EX-99.1 2 b75461ssexv99w1.htm EX-99.1 PRESS RELEASE, ISSUED BY THE COMPANY ON MAY 12, 2009 exv99w1
Exhibit 99.1
(SS&C LOGO)
For Immediate Release
Contact:
Patrick Pedonti
Chief Financial Officer
Tel: +1-860-298-4738
E-mail: investorrelations@sscinc.com
SS&C Technologies Announces Results for Q1 2009
WINDSOR, CT — May 12,2009 — SS&C Technologies, Inc.(www.ssctech.com), a global provider of financial services software and software-enabled services, today announced results for the quarter ended March 31, 2009. Revenue on a GAAP basis for the first quarter of 2009 was $63.7 million. This is a decrease of $4.8 million from revenues over the same period in 2008, with $4.2 million of the decline resulting from the negative impact of foreign exchange. Net income, on a GAAP basis, for the first quarter of 2009, was $3.9 million, an increase of 4% over the same period in 2008.
Adjusted operating income (a non-GAAP financial measure defined in note 1 to the attached Consolidated Condensed Financial Information) was $23.1 million for the three months ended March 31, 2009, compared to $24.6 million in the first quarter of the prior year, a decrease of 6%. GAAP operating income in the first quarter of 2009 was $14.5 million and includes amortization of $7.4 million and stock-based compensation of $1.3 million, compared to $15.8 million of operating income for the same period in 2008, a decrease of 9%. Consolidated EBITDA (a non-GAAP financial measure defined in note 2 of the Consolidated Condensed Financial Information) for the first quarter of 2009 was $25.2 million, compared to $26.8 million in the first quarter of 2008, a decrease of 6%.
Revenues/Operating Income
“SS&C continues to perform in very difficult markets. Many of our largest customers have reduced capital spending and cut back on information technology projects. The assets under management of many of our fund administration clients have shrunk as markets declined and our clients deleveraged. Given this backdrop, a 6% decline in consolidated EBITDA is an excellent result. Our EBITDA margin has remained strong at 39.6% and our decision to reduce our workforce by 9% on November 1, 2008, appears prescient,” said Bill Stone, Chairman and CEO, SS&C Technologies. “While revenue has declined for three straight quarters, we are optimistic this trend will change in Q2. We continue to garner new clients and we are being selected by large, sophisticated organizations for our independence, financial strength and the quality of our service and software offerings.”

 

 

Acquisition
“During the first quarter, we acquired the assets and business of Evare, LLC, a Burlington, Massachusetts-based provider for financial data acquisition, transformation and delivery. Financial institutions spend a considerable amount of time each day in gathering disparate data in disparate formats to conduct reconciliations and communicate with various counterparties and customers. Evare’s high powered service and deep understanding of the complexities of these processes offer a broad range of financial service participants considerable operational cost savings,” noted Stone. “Our clients have responded well to this deal and we are working diligently on integrating Securities Valuation Corporation data as well our SSCNet and Recon product to the Evare offerings.”
Balance Sheet and Cash Flow
SS&C ended the quarter with $35.5 million in cash and cash equivalents, and $407.5 million in debt for a net debt balance of $372.0 million. We generated net cash from operating activities of $11.0 million for the three months ended March 31, 2009, compared to $19.4 million for the same period in 2008. This decrease is related in part to an increase in tax payments of $4.3 million. Income taxes paid in the quarter were $7.4 million compared with $3.1 million in same period in 2008. Other items affecting operating cash flow included an increase in accounts receivable DSO and the effect of increased bonus payments in Q1 2009 compared with Q1 2008.
“Our consolidated total leverage, as defined in our senior credit facilities, is now 3.3 times consolidated EBITDA compared to 6.8 times when we went private,” said Stone. “We plan to use cash to acquire new businesses and we are seeing many opportunities to buy great businesses at prices unseen over the past few years. We are very diligent and conservative in evaluating new opportunities and we believe this strategy has delivered excellent financial results, during good times and bad.”
Earnings Call
SS&C’s Q1 2009 earnings call will take place at 11:00 a.m. eastern time on May 13, 2009. The call will discuss Q1 2009 results. Interested parties may dial 877-680-2259 (US and Canada) or 706-679-6413 (International) and request the “SS&C First Quarter 2009 Earnings Call”, conference ID # 99528797. A replay will be available after 1:00 p.m. eastern time on May 13th, until midnight on May 20th, 2009. The dial-in number is 800-642-1687 (US and Canada) 706-645-9291 (International); access code # 99528797.
This press release contains forward-looking statements relating to, among other things, our expected revenue trend for Q2 2009 and our plans to acquire new businesses. 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 filings with the Securities and Exchange Commission, including without limitation, the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. The Company cautions investors that it may not update any or all of the foregoing forward-looking statements.
About SS&C Technologies
SS&C delivers investment and financial management services and software focused exclusively on the financial services industry. By leveraging expertise in common investment business functions, SS&C cost effectively serves clients in the different industry segments, including: 1) insurance entities and pension funds, 2) institutional asset management, 3) hedge funds and family offices, 4) treasury, banks and credit unions 5) municipal finance, 6) real estate property management, 7) commercial lending and 8) financial markets. Additional information is available at www.ssctech.com.

