Bottomline Technologies Reports Second Quarter Results

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Strong Growth in Subscription and Transaction Revenue Highlights Second Quarter PORTSMOUTH, N.H., Feb. 01, 2018 (GLOBE NEWSWIRE) -- Bottomline Technologies (NASDAQ:EPAY), a leading provider of financial technology that helps businesses make payments ...

Strong Growth in Subscription and Transaction Revenue Highlights Second Quarter

PORTSMOUTH, N.H., Feb. 01, 2018 (GLOBE NEWSWIRE) -- Bottomline Technologies (NASDAQ:EPAY), a leading provider of financial technology that helps businesses make payments simple, smart and secure, today reported financial results for the second quarter ended December 31, 2017.

Subscription and transaction revenues, which are primarily related to the company's cloud platforms, were $63.2 million for the second quarter, up 14% as compared to the second quarter of last year.  Revenues overall for the second quarter were $95.2 million, up 10% as compared to the second quarter of last year. 

GAAP net income for the second quarter was $3.1 million compared to GAAP net loss of $10.3 million for the second quarter of last year, driven by a non-recurring income tax benefit. GAAP net income per share was $0.08 in the second quarter compared to GAAP net loss per share of $0.27 in the second quarter of last year.

Adjusted EBITDA for the second quarter was $22.5 million compared to $18.7 million for the second quarter of last year, an increase of 20% from the second quarter of last year.  Adjusted EBITDA for the second quarter was 24% of overall revenue compared to 22% of overall revenue for the second quarter of last year. Adjusted EBITDA is calculated as discussed in the "Non-GAAP Financial Measures" section that follows.

Core net income for the second quarter was $12.2 million compared to $9.7 million for the second quarter of last year and core earnings per share was $0.31 for the second quarter compared to $0.26 for the second quarter of last year. Core net income and core earnings per share exclude certain items as discussed in the "Non-GAAP Financial Measures" section that follows.

"We continue to execute against our strategic plan and deliver strong results," said Rob Eberle, President and CEO of Bottomline Technologies. "Growth and profitability were ahead of our expectations.  Our product leadership is evidenced by the strong bookings we recorded in the quarter.  We have a high degree of confidence in our ability to continue to execute against our strategic plan, achieve our financial targets and drive shareholder value."

Second Quarter Customer Highlights

  • 31 institutions selected Paymode-X, Bottomline's leading payments platform to automate their payments processes, increase productivity, reduce costs and earn cash rebates.
     
  • 5 organizations, including North American Risk Services (NARS) and KB Insurance, chose Bottomline's cloud-based legal spend management solutions to automate, manage and control their legal spend.  
     
  • 8 banks selected Bottomline's digital banking platforms to help them compete and grow their corporate and business banking franchises by deploying innovative digital capabilities.
     
  • Companies such as Pearson Shared Services Limited and Bank am Bellevue selected Bottomline's Financial Messaging solution to improve operating efficiencies and optimize the effectiveness of their financial transactions. 
     
  • Organizations such as UMB Bank and Innovest chose Bottomline's corporate payment automation solutions to extend their payments capabilities and improve efficiencies.

Second Quarter Strategic Corporate Highlights

  • Selected as a Preferred Partner for Business-to-Business (B2B) Payments by NACHA, the Electronic Payments Association®.  
     
  • Announced expanded capabilities with machine learning, enabling Vendors to pay and get paid smarter and faster using its Paymode-X Intelligent Engagement Model.  The Paymode-X Intelligent Engagement Model is a proprietary Vendor enablement methodology that accelerates automation and financial returns. As the only predictive Vendor enablement solution, the Paymode-X Intelligent Engagement Model uses advanced data science, predictive forecasting and a proven enablement strategy to segment, enroll, and authenticate Vendors swiftly and accurately.
     
  • Expanded capabilities and offerings by becoming a Third Party Provider (TPP) under the UK Open Banking initiative, to allow customers to access information and initiate payments directly with participating banks through secure Application Programming Interfaces (APIs), via cloud-based payment platforms. 

Non-GAAP Financial Measures

We have presented supplemental non-GAAP financial measures as part of this earnings release. The presentation of this non-GAAP financial information should not be considered in isolation from, or as a substitute for, our financial results presented in accordance with GAAP. Core net income, core earnings per share, constant currency information, adjusted EBITDA and adjusted EBITDA as a percent of revenue are non-GAAP financial measures.

Core net income and core earnings per share exclude certain items, specifically amortization of acquisition related intangible assets, goodwill impairment charges, stock-based compensation, acquisition and integration-related expenses, restructuring related costs, minimum pension liability adjustments, non-core charges associated with our convertible notes and revolving credit facility, global enterprise resource planning (ERP) system implementation and other costs, and other non-core or non-recurring gains or losses that arise from time to time.

