ACI Worldwide, Inc. Reports Financial Results for the Quarter Ended September 30, 2013

  ACI Worldwide, Inc. Reports Financial Results for the Quarter Ended
  September 30, 2013

HIGHLIGHTS

  *Non-GAAP revenue of $216 million, up 35% over last year and up 11% ex ORCC
  *SNET bookings growth up 17% over last year
  *Repurchased 1.3 million shares in the quarter, totaling 1.7 million
    year-to-date
  *Adjusted EBITDA margin of 29%, up from 21% in Q3 last year
  *Full year 2013 financial guidance increased for the acquisition of
    Official Payments

Business Wire

NAPLES, Fla. -- November 7, 2013

ACI Worldwide, Inc. (NASDAQ:ACIW), a leading international provider of
electronic payment systems, today announced financial results for the period
ended September 30, 2013. 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 90345878. 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.

“ACI had another busy and productive quarter,” commented Phil Heasley, ACI
President and CEO. “The acquisition of Official Payments extends our reach and
strengthens our position within our fastest growing business, electronic bill
payment. Online Resources continues to perform as, or better than, expected
and we are on track to achieve our targeted $27 million in synergies.
Organically, our Q3 revenues grew 11% and our sales bookings net of term
extensions grew 17% in the quarter.”

FINANCIAL SUMMARY

Financial Results for Q3

Q3 non-GAAP revenue of $216 million grew 35%, or $56 million, from last year’s
quarter. After adjusting for Online Resources’ $37 million contribution,
organic revenue grew 11% in the quarter. Monthly recurring revenue grew to
$151 million, up $46 million, and represented 71% of total revenue in the
quarter. Excluding Online Resources, recurring revenue grew 9% from Q3 2012.

New sales bookings, net of term extensions (SNET), excluding the contribution
from Online Resources, were up 2% compared to last year’s Q3. Consolidated
SNET bookings grew 17%, while Online Resources’ specific SNET grew $4 million,
or 24% in the third quarter from Q3 2012. Our 12-month backlog dropped from
last quarter to $740 million, down $6 million, or $11 million adjusted for
foreign currency fluctuations, while our 60- month backlog increased to $3.11
billion, up $28 million, or $8 million adjusted for foreign currency
fluctuations.

Q3 non-GAAP operating income was $40 million versus $18 million in last year’s
third quarter. Consolidated GAAP operating income was $30 million for the
quarter, versus $8 million in Q3 2012. Adjusted EBITDA of $62 million was $28
million above last year’s quarter of $34 million and represented 29% margin
versus 21% margin last year. Non-GAAP net income was $21 million, or $0.52 per
diluted share, in Q3 2013, versus non-GAAP net income of $12 million, or $0.29
per diluted share in Q3 2012. GAAP net income was $14 million, or $0.35 per
diluted share, versus $6 million, or $0.14 per diluted share in Q3 2012.

We ended the third quarter with $167 million in cash on hand. Operating free
cash flow (“OFCF”) for the quarter was $27 million, up from a negative $1
million in Q3 of last year. The quarter finished with a debt balance of $764
million, up from $661 million last quarter due to our recent debt offering. We
have repurchased $81 million of our stock year-to-date as of November 6^th and
have approximately $108 million remaining on our current authorization.

Official Payments Acquisition

ACI closed the acquisition of Norcross, GA-based Official Payments on November
5^th. Official Payments is a leading provider of electronic bill payment
solutions in the U.S., serving federal, state and local governments, municipal
utilities, higher education institutions and charitable giving organizations.
With more than 3,000 customers representing access to over 100 million end
users, the company processes approximately 20 million payments and over $9
billion in volume annually.

Updated Guidance

We are updating our full year financial expectations given the acquisition of
Official Payments, which closed November 5^th, 2013. We expect Official
Payments to contribute approximately $18 to $20 million in non-GAAP revenue
and $1 million in adjusted EBITDA. Our new guidance ranges include non-GAAP
revenue of $883 to $905 million, non-GAAP operating income of $165 to $175
million, and our adjusted EBITDA range is $257 to $267 million. Additionally,
we continue to expect full year 2013 new sales bookings to increase
organically (excluding ORCC) in the mid teens from last year’s results.

