ACI Worldwide, Inc. Reports Financial Results for the Quarter and Year Ended December 31, 2012 OPERATING HIGHLIGHTS *Strong revenue, up 66% over prior year quarter and 45% sequentially over Q3 *Strong sales bookings across all geographies, up 81% over prior year quarter and 61% sequentially over Q3 *Non-GAAP Operating Income and Adjusted EBITDA growth rate of 108% and 95%, respectively, over prior year quarter *Full year non-GAAP diluted EPS of $2.10, an increase of 43% over prior year Business Wire NAPLES, Fla. -- February 28, 2013 ACI Worldwide, Inc. (NASDAQ:ACIW), a leading international provider of payment systems, today announced financial results for the period ended December 31, 2012. Management will host a conference call at 8:30 am EST to discuss these results as well as 2013 guidance. Interested persons may access a real-time audio broadcast of the teleconference at www.aciworldwide.com/investors or use the following numbers for dial in participation: US/Canada: (866) 914-7436, International/Local: +1 (817) 385-9117. Please provide your name, the conference name ACI Worldwide, Inc. and conference code 98146721. There will be a replay available for two weeks on (855) 859-2056 for US/Canada Dial-In and +1 (404) 537- 3406 for International/Local Dial-In participants. “We closed out a transitional 2012 with record revenues, sales bookings and earnings,” said Chief Executive Officer Philip Heasley. “With the S1 integration substantially complete, we are excited to enter 2013 well positioned to accelerate our growth objectives. Further, the proposed acquisition of Online Resources will add a highly strategic electronic bill payment platform to the ACI suite of products, enabling us to be the Universal Payments Platform company”, continued Mr. Heasley. FINANCIAL SUMMARY Sales Sales bookings in the quarter totaled $309 million, an increase of $138 million, or 81%, over prior year quarter. Sales net of term extensions in the quarter totaled $198 million, an increase of $81 million, or 69%, over the prior-year quarter. S1 contributed $81 million to sales in the quarter. Historical ACI sales increased $57 million, or 33%, over prior year quarter sales bookings of $171 million. For the year 2012, sales totaled $766 million, an increase of $210 million, or 38%, as compared with $556 million last year. S1 contributed $189 million to sales for the year. Backlog 60-month backlog increased $49 million in the quarter to $2.416 billion as compared to $2.367 billion as of September 30, 2012. 12-month backlog increased $12 million to $596 million as compared to $584 million at September 30, 2012. Revenue GAAP revenue increased to $224.1 million, an increase of $89.1 million, or 66%, over prior-year quarter. Historical ACI revenue increased $40.7 million, or 30%, and S1 contributed $48.4 million of revenue in the fourth quarter. Non-GAAP revenue was $227.7 million, an increase of $92.7 million, or 69%, over prior year quarter. Non-GAAP revenue excludes the impact of $3.6 million of deferred revenue that would have been recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements. Revenue for the full year 2012 was $666.6 million, an increase of $201.5 million, or 43%. Historical ACI revenue increased $39.6 million, or 8.5%, and S1 contributed $161.9 million of revenue to the full year. Non-GAAP revenue was $689.0 million, an increase of $223.9 million, or 48%, over prior year. Operating Expenses Excluding $4.4 million and $3.2 million of S1 acquisition related one-time expenses incurred in the quarters ended December 31, 2012 and 2011, respectively, operating expenses increased $49.3 million compared to the prior year quarter primarily due to the addition of $42.7 million of S1 operating expenses, inclusive of $4.0 million of intangibles amortization. Total GAAP operating expenses for the quarter were $148.6 million. Excluding $31.5 million and $6.7 million of S1 acquisition related one-time expenses incurred in the years ended December 31, 2012 and 2011, respectively, operating expenses increased of $168.6 million, or 43%, primarily from the addition of $159 million of S1 operating expenses, inclusive of $13.9 million of intangible amortization. Total GAAP operating expenses were $592.2 for the full year 2012. Historical