Non-core charges associated with our convertible notes and revolving credit facility consist of the amortization of debt issuance and debt discount costs. Acquisition and integration-related expenses include legal and professional fees and other direct transaction costs associated with business and asset acquisitions, costs associated with integrating acquired businesses, including costs for transitional employees or services, integration related professional services costs and other incremental charges we incur as a direct result of acquisition and integration efforts. Global ERP system implementation and other costs relate to direct and incremental costs incurred in connection with our implementation of a new, global ERP solution, the related technology infrastructure and costs related to our implementation of the new revenue recognition standard under US GAAP.

In computing diluted core earnings per share, we exclude the weighted average dilutive effect of shares issuable under our convertible notes to the extent that any such dilution would be offset by our note hedges; the note hedges would be considered an anti-dilutive security under GAAP.

Periodically, such as in periods that include significant foreign currency volatility, we may present certain metrics on a "constant currency" basis, to show the impact of period to period results normalized for the impact of foreign currency rate changes. We calculate constant currency information by translating prior period financial results using current period foreign exchange rates.

Adjusted EBITDA and adjusted EBITDA as a percent of revenue represent our GAAP net income or loss, adjusted for charges related to interest expense, income taxes, depreciation and amortization and other charges, as noted in the reconciliation that follows.

We believe that these supplemental non-GAAP financial measures are useful to investors because they allow for an evaluation of the company with a focus on the performance of its core operations, including more meaningful comparisons of financial results to historical periods and to the financial results of less acquisitive peer and competitor companies. Our executive management team uses these same non-GAAP financial measures internally to assess the ongoing performance of the company. Additionally, the same non-GAAP information is used for planning purposes, including the preparation of operating budgets and in communications with our board of directors with respect to our core financial performance. 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.

Reconciliation of Core Net Income
A reconciliation of core net income to GAAP net income (loss) for the three and six months ended December 31, 2017 and 2016 is as follows:

    
 Three Months Ended 
December 31,
 Six Months Ended 
December 31,
 2017 2016 2017 2016
 (in thousands)
GAAP net income (loss)$3,088  $(10,346) $(1,153) $(20,854)
Amortization of acquisition-related intangible assets5,702  6,090  10,890  12,375 
Goodwill impairment charge-  7,529  -  7,529 
Stock-based compensation expense8,080  8,656  16,540  16,855 
Acquisition and integration-related expenses380  522  1,372  1,771 
Restructuring benefit-  -  (9) - 
Global ERP system implementation and other costs1,339  2,106  3,415  4,597 
Minimum pension liability adjustments3  264  38  541 
Amortization of debt issuance and debt discount costs2,576  3,454  6,285  6,826 
Non-recurring tax benefit (1)(4,402) (4,461) (4,402) (4,461)
Tax effects on non-GAAP income(4,577) (4,152) (9,119) (7,130)
Core net income$12,189  $9,662  $23,857  $18,049 
                

(1)  The non-recurring tax benefit in the three and six months ended December 31, 2017 represents a benefit arising from the revaluation of certain deferred tax liabilities as a result of the U.S. Tax Cuts and Jobs Act. The non-recurring tax benefit in the three and six months ended December 31, 2016 represents a tax benefit in Switzerland related to the impairment of their investment in Intellinx, Ltd.

Reconciliation of Diluted Core Earnings per Share
A reconciliation of our diluted core earnings per share to our GAAP diluted net income (loss) per share for the three and six months ended December 31, 2017 and 2016 is as follows:

    
 Three Months Ended 
December 31,
 Six Months Ended 
December 31,
 2017 2016 2017 2016
        
GAAP diluted net income (loss) per share$0.08  $(0.27) $(0.03) $(0.55)
        
Plus:       
Amortization of acquisition-related intangible assets0.15  0.16  0.28  0.33 
Goodwill impairment charge-  0.20  -  0.20 
Stock-based compensation expense0.21  0.22  0.43  0.44 
Acquisition and integration-related expenses0.01  0.02  0.04  0.05 
Global ERP system implementation and other costs0.03  0.06  0.09  0.12 
Minimum pension liability adjustments-  0.01  -  0.02 
Amortization of debt issuance and debt discount costs0.06  0.09  0.16  0.18 
Non-recurring tax benefit(0.11) (0.12) (0.11) (0.12)
Tax effects on non-GAAP income(0.12) (0.11) (0.24) (0.19)
        
Diluted core earnings per share$0.31  $0.26  $0.62  $0.48 
                

A reconciliation of our non-GAAP weighted average shares used in computing diluted core earnings per share to our GAAP weighted average shares used in computing basic and diluted net income (loss) per share for the three and six months ended December 31, 2017 and 2016 is as follows:

