Aci Worldwide, Inc. · NASDAQ:ACIW
Aci Worldwide — Q3 2009 Earnings Presentation
37 slides from Aci Worldwide's earnings presentation, Nov 5, 2009
Slide 1: September 30, 2009 Quarterly Results
September 30, 2009 Quarterly Results November 5, 2009
Slide 2: 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 provisions of the Private Securities Litigation Reform Act of 1995. A discussion of these forward- lo
Slide 3: Presenters and Q&A
Phil Heasley, Chief Executive Officer Ron Totaro, Chief Operating Officer Scott Behrens, Chief Financial Officer Q&A: Phil Heasley, Ron Totaro and Scott Behrens
Slide 4: Phil Heasley, Chief Executive Officer
Phil Heasley, Chief Executive Officer
Slide 5: Market Commentary
Market Commentary Mega-bank Trends Banks used to regard each unit and country as disparate entities Now we are seeing banks moving towards global deals in software infrastructure to improve efficiencies The good news is that deals under discussion are larger and more comprehensive projects The bad n
Slide 6: Quarterly Business Review
Ron Totaro, Chief Operating Officer Quarterly Business Review
Slide 7: Q3 2009 Business Performance
Q3 2009 Business Performance Revenues mostly flat when adjusting for impact of tail end of deals related to Faster Payments in Q3 2008 EMEA ILF business was significantly lower than last year's quarter Consistent monthly recurring revenue Expenses strongly improved, YTD-09 ~$33 million less than YTD
Slide 8: Q3 2009 Sales Results
Q3 2009 Sales Results Q3 2009 Sales Highlights: Significant add-on activity as relationship management deals continue to do well in this environment: Both Americas and EMEA saw major sales in Retail system add-ons Term extension activity in developed markets: Key Americas term extensions: JPMC, Targ
Slide 9: Q3 2009 Channel Sales Results
Q3 2009 Channel Sales Results Sales (net of Term Extensions) Term Extension Sales Total Sales Q3 2009 v Q3 2008 Channel Performance: Total top 5 customers accounted for 45% of sales dollars in the quarter compared to 35% in Q2-09 and 12% in Q3-08 due to size of renewals in current quarter Americas:
Slide 10: Historic Sales By Quarter 2008-2009
Historic Sales By Quarter 2008-2009 Historic Sales By Quarter 2008-2009
Slide 11: Channel Summary
Channel Summary Americas Monthly recurring revenue reduction of $1.4 million or 4% compared to prior-year due to higher deferred MLF revenue releases in prior-year quarter Monthly recurring revenue rise of $1.0 million or 3% compared to June quarter Continued to protect revenue base with renewals ac
Slide 12: Q3 Product Development Summary
Q3 Product Development Summary Wholesale 6 ACI On Demand customers already live on ACI Enterprise Banker 7.5 (released in June) Reduced conversion time to bring new customer onto ACI Enterprise Banker from 9-12 months to 5 months Introduced Agile Payment Strategy ("APS") Excitement surrounding thoug
Slide 13: Agile Payments Solution Strategy
Agile Payments Solution Strategy 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 11 key products to comprise Agile Payments Solutions functionality required for a holistic solutio
Slide 14: Product & Development Investments
Product & Development Investments Improved Delivery BASE24-eps to extend global leadership in fast-growing markets Cut customer install time for ACI Enterprise Banker by 50% Organized a new function in the company completely focused on innovation to drive common architecture and new product concepts
Slide 15: Financial Review
Financial Review Scott Behrens, Chief Financial Officer
Slide 16: Key Takeaways from the Quarter
Key Takeaways from the Quarter Sales: Down 10% or $10.2 million versus prior-year third quarter or down 1% or $1.0 million compared to June quarter Revenue: Achieved $104.5 million in the current quarter versus $108.6 million in Q3-08 quarter, Q3-09 represented a $17.3 million improvement over Q2-09
Slide 17: Takeaways from the Quarter (cont)
Takeaways from the Quarter (cont) Operating Expenses: Decreased $13.1 million (12%) versus prior-year quarter Other Income and Expense: ~ $0.4 million loss versus a gain of $0.4 million in Q3-08 Negative variance of $0.5 million in FX gain, Interest income/expense variance essentially offset one ano
Slide 18: Backlog is Still a Significant Contributor to Current Period Revenue
Backlog is Still a Significant Contributor to Current Period Revenue Revenue from sales reduced as absolute volume of renewals, particularly in Europe, was lower than in prior year quarter 'Go lives' from backlog continue to show consistent growth Revenue from backlog increased particularly when con
Slide 19: Guidance reiterates stronger operating margins