About ACI Worldwide

ACI Worldwide powers electronic payments and banking for more than 2,600
financial institutions, retailers, billers 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 comprehensive 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; trade finance; and electronic bill presentment
and payment. To learn more about ACI, please visit www.aciworldwide.com. You
can also find us on Twitter @ACI_Worldwide.

To supplement our financial results presented on a GAAP basis, we use the
non-GAAP measures indicated in the tables, which exclude certain business
combination accounting entries related to the acquisition of S1 and Online
Resources and significant transaction related expenses, 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, Online Resources and
    Official Payments 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,
    Online Resources and Official Payments if not for GAAP purchase accounting
    requirements and significant transaction related expenses. 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, Online Resources
    and Official Payments if not for GAAP purchase accounting requirements and
    significant transaction related expenses. 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 closures, net after-tax payments
associated with acquisition related transaction costs, net after-tax payments
associated with IBM IT outsourcing transition and termination, 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.

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, facilities management, and software hosting 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 with respect to the Online
Resources and Official Payments acquisitions and the performance of those
businesses; and (ii) 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 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)
                                                           
                                                 September 30,   December 31,
                                                 2013            2012
ASSETS
Current assets
Cash and cash equivalents                        $ 166,511       $ 76,329
Billed receivables, net of allowances of           166,649         176,313
$6,969 and $8,117, respectively
Accrued receivables                                32,303          41,008
Deferred income taxes, net                         66,461          34,342
Recoverable income taxes                           4,287           5,572
Prepaid expenses                                   21,106          16,746
Other current assets                              18,377        5,816     
Total current assets                              475,694       356,126   
                                                                 
Property and equipment, net                        50,400          41,286
Software, net                                      176,263         129,314
Goodwill                                           630,739         501,141
Other intangible assets, net                       190,591         127,900
Deferred income taxes, net                         34,774          63,370
Other noncurrent assets                           43,034        31,749    
TOTAL ASSETS                                     $ 1,601,495    $ 1,250,886 
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable                                 $ 39,453        $ 33,926
Accrued employee compensation                      40,298          35,194
Current portion of term credit facility            41,398          17,500
Deferred revenue                                   129,230         139,863
Income taxes payable                               5,095           3,542
Deferred income taxes, net                         574             174
Accrued and other current liabilities             39,372        36,400    
Total current liabilities                         295,420       266,599   
                                                                 
Noncurrent liabilities
Deferred revenue                                   67,308          51,519
Note payable under term credit facility            422,855         168,750
Note payable under revolving credit                -               188,000
facility
Senior Notes                                       300,000         -
Deferred income taxes, net                         12,626          14,940
Other noncurrent liabilities                      26,590        26,721    
Total liabilities                                 1,124,799     716,529   
                                                                 
Commitments and contingencies
                                                                 
Stockholders' equity
Preferred stock; $0.01 par value;
5,000,000 shares authorized; no shares             -               -
issued and outstanding at September 30,
2013 and December 31, 2012
Common stock; $0.005 par value;
70,000,000 shares authorized; 46,606,796           232             232
shares issued at September 30, 2013 and
December 31, 2012
Treasury stock, at cost, 8,164,923 and
7,159,023 shares at September 30, 2013             (252,769  )     (186,784  )
and December 31, 2012, respectively
Additional paid-in capital                         539,252         534,953
Retained earnings                                  213,464         199,987
Accumulated other comprehensive loss              (23,483   )    (14,031   )
Total stockholders' equity                        476,696       534,357   
TOTAL LIABILITIES AND STOCKHOLDERS'              $ 1,601,495    $ 1,250,886 
EQUITY
                                                                             
                                                                             

ACI WORLDWIDE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited and in thousands, except per share amounts)
                               
