Slide 1: June 30, 2007 Quarterly Results and Full Year 2007 Guidance Update
June 30, 2007 Quarterly Results and Full Year 2007 Guidance Update September 20, 2007
Slide 2: Private Securities Litigation Reform Act of 1995 Safe Harbor
This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. A discussion of these forward-look
Slide 3: Agenda
Mark Vipond, Chief Operating Officer Overview of Operations June 30 Quarterly Results- Operational Detail Full year 2007 Outlook Henry Lyons, Chief Financial Officer Financial Overview June 30 Results- Financial Detail Full year 2007 Guidance Q&A: Phil Heasley, Henry Lyons and Mark Vipond Agenda
Slide 4: Business Operations Review June 30, 2007 Quarter
Business Operations Review June 30, 2007 Quarter Mark Vipond, Chief Operating Officer
Slide 5: Business activity June 30, 2007 Quarter
Business activity June 30, 2007 Quarter Seven new customers signed Continued momentum in fraud products with three new accounts for Proactive Risk Manager Two ACI Enterprise Banker On Demand Major win with BASE24-eps on IBM zSeries with significant European bank Thirty one new applications signed wi
Slide 6: Business activity - continued
Business activity - continued June 30, 2007 Quarter Retail Payments Solutions BASE24 BASE24-eps Payments Management Wholesale Payments Solutions Integration of P&H and Visual Web International Opportunities Risk Management Solutions Fraud Detection and Prevention Move to Enterprise Risk
Slide 7: Business activity - continued (regional revenue and backlog)
Business activity - continued June 30, 2007 Quarter Americas Revenue of $52.6 million 60-month Backlog of $653 million Market Overview Europe, Middle East and Africa (EMEA) Revenue of $36.5 million 60-month Backlog of $485 million Market Overview Asia/Pacific Revenue of $9.0 million 60-month Backlog
Slide 8: Business activity - continued: ACI On Demand
Business activity - continued June 30, 2007 Quarter ACI On Demand Expansion of Enterprise Banker North American focus in 2007 Global Technology Centers Ireland Romania expansion India/Malaysia Latin/South America location analysis Services Growth Opportunity Strategic Partner Update IBM Hewlett Pack
Slide 9: Commercial Performance Calendar Year 2007 Outlook
Commercial Performance Calendar Year 2007 Outlook Total sales in line with expectations United States is down Rest of World is up Mix of sales changed from expectations Higher Term Extensions Not incremental to backlog but serves to increase “contracted” portion of backlog Lower New Applications, Ne
Slide 10: Financials Review June 30, 2007 Quarter
Financials Review June 30, 2007 Quarter Henry Lyons, Chief Financial Officer
Slide 11: Key Takeaways from Quarter
Key Takeaways from Quarter OFCF growth of ~5x year over year Sequential backlog growth of $26 million Revenue up due to acquisitions Total expenses grew due to acquisitions, stock options review, acquisition intangibles, increased deferred expenses, employee-related costs, release of deferred expens
Slide 12: Operating Free Cash Flow ($ millions)
Operating Free Cash Flow ($ millions) 5.3x growth over prior year quarter $2.3 $11.7 Operating Free Cash Flow -2.2 -1.2 -- 1.9 Selected non-recurring items: $4.5 $11.0 Net cash provided by operating activities 2006 2007 Quarter Ended June 30, Net after-tax cash payments associated with stock option
Slide 13: Adjusted non-GAAP earnings ($ millions)
Adjusted non-GAAP earnings ($ millions) Non-GAAP excludes impact of one-time items, amortization of acquisition intangibles and non-cash equity compensation $11.4 $0.31 $3.7 $0.10 Adjusted Non-GAAP earnings per share $1.0 0.03 $0.9 0.02 Non-cash equity-based compensation $0.5 0.01 $1.8 0.05 Amortiza
Slide 14: 60-Month Backlog ($ millions)
60-Month Backlog ($ millions) All regions contributed to sequential backlog growth in quarter $1,040 $1,078 $1,244 $1,270 Backlog 60-Month 9 8 0 0 Divestitures 0 20 172 175 Acquisitions $1,031 $1,050 $1,072 $1,095 ACI Organic Backlog breakout $1,040 $1,078 $1,244 $1,270 Backlog 60-Month 126 125 127
Slide 15: Revenues by Channel ($ millions)
Revenues by Channel ($ millions) 16% growth driven by acquisition revenues of $13.0 million $84.8 $98.1 Revenues 8.0 9.0 Asia/Pacific 29.7 36.5 EMEA $47.0 $52.6 Americas 17.7 19.6 $29.3 $33.0 Revenues: 2006 2007 Quarter Ended June 30, United States Americas International
Slide 16: Monthly Recurring Revenue ($ millions)
Monthly Recurring Revenue ($ millions) Monthly license fee declines due to sales mix and weakness in the Americas segment Maintenance and processing services fees were driven by activity in EMEA and by acquisitions $47.1 $54.6 Monthly Recurring Revenue 3.4 7.8 Processing Services 26.0 31.3 Maintenan