 

 

SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
(unaudited)
                 
    Three Months   Three Months
    Ended   Ended
    March 31, 2009   March 31, 2008
Revenues:
                
Software licenses
   $ 5,820     $ 6,655  
Maintenance
     15,540       16,357  
Professional services
     5,196       5,268  
Software-enabled services
     37,166       40,243  
     
Total revenues
     63,722       68,523  
     
 
                
Cost of revenues:
                
Software licenses
     2,048       2,299  
Maintenance
     6,474       6,616  
Professional services
     3,977       3,560  
Software-enabled services
     20,573       22,448  
     
Total cost of revenues
     33,072       34,923  
     
 
                
Gross profit
     30,650       33,600  
     
 
                
Operating expenses:
                
Selling and marketing
     5,228       4,995  
Research and development
     5,867       6,964  
General and administrative
     5,082       5,819  
     
Total operating expenses
     16,177       17,778  
     
 
                
Operating income
     14,473       15,822  
 
                
Interest expense, net
     (9,350 )     (10,428 )
Other income, net
     557       225  
     
 
                
Income before income taxes
     5,680       5,619  
Provision for income taxes
     1,782       1,883  
     
 
                
Net income
   $ 3,898     $ 3,736  
     
See Notes to Consolidated Condensed Financial Information.

 

 

SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
(unaudited)
                 
    March 31,   December 31,
    2009   2008
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 35,537     $ 29,299  
Accounts receivable, net
     42,750       38,318  
Deferred income taxes
     233       3,777  
Prepaid expenses and other current assets
     4,823       4,327  
     
Total current assets
     83,343       75,721  
 
                
Property and equipment, net
     13,501       14,030  
 
                
Goodwill
     816,036       822,409  
Intangible and other assets, net
     207,406       215,193  
     
 
                
Total assets
   $ 1,120,286     $ 1,127,353  
     
 
                
LIABILITIES AND STOCKHOLDER’S EQUITY
                
Current liabilities:
                
Current portion of long-term debt
   $ 2,252     $ 2,101  
Accounts payable
     1,882       1,821  
Income taxes payable
     956       4,898  
Accrued employee compensation and benefits
     3,872       13,640  
Other accrued expenses
     10,920       11,561  
Interest payable
     8,868       2,007  
Deferred maintenance and other revenue
     40,326       30,844  
     
Total current liabilities
     69,076       66,872  
 
                
Long-term debt, net of current portion
     405,248       406,625  
Other long-term liabilities
     9,587       9,991  
Deferred income taxes
     50,832       56,612  
     
Total liabilities
     534,743       540,100  
 
                
Total stockholder’s equity
     585,543       587,253  
     
 
                
Total liabilities and stockholder’s equity
   $ 1,120,286     $ 1,127,353  
     
See Notes to Consolidated Condensed Financial Information.

