Fundtech posted quarterly revenues of $40.5 million, a 16% increase year-over-year, compared to second quarter revenues of $34.8 million in 2010, and a 9% increase compared to first quarter 2011 revenues of $37.2 million.

On a GAAP (Generally Accepted Accounting Principles) basis, Fundtech reported net income of $2.1 million, or $0.13 per diluted share, for the second quarter of 2011 compared with net income of $2.4 million, or $0.15 per diluted share, in the second quarter of 2010, and net income of $2.4 million, or $0.15 per diluted share, in the first quarter of 2011.

Excluding stock-based compensation, amortization of intangibles, costs incurred in connection with the previously announced agreement to merge with S1 Corporation and deferred taxes, Fundtech's adjusted (non-GAAP) net income for the second quarter of 2011 was $4.2 million, or $0.27 per diluted share, compared with $3.5 million, or $0.22 per diluted share, in the second quarter of 2010 and $3.6 million, or $0.23 per diluted share, in the first quarter of 2011. (See Schedule A attached to this news release -- Reconciliation from GAAP).

"The second quarter was another strong quarter for us as we posted record revenues exceeding our revenue guidance and meeting the high end of our non-GAAP earnings per share guidance," said Fundtech CEO Reuven BenMenachem. "The second quarter was an especially strong quarter for our messaging business. We closed 15 new system sales, 13 of which were hosting deals. We continued to make good progress cross-selling our Swift product in the United States, as evidenced by four new system sales and we also closed two important GPP-SP sales, one in Europe and one in the Pacific Rim."

Other Highlights:
• During the second quarter of 2011 Fundtech closed 130 new deals and added 14 new bank customers.
• During the second quarter of 2011 Fundtech closed 20 new system sales with banks, including 15 for BBP's prroducts, oone US Payments, two PAYplus FTS, and two for GPP-SP.
• During the second quarter Fundtech paid a quarterly dividend of $0.10 per share, amounting to a cash outlay of $1.5 million. The Company has agreed not to pay any additional dividends while the agreement with S1, as referenced below, is pending.
• On June 27, 2011, Fundtech and S1 Corporation announced that they entered into a definitive agreement to combine businesses through a stock-for-stock merger. Under the terms of the agreement, Fundtech shareholders will receive 2.72 shares of S1 common stock for each Fundtech ordinary share they own. The merger is expected to close in the fourth quarter of 2011 and is subject to approval by S1 and Fundtech shareholders, receipt of regulatory and court approvals, and the satisfaction of customary closing conditions.

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 revenue guidance, primarily due to the weakening of the US Dollar vs. the Swiss Franc, while reducing its guidance for GAAP earnings per share due to the costs incurred during the second quarter in connection with the S1 merger and keeping its non-GAAP guidance unchanged as follows:
• Fundtech estimates that revenues for 2011 will be between $160 million and $163 million compared to the previous guidance of $155 million to $160 million; that GAAP net income per diluted share will be between $0.71 and $0.81 compared to the prior guidance of $0.76 and $0.86; and that non-GAAP net income per diluted share, before all amortization expenses, stock-based compensation expenses, costs incurred in connection with the S1 merger and deferred taxes, will be between $1.03 and $1.13 unchanged compared to the prior guidance.
• Fundtech estimates that financial income for the year 2011 will be $0.6 million and that tax expenses, excluding deferred taxes, will be approximately $2.2 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 $3.6 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 third quarter of 2011 Fundtech is providing the following guidance:
• Fundtech estimates that third quarter revenues will be between $41.5 million and $42.5 million; that GAAP net income per diluted share will be between $0.19 and $0.22; and that non-GAAP net income per diluted share, before all amortization expenses, stock-based compensation expenses, costs incurred in connection with the S1 merger and deferred taxes, will be between $0.27 and $0.30.
• Fundtech estimates that financial income for the third quarter will be $0.2 million and that tax expenses, excluding deferred taxes, will be approximately $0.6 million.
• Fundtech estimates that quarterly amortization expenses for the third quarter of 2011 will be approximately $350,000 and that stock-based compensation expenses will be approximately $900,000.
• Fundtech estimates that the number of shares used for the calculation of quarterly net income per share will be 16.0 million shares.

Fundtech's guidance for the remainder of 2011 does not include the impact in the third and fourth quarters of the S1 merger (including the costs incurred by Fundtech and the impact of the closing of the merger, if the closing occurs prior to December 31, 2011), deferred taxes, other one- time charges 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.

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.

We are presenting Fundtech's non-GAAP net income as well as Adjusted EBITDA. We define non-GAAP net income as net income plus stock-based compensation, amortization of intangibles, impairment of goodwill and other intangible assets, impairment of marketable securities, and deferred taxes. We define Adjusted EBITDA as net income plus stock-based compensation, depreciation and amortization expenses, impairment of marketable securities, deferred and current taxes, and interest expense (income).