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, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-29634
FUNDTECH LTD.
-------------------------------------
(Exact Name of Registrant as Specified in its Charter)
ISRAEL Not Applicable
----------------------------- -----------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
12 Ha'hilazon Street
Ramat-Gan, Israel 52522
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(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: 14,066,473 shares of Ordinary
Shares, NIS 0.01 par value, as of June 30, 2000.
NY2:\956821\01\k$@d01!.DOC\46984.0001
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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, 2000, to
revise our previously reported increase in trade payables for the six months
ended June 30, 2000, as reported in 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, 2000.
<PAGE>
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
PART I
FINANCIAL INFORMATION
FUNDTECH LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 2000 1999
---- ----
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 37,845 $ 41,493
Investment in marketable securities 42,110 41,023
Trade receivables, net 16,518 11,753
Other current assets 2,267 1,868
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Total current assets 98,740 96,137
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Long-term trade receivables 1,965 1,033
Property and equipment, net 8,541 7,941
Other assets, net 19,673 19,798
----------- -----------
Total assets $ 128,919 $ 124,909
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Trade payables $ 1,516 $ 1,528
Deferred revenues and accrued expenses 8,191 4,593
----------- -----------
Total current liabilities 9,707 6,121
Other Liabilities 245 194
Shareholders' equity:
Share capital 42 42
Additional paid-in capital 138,999 137,997
Accumulated other comprehensive loss (2,181) (1,156)
Deferred compensation (114) (147)
Accumulated deficit (17,779) (18,142)
----------- -----------
Total shareholders' equity 118,967 118,594
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Total liabilities and shareholders' equity $ 128,919 $ 124,909
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements (unaudited)
1
<PAGE>
FUNDTECH LTD. AND ITS SUBSIDIARIES
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Software licenses fees $ 6,810 $ 5,532 $ 12,191 $ 10,154
Maintenance and service fees 4,210 2,984 8,192 5,792
Hardware sales 295 516 936 987
--------- ----------- ---------- ----------
Total revenues 11,315 9,032 21,319 16,933
--------- ----------- ---------- ----------
Cost of revenues
Software licenses costs 31 278 62 308
Maintenance and services costs 2,764 2,004 5,480 3,653
Hardware costs 243 395 750 767
--------- ----------- ---------- ----------
Total cost of revenues 3,038 2,677 6,292 4,728
--------- ----------- ---------- ----------
Gross profit 8,277 6,355 15,027 12,205
--------- ----------- ---------- ----------
Operating expenses:
Software development 4,159 2,580 8,334 4,917
Selling and marketing, net 2,412 1,304 4,878 2,399
Amortization of acquisition-related
Intangible assets 603 165 1,206 243
General and administrative 1,597 816 3,252 1,486
In process R&D write-off -- 2,802 -- 2,802
--------- ----------- ---------- ----------
Total operating expenses 8,771 7,667 17,670 11,847
--------- ----------- ---------- ----------
Operating income (loss) (494) (1,312) (2,643) 358
Financial income, net 1,605 853 3,006 977
--------- ----------- ---------- ----------
Net income (loss) $ 1,111 $ (459) $ 363 $ 1,335
========= =========== ========== ==========
Net income (loss) per share:
Basic income (loss) per share $ 0.08 $ (0.04) $ 0.03 $ 0.11
Diluted income (loss) per share $ 0.08 $ (0.04) $ 0.02 $ 0.11
Shares used in computing:
Basic income (loss) per share 14,058,822 12,638,167 14,025,604 11,741,685
Diluted income (loss) per share 14,793,100 12,638,167 14,820,336 12,454,204
Adjusted net income per share (a):
Adjusted net income used in
computing net income per share $ 1,714 $ 2,508 $ 1,569 $ 4,380
Diluted adjusted net income per share 0.12 0.19 0.11 0.35
Shares used in computing diluted
Net income per share 14,793,100 13,383,537 14,820,336 12,454,204
</TABLE>
(a) Adjusted net income and adjusted net income per share excluded the pre-tax
effects of the line item "Amortization of acquisition-related intangible
assets" and "In process R&D write-off", listed above.