 

 

SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
                 
    Three Months   Three Months
    Ended   Ended
    March 31, 2009   March 31, 2008
Cash flow from operating activities:
                
Net income
   $ 3,898     $ 3,736  
Adjustments to reconcile net income to net cash provided by operating activities:
                
Depreciation and amortization
     8,573       8,998  
Stock compensation expense
     1,269       1,289  
Amortization of loan origination costs
     570       587  
Equity losses in long-term investment
     —       39  
Loss on sale or disposition of property and equipment
     2       1  
Deferred income taxes
     (2,089 )     (485 )
Provision for doubtful accounts
     349       250  
Changes in operating assets and liabilities, excluding effects from acquisitions:
                
Accounts receivable
     (4,223 )     (2,992 )
Prepaid expenses and other assets
     208       (654 )
Accounts payable
     45       635  
Accrued expenses
     (3,369 )     (2,429 )
Income taxes payable
     (3,869 )     (330 )
Deferred maintenance and other revenue
     9,668       10,747  
     
Net cash provided by operating activities
     11,032       19,392  
     
 
                
Cash flow from investing activities:
                
Additions to property and equipment
     (102 )     (2,906 )
Cash paid for business acquisitions, net of cash acquired
     (3,550 )     —  
     
Net cash used in investing activities
     (3,652 )     (2,906 )
     
 
                
Cash flow from financing activities:
                
Repayment of debt and acquired debt
     (531 )     (10,580 )
Transactions involving SS&C Technologies Holdings, Inc. common stock
     (123 )     131  
     
Net cash used in financing activities
     (654 )     (10,449 )
     
 
                
Effect of exchange rate changes on cash
     (488 )     375  
     
 
                
Net increase in cash and cash equivalents
     6,238       6,412  
Cash and cash equivalents, beginning of period
     29,299       19,175  
     
Cash and cash equivalents, end of period
   $ 35,537     $ 25,587  
     
See Notes to Consolidated Condensed Financial Information.

 

 

SS&C Technologies, Inc. and Subsidiaries
Notes to Consolidated Condensed Financial Information
Note 1. 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 generally accepted accounting principles (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 reconciliation between adjusted operating income and operating income, the GAAP measure we believe to be most directly comparable to adjusted operating income.
                 
    Three months     Three months  
    ended     ended  
(in thousands)   March 31, 2009     March 31, 2008  
Operating income
   $ 14,473     $ 15,822  
Purchase accounting adjustments
     (51 )     (79 )
Amortization of intangible assets
     7,422       7,569  
Stock-based compensation
     1,269       1,289  
 
            
Adjusted operating income
   $ 23,113     $ 24,601  
 
            
Note 2. Reconciliation of Net Income to EBITDA and 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. EBITDA and 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 and 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 and 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 reconciliation between EBITDA and Consolidated EBITDA and net income.
                         
    Three months     Three months     Twelve months  
    ended     ended     ended  
(in thousands)   March 31, 2009     March 31, 2008     March 31, 2009  
Net income
   $ 3,898     $ 3,736     $ 18,963  
Interest expense, net
     9,350       10,428       40,052  
Taxes
     1,782       1,883       7,045  
Depreciation and amortization
     8,573       8,998       34,613  
           
EBITDA
   $ 23,603     $ 25,045     $ 100,673  
Stock-based compensation
     1,269       1,289       7,303  
Capital-based taxes
     334       416       1,130  
Acquired EBITDA and cost savings
     221       —       2,015  
Unusual or non-recurring charges
     (472 )     (225 )     1,233  
Purchase accounting adjustments
     (51 )     (79 )     (261 )
Other
     345       393       1,298  
 
                  
Consolidated EBITDA
   $ 25,249     $ 26,839     $ 113,391