Revenue Growth Drives Profit Increase
Bottomline Technologies (NASDAQ: EPAY), a leading provider of collaborative payment, invoice and document automation solutions, today reported financial results for the second quarter ended December 31, 2009.
Revenues for the second quarter were $40.1 million, an increase of $5.8 million, or 17%, from the second quarter of last year.
Gross margin for the second quarter was $22.6 million, an increase of $3.6 million from the second quarter of last year. Net income for the second quarter was $0.7 million, or net income per share of $0.03.
Core net income for the second quarter was $6.6 million after excluding acquisition-related expenses of $3.5 million and equity-based compensation of $2.4 million. Core net income was double the $3.3 million reported in the second quarter of last year. Core earnings per share was $0.25 as compared with $0.14 in the second quarter of last year.
“We had a very strong second quarter highlighted by 17% revenue growth from the prior year,” said Rob Eberle, President and CEO of Bottomline Technologies. “In fact, we outperformed in all our important metrics with cash flow from operations of $10 million driving a quarter end cash balance of $55 million, core net income of $6.6 million and strong demand across our business driving orders of $43 million. Strategically, we added several new customers, expanded important and existing customer relationships and made significant progress on the integration of PayMode during the quarter. We enter the third quarter with a strong pipeline and confident we will continue to execute against our strategic plan.”
Revenues for the six months ended December 31, 2009 increased to $76.7 million as compared with $69.8 million in the same period last year. Net income for the six months ended December 31, 2009 was $1.9 million, or net income per share of $0.07.
Core net income for the six months ended December 31, 2009 was $13.4 million after excluding acquisition-related expenses of $7.2 million and equity-based compensation of $4.3 million. Core net income was more than double the $6.1 million reported for the six months ended December 31, 2008. Core earnings per share was $0.52 for the six months ended December 31, 2009 as compared with $0.25 in the same period last year.
Second Quarter Customer Highlights
• Extended relationships and expanded use of Bottomline’s WebSeries® cash management platform for payments and reporting by Franklin Templeton, Raymond James, Morgan Stanley Smith Barney, Cigna Corporation, Medavie Blue Cross and Fidelity.
• Welcomed new customers who selected Bottomline solutions for increased efficiency, security and visibility of enterprise payment and document processes, including Trustmark Insurance Company, Assurant Solutions, Reliance Steel & Aluminum Co., State of Vermont Office of the State Treasurer, Quanta Services, Silliker, Inc., Systems Material Handling, ALK Abello, Inc., and Super Store Industries.
• Strengthened existing customer relationships through orders to expand existing implementations of Bottomline corporate payment and document automation solutions from organizations such as Thermo Fisher Scientific, Weight Watchers International, RRI Energy, Electric Insurance, St. Elizabeth Healthcare, Pacificare Health Systems, OneBeacon Insurance, NYC School Construction Authority, Amcor Sunclipse, Highwoods Properties, Intercontinental Terminals, Agility, TLD Acquisition Company, Illinois Secretary of State, H. Muehlstein and Company, Herbalife International, Novartis, The Prudential, South West Water, Invesco and Lafarge Aggregates.
• Our Legal eXchange™ platform added several new customers including Providence Holdings, an A.M. Best-ranked property and casualty company, and Monitor Liability Managers, Inc.
• Selected by organizations seeking to optimize their Microsoft Dynamics® AX implementations with advanced capabilities for transactional document automation, including Les Produits Chimiques Magnus, Younger Optics, Biagi Brothers, Valley Towing Products, National Decorations Inc. (NDI), and Survey Sampling International.
Second Quarter Strategic Corporate Highlights
• Recognized for innovation and strategic value derived from cloud computing for order to cash processes by the British Computing Society and Computing magazine.
• Named to the 2009 FinTech 100, the annual ranking of the top technology providers serving the global banking and financial services community as compiled by American Banker, Bank Technology News and IDC Financial Insights.
• Launched the latest version of Transform™ AP for integration with Oracle E-Business Suite. Transform AP is designed to provide organizations that are standardized on Oracle with seamless functionality for digital invoice data capture, approval workflow and storage as a means to accelerate accounts payable process cycles and reduce costs associated with manual paper invoice management.
• Introduced the availability of the Legal eXchange Reporting Suite for robust reporting and data analysis, before, during, and after the life of a matter either through standardized or customized reporting with drill-down capabilities, permission-based sharing and security.
• Named the “Information & Computer Technology (ICT) Global Business of the Year” by the Software Association of New Hampshire and the New Hampshire Office of International Commerce.
• Recognized as a 2009 ”Best Company to Work For” by Business NH Magazine.
Bottomline has presented supplemental non-GAAP financial measures and statements as part of this earnings release. Core net income is a non-GAAP financial measure. The non-GAAP financial measures and statements exclude certain items, specifically amortization of intangible assets, equity-based compensation, acquisition-related expenses and restructuring related costs. The presentation of this non-GAAP financial information should not be considered in isolation from, or as a substitute for, the financial results presented in accordance with GAAP. Bottomline believes 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. Bottomline’s executive management team uses these same non-GAAP financial measures and statements 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. Shares used in computing diluted core net income per share are calculated using the treasury stock method which assumes full exercise of in-the-money stock options and warrants and full vesting of restricted stock.
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