WINDSOR, Conn., Feb. 17, 2011 (GLOBE NEWSWIRE) -- SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of software-enabled services and financial services software, today announced its financial results for the fourth quarter and full year ended December 31, 2010.
"2010 was the highest-ever revenue year in SS&C's history and we believe we can continue our success in 2011," said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies Holdings, Inc.
GAAP Results
The Company reported quarterly revenue of $86.1 million for the fourth quarter of 2010, compared to $71.0 million in the fourth quarter of 2009, or an increase of 21.2%. Total annual revenues for the year ended December 31, 2010 were $328.9 million, a 21.4% increase over the $270.9 million in 2009.
GAAP operating income for the fourth quarter of 2010 was $21.0 million, or 24.4% of revenue, up from $19.1 million in 2009's fourth quarter. Operating income for the year ended December 31, 2010 was $79.8 million compared to $67.1 million for 2009.
Net income for the fourth quarter of 2010 was $9.2 million compared to $6.0 million in the fourth quarter of 2009. Net income for the year ended December 31, 2010 was $32.4 million compared to $19.0 million for 2009, a 70.4% increase.
On a fully diluted basis, earnings per share in the fourth quarter of 2010 were $0.12 and represent a 33.3% increase from $0.09 in the fourth quarter of 2009. On a fully diluted basis, earnings per share for the year ended December 31, 2010 were $0.44 and represent a 46.7% increase compared to 2009's $0.30 per diluted share.
Non-GAAP Results
Adjusted Revenue, which is adjusted for one-time purchase accounting adjustments (a non-GAAP measure defined in note 1 to the attached Condensed Consolidated Financial Information), was $86.1 million for the fourth quarter of 2010, an increase of $15.0 million or 21.1% from $71.1 million in the same period for 2009.
Adjusted operating income (a non-GAAP financial measure defined in note 2 to the attached Condensed Consolidated Financial Information) in the fourth quarter of 2010 was $34.1 million, or 39.6% of revenue. This represents a 17.6% increase compared to $29.0 million and 40.8% of revenue, in the fourth quarter of 2009. Adjusted operating income for the year ended December 31, 2010 was $129.2 million. This represents a 21.3% increase compared to adjusted operating income of $106.5 million for 2009.
Adjusted net income (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) for the fourth quarter of 2010 was $18.2 million compared to $13.3 million in 2009's fourth quarter, a 36.6% increase. Adjusted net income for the year ended December 31, 2010 was $65.6 million and represented a 40.7% increase compared to $46.6 million for 2009.
Adjusted diluted earnings per share (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) in the fourth quarter were $0.24 and represent a 14.3% increase from $0.21 in the fourth quarter of 2009. Adjusted diluted earnings per share for the year ended December 31, 2010 were $0.90 and represented a 23.3% increase compared to $0.73 per share in 2009.
Cash Flow
SS&C generated net cash from operating activities of $75.6 million for the year ended December 31, 2010, compared to $59.9 million for the same period in 2009, representing a 26.3% increase. We ended 2010 with $84.8 million of cash on the balance sheet. SS&C's leverage ratio as defined in our credit agreement stood at 1.85 for the year ended 2010, down from 6.8 when we went private in November of 2005.
Annual Run Rate Basis
Annual Run Rate Basis (ARRB) recurring revenue, defined as the addition of maintenance and software-enabled services revenue, was $74.7 million for the fourth quarter of 2010, an annual run-rate of $298.9 million. This represents an increase of 24.5% from $60.0 million and $240.0 million run-rate in the same period in 2009 and an increase of 3.6% from Q3 2010's $72.1 million and $288.6 million run-rate. We believe ARRB of our recurring revenue is a good indicator of visibility.
