SS&C Technologies Holdings, Inc.

SS&C Technologies Record Fourth Quarter and 2011 Results, 2011 Operating Cash Flow of $110 million, up 46.1%

GAAP Diluted EPS of $0.16, up 33%, Adjusted Diluted EPS of $0.29, up 21%

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:

GuidanceQ1 2012FY 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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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 Operations
(in thousands, except per share data)
         
 Three Months EndedYear Ended
  December 31,December 31,December 31,December 31,
 2011201020112010
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,
 20112010
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,
 20112010
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)2011201020112010
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)2011201020112010
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)2011201020112010
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)2011201020112010
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.
CONTACT: Patrick Pedonti

         Chief Financial Officer

         Tel: +1-860-298-4738

         E-mail: investorrelations@sscinc.com