|By Business Wire||
|May 1, 2014 06:02 AM EDT||
ACI Worldwide (NASDAQ: ACIW), a leading international provider of electronic payment and banking systems, today announced financial results for the period ended March 31, 2014. Management will host a conference call at 8:30 am ET to discuss these results as well as 2014 guidance. Interested persons may access a real-time audio broadcast of the teleconference at www.aciworldwide.com/investors or use the following numbers for dial-in participation: US/Canada: (866) 914-7436, International/Local: +1 (817) 385-9117. Please provide your name, the conference name ACI Worldwide, Inc. and conference code 25558357. There will be a replay available for two weeks on (855) 859-2056 for US/Canada Dial-In and +1 (404) 537- 3406 for International/Local Dial-In participants.
“ACI started 2014 strong with results that position us well to achieve our full year expectations,” commented Phil Heasley, President and CEO, ACI Worldwide. “Net new bookings were particularly robust as we are clearly seeing interest in our Universal Payments-enabled solutions.”
Financial Results for Q1
Revenue in Q1 was $221 million, an increase of $59 million, or 37%, above the prior year quarter. The acquisition of Official Payments and incremental revenue from Online Resources contributed $33 million and $29 million, respectively, to the increase in revenue compared to the prior year quarter.
New sales bookings, net of term extensions (SNET) increased 59% compared to the prior year quarter. Our 12-month backlog increased by $13 million from last quarter to $883 million, while our 60-month backlog increased by $49 million from last quarter to $3.91 billion.
Operating income was $0.3 million for the quarter, versus a loss of $4 million in the prior year quarter. Adjusted EBITDA of $32 million grew 46%, or $10 million above last year’s $22 million. Net EBITDA margin in Q1 2014 represented 16% versus 14% margin last year, after adjusting for $28 million and $1 million of pass through interchange in Q1 2014 and Q1 2013, respectively.
Q1 GAAP net loss was $6 million, or ($0.15) per diluted share, versus a net loss of $2 million, or ($0.05) per diluted share in Q1 2013. The variance was primarily driven by increased interest expense and foreign currency fluctuations.
We ended the first quarter with $59 million in cash on hand. Operating free cash flow (OFCF) for the quarter was $15 million, down from $34 million in Q1 of last year. The quarter ended with a debt balance of $779 million. We repurchased 1.2 million shares of our stock in the quarter for approximately $70 million and have approximately $138 million remaining on our current authorization.
We continue to expect to generate non-GAAP revenue in a range of $1.06 to $1.08 billion for the full year and now forecast non-GAAP revenue of $240 to $250 million in the second quarter. Adjusted EBITDA expectations remain in a range of $290 to $300 million. This guidance excludes $13 to $15 million of one-time integration-related expenses and includes $2 million for the deferred revenue adjustments. Lastly, our full year 2014 net new sales bookings growth is expected to be in the upper single digit range.
About ACI Worldwide
ACI Worldwide, the Universal Payments company, powers electronic payments and banking for more than 5,000 financial institutions, retailers, billers and processors around the world. ACI software processes $13 trillion in payments and securities transactions for more than 250 of the leading global retailers, and 21 of the world’s 25 largest banks. Through our comprehensive suite of software products and hosted services, we deliver a broad range of solutions for payment processing; card and merchant management; online banking; mobile, branch and voice banking; fraud detection; trade finance; and electronic bill presentment and payment. To learn more about ACI, please visit www.aciworldwide.com. You can also find us on Twitter @ACI_Worldwide.
|ACI WORLDWIDE, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(unaudited and in thousands, except share and per share amounts)|
|March 31,||December 31,|
|Cash and cash equivalents||$||58,936||$||95,059|
|Receivables, net of allowances of $4,149 and $4,459, respectively||203,600||203,575|
|Deferred income taxes, net||71,051||47,593|
|Recoverable income taxes||2,927||2,258|
|Other current assets||50,956||65,328|
Total current assets
|Property and equipment, net||55,988||57,347|
|Intangible assets, net||232,053||237,693|
|Deferred income taxes, net||39,541||48,852|
|Other noncurrent assets||41,956||40,912|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Current portion of long-term debt||53,227||47,313|
|Income taxes payable||4,121||1,192|
|Deferred income taxes, net||940||753|
|Other current liabilities||70,818||95,016|
|Total current liabilities||353,254||345,600|
|Deferred income taxes, net||10,208||11,000|
|Other noncurrent liabilities||27,396||27,831|
|Commitments and contingencies|
Preferred stock; $0.01 par value; 5,000,000 shares authorized; no shares issued and outstanding at March 31, 2014 and December 31, 2013
Common stock; $0.005 par value; 140,000,000 shares authorized; 46,606,796 shares issued at March 31, 2014 and December 31, 2013
|Additional paid-in capital||544,720||543,163|
|Treasury stock, at cost, 8,680,947 and 7,751,807 shares at March 31, 2014 and December 31, 2013, respectively||(304,018||)||(240,241||)|
|Accumulated other comprehensive loss||(20,414||)||(23,315||)|
|Total stockholders' equity||478,600||543,694|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||1,640,002||$||1,681,851|
|ACI WORLDWIDE, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|(unaudited and in thousands, except per share amounts)|
|For the Three Months Ended|
|Cost of license (1)||5,736||5,918|
|Cost of maintenance, services and hosting (1)||107,887||61,871|
|Research and development||37,456||37,149|
|Selling and marketing||27,909||25,074|
|General and administrative||25,116||25,037|
|Depreciation and amortization||17,078||10,957|
|Total operating expenses||221,182||166,006|
|Operating income (loss)||291||(4,009||)|
|Other income (expense)|
|Total other income (expense)||(10,033||)||(601||)|
|Loss before income taxes||(9,742||)||(4,610||)|
|Income tax benefit||(3,967||)||(2,444||)|
|Loss per common share|
Weighted average common shares outstanding
(1) The cost of software license fees excludes charges for depreciation but includes amortization of purchased and developed software for resale. The cost of maintenance, services and hosting fees excludes charges for depreciation.