    
 Three Months Ended 
December 31,
 Six Months Ended 
December 31,
 2017 2016 2017 2016
 (in thousands)
Numerator:       
        
Core net income$12,189  $9,662  $23,857  $18,049 
        
Denominator:       
        
Weighted average shares used in computing basic net income (loss) per share for GAAP38,087  37,769  37,908  37,854 
        
Impact of dilutive securities (shares related to conversion feature on convertible senior notes, stock options, restricted stock awards and employee stock purchase plan) (1)1,257  93  919  91 
        
GAAP diluted shares39,344  37,862  38,827  37,945 
        
Impact of note hedges (2)(436) -  (217) - 
        
Weighted average shares used in computing diluted core earnings per share38,908  37,862  38,610  37,945 
            

(1)  These securities are dilutive on a GAAP basis in periods where we report GAAP net income. These securities are anti-dilutive on a GAAP basis in periods where we report GAAP net loss.

(2)  In computing diluted core earnings per share, we exclude the weighted average dilutive effect of shares issuable under our convertible senior notes to the extent that any such dilution would be offset by our note hedges; the note hedges would be considered an anti-dilutive security under GAAP.

Reconciliation of Adjusted EBITDA
A reconciliation of our adjusted EBITDA to GAAP net income (loss) for the three and six months ended December 31, 2017 and 2016 is as follows:

    
 Three Months Ended 
December 31,
 Six Months Ended 
December 31,
 2017 2016 2017 2016
 (in thousands)
GAAP net income (loss)$3,088  $(10,346) $(1,153) $(20,854)
        
Adjustments:       
Other expense, net3,532  4,182  7,995  8,117 
Income tax benefit(4,495) (4,478) (4,038) (3,797)
Depreciation and amortization4,875  4,154  9,543  8,241 
Amortization of acquisition-related intangible assets5,702  6,090  10,890  12,375 
Goodwill impairment charge-  7,529  -  7,529 
Stock-based compensation expense8,080  8,656  16,540  16,855 
Acquisition and integration-related expenses380  522  1,372  1,771 
Restructuring benefit-  -  (9) - 
Minimum pension liability adjustments3  264  38  541 
Global ERP system implementation and other costs1,339  2,106  3,415  4,597 
        
Adjusted EBITDA$22,504  $18,679  $44,593  $35,375 
                

Reconciliation of Adjusted EBITDA as a percent of Revenue
A reconciliation of adjusted EBITDA as a percent of revenue to GAAP net income (loss) as a percent of revenue for the three and six months ended December 31, 2017 and 2016 is as follows:

    
 Three Months Ended 
December 31,
 Six Months Ended 
December 31,
 2017 2016 2017 2016
        
GAAP net income (loss) as a percent of revenue3% (12%) (1%) (12%)
        
Adjustments:       
Other expense, net4% 5% 4% 5%
Income tax benefit(5%) (5%) (2%) (2%)
Depreciation and amortization5% 5% 5% 5%
Amortization of acquisition-related intangible assets6% 7% 6% 7%
Goodwill impairment charge0% 9% 0% 4%
Stock-based compensation expense9% 10% 9% 10%
Acquisition and integration-related expenses0% 1% 1% 1%
Global ERP system implementation and other costs2% 2% 2% 3%
        
Adjusted EBITDA as a percent of revenue24% 22% 24% 21%
            

About Bottomline Technologies
Bottomline Technologies (NASDAQ:EPAY) helps make complex business payments simple, smart, and secure. Corporations and banks rely on Bottomline for domestic and international payments, efficient cash management, automated workflows for payment processing and bill review, and state of the art fraud detection, behavioral analytics and regulatory compliance solutions. Thousands of corporations around the world benefit from Bottomline solutions. Headquartered in Portsmouth, NH, Bottomline delights customers through offices across the U.S., Europe, and Asia-Pacific. For more information visit www.bottomline.com.

Bottomline Technologies, Paymode-X and the BT logo are trademarks of Bottomline Technologies (de), Inc. which are registered in certain jurisdictions. All other brand/product names are trademarks of their respective holders.

In connection with this earnings release and our associated conference call, we will be posting additional material financial information (such as financial results, non-GAAP financial projections and non-GAAP to GAAP reconciliations) within the "Investors" section of our website at www.bottomline.com/us/about/investors.

