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Fundtech Reports Financial Results for the Second Quarter of 2004

JERSEY CITY, N.J.--Aug. 3, 2004--Fundtech Ltd. (NASDAQ:FNDT)

-- Quarterly Revenues Grow 6% sequentially and 17% Year-over-Year to $13.7 Million
-- GAAP EPS of 3 cents
-- Adjusted EPS of 7 cents

Fundtech Ltd. (NASDAQ: FNDT), a leading provider of global electronic payment, settlement and cash management solutions, today announced its financial results for the second quarter ended June 30, 2004.

Revenues for the second quarter of 2004 were $13.7 million, up 6% sequentially from $12.9 million in the first quarter of 2004 and 17% higher than $11.7 million in the second quarter of 2003.

On a GAAP (Generally Accepted Accounting Principles) basis, net income for the second quarter of 2004 increased to $388,000, or $0.03 per diluted share, compared with net income of $260,000, or $0.02 per diluted share, for the first quarter of 2004 and a net loss of $(230,000), or $(0.02) per share, in the second quarter of 2003.

Excluding amortization of intangibles and amortization of capitalized software costs, Fundtech's adjusted net profit for the second quarter of 2004 was $1.0 million, or $0.07 per diluted share, compared with $889,000, or $0.06 per diluted share, in the first quarter of 2004 and $399,000, or $0.03 per diluted share, in the second quarter of 2003. (See Schedule A Attached to this Press Release -- Reconciliation to GAAP).

"During the second quarter we continued to execute well across our product lines, and met our revenue and profitability guidance targets," said Fundtech CEO Reuven Ben Menachem. "Conditions are improving at the high end of the market, and we continue to generate healthy operating cash flows as cash and equivalents increased by $6 million on a trailing twelve months basis."

Additional second quarter highlights:

-- Closed 35 new deals and added seven new bank customers.
-- Closed seven new system sales; Four PAYplus USA, one CASHplus, one Banker and one IGT Plus.
-- Received an order from a large Swiss bank to implement IGT Plus.
-- In the U.S., closed ASP and disaster recovery services transactions, which are expected to generate $7.0 million of revenues over the next five years.

For the six months ended June 30, 2004, revenues were $26.6 million, up 17% from $22.7 million for the same period in 2003.

On a GAAP basis, net income for the first six months of 2004 was $648,000, or $0.04 per diluted share, compared with a net loss of $(855,000), or $(0.06) per share, for the first six months of 2003.

Excluding amortization of intangibles and amortization of capitalized software costs, Fundtech's adjusted net profit for the first six months of 2004 was $1.9 million, or $0.12 per diluted share, compared with $403,000, or $0.03 per diluted share, in the first six months of 2003.

Guidance

The financial guidance provided is current as of today only and the Company undertakes no obligation to update its estimates.
For the third quarter of 2004, Fundtech expects revenues of between $13.7 million and $14.1 million, and GAAP earnings per diluted share, including all amortization expenses, in the range of $0.03 to $0.05. Adjusted earnings per diluted share, excluding all amortization expenses, are expected to be in the range of $0.07 to $0.09.

For the fourth quarter of 2004, Fundtech expects revenues to be between $14.1 million and $14.8 million, and GAAP earnings per diluted share, including all amortization expenses, in the range of $0.04 to $0.07. Adjusted earnings per diluted share, excluding all amortization expenses, are expected to be in the range of $0.08 to $0.11.

Amortization expenses in each quarter are estimated to be approximately $629,000, or $0.04 per share. Based on improving business conditions, Fundtech is increasing its top-line and bottom-line guidance for full-year 2004. The Company currently forecasts 2004 revenues of $54.4 million to $55.5 million,
compared with previous guidance of $53.5 million to $54.5 million. The range for GAAP earnings per diluted share has increased to between $0.12 and $0.17 from prior guidance of between $0.10 and $0.16. Earnings per diluted share, before all amortization expenses, are expected to be in the range of $0.28 to $0.33, versus an earlier range of $0.26 to $0.32.

Company to Host Conference Call

Fundtech management will host a conference call at 8:30 a.m. (ET)tomorrow, Wednesday August 4, to discuss its second-quarter 2004 results and to answer questions from the investment community. To participate, please call 866-500-4964 or 011-972-3-925-5910 and ask for the Fundtech Call. From Israel, please dial (03) 925-5910. A replay of the conference call will be available for playback from 12 p.m (ET) August 4 until 12:00 p.m. (ET) August 11. The replay may be accessed by dialing 877-332-1104 or 972 (3) 9255934.
This call will also be webcast live on our website.