Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — Q1 2008 Earnings Presentation
34 slides from Aci Worldwide's earnings presentation, May 8, 2008
Slide 1: March 31, 2008 Quarterly Results
March 31, 2008 Quarterly Results May 8, 2008
Slide 2: Safe Harbor For Forward-Looking Statements
2 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-lo
Slide 3: Agenda
3 • Richard Launder, President, Global Operations • Mark Vipond, President, Global Product • Scott Behrens, Principal Financial Officer • Q&A: Phil Heasley, Richard Launder, Scott Behrens and Mark Vipond Agenda
Slide 4: Business Operations Review
4 Richard Launder, President, Global Operations Business Operations Review
Slide 5: Q1 2008 Sales Results
5 Q1 2008 Sales Results Qtr. Ended March 08 Qtr. Ended March 07 % Growth or Decline New Account 1,311 20,333 -94% New Application 9,621 18,296 -47% Add-On Business 38,101 43,193 -12% Term Extension 14,781 43,660 -66% Total Sales 63,813 125,480 -49% • Q1 2008 following a record year end sales quarter
Slide 6: Q1 2008 Channel Sales Results
6 Q1 2008 Channel Sales Results Qtr. Ended March 08 Qtr. Ended March 07 % Growth or Decline Americas 16,907 35,649 -53% EMEA 19,623 41,071 -52% Asia-Pacific 12,503 5,100 145% Total Sales (net of Term Ext.) 49,032 81,821 -40% Channel Performance: • Asia-Pacific ... growth due to Visual Web sales + la
Slide 7: IBM Alliance Performance
7 IBM Alliance Performance • Deals – Signed Kasikorn bank on System p – A very large deal was signed with Sermepa, a large national switch in Spain. • selected BASE24-eps on System z, signed in May and will be recognized as Q2 sale • Sales Operations – Completed joint account planning for Priority 1
Slide 8: Business Operations Review
8 Mark Vipond, President, Global Product Business Operations Review
Slide 9: ACI Customers by Geography/Product Q1 2008
9 ACI Customers by Geography/Product Q1 2008 Product Customers Payment Engines Retail Banking Wholesale Banking Banking United States 64 93 24 45 56 1 Canada/Latin America 55 2 21 11 33 0 EMEA 144 6 65 57 91 3 Asia/Pacific 82 14 27 28 72 1 Retail United States 60 0 2 3 23 0 Canada/Latin America 22 0
Slide 10: ACI Customers by Region, Industry and Solution Set
10 ACI Customers by Region, Industry and Solution Set – March 31, 2008 • ACI customers use an average of 2.7 products. • 12 new customers added in March quarter. • 2 new countries added in the quarter – Romania (from a client perspective) and Kyrgyzstan. • Customers in 88 countries. • Total of 808 A
Slide 11: Solution Updates - Q1 2008
11 Solution Updates - Q1 2008 • Retail Payment Solutions – Maturity announcements of legacy Retail Payment Products on March 24, 2008. – BASE24-eps customer migration planning has begun. – System z enablement progress. • Wholesale Payment Solutions – Improving sales/market opportunities – in all reg
Slide 12: Focus Areas – Next Months
12 Focus Areas – Next 12 Months • IBM optimization, enablement and market success. • Continued progress with services revenue and margins. • Migration planning for Retail Payment customers. • Wholesale Payment Solution strategies and investment. • Customer satisfaction. • Enhancing the ACI brand.
Slide 13: Financials Review
Financials Review Scott Behrens, Principal Financial Officer
Slide 14: Key Takeaways from the Quarter
14 Key Takeaways from the Quarter . Sales down sequentially by $68 million following a record sales quarter in December 2007 . OFCF of $45.3 million in the quarter versus $18.3 million in March 2007 quarter Includes $36.2 million (net of $1.1 million of expenditures) from IBM; Ex-IBM OFCF of $9.1 mi
Slide 15: Takeaways from the Quarter (cont)
15 Takeaways from the Quarter (cont) . Overall rate of deferred revenue growth is slowing . Short term deferred revenue grew to $135 million compared to December quarter at $116 million . Expenses up $9.3 million year over year ($3.4 million increase + last year included a $5.9 million impact of his
Slide 16: Backlog is a Significant Contributor to Current Period Revenue
16 Backlog is a Significant Contributor to current period Revenue • Shift in product mix combined with higher recurring revenue as well as decreased sales of short term products led to greater reliance on backlog in Q1 2008 – Fewer Application Services (tools) sales – those products mature into curr
Slide 17: Cash Margin
17 Cash Margin Q1 2008 Cash Margin • OFCF was negatively impacted ~$6 million by services and related deferred expenses as well as the remaining $3.3 million variance y-o-y was driven by external professional fees, investment in Retail On-Demand and distributor commissions • IBM-related investments
