ACI Worldwide, Inc. · NASDAQ:ACIW
ACI Worldwide — FY2009 Earnings Presentation
47 slides from ACI Worldwide's earnings presentation, February 2010
Slide 1: December 31, 2009 Quarterly and Year End Results
December 31, 2009 Quarterly and Year End Results
Slide 2: Safe Harbor For Forward-Looking Statements
Private Securities Litigation Reform Act of 1995 Safe Harbor For Forward-Looking Statements 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 provision
Slide 3: Agenda
Agenda • Phil Heasley, Chief Executive Officer • Ron Totaro, Chief Operating Officer • Scott Behrens, Chief Financial Officer • Q&A: Phil Heasley, Ron Totaro, and Scott Behrens 3
Slide 4: Year in Review
Phil Heasley, Chief Executive Officer Year in Review
Slide 5: 2009 Year-End Summary
2009 Year-End Summary • Rise in all recurring revenue categories demonstrating intrinsic business improvement – Particularly in maintenance revenue rise of $6.7 million over prior year • Significant reduction in business operating costs – Total savings of $31.8 million achieved over operating expens
Slide 6: Business Review
Ron Totaro, Chief Operating Officer Business Review
Slide 7: General 2009 Sales Market Summary
General 2009 Sales Market Summary • Demonstrated ability to renew contracts at profitable rates in 2009 – Resulted in higher recurring revenue business throughout the year • Impact of financial markets crisis – Led to further sales cycle elongation so new contracts/new apps did not sell at the same
Slide 8: Q4 2009 Sales Results
Q4 2009 Sales Results Sales Type Product Division Qtr. Ended Qtr. Ended % Growth or Qtr. Ended Qtr. Ended % Growth or Sales Type Dec. 09 Dec. 08 Decline Product Division Dec. 09 Dec. 08 Decline New Account 9,688 16,490 -41% Manage: Retail Payments 73,552 134,273 -45% New Application 18,360 17,014 8%
Slide 9: Q4 2009 Channel Sales Results
Q4 2009 Channel Sales Results Sales (net of Term Extensions) Q4 2009 v Q4 2008 Channel Performance: Sales Net of Term Extensions Qtr. Ended Qtr. Ended % Growth or • Americas … Channel Dec. 09 Dec. 08 Decline Americas 71,558 78,443 -9% – Top 5 customers accounted for $57 million of sales EMEA 34,646
Slide 10: Historic Sales By Quarter 2008-2009
Historic Sales By Quarter 2008-2009 Sales Mix by Category Add-on Business inc. Capacity Total Economic Value of Upgrades & Quarter-End Sales New Accounts New Applications Services Term Extentions 3/31/2008 $63,813 $1,311 $9,621 $38,101 $14,781 2% 15% 60% 23% 6/30/2008 $99,938 $15,856 $23,487 $45,434
Slide 11: Americas Q4/Year in Review
Americas Q4/Year in Review • Q4 revenue of $68.0 million, an increase of 18% over Q4 2008 – Driven by non-recurring license fees and go-lives • Annual revenue of $223.0 million, an increase of 8% over prior year – Driven by increased recurring revenue and timely completion of services projects. • St
Slide 12: 2010 Opportunities - Americas
2010 Opportunities- Americas • Cross Selling – Selling risk products into existing customer base – Leveraging retail relationships to sell wholesale and online banking • Canada – Expansion of our risk footprint – New BASE24-eps® business • Extended Support Services • Latin America – Migration servic
Slide 13: EMEA Q4/Year in Review
EMEA Q4/Year in Review • Q4 revenue of $43.2 million, an increase of 9% over Q4 2008 revenue of $39.4 million – Significant license fee revenue derived from Q4 sales – Q4 large services deals at El Corte Ingles and Muslim Commercial Bank • Annual revenue of $137.1 million, a decrease of 19% – Prior
Slide 14: 2010 Opportunities - EMEA
2010 Opportunities- EMEA • Wholesale Solutions • Processors – Consolidated license renewals – Expansion of system footprint with correlating services • Back office acquisitions and alliances substantially increase the value of the retail payments proposition • Northern Europe – Key renewals • Severa
Slide 15: Asia-Pacific Q4/Year in Review
Asia-Pacific Q4/Year in Review • Q4 revenue of $14.7 million, an increase of 23% due to significant project completion with Thai bank – Recurring revenue up 6% due to customer go-lives – Strong services revenues due to project completions in general • Annual revenue of $45.7 million, an increase of
Slide 16: 2010 Opportunities - Asia
2010 Opportunities- Asia • Online Banking • Cross Selling – Selling risk products into existing customer base – Cross leveraging retail relationships to sell wholesale and online banking • China – Direct model – Retail and risk opportunities • ASEAN – Wholesale payments – Expansion of retail footpri
Slide 17: Customer Revenue by Industry Type
