Fundtech Ltd. (Nasdaq:FNDT), a market leader in global transaction banking solutions, today announced financial results for the fourth quarter and full year ended December 31, 2009.
Fundtech posted quarterly revenues of $32.8 million, a 10% increase year-over-year, compared to fourth quarter revenues of $29.8 million in 2008, and a 7% increase compared to third quarter 2009 revenues of $30.6 million.
On a GAAP (Generally Accepted Accounting Principles) basis, Fundtech reported net income of $3.4 million or $0.21 per diluted share, for the fourth quarter of 2009 compared with net loss of ($2.2) million, or ($0.14) per diluted share, in the fourth quarter of 2008, and net income of $1.6 million, or $0.10 per diluted share, in the third quarter of 2009.
Excluding stock-based compensation, amortization of intangibles, and deferred taxes Fundtech's adjusted net income for the fourth quarter of 2009 was $3.3 million, or $0.21 per diluted share, compared with $0.9 million, or $0.06 per diluted share, in the fourth quarter of 2008 and $2.8 million, or $0.18 per diluted share, in the third quarter of 2009. In the fourth quarter of 2008 adjusted net income also excluded impairment of goodwill and other intangible assets, and impairment of marketable securities (See Schedule A attached to this news release -- Reconciliation to GAAP).
For the year ended December 31, 2009, revenues decreased 3% to $117.8 million from $121.0 million in 2008. GAAP net income in 2009 was $4.7 million, or $0.30 per diluted share, compared with net income of $1.2 million or $0.08 per diluted share, in 2008. Excluding stock-based compensation, amortization of intangibles, and deferred taxes Fundtech's non- GAAP adjusted net income for 2009 was $8.3 million, or $0.53 per diluted share, compared to $8.9 million, or $0.54 per diluted share, in 2008. In 2008 adjusted net income also excluded impairment of goodwill and other intangible assets, and impairment of marketable securities (See Schedule A Attached to this Press Release -- Reconciliation to GAAP).
Commenting on the results, Fundtech Chairman of the Board, Avi Fischer, said: "In one of the wo worst business environments, the company performed very well. Our record revenues in the fourth-quarter demonstrate that Fundtech's business is solid and I believe it is an important indicator towards a promising 2010."
Fundtech CEO Reuven BenMenachem said: "I believe that we are emerging from the global financial crisis stronger than ever, and that we will resume posting double-digit organic growth in 2010. Our main growth engine continues to be Global PAYplus®, which is gaining momentum around the world due to the introduction of our SOA (Services Oriented Architecture) technology, and the increased interest by banks to invest in their global payments infrastructure. While we continue to see weakness in the U.S. small-bank market, our product lines across the globe are well poised for a year of solid growth in 2010."
- During the fourth quarter excluding Accountis Fundtech closed 153 new deals and added 9 new bank customers.
- During the fourth quarter Fundtech closed 12 new system sales with banks including 5 U.S. Payments, 1 Global PAYplus with a U.S. Regional bank, and 6 at BBP.
- As previously announced, during the fourth quarter Fundtech closed a major extension of a Global PAYplus system implementation with a large European bank customer.
- During the fourth quarter Fundtech recorded a positive adjustment of $1.3 million relating to deferred taxes associated with its tax loss carry forwards.
- For the year 2009 operating cash flows were $17.3 million compared to $13.8 million in 2008.
- During 2009 Fundtech acquired 883,000 ordinary shares in consideration for $8.5 million as part of its share repurchase program.
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 Fundtech 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, impairment of goodwill and other intangible assets, impairment of marketable securities, and deferred taxes.
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 Fundtech undertakes no obligation to update its estimates.
For the year 2010 Fundtech is keeping its guidance unchanged as follows:
- Fundtech estimates that revenues for 2010 will be between $132 million and $135 million; that GAAP earnings per diluted share will be between $0.32 and $ 0.42; and that non-GAAP earnings per diluted share, before all amortization expenses and stock-based compensation expenses, will be between $0.63 and $0.73.
- Fundtech estimates that financial income for 2010 will be approximately $200,000 and that tax expenses, excluding deferred taxes will be approximately $1.5 million.
- Fundtech estimates that amortization expenses for 2010 will be approximately $2 million and that stock-based compensation expenses will be approximately $3.0 million.
- Fundtech estimates that the number of shares that will be used for the calculation of 2010 earnings per share will be approximately 16.2 million shares.
For the First quarter of 2010 Fundtech is providing the following guidance:
- Fundtech estimates that first quarter revenues will be between $32.2 million and $32.9 million; that GAAP earnings per diluted share will be between $0.03 and $0.07; and that non-GAAP earnings per diluted share, before all amortization expenses and stock-based compensation expenses, will be between $0.10 and $0.14.
- Fundtech estimates that financial income for the quarter will be approximately $50,000 and that tax expenses, excluding deferred taxes will be approximately $300,000.
- Fundtech estimates that quarterly amortization expenses for the first quarter of 2010 will be approximately $500,000 and that stock-based compensation expenses will be approximately $700,000.
- Fundtech estimates that the number of shares used for the calculation of quarterly earnings per share will be 16.1 million shares.
Fundtech's guidance 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 being evaluated by Fundtech's management under evolving accounting standards which are incapable of assessment in advance.