Slide 18: IBM Outsourcing
18 IBM Outsourcing • IBM to handle all internal IT- mainframe, servers, hardware and end user services • ACI retains its security policy management and ondemand business operations • 7 year term; ACI expects to pay $116 million to IBM over the life of deal • Up to $8 million GAAP expense to be incur
Slide 19: Share Repurchases
19 • March 2008 quarter- – 1,639,755 shares repurchase at an average price of $18.33 • Total shares repurchased since program inception in 2005 – 6,049,484 at average price of $25.46 • $56 million remaining on buyback authorization Q1 2008 share repurchases amount to 27% of overall buyback since pro
Slide 20: Appendix
Appendix
Slide 21: Operating Free Cash Flow
21 Operating Free Cash Flow ($millions) 18.3 9.1 Net ACI Organic Cash Flows $18.3 $45.3 Operating Free Cash Flow 0.0 36.2 Net IBM proceeds and enablement cash flows (0.9) Less alliance Technical enablement expenditures 2.7 0.0 Net after-tax cash payments associated with stock option cash settlement
Slide 22: 60-Month Backlog
22 60-Month Backlog ($ millions) $1,277 $1,380 $1,397 Backlog 60-Month 1,155 1,237 1,241 ACI Other 122 143 156 ACI Deferred Revenue $1,277 $1,380 $1,397 Backlog 60-Month 128 143 151 Asia/Pacific 457 504 522 EMEA $692 $733 $724 Americas 2007 2007 2008 March 31, December 31, March 31, Quarter Ended
Slide 23: Revenues by Channel
23 Revenues by Channel ($ millions) $89.9 $92.6 Revenues 8.6 11.3 Asia/Pacific 28.7 37.3 EMEA $52.6 $44.0 Americas 13.4 11.3 Americas International $39.2 $32.7 United States Revenues: 2007 2008 Quarter Ended March 31,
Slide 24: Monthly Recurring Revenue
24 Monthly Recurring Revenue ($ millions) $52.2 $56.3 Monthly Recurring Revenue 7.1 8.0 Processing Services 29.9 31.5 Maintenance fees $15.2 $16.8 Monthly license fees 2007 2008 Quarter Ended March 31,
Slide 25: Deferred Revenue
25 Deferred Revenue ($ millions) Quarter Ended March 31, December 31, March 31, December 31, 2008 2007 2007 2006 Acquisitions $1.9 $2.0 $0.7 $0.0 ACI Organic 133.5 113.5 95.7 $78.5 Short Term Deferred Revenue $135.4 $115.5 $96.4 $78.5 Acquisitions $0.0 $0.0 $0.0 $0.0 ACI Organic 20.3 27.3 25.3 $22.4
Slide 26: Deferred Expenses
26 Deferred Expenses ($ millions) $5.9 $5.9 $11.4 $12.4 Total Deferred Expenses 5.9 5.9 $11.3 12.3 ACI Organic $0.0 $0.0 $0.1 $0.1 Acquisitions 2006 2007 2007 2008 December 31, March 31, December 31, March 31, Quarter Ended
Slide 27: Organic vs. Acquired Business Performance
27 Organic vs. Acquired Business Performance ($ millions) -- -- (5.9) -- Stock Options Prof Fees $1.0 $12.9 $93.1 $92.6 2008 Quarter $1.0 ($7.9) $3.4 $2.7 Net Change 0.0 (0.8) 1.2 0.8 Acquisitions 1.0 ($7.1) $8.1 $1.9 Organic ($0.0) $20.8 $89.7 $89.9 2007 Quarter Dec-March y-o-y Quarterly Movement i
Slide 28: Non-Cash Compensation, Acquisition Intangibles and Non-Recurring Items
28 Non-Cash Compensation, Acquisition Intangibles and Non-Recurring Items * Tax Effected at 35% $6.8 $0.18 $3.6 $0.10 Total: 1.1 0.03 1.7 0.05 Non-cash equity-based compensation 1.8 0.05 1.9 0.05 Amortization of acquisition-related intangibles and software $3.9 $0.10 $0.0 $0.00 Non-recurring items $
Slide 29: Other Income/Expense
29 Other Income/Expense ($0.9) ($0.9) ($1.0) ($1.0) Total Other Income (Expense) 0.3 (0.0) 0.2 (0.2) Other 0.0 0.0 (2.5) (3.7) FAS 133 Derivative (0.6) (0.3) 1.9 3.7 FX Gain / Loss (1.5) (1.6) (1.4) (1.4) Interest Expense $0.9 $1.0 $0.8 $0.6 Interest Income December 31, 2006 March 31, 2007 December
Slide 30: Non-GAAP Financial Measures
30 Non-GAAP Financial Measures • This presentation includes operating free cash flow and backlog estimates. ACI is presenting these non-GAAP guidance measures to provide more transparency to its earnings, focusing on operating free cash flow and backlog • ACI is presenting operating free cash flow,
Slide 31: Non-GAAP Financial Measures
31 Non-GAAP Financial Measures • ACI also includes backlog estimates which are all software license fees, maintenance fees and services specified in executed contracts, as well as revenues from assumed contract renewals to the extent that we believe recognition of the related revenue will occur with
Slide 32: Forward Looking Statements
32 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 “be
Slide 33: Forward Looking Statements
33 Forward Looking Statements The risks identified in our filings with the Securities and Exchange Commission include: Risks associated with the restatement of our financial statements; Risks associated with our performance which could be materially adversely affected by a general economic downturn
Slide 34: Every Second. Every Day.
MI EVERY SECOND. EVERY DAY.