Slide 17: Deferred Revenue ($ millions)
Deferred Revenue ($ millions) Sequentially up $1.1 million compared to a $5 million decrease in the June 2006 quarter Up $1.1 million after $20 million sequential increase in March quarter $100.6 $95.4 $121.7 $122.8 Total Deferred Revenue $20.4 $16.6 $25.3 $25.7 Long Term Deferred Revenue 20.4 16.6
Slide 18: Deferred Expenses ($ millions)
Deferred Expenses ($ millions) June 2007 quarter expenses impacted by release of $0.7 million of deferred expenses June 2006 quarter expenses benefited from increased capitalization of $0.7 million $5.2 $5.9 $14.6 $13.9 Total Deferred Expenses 5.2 5.9 14.4 13.8 ACI Organic $0.0 $0.0 $0.2 $0.1 Acquis
Slide 19: Organic vs. Acquired Business Performance ($ millions)
Organic vs. Acquired Business Performance ($ millions) Revenue growth driven by acquisitions; expenses up due to acquisitions, amortization of intangibles, employee-related costs, and stock options review Deferred Revenue increased in June 2007 quarter versus a decrease in the June 2006 quarter. Def
Slide 20: Tax Impact on June Quarter and FY 2007
Tax Impact on June Quarter and FY 2007 Reduced GAAP revenue expectations combined with several non-recurring charges significantly reduce fiscal year pre-tax income - Fixed amortization charge related to IP transfer to Ireland does not change; drives up ETR - Establishment of expense structure in Ir
Slide 21: Share repurchase program
Share repurchase program Total Open Market Shares Repurchased: Calendar Year to Date 2007--1,373,720 June 2007 quarter -- 463,100 Subsequent to June quarter-- 909,620 Total Shares Repurchased in Program since 2005 -- 4,160,363 CY 2007 Average Price per Share (open market): $30.41 Total $ Available i
Slide 22: Guidance Tables
Guidance Tables
Slide 23: CY 2007 OFCF Forecast Walk ($ millions)
CY 2007 OFCF Forecast Walk($ millions) $57 - $67 $50 - $55 ~ (4 – 9) ~ ~ ~ 62.9 49.8 (5) (3) 5 (10) - 10.0 20.0 30.0 40.0 50.0 60.0 70.0 Previous Guidance Increase in Cash Taxes Cash Other Income & Exp. Cash Operating Expense Sales Mix / Other Current Guidance
Slide 24: CY 2007 Mo. Backlog Forecast Walk ($ millions)
CY 2007 60 Mo. Backlog Forecast Walk ($ millions) $1,309 - $1,339 $1,290 - $1,310 ~ ~ (33-43) (40) 1,293.9 1,320.1 14 1,270.0 1,280.0 1,290.0 1,300.0 1,310.0 1,320.0 1,330.0 1,340.0 Previous Guidance Projects Deferred to 2008 Sales Mix / Other Current Guidance
Slide 25: CY 2007 Revenue Forecast Walk ($ millions)
CY 2007 Revenue Forecast Walk ($ millions) $428 - $447 $390 - $400 ~ ~ (24-33) 438.4 391.1 (33) (14) 360.0 370.0 380.0 390.0 400.0 410.0 420.0 430.0 440.0 450.0 Previous Guidance Projects Deferred to 2008 Sales Mix / Other Current Guidance
Slide 26: CY 2007 EPS Forecast Walk
CY 2007 EPS Forecast Walk $1.05 - $1.34 $0.20 - $0.40 OFCF Impact Non-OFCF Impact Non-Recurring Items = ~ ($0.19) – ($0.20) ~ ~ ~ ~ ~ ~ ~ (0.41 – 0.56) ~ (0.08-0.09) ~ 0.00 1.24 0.06 (0.05) (0.08) (0.23) (0.55) 0.03 (0.08) (0.11) 0.01 0.23 (0.03) (0.03) - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 Previous
Slide 27: CY 2007 Non-GAAP EPS Forecast Walk
CY 2007 Non-GAAP EPS Forecast Walk $0.82 - $1.02 $1.51 - $1.80 ~ (0.41 – 0.56) ~ ~ ~ (0.08) 1.65 (0.23) (0.55) 0.06 0.88 - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 Previous Guidance Projects Deferred to 2008 Sales Mix / Other Operating Expenses Other Income & Expense Current Guidance
Slide 28: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Non-GAAP Financial Measures Reconciliation This presentation includes non-GAAP information: Operating Free Cash Flow and Adjusted Non-GAAP EPS. ACI is presenting these non-GAAP guidance measures to provide more transparency to its earnings, focusing on operations before s
Slide 29: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words or phrases such as the Co
Slide 30: Forward-Looking Statements (continued)
Forward-Looking Statements (continued) The risks identified in the Company’s filings with the Securities and Exchange Commission include: Risks associated with the restatement of the Company’s financial statements; Risks associated with not having current financial information available one result o
Slide 31: Forward-Looking Statements (continued) Backlog
Forward-Looking Statements (continued) Backlog Estimates of future financial results are inherently unreliable. The Company’s backlog estimates are based on a number of assumptions as described in the Company's Form 10-Q filed on August 10, 2007 in the section entitled "Backlog" under Item 2. -- MAN