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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20459
FORM 10-Q/A
Amendment No. 1
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-29634
FUNDTECH LTD.
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(Exact Name of Registrant as Specified in its Charter)
ISRAEL Not Applicable
-------------- --------------
(State or Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No.)
12 Ha'hilazon Street
Ramat-Gan, Israel 52522
----------------- -----
(Address of Principal (Zip Code)
Executive Offices)
011-972-3-575-2750
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(Registrant's Telephone Number, Including Area Code)
Former Address: Beit Habonim, 2 Habonim St. Ramat Gan, Israel
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(Former name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ].
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 13,950,489 shares of Ordinary
Shares, NIS 0.01 par value, as of November 30, 1999.
C:\Data\EDGAR\46984\0001\10Qmp.rtf
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This Amendment No. 1 on Form 10-Q/A amends Item 1 of Part I of the Quarterly
Report on Form 10-Q of Fundtech Ltd. for the quarter ended June 30, 1999, to
revise our previously reported pro forma unaudited results of operation for the
six months ended June 30, 1999 and the six months ended June 30, 1998, as
reported in Note 4 to the notes to our condensed consolidated financial
statements (unaudited).
In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, this
Amendment No. 1 sets forth the complete text of Item 1 of Part I of our
Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
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Item 1. Condensed Consolidated Financial Statement.
FUNDTECH LTD. AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1999 1998
- ----------------------------------------------------------- --------- ---------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 95,105 $ 13,019
Investment in securities 1,218 --
Trade receivables, net 13,880 12,040
Other current assets 1,562 579
--------- ---------
Total current assets 111,765 25,638
--------- ---------
Long-term trade receivables 760 244
Property and equipment, net 5,579 3,759
Other assets, net 12,936 2,963
--------- ---------
Total assets $ 131,040 $ 32,604
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities:
Trade payables $ 1,673 $ 1,386
Deferred revenues and accrued expenses 6,968 6,112
--------- ---------
Total current liabilities 8,641 7,498
--------- ---------
Other liabilities 45 58
--------- ---------
Shareholders' equity:
Share capital 41 34
Accumulated other comprehensive loss (167) --
Additional paid-in capital 137,754 41,664
Deferred compensation (178) (219)
Accumulated deficit (15,096) (16,431)
--------- ---------
Total shareholders' equity 122,354 25,048
--------- ---------
Total liabilities and shareholders' equity $ 131,040 $ 32,604
========= =========
</TABLE>
See notes to condensed consolidated financial statements (unaudited)
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<PAGE>
FUNDTECH LTD. AND ITS SUBSIDIARIES Condensed Consolidated Statements of
Operations (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Six Months Ended
Three Months Ended June 30, June 30,
------------------------------- ------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues
Software licenses $ 5,532 $ 2,926 $ 10,154 $ 4,944
Maintenance and services fees 2,984 1,783 5,792 2,468
Hardware sales 516 691 987 1,016
------------ ------------ ------------ ------------
Total revenues 9,032 5,400 16,933 8,428
------------ ------------ ------------ ------------
Cost of revenues
Software licenses costs 278 91 308 158
Maintenance and services costs 2,004 1,162 3,653 1,456
Hardware costs 395 561 767 838
============ ============ ============ ============
Total cost of revenues 2,677 1,814 4,728 2,452
------------ ------------ ------------ ------------
Gross profit 6,355 3,586 12,205 5,976
------------ ------------ ------------ ------------
Operating expenses:
Software development 2,580 1,592 4,917 2,859
Selling and marketing, net 1,304 664 2,399 1,209
Amortization of acquisition-related
Intangible assets 165 52 243 52
General and administrative 816 422 1,486 847
In process R&D write-off 2,802 16,600 2,802 16,600
------------ ------------ ------------ ------------
Total operating expenses 7,667 19,330 11,847 21,567
------------ ------------ ------------ ------------
Operating income (loss) (1,312) (15,744) 358 (15,591)
Financial income, net 853 167 977 246
============ ============ ============ ============
Net income (loss) $ (459) $ (15,577) $ 1,335 $ (15,345)
============ ============ ============ ============
Net income (loss) per share:
Basic income (loss) per share $ (0.04) $ (1.46) $ 0.11 $ (1.62)
Diluted income (loss) per share $ (0.04) $ (1.46) $ 0.11 $ (1.62)
Diluted income per share excluding
in-process R&D write-off $ 0.18 $ 0.09 $ 0.33 $ 0.13
Shares used in computing:
Basic income (loss) per share 12,638,167 10,699,000 11,741,685 9,494,000
Diluted income (loss) per share 12,638,167 10,699,000 12,454,204 9,494,000
Diluted income per share excluding
in-process R&D write-off 13,383,537 11,254,000 12,454,204 10,050,000
Adjusted net income per share (a):
Adjusted net income used in computing net
income per share $ 2,508 $ 1,075 $ 4,380 $ 1,307
Diluted adjusted income per share $ 0.19 $ 0.10 $ 0.35 $ 0.13
Shares used in computing diluted income
per share 13,383,537 11,254,000 12,454,204 10,050,000
(a) Adjusted net income and adjusted net income per share exclude the pre-tax
effects of the line items "in process R&D write-off" and "Amortization of
acquisition-related intangible assets", listed above.