                                      Three Months Ended September 30,
                                      2013                  2012
                                                             
Revenues:
Software license fees                 $    56,236            $   39,560
Maintenance fees                           60,457                47,920
Services                                   30,240                35,811
Software hosting fees                     67,006              31,771    
Total revenues                            213,939             155,062   
                                                             
Expenses:
Cost of software                           5,888                 5,874
license fees (1)
Cost of maintenance,
services, and hosting                      80,948                51,944
fees (1)
Research and                               33,642                34,213
development
Selling and marketing                      24,098                20,448
General and                                24,559                24,533
administrative
Depreciation and                          15,249              9,742     
amortization
Total expenses                            184,384             146,754   
                                                             
Operating income                           29,555                8,308
                                                             
Other income
(expense):
Interest income                            159                   222
Interest expense                           (7,453    )           (2,620    )
Other, net                                (3,152    )          (1,430    )
Total other expense                       (10,446   )          (3,828    )
                                                             
Income before income                       19,109                4,480
taxes
Income tax expense                        5,347               (1,175    )
(benefit)
Net income                            $    13,762           $   5,655     
                                                             
Income per share
information
Weighted average
shares outstanding
Basic                                      39,125                39,126
Diluted                                    39,807                40,712
                                                             
Income per share
Basic                                 $    0.35              $   0.14
Diluted                               $    0.35              $   0.14
                                                             
(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 September 30,
                                                    2013          2012
Cash flows from operating activities:
Net income                                          $ 13,762       $ 5,655
Adjustments to reconcile net income to net
cash flows from operating activities
Depreciation                                          5,569          3,559
Amortization                                          13,108         9,941
Provision for doubtful accounts receivable            (1,484   )     115
Deferred income taxes                                 1,436          (4,748  )
Stock-based compensation expense                      3,386          2,575
Excess tax benefit of stock options                   (883     )     (550    )
exercised
Other                                                 1,607          740
Changes in operating assets and
liabilities, net of impact of acquisitions:
Billed and accrued receivables, net                   3,754          (20,040 )
Other current and noncurrent assets                   (1,957   )     753
Accounts payable                                      (4,298   )     (3,156  )
Accrued employee compensation                         3,005          1,567
Accrued liabilities                                   5,080          3,311
Current income taxes                                  2,415          1,865
Deferred revenue                                      (15,856  )     5,789
Other current and noncurrent liabilities             285          (2,051  )
Net cash flows from operating activities             28,929       5,325   
                                                                   
Cash flows from investing activities:
Purchases of property and equipment                   (2,432   )     (6,640  )
Purchases of software and distribution                (2,300   )     (1,386  )
rights
Acquisition of businesses, net of cash               -            (49,852 )
acquired
Net cash flows from investing activities             (4,732   )    (57,878 )
                                                                   
Cash flows from financing activities:
Proceeds from issuance of common stock                594            290
Proceeds from exercises of stock options              4,309          1,253
Excess tax benefit of stock options                   883            550
exercised
Repurchases of common stock                           (68,580  )     (13,772 )
Repurchase of restricted stock and                    (320     )     (578    )
performance shares for tax withholdings
Exercise of common stock warrants                     -              11,866
Cash settlement of common stock warrants              -              (29,596 )
Proceeds from revolver portion of credit              -              24,000
agreement
Proceeds from issuance of senior notes                300,000        -
Repayment of term portion of credit                   (8,871   )     (3,125  )
agreement
Repayment of revolver portion of credit               (188,000 )     -
agreement
Payments for debt issuance costs                      (6,861   )     (541    )
Payments on debt and capital leases                  (1,605   )    (1,205  )
Net cash flows from financing activities             31,549       (10,858 )
                                                                   
Effect of exchange rate fluctuations on               3,024          1,477
cash
Net increase in cash and cash equivalents             58,770         (61,934 )
Cash and cash equivalents, beginning of              107,741      149,616 
period
Cash and cash equivalents, end of period            $ 166,511     $ 87,682  
                                                                             
