ACI Worldwide Inc. (ACIW, Financial) filed Quarterly Report for the period ended 2009-03-31.
Transaction Systems Architects Inc. develops markets installs and supports a broad line of software products and services primarily focused on facilitating electronic payments and electronic commerce. The Company's products are organized into four lines-of-business groups: Consumer Banking Corporate Banking Retail Solutions and System Solutions. ACI Worldwide Inc. has a market cap of $490.4 million; its shares were traded at around $14.04 with a P/E ratio of 28.7 and P/S ratio of 1.2.
Included in our 60-month backlog estimates are amounts expected to be recognized during the initial license term of customer contracts (Committed Backlog) and amounts expected to be recognized from assumed renewals of existing customer contracts (Renewal Backlog). Amounts expected to be recognized from assumed contract renewals are based on the Companys historical renewal experience. The estimated Committed Backlog and Renewal Backlog estimate as of March 31, 2009 is $722 million and $688 million, respectively.
During the three months ended March 31, 2009, we refined our definition of cost of software licenses fess in order to better conform to industry practice. Our definition of cost of software license fee has been revised to be third-party software royalties as well as the amortization of purchased technology. Previously, cost of software license fees also included certain costs associated with maintaining software products that have already been developed and directing future product development efforts. These costs included human resource costs and other incidental costs related to product management, documentation, publications and education. These costs have now been reclassified to research and development and cost of maintenance and services. As a result of this change in definition of cost of software license fees, we reclassified $0.7 million and $8.2 million to cost of maintenance and services and research and development, respectively, from cost of software licenses fees in the accompanying statement of operations for the three months ended March 31, 2008.
Also for the quarter ended March 31, 2009, we reclassified depreciation and amortization expense, excluding amortization of purchased technology as a separate line item in the consolidated statements of operations. Previously, depreciation and amortization was allocated to functional line items of the statement of operations rather than being reported as a separate line item. As a result of disclosing depreciation and amortization as a separate line item, we reclassified $1.0 million from cost of software licenses fees, $1.4 million from cost of maintenance and services, $0.1 million from research and development, $0.1 million from selling and marketing, and $1.5 million from general and administrative for the three months ended March 31, 2008.
Total revenues for the three months ended March 31, 2009 decreased $2.5 million, or 2.7%, as compared to the same period of 2008. Total revenues decreased primarily as a result of a $6.6 million, or 17.4%, decrease in software license fees revenues, partially offset by a $4.1 million, or 19.1%, increase in services revenues.
The decline in total revenues was primarily driven by an $8.3 million decline in total revenues in the EMEA reportable operating segment offset by a $5.9 million increase in the Americas reportable operating segment. A portion of the decline in the EMEA reportable operating segment can be attributed to the recent strengthening of the U.S. dollar relative to other European currencies.
Read the The complete ReportACIW is in the portfolios of Wallace Weitz of Weitz Wallace R & Co.
Transaction Systems Architects Inc. develops markets installs and supports a broad line of software products and services primarily focused on facilitating electronic payments and electronic commerce. The Company's products are organized into four lines-of-business groups: Consumer Banking Corporate Banking Retail Solutions and System Solutions. ACI Worldwide Inc. has a market cap of $490.4 million; its shares were traded at around $14.04 with a P/E ratio of 28.7 and P/S ratio of 1.2.
Highlight of Business Operations:
product licensed, payment terms, creditworthiness of the customer, and timing of delivery or acceptance of our products often cause revenue related to sales generated in one period to be deferred and recognized in later periods. For arrangements in which services revenue is deferred, related direct and incremental costs may also be deferred. Additionally, while the majority of our contracts are denominated in the United States dollar, a substantial portion of our sales are made, and some of our expenses are incurred, in the local currency of countries other than the United States. Fluctuations in currency exchange rates in a given period may result in the recognition of gains or losses for that period. Also during the year ended September 30, 2007, we entered into two interest rate swaps with a commercial bank whereby we pay a fixed rate of 5.375% and 4.90% and receive a floating rate indexed to the 3-month LIBOR from the counterparty on a notional amount of $75 million and forecasted borrowings of $50 million, respectively. During the three months ended March 31, 2009, the Company elected 1-month LIBOR as the variable-rate benchmark for its revolving facility and changed its interest rate to 5.195%. The Company also amended its interest rate swap on the $75 million notional amount from 3-month LIBOR to 1-month LIBOR. This basis swap did not impact the maturity date of the interest rate swap or the accounting. Fluctuations in interest rates in a given period may result in the recognition of gains or losses for that period.Included in our 60-month backlog estimates are amounts expected to be recognized during the initial license term of customer contracts (Committed Backlog) and amounts expected to be recognized from assumed renewals of existing customer contracts (Renewal Backlog). Amounts expected to be recognized from assumed contract renewals are based on the Companys historical renewal experience. The estimated Committed Backlog and Renewal Backlog estimate as of March 31, 2009 is $722 million and $688 million, respectively.
During the three months ended March 31, 2009, we refined our definition of cost of software licenses fess in order to better conform to industry practice. Our definition of cost of software license fee has been revised to be third-party software royalties as well as the amortization of purchased technology. Previously, cost of software license fees also included certain costs associated with maintaining software products that have already been developed and directing future product development efforts. These costs included human resource costs and other incidental costs related to product management, documentation, publications and education. These costs have now been reclassified to research and development and cost of maintenance and services. As a result of this change in definition of cost of software license fees, we reclassified $0.7 million and $8.2 million to cost of maintenance and services and research and development, respectively, from cost of software licenses fees in the accompanying statement of operations for the three months ended March 31, 2008.
Also for the quarter ended March 31, 2009, we reclassified depreciation and amortization expense, excluding amortization of purchased technology as a separate line item in the consolidated statements of operations. Previously, depreciation and amortization was allocated to functional line items of the statement of operations rather than being reported as a separate line item. As a result of disclosing depreciation and amortization as a separate line item, we reclassified $1.0 million from cost of software licenses fees, $1.4 million from cost of maintenance and services, $0.1 million from research and development, $0.1 million from selling and marketing, and $1.5 million from general and administrative for the three months ended March 31, 2008.
Total revenues for the three months ended March 31, 2009 decreased $2.5 million, or 2.7%, as compared to the same period of 2008. Total revenues decreased primarily as a result of a $6.6 million, or 17.4%, decrease in software license fees revenues, partially offset by a $4.1 million, or 19.1%, increase in services revenues.
The decline in total revenues was primarily driven by an $8.3 million decline in total revenues in the EMEA reportable operating segment offset by a $5.9 million increase in the Americas reportable operating segment. A portion of the decline in the EMEA reportable operating segment can be attributed to the recent strengthening of the U.S. dollar relative to other European currencies.
Read the The complete ReportACIW is in the portfolios of Wallace Weitz of Weitz Wallace R & Co.