|ACI WORLDWIDE, INC. AND SUBSIDIARIES|
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS|
|(unaudited and in thousands)|
|For the Three Months Ended|
|Cash flows from operating activities:|
|Adjustments to reconcile net loss to net cash flows from operating activities:|
|Amortization of deferred debt issuance costs||1,348||960|
|Deferred income taxes||(11,277||)||(6,096||)|
|Stock-based compensation expense||4,772||3,950|
|Excess tax benefit of stock options exercised||(4,070||)||(1,308||)|
Changes in operating assets and liabilities, net of impact of acquisitions:
|Accrued employee compensation||(3,580||)||(12,281||)|
|Current income taxes||6,166||4,278|
|Other current and noncurrent assets and liabilities||(15,163||)||(4,549||)|
|Net cash flows from operating activities||15,257||34,927|
|Cash flows from investing activities:|
|Purchases of property and equipment||(4,228||)||(6,241||)|
|Purchases of software and distribution rights||(3,580||)||(2,764||)|
|Acquisition of businesses, net of cash acquired||-||(264,202||)|
|Net cash flows from investing activities||(7,808||)||(273,207||)|
|Cash flows from financing activities:|
|Proceeds from issuance of common stock||652||475|
|Proceeds from exercises of stock options||2,887||3,864|
|Excess tax benefit of stock options exercised||4,070||1,308|
|Repurchases of common stock||(70,000||)||-|
|Repurchase of restricted stock and performance shares for tax withholdings||(4,503||)||(5,520||)|
|Proceeds from term portion of credit agreement||-||300,000|
|Proceeds from revolving credit facility||40,000||-|
|Repayment of revolving credit facility||(8,000||)||-|
|Repayment of term portion of credit agreement||(8,871||)||(3,750||)|
|Payments on other debt and capital leases||(382||)||(8,338||)|
|Payment for debt issuance costs||(163||)||(9,272||)|
Net cash flows from financing activities
|Effect of exchange rate fluctuations on cash||738||(4,332||)|
|Net increase (decrease) in cash and cash equivalents||(36,123||)||36,155|
|Cash and cash equivalents, beginning of period||95,059||76,329|
|Cash and cash equivalents, end of period||$||58,936||$||112,484|
|ACI Worldwide, Inc.|
|Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1)|
|(unaudited and in thousands, except per share data)|
|FOR THE THREE MONTHS ENDED March 31,|
|Selected Non-GAAP Financial Data||GAAP||Adj||Non-GAAP||GAAP||Adj||Non-GAAP||$ Diff||% Diff|
|Total revenues (2)||$||221,473||$||587||$||222,060||$||161,997||$||1,134||$||163,131||$||58,929||36||%|
|Total expenses (3)||221,182||(5,739||)||215,443||166,006||(6,597||)||159,409||56,034||35||%|
|Operating income (loss)||291||6,326||6,617||(4,009||)||7,731||3,722||2,895||78||%|
|Income (Loss) before income taxes||(9,742||)||6,326||(3,416||)||(4,610||)||7,731||3,121||(6,537||)||-209||%|
|Income tax expense (benefit) (4)||(3,967||)||2,214||(1,753||)||(2,444||)||2,706||262||(2,015||)||-769||%|
|Net income (loss)||$||(5,775||)||$||4,112||$||(1,663||)||$||(2,166||)||$||5,025||$||2,859||$||(4,522||)||-158||%|
|Amortization - acquisition related intangibles||6,538||-||6,538||3,842||-||3,842||2,696||70||%|
|Amortization - acquisition related software||5,107||-||5,107||2,993||-||2,993||2,114||71||%|
|Amortization - other||3,637||-||3,637||3,587||-||3,587||50||1||%|
|Stock-based compensation (5)||4,772||-||4,772||3,950||-||3,950||822||21||%|
|Earnings per share information|
|Weighted average shares outstanding|
|Earnings per share|
(1) This presentation includes non-GAAP measures. Our non-GAAP measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
(2) Adjustment for ORCC deferred revenue that would have been recognized in the normal course of business but was not recognized due to GAAP purchase accounting requirements.
(3) Expense for significant transaction related transactions, including, $2.0 million for employee related actions, $2.0 million for data center moves and $1.7 million for professional and other fees in 2014 and $1.9 million for employee related actions, $2.5 million for ORCC acquisition fees and $2.2 million for other professional fees in 2013.
(4) Adjustments tax effected at 35%.
|Reconciliation of Operating Free Cash Flow (millions)||2014||2013|
|Net cash provided (used) by operating activities||$||15.3||$||34.9|
|Payments associated with acquired opening balance sheet liabilities||4.1||-|
|Net after-tax payments associated with employee-related actions (4)||1.2||1.5|
|Net after-tax payments associated with lease terminations (4)||0.4||0.1|
|Net after-tax payments associated with significant transaction related expenses (4)||1.8||4.9|
Net after-tax payments associated with IBM IT Outsourcing Termination (4)
|Less capital expenditures||(7.8||)||(9.0||)|
|Operating Free Cash Flow||$||15.0||$||34.3|
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