                                                                             

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 September 30,
                     2013                     2013        2012                       2012
Selected
Non-GAAP             GAAP       Adj         Non-GAAP   GAAP         Adj         Non-GAAP   $ Diff    %
Financial                                                                                                   Diff
Data
                                                                                                            
Total                $ 213,939   $ 1,696      $ 215,635   $ 155,062     $ 4,882      $ 159,944   $ 55,691   35  %
revenues (2)
Total                  184,384     (8,676 )     175,708     146,754       (4,476 )     142,278     33,430   23  %
expenses (3)
Operating              29,555      10,372       39,927      8,308         9,358        17,666      22,261   126 %
income
Income
before                 19,109      10,372       29,481      4,480         9,358        13,838      15,643   113 %
income taxes
Income tax
expense               5,347     3,630     8,977     (1,175  )   3,275     2,100     6,877   327 %
(benefit)
(4)
Net income           $ 13,762   $ 6,742    $ 20,504   $ 5,655     $ 6,083    $ 11,738   $ 8,766   75  %
                                                                                                            
Depreciation           5,569       -            5,569       3,559         -            3,559       2,010    56  %
Amortization
-
acquisition            4,701       -            4,701       3,193         -            3,193       1,508    47  %
related
intangibles
Amortization
-
acquisition            4,513       -            4,513       3,522         -            3,522       991      28  %
related
software
Amortization           3,894       -            3,894       3,225         -            3,225       669      21  %
- other
Stock-based
compensation           3,386       -            3,386       2,575         (146   )     2,429       957      39  %
(5)
                                                                                              
Adjusted             $ 51,618   $ 10,372   $ 61,990   $ 24,382    $ 9,212    $ 33,594   $ 28,396  85  %
EBITDA
                                                                                                            
Earnings per
share
information
Weighted
average
shares
outstanding
Basic                  39,125      39,125       39,125      39,126        39,126       39,126
Diluted                39,807      39,807       39,807      40,712        40,712       40,712
                                                                                                            
Earnings per
share
Basic                $ 0.35      $ 0.17       $ 0.52      $ 0.14        $ 0.16       $ 0.30      $ 0.22     75  %
Diluted              $ 0.35      $ 0.17       $ 0.52      $ 0.14        $ 0.15       $ 0.29      $ 0.23     79  %
                                                                                                            

(1) This presentation includes non-GAAP measures. Our non-GAAP measures are
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.

(2) Adjustment for deferred revenue that would have been recognized in the
normal course of business by ORCC and S1 but was not recognized due to GAAP
purchase accounting requirements.

(3) Expense for significant transaction related transactions, including, $5.2
million for employee related actions, $1.0 million for facility closures and
$2.5 million for professional and other fees in 2013 and $0.5 million for
employee related actions, $3.5 million for facility closures, $0.1 million for
termination of the IBM IT outsourcing agreement and $0.3 million for other
professional fees in 2012.

(4) Adjustments tax effected at 35%.

(5) Accelerated stock compensation expense for terminated employees related to
the S1 acquisition.


                                                            
                                                   Quarter Ended September 30,
Reconciliation of Operating Free Cash Flow         2013           2012
(millions)
                                                                   
Net cash provided (used) by operating              $   28.9        $  5.3
activities
Net after-tax payments associated with                 1.5            1.3
employee-related actions (4)
Net after-tax payments associated with                 0.5            0.7
lease terminations (4)
Net after-tax payments associated with
significant transaction related expenses               0.9            -
(4)
Net after-tax payments associated with IBM             -              0.2
IT Outsourcing Transition (4)
Less capital expenditures                             (4.7  )      (8.0  )
Operating Free Cash Flow                           $   27.1      $  (0.5  )
                                                                   
(5) Amounts are tax effected at 35%.

Contact:

ACI Worldwide
John Kraft, 239-403-4627
Vice President, Investor Relations & Strategic Analysis
john.kraft@aciworldwide.com