SS&C Technologies Holdings, Inc.

SS&C Technologies Results for Q2 2011, Record Revenue of $92 Million

GAAP Net Income of $13.0 million, up 199%, Adjusted Net Income of $21.3 million, up 31.8%

WINDSOR, Conn., Aug. 3, 2011 (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 quarter ended June 30, 2011.

"I am pleased to report that our second quarter revenue of $91.8 million rose 12.5 percent year-over-year," said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies Holdings, Inc. "For the six months ended June 30, 2011, we had strong cash flow from operations of $41.1 million, up 75 percent from $23.4 million for the same period in 2010."

Results

The Company reported quarterly revenue of $91.8 million for the second quarter of 2011, compared to $81.6 million in the second quarter of 2010, an increase of 12.5 percent.

GAAP operating income for the second quarter of 2011 was $22.9 million, or 24.9 percent of revenue. This represents a 15.7 percent increase compared to GAAP operating income of 19.8 million and 24.2 percent of revenue in the second quarter of 2010. GAAP net income for the second quarter of 2011 was $13.0 million compared to $4.4 million in the second quarter of 2010, an increase of 199 percent.

On a fully diluted GAAP basis, earnings per diluted share in the second quarter of 2011 were up 167 percent to $0.16 compared with $0.06 in the second quarter of 2010.

Adjusted operating income (a non-GAAP measure defined in note 2 to the attached Condensed Consolidated Financial Information) in the second quarter of 2011 was $35.8 million, or 39.0 percent of adjusted revenue. This represents a 10.7 percent increase compared to adjusted operating income of $32.4 million and 39.6 percent of adjusted revenue in the second quarter of 2010.

Adjusted net income (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) for the second quarter of 2011 was $21.3 million compared to $16.2 million in 2010's second quarter, a 31.8 percent increase.

Adjusted diluted earnings per share (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) in the second quarter of 2011 were $0.26 compared to $0.22 in the second quarter of 2010, an increase of 18 percent.

Annual Run Rate Basis

Annual Run Rate Basis (ARRB) recurring revenue, defined as the addition of maintenance and software-enabled services revenue, was $81.0 million for the second quarter of 2011, an annual run-rate of $323.8 million. This represents an increase of 14.9 percent from $70.4 million and $281.8 million run-rate in the same period in 2010 and an increase of 4.9 percent from Q1 2011's $77.2 million and $308.7 million run-rate. We believe ARRB of our recurring revenue is a good indicator of visibility into future revenue.

Operating Cash Flow

SS&C ended the quarter with $82.6 million in cash and cash equivalents, and $203.7 million in debt for a net debt balance of $121.1 million. We generated net cash from operating activities of $41.1 million for the six months ended June 30, 2011, compared to $23.4 million for the same period in 2010.

Guidance

SS&C announces the following financial guidance for the third quarter and fiscal year 2011:

GuidanceQ3 2011FY 2011
Total Revenue ($M) $93.5 - $95.0 $369.0 - $373.0
Adjusted Net Income ($M) $21.6 - $22.1 $84.0 - $85.2
Cash from Operating Activities ($M) N/A $84.0 - $87.0
Capital Expenditures (% of revenue) N/A 2.1% - 2.3%

Results of SS&C Technologies, Inc.

Our operating subsidiary, SS&C Technologies, Inc., posted the same revenues and net income for the second quarter of 2011 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 these measures provide useful information to investors regarding our financial condition and results of operations.

Earnings Call and Press Release

SS&C's Q2 earnings call will take place at 5:00 p.m. eastern time today, August 3, 2011. The call will discuss Q2 2011 results and our guidance and business outlook. Interested parties may dial 877-312-8798 (U.S. and Canada) or 253-237-1193 (International) and request the "SS&C Technologies 2011 Second Quarter Earnings Conference Call," conference ID # 84807039. A replay will be available after 8:00 p.m. eastern time on August 3, 2011, until midnight on August 10, 2011. The dial-in number is 855-859-2056 (U.S. and Canada) 404-537-3406 (International); access code # 84807039. The call will also be available for replay on SS&C's website after August 10, 2011; access: http://investor.ssctech.com/results.cfm .