Customer Revenue by Industry Type Industry Type CY 2009 Revenue % Finance 283,699 68% Banks and credit unions Other 16,495 5% Healthcare, Colleges, Government, social svcs, etc Processor 72,660 17% Processors and credit card companies Retail 32,900 10% Retail Grand Total 405,755 100% Industry Type P
Slide 18: Product and Cost Containment Initiatives
Product and Cost Containment Initiatives
Slide 19: Major Product Improvements/Initiatives 2009
Major Product Improvements/Initiatives 2009 • Implemented first deployment of Proactive Risk Manager (PRM) on IBM System z using DB2 and Websphere MQ for a customer in Asia-Pacific • Implemented BASE24-eps® 08.2 on IBM System z, with DB2 and WebSphere MQ for a customer in EMEA • Delivered a signific
Slide 20: The Agile Payments Strategy in Action
The Agile Payments Strategy in Action Be the leading provider of a unified solution that initiates, manages, secures and operates payments to maximize the total ™ economic impact for our customers. • Identified key products required for a holistic solution. • Deconstructing products into software se
Slide 21: Alliance Relationships Expand during 2009
Alliance Relationships Expand during 2009 • Hired senior alliances leader to build and manage all synergistic third-party relationships • Alliance approval model refinement begun – Now instituting “Alliance Leadership Council” (ALC) approach • Signed alliance with Bell ID • Key IBM alliance deals in
Slide 22: Business Improvement Achievements in 2009
Business Improvement Achievements in 2009 • Rationalized headcount in mature markets and reinvested in growth regions • Hired chief product officer, services leaders in EMEA and Asia as well as new EMEA sales leader • Globalized Help24 customer support • Purchased selected, strategic products and en
Slide 23: Financial Review
Financial Review Scott Behrens, Chief Financial Officer
Slide 24: Key Takeaways from the Quarter
Key Takeaways from the Quarter ↑ Strong Operating Income ↑ Rise of ~$15 million versus Q4 2008; rise of $23 million compared to Q3 ↑ OFCF of $29.8 million ↑ Sequential improvement of $40.2 million compared to Q3 2009 ↑ Revenue growth of 15%; achieved $125.9 million in the current quarter versus $109
Slide 25: Key Takeaways from the Year
Key Takeaways from the Year • Higher Operating Income • Rise of ~$20 million versus 2008 • Recurring Revenue rise of approximately $8 million • Revenue essentially flat y-o-y excluding impact of FX • Expenses down dramatically as a result of restructuring • ~$30 million reduction in personnel relate
Slide 26: Backlog is the Significant Driver of Current Period Revenue
Backlog is the Significant Driver of Current Period Revenue Revenue Qtr. Ended Qtr. Ended % Growth or Revenue Dec. 09 Dec. 08 Decline Revenue from Backlog 112,893 88,838 27% Revenue from Sales 13,017 20,373 -36% Total Revenue 125,911 109,211 15% Revenue from Backlog 90% 81% Revenue from Sales 10% 19
Slide 27: Revenue Phasing is consistent over past two years
Revenue Phasing is consistent over past two years Total Revenue 140.0 120.0 100.0 80.0 60.0 125.9 109.2 108.6 109.2 104.5 90.7 88.2 87.2 40.0 20.0 0.0 Q1'08 Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 Q4'09 • Q2 2008 revenue was higher than a normal quarter due to Faster Payments regulatory mandate in the U
Slide 28: Operating Income doubled over the past 8 quarters
Operating Income doubled over the past 8 quarters Operating Income 50.0 40.0 30.0 20.0 35.0 10.0 19.6 11.9 1.3 3.0 - (2.1) (2.1) (3.2) 08 08 08 08 09 09 09 09 1' 2' 3' 4' 1' 2' 3' 4' Q Q Q Q Q Q Q Q (10.0) Op.Income • Operating income also remains back-half loaded and has grown significantly as we r
Slide 29: Performance versus 2009 Guidance
Performance versus 2009 Guidance November 09 Key Metrics 2008 Actuals Guidance 2009 Actuals Sales $460 $414-428 $425 GAAP Revenue $418 $406 $406 GAAP Operating Income $22 $36.5-38.5 $42 • Achieved $424.6 million in sales – Signed $170 million of business in Q4 2009 alone – Led by ~$107 million in US
Slide 30: 2010 Guidance
2010 Guidance Key Metrics 2009 Actuals 2010 Growth Range 2010 Low 2010 High Revenue $405.8 3-5% $418 $428 Operating Income $41.6 15-20% $48 $50 Operating EBITDA $72.9 14-18% $83 $86 • Revenue – Expect revenue growth even as we anticipate fewer term renewals in 2010 where revenue recognition occurs i
Slide 31: Other factors impacting Guidance
Other factors impacting Guidance • Sales will be flat over 2009 performance • Expenses – Cash expenses should grow approximately 2-3% in calendar year – Dep’n and Amortization of approximately $26 million • OFCF should trend higher in line with operating income growth – Capex in the $15 million rang
