WINDSOR, Conn., Feb. 21, 2012 (GLOBE NEWSWIRE) -- SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of investment and financial software-enabled services and software, today announced its financial results for the fourth quarter and full year ended December 31, 2011.
"2011 was the highest-ever revenue year in SS&C's history and we believe we can continue our success in 2012," said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies Holdings, Inc. "During 2011 our operating cash flow improved on 2010 and our strong financial position continued. In 2011 operating cash flow was $110 million up 46.1%, from $75.6 million in 2010."
Results
The Company reported revenue of $95.7 million for the fourth quarter of 2011, compared to $86.1 million in the fourth quarter of 2010, an increase of 11.1 percent. Total revenue for the year ended December 31, 2011 was $370.8 million, a 12.7 percent increase over $328.9 million of revenue in 2010.
GAAP operating income for the fourth quarter of 2011 was $23.7 million, or 24.8 percent of revenue, up from $21.0 million in 2010's fourth quarter. Operating income for the year ended December 31, 2011 was $93.8 million, or 25.3 percent of revenue, compared to $79.8 million for 2010.
Net income for the fourth quarter of 2011 was $13.3 million, compared to $9.2 million in the fourth quarter of 2010, an increase of 44.5 percent. Net income for the year ended December 31, 2011 was $51.0 million, compared to $32.4 million for 2010, a 57.4 percent increase.
On a fully diluted basis, earnings per share in the fourth quarter of 2011 were $0.16, a 33.3 percent increase from $0.12 in the fourth quarter of 2010. On a fully diluted basis, earnings per share for the year ended December 31, 2011 were $0.63, a 43.2 percent increase compared to 2010's $0.44 per share.
Adjusted operating income (a non-GAAP financial measure defined in note 2 to the attached Condensed Consolidated Financial Information) in the fourth quarter of 2011 was $38.4 million, or 40.1 percent of revenue. This represents a 12.6 percent increase compared to $34.1 million and 39.6 percent of revenue in the fourth quarter of 2010. Adjusted operating income for the year ended December 31, 2011 was $146.0 million. This represents a 12.9 percent increase compared to adjusted operating income of $129.2 million for 2010.
Adjusted net income (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) for the fourth quarter of 2011 was $23.3 million, compared to $18.2 million in 2010's fourth quarter, a 28.4 percent increase. Adjusted net income for the year ended December 31, 2011 was $86.5 million, a 31.7 percent increase compared to $65.6 million for 2010.
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 $0.29, a 20.8 percent increase from $0.24 in the fourth quarter of 2010. Adjusted diluted earnings per share for the year ended December 31, 2011 were $1.07, an 18.9 percent increase compared to $0.90 per share in 2010.
Annual Run Rate Basis
Annual Run Rate Basis (ARRB) recurring revenue, defined as the addition of maintenance and software-enabled services revenue, was $83.3 million for the fourth quarter of 2011, an annual run-rate of $333.2 million. This represents an increase of 11.5 percent from $74.7 million and $298.9 million run-rate in the same period in 2010 and an increase of 0.5 percent from Q3 2011's $82.8 million and $331.4 million run-rate. We believe ARRB of our recurring revenue is a good indicator of visibility.
Operating Cash Flow
SS&C ended the quarter with $40.3 million in cash and cash equivalents, and $100.0 million in debt, for a net debt balance of $59.7 million. SS&C generated net cash from operating activities of $110.4 million for the year ended December 31, 2011, compared to $75.6 million for 2010, representing a 46.1 percent increase. SS&C's leverage ratio as defined in our credit agreement stood at 0.7 for the year ended 2011.
Guidance
SS&C announces the following financial guidance for the first quarter and fiscal year 2012:
| Guidance | Q1 2012 | FY 2012 |
| Total Revenue ($M) | $94.0 -- $97.0 | $398.0 -- $408.0 |
| Adjusted Net Income ($M) | $22.8 -- $23.9 | $99.5 -- $103.5 |
| Cash from Operating Activities ($M) | N/A | $115.0 -- $120.0 |
| Capital Expenditures ( percent of revenue) | N/A | 2.2% – 2.7% |
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 2011 earnings call will take place at 5:00 p.m. eastern time today, February 21, 2012. The call will discuss Q4 and 2011 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 2011 Earnings Call," conference ID #46268521. A replay will be available after 8:00 p.m. eastern time on February 21, until midnight on February 28, 2012. The dial-in number is 855-859-2056 (U.S. and Canada) 404-537-3406 (International); access code #46268521. The call will also be available for replay on SS&C's website after February 21, 2012: 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 2012 and full year 2012. 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
SS&C is a global provider of investment and financial software-enabled services and software 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.