Acquisitions
The Company acquired three businesses in 2010 including Geller Investment Partnership Services (GIPS), the thinklink business from TD Ameritrade, and TimeShareWare. GIPS provides accounting, reporting, performance, tax and investor services for the private equity industry. The thinklink software platform is an internet-deployed trade order management and execution solution with more than fifty institutional sell-side clients. The TimeShareWare acquisition includes software solutions for shared-ownership resorts and has more than 500 product installations around the world including Marriott, Group RCI, Holiday Inn Vacation Club Vacations, and more.
Fourth Quarter Highlights
- Continued Software-Enabled Services Growth: SS&C increased its software-enabled services business to $56.1 million, an increase of 32.2% over $42.5 million in the same period in 2009. Revenues from software-enabled services accounted for 65.2% of total revenue in the fourth quarter of 2010.
- Record Quarter for Revenues: A 20.4% increase in license revenue in the fourth quarter of 2010 over the same period in 2009 combined with a 32.2% increase in software-enabled services led to SS&C's highest-ever quarterly revenue of $86.1 million in the fourth quarter of 2010.
- New York City Office Consolidation: SS&C renegotiated and added to its space in mid-town Manhattan to support growth in fund administration, financial training, and municipal finance businesses, and bringing in Geller Investment Partnership Services private equity fund administration business.
- TimeShareWare Acquisition: SS&C extended its real estate property offering with TimeShareWare's platform technology based on a three-tier Service Oriented Architecture (SOA) to manage all aspects of resort industry management.
- Key Client Wins: SS&C signed key Q4 client deals including a global bank's Corporate Trust and Agency Services for SS&C's Money Market Manager; a U.S.-based financial services organization will use LMS Loan Suite to manage its US$14 billion loan portfolio; a large U.S. independent broker/dealer selected SS&C's Recon, Fiera Capital Management expanded its relationship with SS&C and chose its Global Wealth Platform; a large Canadian bank licensed SS&C MarginMan to process precious metals and foreign exchange, and Solmar Hotels & Resorts selected SS&C's TimeShareWare Professional to manage sales and marketing, lead management, property management, and online rental operations.
- SAS No. 70 and CICA 5970 Audits: In the fourth quarter, SS&C completed 14 independent audits of its selected controls, processes and procedures in compliance with the American Institute of Certified Public Accountants' (AICPA) (SAS) No. 70 for service organizations and the Canadian Institute of Chartered Accountants (CICA) Section 5970. Completion of the SAS 70 designation acknowledges that SS&C's processes and controls have been evaluated and tested by an independent service auditor: PricewaterhouseCoopers. The examinations included its data centers, the Company's SaaS solutions and its full service fund administration and institutional outsourcing services platform.
Guidance
SS&C announces the following financial guidance for the first quarter and fiscal year 2011:
| Guidance | Q1 2011 | FY 2011 |
| Total Revenue ($M) | $87.0 -- $88.5 | $362.0 -- $369.0 |
| Adjusted Net Income ($M) | $18.6 -- $19.2 | $81.8 -- $84.8 |
| Cash from Operating Activities ($M) | N/A | $82.0 -- $ 86.0 |
| Capital Expenditures (% of revenue) | N/A | 1.9% - 2.1% |
Results of SS&C Technologies, Inc.
Our operating subsidiary, SS&C Technologies, Inc., posted the same revenues and net income for the fourth quarter of 2010 and year ended December 31, 2010 as the Company.
Non-GAAP Financial Measures
Adjusted revenue, adjusted operating income, adjusted consolidated EBITDA, adjusted net income and adjusted diluted earnings per share are non-GAAP measures. See the accompanying notes to the attached Condensed Consolidated Financial Information for the reconciliations and definitions for each of these non-GAAP measures and the reasons our management believes that these measures provide useful information to investors regarding our financial condition and results of operations.
Earnings Call and Press Release
SS&C's Q4 and Fiscal Year 2010 earnings call will take place at 5:00 p.m. eastern time today, February 17, 2011. The call will discuss Q4 and 2010 results. Interested parties may dial 877-312-8798 (U.S. and Canada) or 253-237-1193 (International) and request the "SS&C Fourth Quarter and 2010 Earnings Call," conference ID #43918491. A replay will be available after 8:00 p.m. eastern time on February 17, until midnight on February 24, 2011. The dial-in number is 800-642-1687 (U.S. and Canada) 706-645-9291 (International); access code #43918491. The call will also be available for replay on SS&C's website after February 18, 2011: http://investor.ssctech.com/results.cfm.