ACI operating expense growth was led primarily by higher deferred cost recognition upon project go-lives. Operating Income Consolidated GAAP operating income was $75.5 million for the quarter. Non-GAAP operating income totaled $83.6 million, an increase of $43.4 million, or 108%, above the prior-year quarter. Non-GAAP operating income excludes the $3.6 million deferred revenue adjustment due to purchase accounting as well as the impact of $4.4 million of acquisition-related one-time expenses. Operating income for the full year 2012 was $74.4 million, versus $66.2 million for the full year 2011. Excluding the $22.5 million deferred revenue adjustment due to purchase accounting as well as the impact of $31.5 million of acquisition-related one-time expenses, operating income increased $55.4 million, or 76%, to $128.3 million. Adjusted EBITDA Adjusted EBITDA increased to $101.1 million, an improvement of $49.2 million, or 95%, compared to the prior year quarter. Adjusted EBITDA excludes the impact of $3.6 million of deferred revenue that would have been recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements and $4.4 million of acquisition related one-time expenses. Full year 2012 Adjusted EBITDA was $191.4 million, an increase of $78.9 million, or 70%, as compared to $112.6 million for full year 2011. Liquidity We ended the year with $76.3 million in cash on hand as of December 31, 2012. During the quarter, we repaid $20.7 million in refundable liability to IBM upon termination of our Alliance and $10.4 million in debt. We ended the quarter with a debt balance of $374.3 million. As of December 31, 2012, we had up to $62 million of unused borrowings under our Revolving Credit Facility. Operating Free Cash Flow Operating free cash flow (“OFCF”) for the quarter and full year 2012 was $23.6 million, and $23.5 million, respectively, both impacted by back-end timing of sales bookings and revenue during the year. OFCF for the quarter and full year 2011 was $30.0 million, and $67.2 million, respectively Other Expense Other expense for the quarter was $1.5 million, an increase of $0.5 million as compared to other expense of $1.0 million in the prior-year quarter. Other expense for the full year 2012 was $9.1 million as compared to other expense of $1.9 million for the full year 2011. The increase was primarily the result of $8.0 million of increased interest expense due to increased borrowings partially offset by a gain of $1.6 million on the shares of S1 stock previously held as available-for-sale. Taxes Income tax expense in the quarter was $24.3 million, or a 33% effective tax rate, compared to income tax expense of $12.1 million, or a 34% effective tax rate in the prior year quarter. Income tax expense for the year ended December 2012 was $16.4 million, or a 25% effective tax rate, as compared to $18.5 million, or a 29% effective tax rate, for the prior year ended December 2011. The year-over-year decrease in the effective tax rate was largely due to the mix of lower domestic earnings at the U.S. tax rate offset by higher foreign income at lower tax rates. Net Income and Diluted Earnings Per Share Net income for the quarter ended December 31, 2012 was $49.7 million, compared to net income of $23.9 million during the same period last year. GAAP earnings per share for the quarter was $1.24 per diluted share compared to $0.70 per diluted share during the same period last year. Excluding the tax-adjusted impact of $4.4 million of S1 acquisition related one-time expenses and the impact of $3.6 of million deferred revenue that would have been recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements, earnings per share was $1.37 per diluted share, versus $0.76 per share last year, up 81%. GAAP earnings per share for the year ended December 2012 was $1.22 compared to $1.34 per diluted share for the year ended December 2011. Excluding the tax-adjusted impact of $31.5 million of S1 acquisition related one-time expenses and the impact of $22.5 of million deferred revenue that would have been recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements, earnings per share was $2.10 per diluted share, versus $1.47 per share last year, up 43%. Weighted Average Shares Outstanding Total diluted weighted average shares outstanding were 39.9 million for the year ended December 31, 2012 as compared to 34.2 million shares outstanding for the year ended December 31, 2011. The number of weighted average shares outstanding was increased by 5.9 million due to the issuance of shares related to the acquisition of S1 Corporation. 