This press release contains forward-looking statements relating to, among other things, our financial guidance for the third 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

Celebrating its 25th year, 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 Operation
(in thousands, except per share data)
(unaudited)
     
     
 Three Months EndedSix Months Ended
 June 30,
2011
June 30,
2010
June 30,
2011
June 30,
2010
Revenues:        
 Software licenses $4,982 $6,074 $11,555 $11,663
 Maintenance 19,418 17,817 38,865 35,836
 Professional services 5,860 5,099 11,127 10,488
 Software-enabled services 61,543 52,628 119,263 101,805
 Total revenues 91,803 81,618 180,810 159,792
         
Cost of revenues:        
 Software licenses 1,700 1,908 3,375 3,836
 Maintenance  8,801 8,084 17,467 16,081
 Professional services 3,981 3,260 7,551 6,618
 Software-enabled services 31,155 27,688 61,739 53,567
 Total cost of revenues 45,637 40,940 90,132 80,102
         
Gross profit 46,166 40,678 90,678 79,690
         
Operating expenses:        
 Selling and marketing 7,018 6,483 13,908 12,635
 Research and development 9,053 7,860 17,025 15,619
 General and administrative 7,200 6,546 13,743 12,226
 Total operating expenses 23,271 20,889 44,676 40,480
         
Operating income 22,895 19,789 46,002 39,210
         
Interest expense, net (3,474) (8,058) (8,601) (17,075)
Other income (expense), net  119 115 (168) --
Loss on extinguishment of debt  -- (5,480) (2,881) (5,480)
         
Income before income taxes 19,540 6,366 34,352 16,655
Provision for income taxes  6,512 2,004 11,490 3,272
         
Net income $13,028 $4,362 $22,862 $13,383
         
Basic earnings per share $0.17 $0.06 $0.30 $0.20
         
Basic weighted average number of common shares outstanding 76,724 70,960 75,556 65,900
         
Diluted earnings per share $0.16 $0.06 $0.29 $0.19
         
Diluted weighted average number of common and common equivalent shares outstanding 80,800 74,538 79,756 69,424
         
See Notes to Condensed Consolidated Financial Information.
 
 
SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
   
   
 June 30,
2011
December 31,
2010
ASSETS  
Current assets:    
Cash and cash equivalents $82,642 $84,843
Accounts receivable, net  44,728 45,531
Prepaid income taxes 8,522 2,242
Deferred income taxes 1,268 1,142
Prepaid expenses and other current assets 6,622 5,932
 Total current assets 143,782 139,690
     
Property and equipment, net 13,964 13,570
     
Deferred income taxes 660 686
Goodwill 945,079 926,668
Intangible and other assets, net  182,750 195,112
     
 Total assets $1,286,235 $1,275,726
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Current portion of long-term debt $1,471 $1,702
Accounts payable 4,201 3,790
Accrued employee compensation and benefits 9,010 16,854
Other accrued expenses 11,973 11,052
Interest payable 652 1,305
Deferred maintenance and other revenue 48,992 41,671
 Total current liabilities 76,299 76,374
     
Long-term debt, net of current portion 202,281 289,092
Other long-term liabilities 13,687 12,343
Deferred income taxes 35,324 40,734
 Total liabilities 327,591 418,543
     
Total stockholders' equity 958,644 857,183
     
 Total liabilities and stockholders' equity $1,286,235 $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)
(unaudited)
   
   
 Six Months Ended
  June 30,
2011
 June 30,
2010
Cash flow from operating activities:    
Net income $22,862 $13,383
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 20,990 20,297
Stock-based compensation expense 5,435 5,232
Amortization of loan origination costs 1,808 2,403
Gain on sale or disposition of property and equipment  --  (2)
Deferred income taxes (5,904) (6,090)
Provision for doubtful accounts 649 454
Changes in operating assets and liabilities, excluding effects from acquisitions:
Accounts receivable 1,306 (2,423)
Prepaid expenses and other assets (296) 818
Accounts payable 243 (857)
Accrued expenses and other liabilities  (9,236) (10,914)
Income taxes receivable and payable (3,457) (3,838)
Deferred maintenance and other revenues 6,654 4,971
Net cash provided by operating activities 41,054 23,434
     
