Bottomline reports $3.6 million third-quarter loss
So far, the firm’s loss stands at $10.6 million for the first nine months of the fiscal year
Bottomline Technologies posted a net loss of $3.6 million, or 10 cents a share, in its third quarter, compared to a $1.3 million loss in the same quarter of the previous year, according to the Portsmouth-based company’s filing with the U.S. Securities and Exchange Commission.
That brings the firm’s loss to $10.6 million for the first nine months of its fiscal year. At this point in fiscal 2012, the financial software company was $2.9 million in the black.
The losses came despite a revenue increase of 17 percent, to $64.4 million, in the quarter and 16 percent, to $189.7 million, year-to-date. The losses were primarily due to increased expenses related to acquisitions – particularly having to do with expansion of Bottomline’s commercial banking services — increased compensation for top executives.
The company made three acquisitions in fiscal 2013: Prilos AG, a German firm, for $700,000, in February; 5280 Dynamic Solutions LLC, for $1.6 million, last October, and Albany Software Ltd., for $32 million, in September.
But the big concern has to do with an earlier acquisition of the operations of Intuit Inc.’s commercial banking business in March 2012. That business was losing customers even before Bottomline bought it. Bottomline hoped to turn it around, “but we expect revenue and profit for the Banking Solutions segment to decrease during the remainder of the fiscal year as a result of anticipated customer losses in our commercial banking business and as a result of increased expenses related to the commercial banking hosted infrastructure and sales and marketing efforts,” the company reported to the SEC.
The company also faces various expenses for the first time in order to service the large debt for its bond issue. The noncash interest expense was $2.7 million last quarter. As part of the bond issue, the company hedged by buying derivative instruments, incurring a $4.4 million loss for the year (though it did gain some $482,000 last quarter.)
Finally, equity-based compensation for the firm’s top executives continued to increase. Last quarter, the executives received $4.6 million, and year to date they received $13.5 million.