Guidance reiterates stronger operating margins At this point in time, anticipate full risk/opportunity adjustment is necessary Sales should come within the risk-adjusted range of $414-428 million GAAP Revenues are expected at approximately $406 million as sales perform to the risk-adjusted number St
Slide 20: Appendix
Appendix
Slide 21: Operating Free Cash Flow
Operating Free Cash Flow* ($ millions) Quarter Ended September 30, Quarter Ended September 30, 2009 2008 Net cash provided (used) by operating activities $(8.0) $ 3.2 Net after-tax payments associated with employee-related actions 0.3 0.4 Net after-tax payments associated with IBM IT Outsourcing Tra
Slide 22: 60-Month Backlog
60-Month Backlog ($ millions) Quarter Ended Quarter Ended Quarter Ended September 30, 2009 June 30, 2009 September 30, 2008 Americas 827 $817 $744 EMEA 504 504 511 Asia/Pacific 156 155 159 Backlog 60-Month $1,487 $1,476 $1,414 ACI Deferred Revenue 132 $140 $131 ACI Other 1,355 $1,336 $1,283 Backlog
Slide 23: Revenues by Channel
Revenues by Channel ($ millions) Quarter Ended September 30, Quarter Ended September 30, 2009 2008 Revenues: United States $46.2 $39.8 Americas International 12.5 13.3 Americas $58.7 $53.1 EMEA 35.2 45.4 Asia/Pacific 10.6 10.1 Revenues $104.5 $108.6
Slide 24: Monthly Recurring Revenue
Monthly Recurring Revenue ($ millions) Quarter Ended September 30, Quarter Ended September 30, 2009 2008 Monthly license fees $19.5 $21.3 Maintenance fees 35.0 34.0 Processing Services 8.4 8.1 Monthly Recurring Revenue $62.9 $63.4
Slide 25: Deferred Revenue & Expense
Deferred Revenue & Expense ($ millions) Quarter Ended Quarter Ended Quarter Ended Quarter Ended June 30, June 30, September 30, 2009 2009 September 30, 2008 2008 Short Term Deferred Revenue $103.4 $107.7 $107.3 $123.0 Long Term Deferred Revenue 28.7 32.4 23.3 23.2 Total Deferred Revenue $132.1 $140.
Slide 26: Non-Cash Compensation and Acquisition Intangibles
Non-Cash Compensation and Acquisition Intangibles Quarter ended September 30, 2009 Quarter ended September 30, 2009 Quarter ended September 30, 2008 Quarter ended September 30, 2008 EPS Impact* $ in Millions EPS Impact* $ in Millions Employee-Related $0.05 $1.6 $0.07 $2.3 IBM IT Outsourcing Severanc
Slide 27: Other Income / Expense
Other Income / Expense ($ millions) Quarter Ended Quarter Ended Quarter Ended Quarter Ended September 30, 2009 June 30, 2009 September 30, 2008 June 30, 2008 Interest Income $0.1 $0.4 $0.6 $0.7 Interest Expense ($0.5) (0.5) ($1.1) (1.0) FX Gain / Loss $1.1 (4.3) $1.6 (0.7) Interest Rate Swap Loss ($
Slide 28: Sales by Channel and Product Division
Sales by Channel and Product Division ($ millions) Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended September 30, 2009 June 30, 2009 March 31, 2009 December 31, 2008 September 30, 2008 Sales by Channel: Americas $65.5 $43.8 $38.9 $119.6 $46.8 EMEA 23.3 44.7 17.4 47.1 53.0 Asia P
Slide 29: Reclassification Recast
Reclassification Recast The Company redefined its cost of software license fees in order to better conform to industry practice. The definition has been revised to be third-party software royalties as well as the amortization of purchased technology. Previously, cost of software license fees also in
Slide 30: 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 for employee related actions and IBM IT Outsourcing transition and severance less capital expenditures and plus or minus net
Slide 31: Non-GAAP Measures and Backlog Estimates
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 presented in accordance with GA
Slide 32: Backlog estimates are inherently unreliable
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 management's control. For exampl
Slide 33: 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 34: Forward Looking Statements
Forward Looking Statements Any or all of the forward-looking statements may turn out to be wrong. They can be affected by the judgments and estimates underlying such assumptions or by known or unknown risks and uncertainties. Many of these factors will be important in determining our actual future r
Slide 35: Forward Looking Statements
Forward Looking Statements The recent restatements of our financial statements; The consolidation in the financial services industry that may adversely impact the number of customers and revenues in the future; The economic changes in the banking and financial services industries that apply to most
Slide 36: Forward Looking Statements
Forward Looking Statements The possibility that if we are unable to successfully perform under the terms of our alliance with IBM or our customers are not receptive to the alliance, then our business, financial condition and/or results of operations may be adversely affected; Our outsourcing agreeme
Slide 37: EVERY SECOND. EVERY DAY.
Ml EVERY SECOND. EVERY DAY.