This press release contains forward-looking statements relating to, among other things, our financial guidance for the first quarter of 2011 and full year 2011. Such statements reflect management's best judgment based on factors currently known but are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, the state of the economy and the financial services industry, the Company's ability to finalize large client contracts, fluctuations in customer demand for the Company's products and services, intensity of competition from application vendors, delays in product development, the Company's ability to control expenses, terrorist activities, the Company's ability to integrate acquired businesses, the effect of the acquisitions on customer demand for the Company's products and services, and those risks described in the Company's publicly available filings with the Securities and Exchange Commission. The Company cautions investors that it may not update any or all of the foregoing forward-looking statements.
About SS&C Technologies Holdings, Inc.
SS&C is a leader in the delivery of investment and financial management software and related services focused exclusively on the global financial services industry. Founded in 1986, SS&C has its headquarters in Windsor, Connecticut and offices around the world. 5,000 financial services organizations, from the world's largest to local financial services organizations, manage and account for their investments using SS&C's products and services. These clients in the aggregate manage over $16 trillion in assets. Additional information about SS&C (Nasdaq:SSNC) is available at www.ssctech.com.
Follow SS&C on Twitter at @ssctechnologies.
The SS&C Technologies logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8587
| SS&C Technologies Holdings, Inc. and Subsidiaries | ||||
| Condensed Consolidated Statements of Operation | ||||
| (in thousands, except per share data) | ||||
| Three Months Ended | Year Ended | |||
|
December 31, 2010 |
December 31, 2009 |
December 31, 2010 |
December 31, 2009 |
|
| Revenues: | ||||
| Software licenses | $6,054 | $5,029 | $23,683 | $20,661 |
| Maintenance | 18,573 | 17,534 | 72,703 | 66,099 |
| Professional services | 5,343 | 6,017 | 20,727 | 20,889 |
| Software-enabled services | 56,140 | 42,465 | 211,792 | 163,266 |
| Total revenues | 86,110 | 71,045 | 328,905 | 270,915 |
| Cost of revenues: | ||||
| Software licenses | 1,996 | 2,195 | 7,750 | 8,499 |
| Maintenance | 8,407 | 7,207 | 32,712 | 27,559 |
| Professional services | 3,711 | 3,495 | 13,954 | 14,154 |
| Software-enabled services | 29,379 | 22,449 | 111,516 | 87,528 |
| Total cost of revenues | 43,493 | 35,346 | 165,932 | 137,740 |
| Gross profit | 42,617 | 35,699 | 162,973 | 133,175 |
| Operating expenses: | ||||
| Selling and marketing | 6,319 | 5,133 | 25,229 | 20,362 |
| Research and development | 7,956 | 6,920 | 31,442 | 26,513 |
| General and administrative | 7,297 | 4,514 | 26,462 | 19,197 |
| Total operating expenses | 21,572 | 16,567 | 83,133 | 66,072 |
| Operating income | 21,045 | 19,132 | 79,840 | 67,103 |
| Interest expense, net | (6,594) | (9,072) | (30,412) | (36,863) |
| Other income (expense), net | (154) | (162) | 499 | (1,418) |
| Loss on extinguishment of debt | -- | -- | (5,480) | -- |
| Income before income taxes | 14,297 | 9,898 | 44,447 | 28,822 |
| Provision for income taxes | 5,121 | 3,876 | 12,034 | 9,804 |
| Net income | $9,176 | $6,022 | $32,413 | $19,018 |
| Basic earnings per share | $0.13 | $0.10 | $0.47 | $0.31 |
|
Basic weighted average number of common shares outstanding |
72,316 | 60,392 | 69,027 | 60,381 |
| Diluted earnings per share | $0.12 | $0.09 | $0.44 | $0.30 |
|
Diluted weighted average number of common and common equivalent shares outstanding |
76,594 | 64,542 | 73,079 | 63,653 |
| See Notes to Condensed Consolidated Financial Information. | ||||
| SS&C Technologies Holdings, Inc. and Subsidiaries | ||
| Condensed Consolidated Balance Sheets | ||
| (in thousands) | ||
|