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| SS&C Technologies Holdings, Inc. and Subsidiaries | ||||
| Condensed Consolidated Statements of Operations | ||||
| (in thousands, except per share data) | ||||
| Three Months Ended | Year Ended | |||
| December 31, | December 31, | December 31, | December 31, | |
| 2011 | 2010 | 2011 | 2010 | |
| Revenues: | ||||
| Software licenses | $6,166 | $6,054 | $23,507 | $23,683 |
| Maintenance | 19,807 | 18,573 | 78,266 | 72,703 |
| Professional services | 6,233 | 5,343 | 23,048 | 20,727 |
| Software-enabled services | 63,489 | 56,140 | 246,007 | 211,792 |
| Total revenues | 95,695 | 86,110 | 370,828 | 328,905 |
| Cost of revenues: | ||||
| Software licenses | 1,736 | 1,996 | 6,825 | 7,750 |
| Maintenance | 8,797 | 8,407 | 34,993 | 32,712 |
| Professional services | 4,110 | 3,711 | 15,549 | 13,954 |
| Software-enabled services | 33,034 | 29,379 | 126,921 | 111,516 |
| Total cost of revenues | 47,677 | 43,493 | 184,288 | 165,932 |
| Gross profit | 48,018 | 42,617 | 186,540 | 162,973 |
| Operating expenses: | ||||
| Selling and marketing | 7,676 | 6,319 | 28,892 | 25,229 |
| Research and development | 9,297 | 7,956 | 35,650 | 31,442 |
| General and administrative | 7,360 | 7,297 | 28,221 | 26,462 |
| Total operating expenses | 24,333 | 21,572 | 92,763 | 83,133 |
| Operating income | 23,685 | 21,045 | 93,777 | 79,840 |
| Interest expense, net | (2,812) | (6,594) | (14,628) | (30,412) |
| Other (expense) income, net | (603) | (154) | (423) | 499 |
| Loss on extinguishment of debt | (1,906) | -- | (4,787) | (5,480) |
| Income before income taxes | 18,364 | 14,297 | 73,939 | 44,447 |
| Provision for income taxes | 5,104 | 5,121 | 22,918 | 12,034 |
| Net income | $13,260 | $9,176 | $51,021 | $32,413 |
| Basic earnings per share | $0.17 | $0.13 | $0.67 | $0.47 |
| Basic weighted average number of common shares outstanding | 77,470 | 72,316 | 76,482 | 69,027 |
| Diluted earnings per share | $0.16 | $0.12 | $0.63 | $0.44 |
| Diluted weighted average number of common and common equivalent shares outstanding | 81,194 | 76,594 | 80,709 | 73,079 |
| See Notes to Condensed Consolidated Financial Information. | ||||
| SS&C Technologies Holdings, Inc. and Subsidiaries | ||
| Condensed Consolidated Balance Sheets | ||
| (in thousands) | ||
| December 31, | December 31, | |
| 2011 | 2010 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $40,318 | $84,843 |
| Accounts receivable, net | 47,201 | 45,531 |
| Prepaid income taxes | 788 | 2,242 |
| Deferred income taxes | 889 | 1,142 |
| Prepaid expenses and other current assets | 5,214 | 5,932 |
| Restricted cash | 1,149 | -- |
| Total current assets | 95,559 | 139,690 |
| Property and equipment, net | 14,304 | 13,570 |
| Deferred income taxes | 1,111 | 686 |
| Goodwill | 931,639 | 926,668 |
| Intangible and other assets, net | 164,995 | 195,112 |
| Total assets | $1,207,608 | $1,275,726 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Current portion of long-term debt | $ -- | $1,702 |
| Accounts payable | 4,170 | 3,790 |
| Accrued employee compensation and benefits | 19,770 | 16,854 |
| Other accrued expenses | 14,058 | 11,052 |
| Interest payable | 95 | 1,305 |
| Deferred maintenance and other revenue | 46,395 | 41,671 |
| Total current liabilities | 84,488 | 76,374 |
| Long-term debt, net of current portion | 100,000 | 289,092 |
| Other long-term liabilities | 14,081 | 12,343 |
| Deferred income taxes | 28,936 | 40,734 |
| Total liabilities | 227,505 | 418,543 |
| Total stockholders' equity | 980,103 | 857,183 |
| Total liabilities and stockholders' equity | $1,207,608 | $1,275,726 |
| 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, | December 31, | |
| 2011 | 2010 | |
| Cash flow from operating activities: | ||
| Net income | $51,021 | $32,413 |
| Adjustments to reconcile net income to net cash provided | ||
| by operating activities: | ||
| Depreciation and amortization | 42,224 | 40,728 |
| Stock-based compensation expense | 13,493 | 13,254 |
| Amortization of loan origination costs | 4,485 | 3,392 |
| Loss (gain) on sale or disposition of property and equipment | 11 | (9) |
| Deferred income taxes | (12,423) | (13,700) |
| Provision for doubtful accounts | 802 | 831 |
| Changes in operating assets and liabilities, excluding effects | ||
| from acquisitions: | ||
| Accounts receivable | (1,818) | 1,066 |
| Prepaid expenses and other assets | (324) | (133) |
| Accounts payable | 278 | (1,041) |
| Accrued expenses and other liabilities | 4,076 | (2,660) |
| Income taxes receivable and payable | 4,181 | 2,073 |