2013 Guidance ACI is guiding on three metrics for calendar year 2013. On an organic basis, we currently expect to achieve revenue in a range of $765-$785 million, operating income of $150-$160 million and Adjusted EBITDA of $230-$240 million. About ACI Worldwide ACI Worldwide powers electronic payments and banking for more than 1,750 financial institutions, retailers and processors around the world. ACI software enables $13 trillion in payments each day, processing transactions for more than 250 of the leading global retailers, and 18 of the world’s 20 largest banks. Through our integrated suite of software products and hosted services, we deliver a broad range of solutions for payments processing, card and merchant management, online banking, mobile, branch and voice banking, fraud detection, and trade finance. To learn more about ACI and the reasons why our solutions are trusted globally, please visit www.aciworldwide.com. You can also find us on www.paymentsinsights.comor on Twitter@ACI_Worldwide. Non-GAAP Financial Measures ACI Worldwide, Inc. Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) (unaudited and in thousands, except per share data) FOR THE THREE MONTHS ENDED DECEMBER 31, 2012 2012 2011 2011 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP $ Diff % Diff Revenues: (2) Total revenues $ 224,095 $ 3,635 $ 227,730 $ 135,037 $ - $ 135,037 $ 92,693 69 % Expenses: Cost of software 6,968 - 6,968 4,077 - 4,077 2,891 71 % license fees Cost of maintenance, 53,502 - 53,502 27,445 - 27,445 26,057 95 % services and hosting fees Research and 33,586 - 33,586 20,781 - 20,781 12,805 62 % development Selling and 22,730 - 22,730 20,023 - 20,023 2,707 14 % marketing General and administrative 21,616 (4,430 ) 17,186 20,191 (3,200 ) 16,991 195 1 % (3) Depreciation and 10,158 - 10,158 5,477 - 5,477 4,681 85 % amortization Total expenses 148,560 (4,430 ) 144,130 97,994 (3,200 ) 94,794 49,336 52 % Operating 75,535 8,065 83,600 37,043 3,200 40,243 43,357 108 % income Other income (expense): Interest 209 - 209 676 - 676 (467 ) -69 % income Interest (3,031 ) - (3,031 ) (1,008 ) - (1,008 ) (2,023 ) 201 % expense Other, net 1,298 - 1,298 (714 ) - (714 ) 2,012 -282 % Total other income (1,524 ) - (1,524 ) (1,046 ) - (1,046 ) (478 ) 46 % (expense) Income before 74,011 8,065 82,076 35,997 3,200 39,197 42,879 109 % income taxes Income tax 24,347 2,823 27,170 12,106 1,120 13,226 13,944 105 % expense (4) Net income $ 49,664 $ 5,242 $ 54,906 $ 23,891 $ 2,080 $ 25,971 $ 28,935 111 % Depreciation and 13,948 - 13,948 7,035 - 7,035 6,913 98 % amortization Stock-based 3,525 - 3,525 4,563 - 4,563 (1,038 ) -23 % compensation Adjusted $ 93,008 $ 8,065 $ 101,073 $ 48,641 $ 3,200 $ 51,841 $ 49,232 95 % EBITDA Earnings per share information Weighted average shares outstanding Basic 39,393 39,393 39,393 33,564 33,564 33,564 Diluted 40,055 40,055 40,055 34,232 34,232 34,232 Earnings per share Basic $ 1.26 $ 0.13 $ 1.39 $ 0.71 $ 0.06 $ 0.77 $ 0.62 80 % Diluted $ 1.24 $ 0.13 $ 1.37 $ 0.70 $ 0.06 $ 0.76 $ 0.61 81 % This presentation includes non-GAAP measures. Our non-GAAP measures are (1) not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Adjustment for $3.6 million of deferred revenue that would have been (2) recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements. One-time expense related to the acquisition of S1, including, $1.3 (3) million for facility closures, $0.2 million for employee related actions, and $3.0 million for other professional fees in 2012 and $3.2 million of professional fees in 2011. (4) Adjustments tax effected at 35%. ACI Worldwide, Inc. Reconciliation of Selected GAAP Measures to Non-GAAP Measures (1) (unaudited and in thousands, except per share data) FOR THE YEARS ENDED DECEMBER 31, 2012 2012 2011 2011 GAAP Adjustments Non-GAAP GAAP Adjustments Non-GAAP $ Diff % Diff Revenues: (2) Total revenues $ 666,579 $ 22,461 $ 689,040 $ 465,095 $ - $ 465,095 $ 223,945 48 % Expenses: Cost of