Fundtech Q1 net income rises

Source: Fundtech

Fundtech (Nasdaq:FNDT), a market leader in global transaction banking solutions, today announced financial results for the first quarter 2011.

Fundtech posted quarterly revenues of $37.2 million, an 11% increase year-over-year, compared to first quarter revenues of $33.4 million in 2010, and a 2% decrease compared to fourth quarter 2010 revenues of $37.8 million.

On a GAAP (Generally Accepted Accounting Principles) basis, Fundtech reported net income of $2.4 million, or $0.15 per diluted share, for the first quarter of 2011 compared with net income of $1.4 million, or $0.09 per diluted share, in the first quarter of 2010, and net income of $5.8 million, or $0.37 per diluted share, in the fourth quarter of 2010.

Excluding stock-based compensation, amortization of intangibles, and deferred taxes Fundtech's adjusted (non-GAAP) net income for the first quarter of 2011 was $3.6 million, or $0.23 per diluted share, compared with $2.5 million, or $0.16 per diluted share, in the first quarter of 2010 and $4.6 million, or $0.29 per diluted share, in the fourth quarter of 2010. (See Schedule A attached to this news release -- Reconciliation from GAAP).

"The first quarter was another strong quarter for us as we exceeded the high end of our guidance for both revenues and earnings per share," said Fundtech CEO Reuven BenMenachem. "Coming off a strong 2010 we continue to execute well across our three segments and I feel confident that we are well positioned for continued growth. This Quarter we closed our largest ever Global CASHplus sale with a Pacific Rim bank. I believe that this multi-million dollar deal will establish Global CASHplus as a leading cash management solution in the international market."

Other Highlights:
• During the first quarter of 2011 Fundtech closed 110 new deals and added 4 new bank customers.
• During the first quarter of 2011 Fundtech closed 5 new system sales with banks, including 1 CASHplus, 1 Global PAYplus, 1 Global CASHplus and 2 for BBP's products.
• For the three months ended March 31, 2011 operating cash flows were $28.1 million ccompared to $20.8 million in the first quarter of 2010.
• CASHplus wins XCelent award for advanced technology and Aite Group award for innovation.

Guidance

The financial guidance provided is current as of today only and Fundtech undertakes no obligation to update its estimates.

For the year 2011 Fundtech is increasing its guidance as follows:
• Fundtech estimates that revenues for 2011 will be between $155 million and $160 million compared to the previous guidance of $154 million to $159 million; that GAAP net income per diluted share will be between $0.76 and $0.86 compared to the prior guidance of $0.73 and $0.83; and that non-GAAP net income per diluted share, before all amortization expenses, stock-based compensation expenses and deferred taxes, will be between $1.03 and $1.13 compared to the prior guidance of between $1.00 and $1.10.
• Fundtech estimates that financial income for the year 2011 will be $0.5 million and that tax expenses, excluding deferred taxes, will be approximately $2.6 million.
• Fundtech estimates that annual amortization expenses for the year 2011 will be approximately $1.4 million and that stock-based compensation expenses will be approximately $3.5 million.
• Fundtech estimates that the number of shares used for the calculation of the annual net income per share will be 16 million shares.
For the second quarter of 2011 Fundtech is providing the following guidance:
• Fundtech estimates that second quarter revenues will be between $38.5 million and $39.5 million; that GAAP net income per diluted share will be between $0.15 and $0.19; and that non-GAAP net income per diluted share, before all amortization expenses, stock-based compensation expenses, and deferred taxes, will be between $0.23 and $0.27.
• Fundtech estimates that financial income for the second quarter will be $0.1 million and that tax expenses, excluding deferred taxes, will be approximately $0.5 million.
• Fundtech estimates that quarterly amortization expenses for the second quarter of 2011 will be approximately $350,000 and that stock-based compensation expenses will be approximately $850,000.
• Fundtech estimates that the number of shares used for the calculation of quarterly net income per share will be 15.9 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.

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