09 per diluted share, compared with a net loss of $(608,000), or $(0.04) per share, for the first nine months of 2003.
Excluding amortization of intangibles and amortization of capitalized software costs, Fundtech's adjusted net profit for the first nine months of 2004 was $3.2 million, or $0.21 per diluted share, compared with adjusted net profit of $1.3 million, or $0.09 per diluted share, for the nine months of 2003. (See Schedule A attached to this news release - Reconciliation to GAAP).
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 2004, Fundtech expects revenues to be between $14.7 million and $15.4 million. GAAP earnings per diluted share, including all amortization expenses, are expected to be in the range of $0.05 to $0.08.
Adjusted earnings per diluted share, excluding all amortization expenses, are expected to be in the range of $0.09 to $0.12.
Amortization expenses in the fourth quarter are estimated to be approximately $650,000, or $0.04 per share.
The impact of the Datasphere acquisition on the operating results of Fundtech in the fourth quarter is expected to be immaterial.