software 23,592 - 23,592 15,418 - 15,418 8,174 53 % license fees Cost of maintenance, 202,052 - 202,052 118,866 - 118,866 83,186 70 % services and hosting fees Research and 133,759 - 133,759 90,176 - 90,176 43,583 48 % development Selling and 87,054 - 87,054 80,922 - 80,922 6,132 8 % marketing General and administrative 108,747 (31,464 ) 77,283 71,425 (6,700 ) 64,725 12,558 19 % (3) Depreciation and 37,003 - 37,003 22,057 - 22,057 14,946 68 % amortization Total expenses 592,207 (31,464 ) 560,743 398,864 (6,700 ) 392,164 168,579 43 % Operating 74,372 53,925 128,297 66,231 6,700 72,931 55,366 76 % income Other income (expense): Interest 914 - 914 1,315 - 1,315 (401 ) -30 % income Interest (10,417 ) - (10,417 ) (2,431 ) - (2,431 ) (7,986 ) 329 % expense Other, net 399 - 399 (802 ) - (802 ) 1,201 -150 % Total other income (9,104 ) - (9,104 ) (1,918 ) - (1,918 ) (7,186 ) 375 % (expense) Income before 65,268 53,925 119,193 64,313 6,700 71,013 48,180 68 % income taxes Income tax 16,422 18,874 35,296 18,461 2,310 20,771 14,525 70 % expense (4) Net income $ 48,846 $ 35,051 $ 83,897 $ 45,852 $ 4,390 $ 50,242 $ 33,655 67 % Depreciation and 50,781 - 50,781 28,378 - 28,378 22,403 79 % amortization Stock-based compensation 15,186 (2,822 ) 12,364 11,255 - 11,255 1,109 10 % (5) Adjusted $ 140,339 $ 51,103 $ 191,442 $ 105,864 $ 6,700 $ 112,564 $ 78,878 70 % EBITDA Earnings per share information Weighted average shares outstanding Basic 38,696 38,696 38,696 33,457 33,457 33,457 Diluted 39,905 39,905 39,905 34,195 34,195 34,195 Earnings per share Basic $ 1.26 $ 0.91 $ 2.17 $ 1.37 $ 0.13 $ 1.50 $ 0.67 44 % Diluted $ 1.22 $ 0.88 $ 2.10 $ 1.34 $ 0.13 $ 1.47 $ 0.63 43 % This presentation includes non-GAAP measures. Our non-GAAP measures are (1) not meant to be considered in isolation or as a substitute for comparable GAAP measures, and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Adjustment for $22.5 million of deferred revenue that would have been (2) recognized in the normal course of business by S1 but was not recognized due to GAAP purchase accounting requirements. One-time expense related to the acquisition of S1, including, $14 (3) million for employee related actions, $4.9 million for facility closures, $3.2 million for IT exit costs and $9.3 million for other professional fees. (4) Adjustments tax effected at 35%. (5) Accelerated stock compensation expense for terminated employees related to the S1 acquisition. To supplement our financial results presented on a GAAP basis, we use the non-GAAP measure indicated in the tables, which exclude certain business combination accounting entries and expenses related to the acquisition of S1, as well as other significant non-cash expenses such as depreciation, amortization and share-based compensation, that we believe are helpful in understanding our past financial performance and our future results. The presentation of these non-GAAP financial measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. 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 GAAP. We believe that these non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. Certain non-GAAP measures include: *Non-GAAP revenue: revenue plus deferred revenue that would have been recognized in the normal course of business by S1 if not for GAAP purchase accounting requirements. Non-GAAP revenue should be considered in addition to, rather than as a substitute for, revenue. *Non-GAAP operating income: operating income (loss) plus deferred revenue that would have been recognized in the normal course of business by S1 if not for GAAP purchase accounting requirements and one-time expense related to the acquisition of S1. Non-GAAP operating income should be considered in addition to, rather than as a substitute for, operating income. *Adjusted EBITDA: net income (loss) plus income tax expense, net interest income (expense), net other income (expense), depreciation, amortization and non-cash compensation, as well as deferred revenue that would have been recognized in the normal course of business by S1 if not for GAAP purchase accounting requirements and one-time expense related to the acquisition of S1. Adjusted EBITDA should be considered in addition to, rather than as a substitute for, operating income. ACI is also