Slide 32: Appendix
Appendix
Slide 33: Operating Free Cash Flow ($ millions)
Operating Free Cash Flow ($ millions) Quarter Ended December 31, 2009 2008 Net cash provided by operating activities* $32.8 $ 31.6 Selected non-recurring items: Net after-tax cash payments associated with employee-related actions 1.3 2.0 Less capital expenditures (3.4) (0.7) Less alliance technical
Slide 34: 60-Month Backlog ($ millions)
60-Month Backlog ($ millions) Quarter Ended December 31, September 30, December 31, 2009 2009 2008 Americas $850 $829 $773 EMEA 510 505 480 Asia/Pacific 157 156 157 Backlog 60-Month $1,517 $1,490 $1,410 ACI Deferred Revenue $138 $132 $124 ACI Other 1,379 1,358 1,286 Backlog 60-Month $1,517 $1,490 $1
Slide 35: Revenues by Channel ($ millions)
Revenues by Channel ($ millions) Quarter Ended December 31, 2009 2008 Revenues: United States $55.7 $43.9 Americas International 12.3 13.9 Americas $68.0 $57.8 EMEA 43.2 39.4 Asia/Pacific 14.7 12.0 Revenues $125.9 $109.2 35
Slide 36: Monthly Recurring Revenue ($ millions)
Monthly Recurring Revenue ($ millions) Quarter Ended December 31, 2009 2008 Monthly license fees $18.5 $18.3 Maintenance fees 37.1 31.7 Processing Services 8.3 8.1 Monthly Recurring Revenue $63.9 $58.1 36
Slide 37: Deferred Revenue & Expense ($ millions)
Deferred Revenue & Expense ($ millions) Quarter Ended December 31, September 30, December 31, September 30, 2009 2009 2008 2008 Short Term Deferred Revenue $106.3 $103.4 $99.9 $107.3 Long Term Deferred Revenue 31.5 28.7 24.3 23.3 Total Deferred Revenue $137.8 $132.1 $124.2 $130.6 Total Deferred Expe
Slide 38: Non-Cash Compensation, Acquisition Intangibles and Non-Recurring Items
Non-Cash Compensation, Acquisition Intangibles and Non-Recurring Items Quarter ended December 31, Quarter ended December 31, 2009 2008 Non-recurring items EPS Impact* $ in Millions EPS Impact* $ in Millions Employee-related $0.00 $0.0 $0.05 $1.9 Reversal of LTIP Program 0.00 0.0 (0.04) (1.4) IBM IT
Slide 39: Other Income/Expense ($ millions)
Other Income/Expense ($ millions) Quarter Ended December 31, September 30, December 31, September 30, 2009 2009 2008 2008 Interest Income $0.2 $0.1 $0.7 $0.6 Interest Expense (1.1) (0.5) (1.5) (1.1) FX Gain / Loss (1.2) 1.1 9.3 1.6 Interest Rate Swap Loss (0.2) (0.7) (4.3) (0.8) Other (0.5) (0.4) 0.
Slide 40: Operating EBITDA
Operating EBITDA Year Ended December 31, 2009 Operating Income $41.6 Depreciation Expense 6.3 Amortization Expense 17.4 Non-Cash Compensation Expense 7.6 Operating EBITDA $72.9 • Operating EBITDA is defined as operating income plus depreciation and amortization and non-cash compensation. 40
Slide 41: Non-GAAP Financial Measures
Non-GAAP Financial Measures ACI is presenting operating free cash flow, which is defined as net cash provided (used) by operating activities, excluding after tax cash payments associated with one-time employee related actions, IBM IT outsourcing transition and severance, and the early termination of
Slide 42: Non-GAAP Financial Measures
Non-GAAP Financial Measures Management generally compensates for limitations in the use of non-GAAP financial measures by relying on comparable GAAP financial measures and providing investors with a reconciliation of non-GAAP financial measures only in addition to and in conjunction with results pre
Slide 43: Non-GAAP Financial Measures
Non-GAAP Financial Measures Backlog is considered a non-GAAP financial measure as defined by SEC Regulation G. Our 60-month backlog estimate represents expected revenues from existing customers using the following key assumptions: Maintenance fees are assumed to exist for the duration of the license
Slide 44: Non-GAAP Financial Measures
Non-GAAP Financial Measures Estimates of future financial results are inherently unreliable. Our backlog estimates require substantial judgment and are based on a number of assumptions as described above. These assumptions may turn out to be inaccurate or wrong, including for reasons outside of mana
Slide 45: 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 “belie
Slide 46: Forward Looking Statements (Cont)
Forward Looking Statements (Cont) All of the foregoing forward-looking statements are expressly qualified by the risk factors discussed in our filings with the Securities and Exchange Commission. Such factors include, but are not limited to, risks related to the global financial crisis, restrictions
Slide 47: IMAI
IMAI EVERY SECOND. EVERY DAY. 47