Cash flow from investing activities:    
Additions to property and equipment (3,102) (2,238)
Proceeds from sale of property and equipment -- 52
Cash paid for business acquisitions, net of cash acquired (14,798) (11,372)
Additions to capitalized software and other intangibles (1,075) (99)
Net cash used in investing activities (18,975) (13,657)
     
Cash flow from financing activities:    
Repayment of debt  (87,833) (81,597)
Proceeds from common stock issuance, net 51,971 134,611
Proceeds from exercise of stock options 6,190 5,396
Purchase of common stock for treasury -- (1,169)
Income tax benefit related to exercise of stock options 4,884 3,583
Net cash (used in) provided by financing activities (24,788) 60,824
     
Effect of exchange rate changes on cash and cash equivalents 508 (770)
     
Net (decrease) increase in cash and cash equivalents (2,201) 69,831
Cash and cash equivalents, beginning of period 84,843 19,055
Cash and cash equivalents, end of period $82,642 $88,886
     
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
June 30,
Six Months Ended
June 30,
 (in thousands)2011201020112010
Revenue $91,803 $81,618 $180,810 $159,792
Purchase accounting adjustments to deferred revenue 7 62 14 142
Adjusted revenue $91,810 $81,680 $180,824 $159,934

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
June 30,
Six Months Ended
June 30,
 (in thousands)2011201020112010
Operating income  $22,895 $19,789 $46,002 $39,210
Amortization of intangible assets 9,161 8,734 18,113 17,408
Stock-based compensation 3,638 3,882 5,435 5,232
Capital-based taxes 2 228 154 454
Unusual or non-recurring charges 242 (153) 490 83
Purchase accounting adjustments (102) (60) (204) (37)
Other -- (45) (30) 161
Adjusted operating income $35,836 $32,375 $69,960 $62,511

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 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
June 30,
Six Months Ended
June 30,
Twelve Months Ended
June 30,
(in thousands)20112010201120102011
Net income $13,028 $4,362 $22,862 $13,383 $41,892
Interest expense, net 3,474 13,538 11,482 22,555 24,819
Taxes 6,512 2,004 11,490 3,272 20,252
Depreciation and amortization 10,612 10,184 20,990 20,297 41,421
EBITDA 33,626 30,088 66,824 59,507 128,384
Stock-based compensation 3,638 3,882 5,435 5,232 13,457
Capital-based taxes 2 228 154 454 791
Acquired EBITDA and cost savings --  -- 443 192 2,856
Unusual or non-recurring charges 123 (267) 659 84 250
Purchase accounting adjustments (102) (60) (204) (37) (405)
Other 116 (45) 86 161 (36)
Consolidated EBITDA 37,403 33,826 73,397 65,593 145,297
Less: acquired EBITDA -- -- (443) (192) (2,856)
Adjusted Consolidated EBITDA $37,403 $33,826 $72,954 $65,401 $142,441

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
June 30,
Six Months Ended
June 30,
(in thousands, except per share data)2011201020112010
GAAP — Net income $13,028 $4,362 $22,862 $13,383
Plus: Amortization of intangible assets 9,161 8,734 18,113 17,408
Plus: Amortization of deferred financing costs 416 554 886 1,138
Plus: Stock-based compensation 3,638 3,882 5,435 5,232
Plus: Capital-based taxes 2 228 154 454
Plus: Unusual and non-recurring items 123 (267) 659 84
Plus: Loss on extinguishment of debt -- 5,480 2,881 5,480
Plus: Purchase accounting adjustments (102) (60) (204) (37)
Plus: Other -- (45) (30) 161
Income tax effect (1) (4,960) (6,701) (10,296) (13,029)
Adjusted net income $21,306 $16,167 $40,460 $30,274
         
Adjusted diluted earnings per share $0.26 $0.22 $0.51 $0.44
         
GAAP diluted earnings per share $0.16 $0.06 $0.29 $0.19
         
Diluted weighted-average shares outstanding  80,800 74,538 79,756 69,424
         
(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.
CONTACT: Patrick Pedonti

         Chief Financial Officer

         Tel: +1-860-298-4738

         E-mail: investorrelations@sscinc.com