Exec stock awards hurt Bottomline’s bottom line

Bottomline Technologies posted a loss of nearly $2 million (8 cents a diluted share) in the third quarter of fiscal 2007 (ending in March 31), thanks, in part, to spending some $2 million in stock-based compensation, the Portsmouth based financial software announced this week.

Revenues for the quarter were $31.1 million, a 25-percent increase from the same quarter from the previous fiscal year. Growth was particularly strong in the software licenses, which went up 60 percent.

But the company expenses were up as well, especially in sales and marketing. Still the company would have made about nearly $2.8 million — more than double the previous year — under the old accounting rules, where the company didn’t have to count the stock awards for its top executives. Under the new rules, the $2 million compensation as well as the $2.7 million in acquisition-related amortization of intangible assets turns that gain into a loss, though slightly less than the $2.1 million the company posted in the third quarter of fiscal 2006.

In the nine months of this fiscal year, the company lost $5.47 million dollars (23 cents a diluted share), despite receiving nearly $86 million in revenue, a $10 million increase of revenue over the previous fiscal year. That loss would have been nearly a $7 million gain under the old accounting rules, about a half million less than the loss in previous fiscal year.

The company also announced that it landed some high profile customers last year, including Universal Music Group, MTV Networks and Select Hotels Group. — BOB SANDERS