Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — FY2011 Earnings Presentation
38 slides from Aci Worldwide's earnings presentation, Feb 14, 2012
Slide 1: December 31, 2011 Quarterly and Year End Results Presentation
December 31, 2011 Quarterly and Year End Results Presentation February 14, 2012 1
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: Annual Overview and S1 Acquisition
Annual Overview and S1 Acquisition Phil Heasley Chief Executive Officer 3
Slide 4: 2011 Year in Review
2011 Year in Review • Exceeded full year guidance targets • Record sales bookings of $556 million • Solid backlog growth • Strong revenue growth of 11% • Good Operating Free Cash Flow generation • Expanded operating income margin • Improved Adjusted EBITDA margin • Visibility into forward revenue an
Slide 5: ACI / S1 - Compelling Strategic Rationale
ACI / S1 - Compelling Strategic Rationale • Combination creates an industry leader in financial and payments software serving financial institutions (“FI”), Processors and Merchant Retailers worldwide • Summary pro forma financials are compelling – Approximately $700 million in combined 2012E Revenu
Slide 6: Financial Review
Financial Review Scott Behrens Chief Financial Officer 6
Slide 7: Key Takeaways from the Fourth Quarter
Key Takeaways from the Fourth Quarter Solid Sales Performance in line with prior-year quarter • Strength in new add-on sales across the geographies Strong revenue quarter • Strong recurring revenue • Timing of ‘go-live’ events resulted in lower non-recurring revenues from backlog versus prior-year q
Slide 8: ACI Organic Key Takeaways from the Year
ACI Organic Key Takeaways from the Year Record sales year with $556 million in bookings • Sales rise of $31 million over prior-year led by solid add-on business • Full-year sales growth of 6%, new sales growth of 5% • Excluding FDC deal, overall growth was 16%, new sales growth was 12% 60-Month Back
Slide 9: ACI Organic Key Takeaways from the Year (cont)
ACI Organic Key Takeaways from the Year (cont) Operating Free Cash Flow of $67.2 million • Up $4.4 million or 7% over prior year • Ended the year with $197.1 million in cash Strong growth in operating income • Up $12.6 million or 24% over prior-year • Up $19.3 million or 36%, excluding S1 acquisitio
Slide 10: 2011 Achieved Strong Performance vs Guidance
2011 Achieved Strong Performance vs Guidance 2011 Actuals ex Key Metrics 2010 Actuals 2011 Range Trans Fees Revenue $418.4 $450-460 $465.1 Operating Income* $53.6 $65-69 $72.9 Adjusted EBITDA* $87.8 $101-104 $112.6 • Revenue was greater than range for the year due to strong sales • Operating Income
Slide 11: 2012 Organic Guidance
2012 Organic Guidance Key Metrics 2011 Actuals 2012 Low 2012 High Revenue $465.1 $490 $500 Operating Income* $72.9 $84 $89 Adjusted EBITDA* $112.6 $124 $129 • Revenue - Revenue growth rate in the mid to high single digit range - Revenue and margin phasing consistent with prior-year - Beginning 12-mo
Slide 12: ACI / S1
ACI / S1 12
Slide 13: ACI / S1 - Transaction Update
ACI / S1 - Transaction Update • Closed S1 exchange offer on Friday February 10th, 2012 • Integration plan underway – Annual cost synergies of $30 million to be achieved by end of Q1 – Additional cost synergies, including data center and facilities consolidation, to be provided in Q2 – S1’s Large FIs
Slide 14: ACI / S1 - Pro Forma 2011