presenting operating free cash flow, which is defined as net cash provided by operating activities, plus net after-tax payments associated with employee-related actions and facility disclosures, net after-tax payments associated with IBM IT outsourcing transition, and less capital expenditures. Operating free cash flow is considered a non-GAAP financial measure as defined by SEC Regulation G. We utilize this non-GAAP financial measure, and believe it is useful to investors, as an indicator of cash flow available for debt repayment and other investing activities, such as capital investments and acquisitions. We utilize operating free cash flow as a further indicator of operating performance and for planning investing activities. Operating free cash flow should be considered in addition to, rather than as a substitute for, net cash provided by operating activities. A limitation of operating free cash flow is that it does not represent the total increase or decrease in the cash balance for the period. This measure also does not exclude mandatory debt service obligations and, therefore, does not represent the residual cash flow available for discretionary expenditures. We believe that operating free cash flow is useful to investors to provide disclosures of our operating results on the same basis as that used by our management. Reconciliation of Operating Free Quarter Ended December Year Ended December 31, Cash Flow 31, (millions) 2012 2011 2012 2011 Net cash provided (used) by $ 3.5 $ 31.2 ($9.3 ) $ 83.5 operating activities Net after-tax payments associated with 0.4 - 6.2 - employee-related actions Net after-tax payments 1.9 - 2.7 - associated with lease terminations Net after-tax payments associated with S1 - 3.3 8.8 3.7 related transaction costs Net after-tax payments associated with - - 10.2 cash settlement of S1 options Net after-tax payments associated with 0.2 0.2 0.9 0.9 IBM IT Outsourcing Transition Plus IBM Alliance liability 20.7 - 20.7 - repayment Less capital (3.1 ) (3.1 ) (16.7 ) (19.0 ) expenditures Less Alliance technical - (1.6 ) - (1.9 ) enablement expenditures Operating Free $ 23.6 $ 30.0 $ 23.5 $ 67.2 Cash Flow ACI also includes backlog estimates, which include 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 the corresponding backlog period. We have historically included assumed renewals in backlog estimates based upon automatic renewal provisions in the executed contract and our historic experience with customer renewal rates. 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 term for those contracts in which the committed maintenance term is less than the committed license term. *License and facilities management arrangements are assumed to renew at the end of their committed term at a rate consistent with our historical experiences. *Non-recurring license arrangements are assumed to renew as recurring revenue streams. *Foreign currency exchange rates are assumed to remain constant over the 60-month backlog period for those contracts stated in currencies other than the U.S. dollar. *Our pricing policies and practices are assumed to remain constant over the 60-month backlog period. 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 example, our customers may attempt to renegotiate or terminate their contracts for a number of reasons, including mergers, changes in their financial condition, or general changes in economic conditions in the customer’s industry or geographic location, or we may experience delays in the development or delivery of products or services specified in customer contracts which may cause the actual renewal rates and amounts to differ from historical experiences. Changes in foreign currency exchange rates may also impact the amount of revenue actually recognized in future periods. Accordingly, there can be no assurance that contracts included in backlog estimates will actually generate the specified revenues or that the actual revenues will be generated within the corresponding 60-month period. Backlog should be considered in addition to, rather than as a substitute for, reported revenue and deferred revenue. Forward-Looking Statements This press release 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 “believes,” “will,” “expects,” “anticipates,” “intends,” and