December 31, 2010 |
December 31, 2009 |
|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $84,843 | $19,055 |
| Accounts receivable, net | 45,531 | 41,600 |
| Prepaid income taxes | 2,242 | 669 |
| Deferred income taxes | 1,142 | 1,780 |
| Prepaid expenses and other current assets | 5,932 | 6,164 |
| Total current assets | 139,690 | 69,268 |
| Property and equipment, net | 13,570 | 14,036 |
| Deferred income taxes | 686 | 499 |
| Goodwill | 926,668 | 885,517 |
| Intangible and other assets, net | 195,112 | 216,321 |
| Total assets | $1,275,726 | $1,185,641 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Current portion of long-term debt | $1,702 | $4,270 |
| Accounts payable | 3,790 | 4,804 |
| Income taxes payable | -- | 703 |
| Accrued employee compensation and benefits | 16,854 | 14,693 |
| Other accrued expenses | 11,052 | 16,938 |
| Interest payable | 1,305 | 2,070 |
| Deferred maintenance and other revenue | 41,671 | 40,400 |
| Total current liabilities | 76,374 | 83,878 |
| Long-term debt, net of current portion | 289,092 | 392,989 |
| Other long-term liabilities | 12,343 | 12,779 |
| Deferred income taxes | 40,734 | 50,008 |
| Total liabilities | 418,543 | 539,654 |
| Total stockholders' equity | 857,183 | 645,987 |
| Total liabilities and stockholders' equity | $1,275,726 | $1,185,641 |
| See Notes to Condensed Consolidated Financial Information. | ||
| SS&C Technologies Holdings, Inc. and Subsidiaries | ||
| Condensed Consolidated Statements of Cash Flows | ||
| (in thousands) | ||
| Year Ended | ||
|
December 31, 2010 |
December 31, 2009 |
|
| Cash flow from operating activities: | ||
| Net income | $32,413 | $19,018 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 40,728 | 36,028 |
| Stock-based compensation expense | 13,254 | 5,607 |
| Amortization of loan origination costs | 3,392 | 2,306 |
| (Gain) loss on sale or disposition of property and equipment | (9) | 13 |
| Deferred income taxes | (13,700) | (8,861) |
| Provision for doubtful accounts | 831 | 213 |
| Changes in operating assets and liabilities, excluding effects from acquisitions: | ||
| Accounts receivable | 1,066 | 3,360 |
| Prepaid expenses and other assets | (133) | (284) |
| Accounts payable | (1,041) | 1,549 |
| Accrued expenses and other liabilities | (2,660) | 1,646 |
| Income taxes prepaid and payable | 2,073 | (5,236) |
| Deferred maintenance and other revenues | (647) | 4,493 |
| Net cash provided by operating activities | 75,567 | 59,852 |
| Cash flow from investing activities: | ||
| Additions to property and equipment | (4,834) | (2,559) |
| Proceeds from sale of property and equipment | 59 | 3 |
| Cash paid for business acquisitions, net of cash acquired | (45,815) | (51,477) |
| Additions to capitalized software and other intangibles | (509) | (101) |
| Net cash used in investing activities | (51,099) | (54,134) |
| Cash flow from financing activities: | ||
| Cash received from other borrowings | -- | 2,000 |
| Repayment of debt | (108,120) | (19,679) |
| Proceeds from exercise of stock options | 10,813 | 1,998 |
| Income tax benefit related to exercise of stock options | 5,064 | -- |
| Proceeds from common stock issuance, net | 134,558 | -- |
| Purchase of common stock for treasury | (1,169) | (2,215) |
| Net cash provided by (used in) financing activities | 41,146 | (17,896) |
| Effect of exchange rate changes on cash and cash equivalents | 174 | 1,934 |
| Net increase in cash and cash equivalents | 65,788 | (10,244) |
| Cash and cash equivalents, beginning of period | 19,055 | 29,299 |
| Cash and cash equivalents, end of period | $84,843 | $19,055 |
| See Notes to Condensed Consolidated Financial Information. | ||
SS&C Technologies Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Information
Note 1. Reconciliation of Revenue to Adjusted Revenue