ACI / S1 - Pro Forma 2011 ($ in Millions) Stand-alone Stand-alone Illustrative ACI S1 (1) Combined Revenue $ 465 $ 245 $ 710 Adjusted EBITDA (2) (3) $ 113 $ 29 $ 142 Margin % 24% 12% 20% 60-Month Backlog $ 1,617 $ 685 $ 2,302 • S1 2011E Revenue and Adjusted EBITDA represents midpoint of 2011 Guidanc
Slide 15: ACI / S1 – Combined 2012 Guidance
ACI / S1 – Combined 2012 Guidance ($ in Millions) Standalone Combined Guidance before ACI One-Time Trans. Exps. Revenue $ 495 $ 696 - $ 706 Adjusted EBITDA $ 127 $ 165 - $ 170 Margin % 26% 24% 24% Operating Income $ 87 $ 99 - $ 104 Margin % 17% 14% 15% • ACI 2012E represents midpoint of organic Guid
Slide 16: ACI / S1 - Pro Forma Credit Statistics 12/31/2011
ACI / S1 - Pro Forma Credit Statistics 12/31/2011 ($ in Millions) Stand-alone Stand-alone Trans. Illustrative ACI S1 (1) Adjustments Combined Cash $ 197 $ 96 $ (110) $ 183 Revolver $ 75 $ - $ 95 $ 170 Term Loan - - 200 200 Total Debt $ 75 $ - $ 295 $ 370 Total Debt / PF 2011 Adj. EBITDA (2) 0.7x NM
Slide 17: Appendix
J trusted globally
Slide 18: ACI / S1 – Combined 2012 Guidance
ACI / S1 – Combined 2012 Guidance ($ in Millions) Standalone Incremental Cost Purchase Combined before One-Time Combined after ACI S1 Synergies Acct. Adj. One-Time Trans. Exps. Trans. Exps. One-Time Trans. Exps. Revenue $ 495 $ 213 - $ 223 $ - $ (12) $ 696 - $ 706 $ - $ 696 - $ 706 Adjusted EBITDA $
Slide 19: ACI / S1 - Pro Forma 2012E Purchase Accounting and One-Time Transaction Expenses Assumptions
ACI / S1 - Pro Forma 2012E Purchase Accounting and One-Time Transaction Expenses Assumptions ($ in Millions) • Synergies reflect amount to be realized in 2012 (75% of $30M) • Non-cash deferred revenue adjustment estimated at 40% of S1 deferred revenue balance with 2/3rd recognized in 2012 and 1/3rd
Slide 20: Historic Sales By Quarter 2010-2011
Historic Sales By Quarter 2010-2011 Sales Mix by Category Add-on Business Total Economic Value of New Accounts / New inc. Capacity Quarter-End Sales Applications Upgrades & Term Extension 3/31/2010 $81,142 $5,758 $35,066 $40,318 7% 43% 50% 6/30/2010 $107,985 $1,224 $68,474 $38,287 1% 63% 35% 9/30/20
Slide 21: Sales Composition
Sales Composition Product Division Total Sales Qtr Ended Qtr Ended % Growth or Qtr Ended Qtr Ended % Growth or Product Focus Dec 11 Dec 10 Decline ($MM) Dec 11 Dec 10 Decline New Accounts / Online Banking 19,881 19,757 0.6% New Applications $12,906 $43,988 -70.7% Retail & Wholesale Payments 121,671
Slide 22: Sales By Region by Quarter and Year
Sales By Region by Quarter and Year Total Sales Qtr Ended Qtr Ended % Growth or Channel Dec 11 Dec 10 Decline Americas $85,545 $75,451 13.4% EMEA 60,804 76,824 -20.9% Asia-Pacific 25,035 22,552 11.0% Total Sales $171,385 $174,827 -2.0% Total Sales Yr Ended Dec Yr Ended Dec % Growth or Channel 11 10
Slide 23: Backlog as a Contributor of Quarterly Revenue
Backlog as a Contributor of Quarterly Revenue Revenue Qtr Ended Qtr Ended % Growth or Revenue Dec 11 Dec 10 Decline Revenue from Backlog $122,374 130,927 -6.5% Revenue from Sales 12,662 10,314 22.8% Total Revenue $135,036 $141,241 -4.4% Revenue from Backlog 91% 93% Revenue from Sales 9% 7% • Backlog
Slide 24: Operating Free Cash Flow ($ millions)
Operating Free Cash Flow ($ millions) Quarter Ended Year Ended December 31, December 31, 2011 2010 2011 2010 Net cash provided by operating activities $31.2 $32.2 $83.5 $81.3 Adjustments: Net after-tax payments associated with S1 acquisition costs 3.3 - 3.7 - Net after-tax payments associated with I
