ACI Worldwide (Nasdaq:ACIW), a leading international provider of electronic payments software and solutions, today announced financial results for the period ended June 30, 2009.
"The business is where we expected it to be at this point in 2009, and we are quite excited with the payments opportunities ahead of us, particularly in EMEA. Our second quarter revenues, on a constant FX-basis and without the distortion of non-recurring government mandate deals, are in line with the prior-year quarter. Moreover, our cash generation in the first half of the year was where I expected it to be and I'm pleased with how well we are tracking to our full year guidance," said Chief Executive Officer Philip Heasley.
Notable sales business during the quarter included:
- Americas: Strong Money Transfer System bookings seen in the U.S. augmented by applications sales to Canadian and U.S. processors. Americas also booked four key Latin American multi-product bank transactions.
- EMEA: Sales bookings included a large term renewal and add-on for a Dutch bank and an IBM System p BASE24-eps, ACI Proactive Risk Manager(tm) and ACI Payments Manager(tm) deal signed in France.
- Asia: Achieved a new customer in Vietnam for BASE24-eps as well as a risk management system sale in New Zealand.
Sales bookings in the quarter totaled $97.3 million which was a reduction of 3%, or $2.6 million, as compared to the June 2008 quarter. Notable changes in the mix of sales included a rise of approximately $20 million in add-ons and term extensions which was largely offset by a reduction of approximately $22 million in new sales/new applications activity.
Revenue was $87.2 million in the quarter ended June 30, 2009, a reduction of $22.0 million or 20% over the prior-year quarter revenue of $109.2 million. The decrease in revenue was largely attributable to initial license fee and service fee contributions of approximately $15.0 million due to the impact of Faster Payments and the Middle East switch "go live" in the prior-year quarter.. Negative foreign currency exchange impact of approximately $4 million also diminished second quarter 2009 results as compared to prior year. However, notwithstanding the absolute reduction in revenue, we achieved recurring revenue growth of $1.5 million compared to the prior-year quarter.
As of June 30, 2009, our estimated 60-month backlog was $1.476 billion as compared to $1.410 billion at March 31, 2009, and $1.437 billion as of June 30, 2008. As of June 30, 2009, our 12-month backlog was $349 million, as compared to $335 million for the quarter ended March 31, 2009, and $341 million for the quarter ended June 30, 2008. The 12-month backlog increase of $14 million as compared to the quarter ended March 31, 2009 is due to significant projects moving into the 12-month backlog period as well as the expected timing of revenue recognition for certain sales made in the quarter ended June 30, 2009. Both 12-month and 60-month backlog were positively impacted by foreign currency exchange rate movement since March 31, 2009.
We had $114.4 million in cash on hand at June 30, 2009, an increase of $4.9 million as compared to the March 31, 2009 quarter. As of June 30, 2009, we also had approximately $70.0 million in unused borrowings under our credit facility.
Operating Free Cash Flow
Operating free cash flow ("OFCF") for the quarter was $13.6 million compared to $(10.9) million for the June 2008 quarter. The year-over-year positive variance in operating free cash flow of $24.5 million was largely due to timing of $5.6 million in trade cash receipts, reduced payroll expenditure of approximately $5.4 million and $7.0 million in lower capital expenditures and facilities payments.
Operating loss was $3.2 million in the June 2009 quarter, a reduction of $4.5 million as compared to operating income of $1.3 million in the June 2008 quarter.
Operating expenses were $90.4 million in the June 2009 quarter compared to $108.0 million in the June 2008 quarter, an improvement of $17.6 million or 16%. Operating expense variances over prior-year quarter were as follows: a reduction of $3.5 million as a result of beneficial foreign exchange translation effect, a reduction of $4.6 million due to restructuring savings, a decrease of $3.8 million in release of deferred software and services expense, a reduction of $3.1 million in IBM IT Outsourcing transition costs, and lastly, a decrease of $2.6 million in bad debt expense and other costs.
Other Income and Expense
Other expense for the quarter was $3.7 million, compared to other income of $2.0 million in the June 2008 quarter. The increase in other expense versus the prior-year quarter resulted primarily from a negative variance of $3.6 million related to foreign currency exposure as well as $3.3 million increase in non-cash loss on the fair value interest rate swap. The losses were partially mitigated by a $1 million gain on the final cash settlement related to a 2006 sale of intellectual property.
Income tax benefit in the quarter was $3.4 million as a result of the pre-tax loss of $6.9 million.
Net Loss and Diluted Earnings Per Share
Net loss for the quarter was $3.6 million, compared to net income of $0.8 million during the same period last year.
Loss per share for the quarter ended June 2009 was $(0.10) per diluted share compared to earnings of $0.02 per diluted share during the same period last year.
Weighted Average Shares Outstanding
Total diluted weighted average shares outstanding were 34.1 million for the quarter ended June 30, 2009 as compared to 34.9 million shares outstanding for the quarter ended June 30, 2008.
Re-affirmation of Guidance
We do not anticipate any changes to our annual guidance based upon what we are seeing in our business markets to date. We now anticipate that our business will achieve the lower end of the guidance range. Hence, guidance remains as indicated on February 26, 2009 with the calendar year guidance as follows: Sales of $450-460 million, GAAP revenue of $415-425 million and GAAP Operating Income of $35-40 million
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