Adjusted revenue represents revenue adjusted for one-time purchase accounting adjustments to fair value deferred revenue acquired in business combinations. Adjusted revenue is presented because we use this measure to evaluate performance of our business against prior periods and believe it is a useful indicator of the underlying performance of the Company. Adjusted revenue is not a recognized term under generally accepted accounting principles (GAAP). Adjusted revenue does not represent revenue, as that term is defined under GAAP, and should not be considered as an alternative to revenue as an indicator of our operating performance. Adjusted revenue as presented herein is not necessarily comparable to similarly titled measures. The following is a reconciliation between adjusted revenue and revenue, the GAAP measure we believe to be most directly comparable to adjusted revenue.
|
Three months ended December 31, |
Year ended December 31, |
|||
| (in thousands) | 2010 | 2009 | 2010 | 2009 |
| Revenue | $86,110 | $71,045 | $328,905 | $270,915 |
| Purchase accounting adjustments to deferred revenue | 11 | 48 | 189 | 48 |
| Adjusted revenue | $86,121 | $71,093 | $329,094 | $270,963 |
Note 2. Reconciliation of Operating Income to Adjusted Operating Income
Adjusted operating income represents operating income adjusted for amortization of acquisition-related intangible assets and purchase accounting adjustments for deferred revenue and other expenses. Adjusted operating income is presented because we use this measure to evaluate performance of our business and believe it is a useful indicator of the underlying performance of the Company. Adjusted operating income is not a recognized term under GAAP. Adjusted operating income does not represent operating income, as that term is defined under GAAP, and should not be considered as an alternative to operating income as an indicator of our operating performance. Adjusted operating income as presented herein is not necessarily comparable to similarly titled measures. The following is a reconciliation between adjusted operating income and operating income, the GAAP measure we believe to be most directly comparable to adjusted operating income.
|
Three months ended December 31, |
Year ended December 31, |
|||
| (in thousands) | 2010 | 2009 | 2010 | 2009 |
| Operating income | $21,045 | $19,132 | $79,840 | $67,103 |
| Amortization of intangible assets | 8,950 | 8,037 | 35,085 | 31,129 |
| Stock-based compensation | 4,073 | 1,244 | 13,254 | 5,607 |
| Capital-based taxes | 230 | 123 | 1,091 | 795 |
| Unusual or non-recurring charges | (30) | 149 | 174 | 776 |
| Purchase accounting adjustments | (114) | 70 | (238) | (93) |
| Other | (75) | 224 | 39 | 1,201 |
| Adjusted operating income | $34,079 | $28,979 | $129,245 | $106,518 |
Note 3. Reconciliation of Net Income to EBITDA, Consolidated EBITDA and Adjusted Consolidated EBITDA
EBITDA represents net income before interest expense, income taxes, depreciation and amortization. Consolidated EBITDA, defined under our Credit Agreement entered into in November 2005, is used in calculating covenant compliance, and is EBITDA adjusted for certain items. Consolidated EBITDA is calculated by subtracting from or adding to EBITDA items of income or expense described below. Adjusted consolidated EBITDA is calculated by subtracting acquired EBITDA from consolidated EBITDA. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are presented because we use these measures to evaluate performance of our business and believe them to be useful indicators of an entity's debt capacity and its ability to service debt. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are not recognized terms under GAAP and should not be considered in isolation or as an alternative to operating income, net income or cash flows from operating activities. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA do not represent net income, as that term is defined under GAAP, and should not be considered as an alternative to net income as an indicator of our operating performance. The following is a reconciliation between EBITDA, consolidated EBITDA and adjusted consolidated EBITDA and net income.