Cautionary Language
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements reflecting our expectations about our ability to execute on our strategic plans, achieve future growth and profitability, achieve financial targets, expand margins and increase shareholder value.  Any statements that are not statements of historical fact (including but not limited to statements containing the words "believes," "plans," "anticipates," "expects," "look forward", "confident", "estimates" and similar expressions) should be considered to be forward-looking statements.  Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors including, among others, competition, market demand, technological change, strategic relationships, recent acquisitions, international operations and general economic conditions. For additional discussion of factors that could impact Bottomline Technologies' operational and financial results, refer to our Form 10-K for the fiscal year ended June 30, 2017 and the subsequently filed Form 10-Qs and Form 8-Ks or amendments thereto. Any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. We do not assume any obligation to update any forward-looking statements.

Media Contact:
Rick Booth
Bottomline Technologies
603.501.6270
rbooth@bottomline.com

 
Bottomline Technologies
Unaudited Condensed Consolidated Statement of Operations
(in thousands, except per share amounts)
        
 Three Months Ended 
December 31,
 Six Months Ended 
December 31,
 2017 2016 2017 2016
Revenues:       
Subscriptions and transactions$63,187  $55,644  $123,901  $107,776 
Software licenses2,620  3,492  4,985  5,613 
Service and maintenance28,433  25,920  55,775  53,593 
Other955  1,672  1,830  2,830 
        
Total revenues95,195  86,728  186,491  169,812 
        
Cost of revenues:       
Subscriptions and transactions27,201  24,782  54,612  48,668 
Software licenses229  196  399  324 
Service and maintenance12,968  13,416  25,200  26,701 
Other701  1,178  1,368  2,056 
Total cost of revenues41,099  39,572  81,579  77,749 
        
Gross profit54,096  47,156  104,912  92,063 
        
Operating expenses:       
Sales and marketing21,396  19,325  40,701  38,200 
Product development and engineering13,892  13,082  27,707  26,017 
General and administrative10,981  11,772  22,810  24,476 
Amortization of acquisition-related intangible assets5,702  6,090  10,890  12,375 
Goodwill impairment charge-  7,529  -  7,529 
Total operating expenses51,971  57,798  102,108  108,597 
        
Income (loss) from operations2,125  (10,642) 2,804  (16,534)
        
Other expense, net(3,532) (4,182) (7,995) (8,117)
        
Loss before income taxes(1,407) (14,824) (5,191) (24,651)
Income tax benefit4,495  4,478  4,038  3,797 
        
Net income (loss)$3,088  $(10,346) $(1,153) $(20,854)
        
Net income (loss) per share:       
Basic$0.08  $(0.27) $(0.03) $(0.55)
Diluted$0.08  $(0.27) $(0.03) $(0.55)
        
Shares used in computing net income (loss) per share:       
Basic38,087  37,769  37,908  37,854 
Diluted39,344  37,769  37,908  37,854 
            

 

 
Bottomline Technologies
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
 December 31, June 30,
 2017 2017
ASSETS   
Current assets:   
Cash, cash equivalents and marketable securities$74,055  $126,542 
Cash and cash equivalents, held for customers3,481  - 
Accounts receivable78,073  64,244 
Other current assets18,556  16,807 
    
Total current assets174,165  207,593 
    
Property and equipment, net27,199  26,195 
Goodwill and intangible assets, net375,349  365,980 
Other assets18,058  17,671 
    
Total assets$594,771  $617,439 
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Accounts payable$10,268  $9,013 
Accrued expenses and other current liabilities28,411  29,179 
Customer account liabilities3,481  - 
Deferred revenue59,835  74,113 
Convertible senior notes-  183,682 
    
Total current liabilities101,995  295,987 
    
Borrowings under credit facility150,000  - 
Deferred revenue, non current25,172  22,047 
Deferred income taxes13,452  15,433 
Other liabilities22,202  22,016 
    
Total liabilities312,821  355,483 
    
Stockholders' equity   
Common stock44  43 
Additional paid-in-capital660,701  624,001 
Accumulated other comprehensive loss(29,671) (32,325)
Treasury stock(131,528) (113,071)
Accumulated deficit(217,596) (216,692)
    
Total stockholders' equity281,950  261,956 
    
Total liabilities and stockholders' equity$594,771  $617,439 
        



This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Bottomline Technologies, Inc. via Globenewswire

Source(s) : Bottomline Technologies, Inc.

Complément d'information
  • 21% Growth in Subscription and Transaction Revenue Highlights Third QuarterPORTSMOUTH, N.H., May 03, 2018 (GLOBE NEWSWIRE) -- Bottomline Technologies (NASDAQ:EPAY), a leading provider of financial technology that helps make business ...
  • Strong Growth in Subscription and Transaction Revenue Highlights First Quarter PORTSMOUTH, N.H., Nov. 02, 2017 (GLOBE NEWSWIRE) -- Bottomline Technologies (NASDAQ:EPAY), a leading provider of financial technology which helps businesses pay ...
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