words and phrases of similar impact. The forward-looking statements are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, but are not limited to, statements regarding: (i) expectations that our growth objectives will accelerate in 2013 partly as a result of the substantial completion of the S1 integration; (ii) expectations that the addition of Online Resources’ electronic bill payment platform (through our pending acquisition of Online Resources Corporation) will enable us to be recognized as the “universal payments platform company”; and (iii) expectations regarding 2013 financial guidance related to revenue, operating income and adjusted EBITDA. 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, increased competition, the performance of our strategic product, BASE24-eps, demand for our products, restrictions and other financial covenants in our credit facility, consolidations and failures in the financial services industry, customer reluctance to switch to a new vendor, the accuracy of management’s backlog estimates, the maturity of certain products, our strategy to migrate customers to our next generation products, ratable or deferred recognition of certain revenue associated with customer migrations and the maturity of certain of our products, failure to obtain renewals of customer contracts or to obtain such renewals on favorable terms, delay or cancellation of customer projects or inaccurate project completion estimates, volatility and disruption of the capital and credit markets and adverse changes in the global economy, our existing levels of debt, impairment of our goodwill or intangible assets, litigation, future acquisitions, strategic partnerships and investments, risks related to the expected benefits to be achieved in the proposed transaction with Online Resources, the complexity of our products and services and the risk that they may contain hidden defects or be subjected to security breaches or viruses, compliance of our products with applicable legislation, governmental regulations and industry standards, our compliance with privacy regulations, the protection of our intellectual property in intellectual property litigation, the cyclical nature of our revenue and earnings and the accuracy of forecasts due to the concentration of revenue generating activity during the final weeks of each quarter, business interruptions or failure of our information technology and communication systems, our offshore software development activities, risks from operating internationally, including fluctuations in currency exchange rates, exposure to unknown tax liabilities, and volatility in our stock price. For a detailed discussion of these risk factors, parties that are relying on the forward-looking statements should review our filings with the Securities and Exchange Commission, including our most recently filed Annual Report on Form 10-K, Registration Statement on Form S-4, and subsequent reports on Forms 10-Q and 8-K. ACI WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (unaudited and in thousands, except share and per share amounts) December 31, December 31, 2012 2011 ASSETS Current assets Cash and cash equivalents $ 76,329 $ 197,098 Billed receivables, net of allowances of 176,313 93,355 $8,117 and $4,843, respectively Accrued receivables 41,008 6,693 Deferred income taxes, net 34,342 25,944 Recoverable income taxes 5,572 - Prepaid expenses 16,746 9,454 Other current assets 5,816 9,320 Total current assets 356,126 341,864 Property and equipment, net 41,286 20,479 Software, net 129,314 22,598 Goodwill 501,141 214,144 Other intangible assets, net 127,900 18,343 Deferred income taxes, net 63,370 13,466 Other noncurrent assets 31,749 33,748 TOTAL ASSETS $ 1,250,886 $ 664,642 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 33,926 $ 11,532 Accrued employee compensation 35,194 27,955 Current portion of Term Credit Facility 17,500 - Deferred revenue 139,863 132,995 Income taxes payable 3,542 10,427 Deferred income taxes 174 - Alliance agreement liability - 20,667 Accrued and other current liabilities 36,400 23,481 Total current liabilities 266,599 227,057 Noncurrent liabilities Deferred revenue 51,519 32,721 Note payable under Term Credit Facility 168,750 - Note payable under