Slide 25: 60-Month Backlog ($ millions)
60-Month Backlog ($ millions) Quarter Ended December 31, September 30, December 31, 2011 2011 2010 Americas $912 $894 $866 EMEA 514 520 501 Asia/Pacific 191 189 188 Backlog 60-Month $1,617 $1,603 $1,555 Deferred Revenue $166 $156 $153 Other 1,451 1,447 1,402 Backlog 60-Month $1,617 $1,603 $1,555 25
Slide 26: Revenues by Channel ($ millions)
Revenues by Channel ($ millions) Quarter Ended December 31, 2011 2010 Revenues: United States $59.1 $54.8 Americas International 16.5 20.3 Americas $75.6 $75.1 EMEA 42.2 53.1 Asia/Pacific 17.2 13.0 Revenues $135.0 $141.2 26
Slide 27: Monthly Recurring Revenue ($ millions)
Monthly Recurring Revenue ($ millions) Quarter Ended December 31, 2011 2010 Monthly Software License Fees $26.1 $32.5 Maintenance Fees 38.3 34.4 Processing Services 14.3 13.7 Monthly Recurring Revenue $78.7 $80.6 27
Slide 28: Deferred Revenue and Expense ($ millions)
Deferred Revenue and Expense ($ millions) Quarter Ended December 31, September 30, December 31, September 30, 2011 2011 2010 2010 Short Term Deferred Revenue $133.0 $123.9 $121.9 $131.5 Long Term Deferred Revenue 32.7 32.5 31.0 35.7 Total Deferred Revenue $165.7 $156.4 $152.9 $167.2 Total Deferred E
Slide 29: Non-Cash Compensation, Acquisition Intangibles and Software
Non-Cash Compensation, Acquisition Intangibles and Software Quarter ended Quarter ended December 31, 2011 December 31, 2010 EPS Impact* $ in Millions EPS Impact* $ in Millions Amortization of acquisition- related intangibles $0.03 $0.9 $0.03 $1.0 Amortization of acquisition- related software 0.03 0.
Slide 30: Other Income / Expense ($ millions)
Other Income / Expense ($ millions) Quarter Ended December 31, September 30, December 31, September 30, 2011 2011 2010 2010 Interest Income $0.7 $0.2 $0.2 $0.2 Interest Expense ($1.0) ($0.4) ($0.5) ($0.4) FX Gain / Loss ($0.8) ($0.1) ($0.1) ($1.5) Other $0.1 $0.0 $0.0 ($0.1) Total Other Income (Expe
Slide 31: Adjusted EBITDA
Adjusted EBITDA Quarter Ended Year Ended December 31, December 31, 2011 2011 2010 2011 2010 Net Income $23.9 $27.1 $45.9 $27.2 Plus: Income Tax Expense 12.1 15.3 18.5 21.5 Net Interest Expense 0.3 0.3 1.1 1.3 Net Other Expense 0.7 0.1 0.8 3.6 Depreciation Expense 2.0 1.6 7.5 6.7 Amortization Expense
Slide 32: 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, less net after-tax payments associated with S1 acquisition costs, net after-tax payments associated with IBM IT outsourcing transition costs, and capital expe
Slide 33: Non-GAAP Financial Measures
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 within th
Slide 34: 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 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures The presentation of these non-GAAP financial measures should be considered in addition to our GAAP results and is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Management general
Slide 36: 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 “bel
Slide 37: Forward-Looking Statements
Forward-Looking Statements 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 and the continuing de
Slide 38: ACI's software underpins electronic payments throughout retail and wholesale banking
ACI’s software underpins electronic payments throughout retail and wholesale banking, and commerce all the time, without fail. www.aciworldwide.com