Bottomline Technologies posts Q2 results

Revenues for the second quarter were $26.1 million compared with $23.9 million in the second quarter of last year. Net income for the second quarter was $1.1 million, or net income per share of $0.05, compared with a net income of $1.2 million, or net income per share of $0.07 in the second quarter of last year. The fiscal 2006 second quarter net income reflects the expense impact associated with stock-based compensation as a result of accounting rules that Bottomline adopted on July 1, 2005.

During the second quarter of fiscal 2006, the company incurred acquisition-related amortization of intangible assets of approximately $774,000, and stock compensation expense of $1.7 million. Excluding these acquisition related and stock compensation items, non-GAAP net income for the second quarter was $3.6 million, or non-GAAP net income per share of $0.16, compared with non-GAAP net income of $2.0 million, or non-GAAP net income per share of $0.11, in the second quarter of last year. The operating results represent a $1.6 million increase in non-GAAP net income from the second quarter last year.

"We continue to deliver both customer value and business plan results. From a financial perspective, we were especially pleased with the increase in EBITDA," said Joe Mullen, CEO of Bottomline Technologies. "We have also recently announced two acquisitions. The purchase of Visibillity adds to our strong position in the growing legal spend management market. The acquisition of Tranmit, which was announced yesterday, extends our product set in the invoice management and payables solutions market. Looking forward, we believe we have more value to offer both our large customer base and new clients."

Revenues for the six months ended December 31, 2005 were $50.8 million compared with $45.7 million in the same period last year. Net income for the six months ended December 31, 2005 was $1.2 million, or net income per share of $0.05, compared with a net income of $1.9 million, or net income per share of $0.10, in the same period last year. Net income for the six months ended December 31, 2005 reflects the expense impact associated with stock-based compensation as a result of accounting rules that Bottomline adopted on July 1, 2005.

During the six months ended December 31, 2005, the company incurred acquisition-related amortization of intangible assets of approximately $1.7 million and stock compensation expense of $3.4 million. Excluding these items, non-GAAP net income for the six months ended December 31, 2005 was $6.3 million, or non-GAAP net income per share of $0.27, compared with non-GAAP net income of $3.6 million, or non-GAAP net income per share of $0.19, in the same period of last year. The six-month operating results represent a $2.7 million increase in non-GAAP net income from the same period last year.

Customer Highlights:

Continued market adoption of Legal eXchange®, Bottomline's Web-based legal spend management solution, signing multi-year contracts with McKesson Corporation, Erie Insurance Company and a leading oil and gas company during the quarter.

Key banking customers, UMB Bank and Fifth Third Bancorp, broadened their investments in Bottomline's modular electronic banking and enterprise payment platforms.

Well-known organizations such as Goldman Sachs, Budget Rent A Car, Pennsylvania Hospital, Campbell Soup Company, Forest City Enterprises and Yum Brands selected Bottomline's platforms to automate and enhance financial processes.

Company and Product Highlights:

Acquired Visibillity, Inc., a provider of legal e-billing solutions for the insurance industry. The acquisition further extends Bottomline's position as a leading provider of Web-based legal spend management services, and adds a number of significant clients to its growing customer base, including CNA Insurance, Employers Mutual Casualty Company and RiverStone Group.

Acquired Tranmit Plc, a provider of Web-based purchase-to-pay automation solutions, on January 24, 2006. The addition of Tranmit's invoice management capabilities further enhances the company's ability to provide global organizations with comprehensive hosted, licensed and outsourced solutions for improving the overall efficiency and productivity of the accounts payable function.

Announced Pan-European payments and reporting capabilities for the WebSeries platform, enabling European corporate customers to consolidate multiple banking connections and prepare for the advent of the new Single European Payments Area (SEPA) standard.

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