|
Three months ended December 31, |
Year ended December 31, |
|||
| (in thousands) | 2010 | 2009 | 2010 | 2009 |
| Net income | $9,176 | $6,022 | $32,413 | $19,018 |
| Interest expense, net | 6,594 | 9,072 | 35,892 | 36,863 |
| Taxes | 5,121 | 3,876 | 12,034 | 9,804 |
| Depreciation and amortization | 10,372 | 9,321 | 40,728 | 36,028 |
| EBITDA | 31,263 | 28,291 | 121,067 | 101,713 |
| Stock-based compensation | 4,073 | 1,244 | 13,254 | 5,607 |
| Capital-based taxes | 230 | 123 | 1,091 | 795 |
| Acquired EBITDA and cost savings | 329 | 1,774 | 6,392 | 8,053 |
| Unusual or non-recurring charges | 124 | 307 | (325) | 1,990 |
| Purchase accounting adjustments | (114) | 70 | (238) | (93) |
| Other | (75) | 224 | 39 | 1,201 |
| Consolidated EBITDA | 35,830 | 32,033 | 141,280 | 119,266 |
| Less: acquired EBITDA | (329) | (1,774) | (6,392) | (8,053) |
| Adjusted Consolidated EBITDA | $35,501 | $30,259 | $134,888 | $111,213 |
Note 4. Reconciliation of Net Income to Adjusted Net Income and Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share
Adjusted net income and adjusted diluted earnings per share represent net income and earnings per share before amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes and other unusual and non-recurring items. Adjusted net income and adjusted diluted earnings per share are not recognized terms under GAAP, do not represent net income or diluted earnings per share, as those terms are defined under GAAP, and should not be considered as alternatives to net income or diluted earnings per share as indicators of our operating performance. Adjusted net income and adjusted diluted earnings per share are important to management and investors because it represents our operational performance exclusive of the effects of amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes and other unusual and non-recurring items that are not operational in nature or comparable to those of our competitors. The following is a reconciliation between adjusted net income and adjusted diluted earnings per share and net income and diluted earnings per share.
|
Three months ended December 31, |
Year ended December 31, |
|||
| (in thousands, except per share data) | 2010 | 2009 | 2010 | 2009 |
| GAAP – Net income | $9,176 | $6,022 | $32,413 | $19,018 |
| Plus: Amortization of intangible assets | 8,950 | 8,037 | 35,085 | 31,129 |
| Plus: Amortization of deferred financing costs | 496 | 582 | 2,127 | 2,306 |
| Plus: Stock-based compensation | 4,073 | 1,244 | 13,254 | 5,607 |
| Plus: Capital-based taxes | 230 | 123 | 1,091 | 795 |
| Plus: Unusual and non-recurring items | 124 | 307 | (325) | 1,990 |
| Plus: Loss on extinguishment of debt | -- | -- | 5,480 | -- |
| Plus: Purchase accounting adjustments | (114) | 70 | (238) | (93) |
| Plus: Other | (75) | 224 | 39 | 1,201 |
| Income tax effect (1) | (4,672) | (3,294) | (23,301) | (15,311) |
| Adjusted net income | $18,188 | $13,315 | $65,625 | $46,642 |
| Adjusted diluted earnings per share | $0.24 | $0.21 | $0.90 | $0.73 |
| GAAP diluted earnings per share | $0.12 | $0.09 | $0.44 | $0.30 |
| Diluted weighted-average shares outstanding | 76,594 | 64,542 | 73,079 | 63,653 |
|
(1) An estimated normalized effective tax rate of 35% has been used to adjust the provision for income taxes for the purposes of computing adjusted net income. |
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