Revolving Credit 188,000 75,000 Facility Deferred income taxes 14,940 - Other noncurrent liabilities 26,721 12,534 Total liabilities 716,529 347,312 Stockholders' equity Preferred stock - - Common stock 232 204 Common stock warrants - 24,003 Treasury stock (186,784 ) (163,411 ) Additional paid-in capital 534,953 322,654 Retained earnings 199,987 151,141 Accumulated other comprehensive loss (14,031 ) (17,261 ) Total stockholders' equity 534,357 317,330 TOTAL LIABILITIES AND STOCKHOLDERS' $ 1,250,886 $ 664,642 EQUITY ACI WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited and in thousands, except per share amounts) For the Three Months Ended December 31, 2012 2011 Revenues: Software license fees $ 94,731 $ 60,762 Maintenance fees 58,862 39,164 Services 38,985 21,956 Software hosting fees 31,517 13,155 Total revenues 224,095 135,037 Expenses: Cost of software license fees 6,968 4,077 (1) Cost of maintenance, services 53,502 27,445 and hosting fees (1) Research and development 33,586 20,781 Selling and marketing 22,730 20,023 General and administrative 21,616 20,191 Depreciation and amortization 10,158 5,477 Total expenses 148,560 97,994 Operating income 75,535 37,043 Other income (expense): Interest income 209 676 Interest expense (3,031 ) (1,008 ) Other, net 1,298 (714 ) Total other income (expense) (1,524 ) (1,046 ) Income before income taxes 74,011 35,997 Income tax expense 24,347 12,106 Net income $ 49,664 $ 23,891 Earnings per share information Weighted average shares outstanding Basic 39,393 33,564 Diluted 40,055 34,232 Earnings per share Basic $ 1.26 $ 0.71 Diluted $ 1.24 $ 0.70 (1) The cost of software license fees excludes charges for depreciation but includes amortization of purchased and developed software for resale. The cost of maintenance, services and hosting fees excludes charges for depreciation. ACI WORLDWIDE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited and in thousands) For the Three Months Ended December 31, 2012 2011 Cash flows from operating activities: Net income $ 49,664 $ 23,891 Adjustments to reconcile net income to net cash flows from operating activities Depreciation 3,596 2,012 Amortization 10,352 5,023 Deferred income taxes 12,542 415 Stock-based compensation expense 3,525 4,563 Excess tax benefit of stock options (165 ) (553 ) exercised Other 852 419 Changes in operating assets and liabilities, net of impact of acquisitions: Billed and accrued receivables, net (48,003 ) (29,977 ) Other current and noncurrent assets 2,092 (1,269 ) Accounts payable 5,965 (305 ) Accrued employee compensation (2,737 ) 1,600 Accrued liabilities 2,311 2,327 Alliance liability (20,667 ) - Current income taxes 5,886 12,725 Deferred revenue (21,470 ) 10,625 Other current and noncurrent liabilities (266 ) (269 ) Net cash flows from operating activities 3,477 31,227 Cash flows from investing activities: Purchases of property and equipment (3,018 ) (1,358 ) Purchases of software and distribution (54 ) (1,719 ) rights Alliance technical enablement expenditures - (1,600 ) Net cash flows from investing activities (3,072 ) (4,677 ) Cash flows from financing activities: Proceeds from issuance of common stock 398 305 Proceeds from exercises of stock options 1,671 1,698 Excess tax benefit of stock options 165 553 exercised Repurchase of restricted stock for tax (331 ) (64 ) withholdings Proceeds from revolving portion of credit - 75,000 agreement Repayment of interim revolving credit - (75,000 ) facility Repayment of revolver portion of credit (6,000 ) agreement Repayment of term portion of credit (4,375 ) - agreement Payments for debt issuance costs - (11,789 ) Payments on debt and capital leases (1,332 ) (550 ) Net cash flows from financing activities (9,804 ) (9,847 ) Effect of exchange rate fluctuations on cash (1,954 ) 695 Net increase (decrease) in cash and cash (11,353 ) 17,398 equivalents Cash and cash equivalents, beginning of 87,682 179,700 period Cash and cash equivalents, end of period $ 76,329 $ 197,098 Contact: ACI Worldwide John Kraft, 239-403-4627 Vice President, Investor Relations & Strategic Analysis firstname.lastname@example.org
ACI Worldwide, Inc. Reports Financial Results for the Quarter and Year Ended December 31, 2012
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