ACI Worldwide Inc. (ACIW, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 $555.2 million; its shares were traded at around $16.32 with a P/E ratio of 40.7 and P/S ratio of 1.3.
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 as of September 30, 2009 is $734 million and $753 million, respectively.
During 2009, we refined our definition of cost of software licenses fees in order to better conform to industry practice. Our definition of cost of software license fees has been revised to include third-party software royalties as well as the amortization of purchased and developed software for resale. 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 $0.9 million and $7.9 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 September 30, 2008. We reclassified $2.3 million and $24.6 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 nine months ended September 30, 2008. Additionally, $1.8 million and $3.5 million of third-party royalties have been reclassified from cost of maintenance and services to cost of software for the three-month and nine-month periods ended September 30, 2008 to conform to the current period presentation.
Also for the nine months ended September 30, 2009, we reported depreciation and amortization expense (excluding amortization of purchased and developed software for resale) as a separate line item in the condensed 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 $1.1 million from cost of software licenses fees, $1.3 million from cost of maintenance and services, $0.1 million from research and development, $0.1 million from selling and marketing, and $1.4 million from general and administrative for the three months ended September 30, 2008. We reclassified $3.4 million from cost of software licenses fees, $4.0 million from cost of maintenance and services, $0.4 million from research and development, $0.7 million from selling and marketing, and $3.9 million from general and administrative for the nine months ended September 30, 2008.
Read the The complete ReportACIW is in the portfolios of Wallace Weitz of Weitz Wallace R & Co, 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 $555.2 million; its shares were traded at around $16.32 with a P/E ratio of 40.7 and P/S ratio of 1.3.
Highlight of Business Operations:
Several other factors related to our business may have a significant impact on our operating results from year to year. For example, the accounting rules governing the timing of revenue recognition in the software industry are complex and it can be difficult to estimate when we will recognize revenue generated by a given transaction. Factors such as maturity of the software product licensed, payment terms, creditworthiness of the customer, and timing of delivery or acceptance of our products often cause revenues 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 $50 million, respectively. During the nine months ended September 30, 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 as of September 30, 2009 is $734 million and $753 million, respectively.
During 2009, we refined our definition of cost of software licenses fees in order to better conform to industry practice. Our definition of cost of software license fees has been revised to include third-party software royalties as well as the amortization of purchased and developed software for resale. 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 $0.9 million and $7.9 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 September 30, 2008. We reclassified $2.3 million and $24.6 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 nine months ended September 30, 2008. Additionally, $1.8 million and $3.5 million of third-party royalties have been reclassified from cost of maintenance and services to cost of software for the three-month and nine-month periods ended September 30, 2008 to conform to the current period presentation.
Also for the nine months ended September 30, 2009, we reported depreciation and amortization expense (excluding amortization of purchased and developed software for resale) as a separate line item in the condensed 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 $1.1 million from cost of software licenses fees, $1.3 million from cost of maintenance and services, $0.1 million from research and development, $0.1 million from selling and marketing, and $1.4 million from general and administrative for the three months ended September 30, 2008. We reclassified $3.4 million from cost of software licenses fees, $4.0 million from cost of maintenance and services, $0.4 million from research and development, $0.7 million from selling and marketing, and $3.9 million from general and administrative for the nine months ended September 30, 2008.
Read the The complete ReportACIW is in the portfolios of Wallace Weitz of Weitz Wallace R & Co, Wallace Weitz of Weitz Wallace R & Co.