See notes to condensed consolidated financial statements (unaudited)
2
<PAGE>
FUNDTECH LTD. AND ITS SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
For Six Months Ended June 30, 2000 and June 30, 1999
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 363 $ 1,335
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization 2,531 762
In process research and development write-off -- 2,802
Amortization of deferred compensation 33 41
Capital gain on sale of property and equipment (4) --
Increase in other liabilities -- (13)
Increase in trade receivables, net (5,673) (2,057)
Increase in other current assets (389) (776)
Increase (decrease) in trade payables (18) 163
Increase (decrease) in deferred revenues and accrued expenses 2,298 (2,111)
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Net cash provided by (used in) operating activities (859) 146
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CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for acquisition -- (9,194)
Purchase of property and equipment (1,922) (1,646)
Investment in securities (1,646) --
Proceeds from sale of property and equipment 23 --
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Net cash used in investing activities (3,545) (10,840)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of share capital and exercise of
stock options and warrants, net 1,002 92,393
Proceeds from long term loans -- 387
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Net cash provided by financing activities 1,002 92,780
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Effect of exchange rate on cash and cash equivalent (246) --
Increase (decrease) in cash and cash equivalents (3,648) 82,086
Cash and cash equivalents at the beginning of the period 41,493 13,019
------------- -------------
Cash and cash equivalents at the end of the period $ 37,845 $ 95,105
============= =============
</TABLE>
See notes to condensed consolidated financial statements (unaudited)
3
<PAGE>
FUNDTECH LTD.
NOTES TO CONDENSED CONDOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements as of
June 30, 2000 and for the three months ended June 30, 2000 and 1999 and for the
six months ended June 30, 2000 and 1999 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, 1999. The results of operations for the three months ended June 30,
2000 are not necessarily indicative of the results for the entire fiscal year
ending December 31, 2000.
2. REALLOCATION OF BUSINESS ACQUISITIONS
In 1999 the company acquired all the shares of Biverony Batchelet Partners AG
("BBP") and certain assets and certain liabilities of Sterling, a U.S. company.
The acquisitions have been accounted for by the purchase method of accounting
and accordingly the purchases have been allocated to the net assets acquired
based on the fair value estimations at the date of acquisitions. The excess of
the purchase price over the estimated fair value of net assets acquired have
been recorded as goodwill.
During the three months ended June 30, 2000 the initial purchase price
allocation has been reallocated to appropriately reflect the fair value of
Sterling and BBP net assets acquired. the purchase price reallocation resulted
in a reduction of approximately $1,287 thousand at fair value assigned to
Sterling and BBP with corresponding increase to goodwill.
3. NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share is computed using the weighted average number
of common shares outstanding during each period. Diluted net income (loss) per
share is computed using the weighted average number of common shares outstanding
and dilutive common stock equivalents outstanding during the period. Our
reconciliation of the numerators and denominators used in computing the basic
and diluted net income (loss) per share is as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30
2000 1999 2000 1999
-------------------- --------------------
(in thousands)
<S> <C> <C>
Numerator:
Numerator for basic and diluted per share
amounts - net income (loss) $1,111 $(459) $363 $1,335
Denominator:
Denominator for basic net income (loss)
per share weighted average shares 14,058,822 12,638,167 14,025,604 11,741,685
Effect of dilutive stock options and warrants 734,278 -- 794,732 712,519
Denominator for dilutive net income (loss)
per share weighted average shares
and
assumed conversions 14,793,100 12,638,167 14,820,336 12,454,204
</TABLE>
4
<PAGE>
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 Bem Menahchem
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Dated: August 21, 2000 Chairman, President & CEO
/s/ Michael Carus
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Dated: August 21, 2000 Executive Vice President, COO & CFO
(Principal Financial Officer)