</TABLE>
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FUNDTECH LTD. AND ITS SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
for Six Months Ended June 30, 1999 and June 30, 1998
(In thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1999 1998
-------- --------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income(loss) ............................................................................. $ 1,335 $(15,345)
Adjustments to reconcile net income to net cash used in operating
activities:
Depreciation and amortization ......................................................... 762 84
In process research and development wirte-0f .......................................... 2,802 16,600
Amortization of deferred compensation ................................................. 41 34
Capital loss (gain) on sale of fixed assets ........................................... -- 4
Increase in other liabilities ......................................................... (13) 9
Increase in trade receivables ......................................................... (2,057) (506)
Decrease (increase) in other accounts receivable and prepaid expenses ................. (776) (265)
Increase (decrease) in trade payables ................................................. 163 106
Increase (decrease) in deferred revenues and accrued expenses ......................... (2,111) (1,208)
-------- --------
Net cash used in operating activities ........................................................ 146 (487)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for acquisition ............................................................... (9,194) (18,600)
Investments in short-term deposits .................................................... -- 2,694
Proceeds from sale of fixed ........................................................... -- 12
Purchase of fixed assets .............................................................. (1,646) (258)
-------- --------
Net cash provided by (used in) investing activities .......................................... (10,840) (16,152)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payment of long-term loan to a related party ................................ -- (242)
Proceeds from the issuance of share capital and exercise of stock options
and warrants, net .................................................................. 92,393 29,409
Proceeds from long term loans ......................................................... 387 36
Short-term bank credit, net ........................................................... -- (250)
-------- --------
Net cash provided by financing activities .................................................... 92,780 28,953
-------- --------
Increase (decrease) in cash and cash equivalents ................................................. 82,086 12,314
Cash and cash equivalents at the beginning of the period ......................................... 13,019 1,573
-------- --------
Cash and cash equivalents at the end of the period ............................................... $ 95,105 $ 13,887
======== ========
</TABLE>
See notes to condensed consolidated financial statements (unaudited)
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FUNDTECH LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements as of June 30, 1999 and for the three months ended June 30, 1999 and
1998 and for the six months ended June 30, 1999 and 1998 are unaudited and
reflect all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim periods. The condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto, together with management's
discussion and analysis of the financial condition and results of operations,
contained in Fundtech's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998. The results of operations for the three months ended June 30,
1999 are not necessarily indicative of the results for the entire fiscal year
ending December 31, 1999.
2. NET INCOME PER SHARE
Basic net income per share is computed using the weighted average
number of common shares outstanding during each period. Diluted net income per
share is computed using the weighted average number of common shares outstanding
and dilutive common stock equivalents outstanding during the period. A
reconciliation of the numerators and denominators used in computing the basic
and diluted net income per share is as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1999 1998 1999 1998
---- ---- ---- ----
(U.S. dollars in thousands, except share amounts)
<S> <C> <C> <C> <C>
Numerator:
Numerator for basic and diluted per share amounts -
net income (loss) (459) (15,577) 1,335 (15,345)
Denominator:
Denominator for basic net income (loss) per share
weighted average shares 12,638,167 10,699,000 11,741,685 9,494,000
Effect of dilutive stock options and warrants -- -- 712,519 --
Denominator for dilutive net income (loss) per share
weighted average shares and assumed conversions 12,638,167 10,699,000 12,454,204 9,494,000
</TABLE>
3. SHARE CAPITAL
On April 30, 1999, Fundtech completed a public offering of 2,9000,000
Ordinary Shares, which raised net proceeds in the amount of approximately $92.3
million.
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4. PURCHASE OF BBP
In June 1999, Fundtech entered into a Share Purchase Agreement ("the
Agreement"), with Biveroni Batchelet Partners AG, a Swiss corporation ("BBP")
and its shareholders (the "Shareholders"), pursuant to which Fundtech purchased
all of the outstanding shares of BBP from the shareholders for an aggregate
purchase price of approximately $13.3 million, of which 75% was paid in cash and
25% in stock ( 105,315 Ordinary Shares). The transaction was recorded as a
purchase and resulted in the initial recording of approximately $10 million of
goodwill which is being amortized over 8.5 years and a one time write-off of R&D
in process in the amount of $2.8 million.
The Pro Forma unudited results of operations for the six months ended
June 30, 1999 and June 1998, assuming consummation of the purchase and issuance
of the 25% in stock as of January 1, 1998 are as follows:
Six Months Ended June 30,
---------------------------
1999 1998
---- ----
Sales 20,063 10,548
Net Income (loss) 3,520 (16,196)
Net Income per share:
Basic 0.28 (1.50)
Diluted 0.26 (1.50)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Fundtech Ltd.
(Registrant)
/s/ Reuven Ben-Menachem
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Dated: December 9, 1999 Chairman, President & CEO
/s/ Michael Carus
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Dated: December 9, 1999 Executive Vice President, COO & CFO
(Principal Financial Officer)
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