| Deferred maintenance and other revenues | 4,401 | (647) |
| Net cash provided by operating activities | 110,407 | 75,567 |
| Cash flow from investing activities: | ||
| Additions to property and equipment | (6,222) | (4,834) |
| Cash paid for business acquisitions, net of cash acquired | (20,577) | (45,815) |
| Additions to capitalized software and other intangibles | (1,406) | (509) |
| Other | (1,149) | 59 |
| Net cash used in investing activities | (29,354) | (51,099) |
| Cash flow from financing activities: | ||
| Proceeds from debt financing | 100,000 | -- |
| Repayment of debt | (291,051) | (108,120) |
| Proceeds from common stock issuance, net | 51,971 | 134,558 |
| Proceeds from exercise of stock options | 8,788 | 10,813 |
| Purchase of common stock for treasury | -- | (1,169) |
| Income tax benefit related to exercise of stock options | 4,934 | 5,064 |
| Net cash (used in) provided by financing activities | (125,358) | 41,146 |
| Effect of exchange rate changes on cash and cash equivalents | (220) | 174 |
| Net (decrease) increase in cash and cash equivalents | (44,525) | 65,788 |
| Cash and cash equivalents, beginning of period | 84,843 | 19,055 |
| Cash and cash equivalents, end of period | $40,318 | $84,843 |
| 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) | 2011 | 2010 | 2011 | 2010 |
| Revenue | $95,695 | $86,110 | $370,828 | $328,905 |
| Purchase accounting adjustments to deferred revenue | 7 | 11 | 27 | 189 |
| Adjusted revenue | $95,702 | $86,121 | $370,855 | $329,094 |
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) | 2011 | 2010 | 2011 | 2010 |
| Operating income | $23,685 | $21,045 | $93,777 | $79,840 |
| Amortization of intangible assets | 9,418 | 8,950 | 36,826 | 35,085 |
| Stock-based compensation | 4,278 | 4,073 | 13,493 | 13,254 |
| Capital-based taxes | 200 | 230 | 354 | 1,091 |
| Unusual or non-recurring charges (gains) | 863 | (30) | 1,932 | 174 |
| Purchase accounting adjustments | (65) | (114) | (373) | (238) |
| Other | -- | (75) | (30) | 39 |
| Adjusted operating income | $38,379 | $34,079 | $145,979 | $129,245 |
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, 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 alternatives 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 alternatives 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) | 2011 | 2010 | 2011 | 2010 |
| Net income | $13,260 | $9,176 | $51,021 | $32,413 |
| Interest expense, net | 4,718 | 6,594 | 19,415 | 35,892 |
| Income taxes | 5,104 | 5,121 | 22,918 | 12,034 |
| Depreciation and amortization | 10,742 | 10,372 | 42,224 | 40,728 |
| EBITDA | 33,824 | 31,263 | 135,578 | 121,067 |
| Stock-based compensation | 4,278 | 4,073 | 13,493 | 13,254 |
| Capital-based taxes | 200 | 230 | 354 | 1,091 |
| Acquired EBITDA and cost savings | -- | 329 | 1,192 | 6,392 |
| Unusual or non-recurring charges (gains) | 1,465 | 124 | 2,355 | (325) |
| Purchase accounting adjustments | (65) | (114) | (373) | (238) |
| Other | (147) | (75) | (183) | 39 |
| Consolidated EBITDA | 39,555 | 35,830 | 152,416 | 141,280 |
| Less: acquired EBITDA and cost savings | -- | (329) | (1,192) | (6,392) |
| Adjusted Consolidated EBITDA | $39,555 | $35,501 | $151,224 | $134,888 |
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 they represent 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) | 2011 | 2010 | 2011 | 2010 |
| GAAP – Net income | $13,260 | $9,176 | $51,021 | $32,413 |
| Plus: Amortization of intangible assets | 9,418 | 8,950 | 36,826 | 35,085 |
| Plus: Amortization of deferred financing costs | 356 | 496 | 1,656 | 2,127 |
| Plus: Stock-based compensation | 4,278 | 4,073 | 13,493 | 13,254 |
| Plus: Capital-based taxes | 200 | 230 | 354 | 1,091 |
| Plus: Unusual or non-recurring charges (gains) | 1,465 | 124 | 2,355 | (325) |
| Plus: Loss on extinguishment of debt | 1,906 | -- | 4,787 | 5,480 |
| Plus: Purchase accounting adjustments | (65) | (114) | (373) | (238) |
| Plus: Other | -- | (75) | (30) | 39 |
| Income tax effect (1) | (7,469) | (4,672) | (23,635) | (23,301) |
| Adjusted net income | $23,349 | $18,188 | $86,454 | $65,625 |
| Adjusted diluted earnings per share | $0.29 | $0.24 | $1.07 | $0.90 |
| GAAP diluted earnings per share | $0.16 | $0.12 | $0.63 | $0.44 |
| Diluted weighted-average shares outstanding | 81,194 | 76,594 | 80,709 | 73,079 |
| (1) An estimated normalized effective tax rate of 35% has been used to adjust the provision for income taxes for the items noted above for the purposes of computing adjusted net income. | ||||