Delaware
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1-11869
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13-3362547
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(State or other jurisdiction of
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(Commission
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(I.R.S. Employer
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incorporation or organization)
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File Number)
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Identification Number)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Exhibit No.
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Description
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99.1
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Press Release of FactSet Research Systems Inc., dated June 12, 2012
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FACTSET RESEARCH SYSTEMS INC.
(Registrant)
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Date: June 12, 2012
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By:
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/s/ Maurizio Nicolelli
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Maurizio Nicolelli
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Senior Vice President and Director of Finance
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(Principal Financial Officer)
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Exhibit No.
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Description of Document
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99.1
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Press Release of Registrant, dated June 12, 2012 reporting the results of operations for the Registrant’s third fiscal quarter ended May 31, 2012.
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ASV grew to $811 million, up 9%
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Revenues rose 10% to $202 million
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Diluted EPS grew 14% to $1.05
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Quarterly free cash flow was $70 million, an increase of 23%
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(Condensed and Unaudited)
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Three Months Ended
May 31,
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Nine Months Ended
May 31,
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||||||||||||||||||||||
(In thousands, except per share data)
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2012
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2011
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Change
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2012
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2011
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Change
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Revenues
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$ | 202,311 | $ | 183,647 | 10.2 | % | $ | 598,130 | $ | 534,571 | 11.9 | % | ||||||||||||
Operating income
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68,494 | 61,823 | 10.8 | % | 202,363 | 179,345 | 12.8 | % | ||||||||||||||||
Provision for income taxes
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20,997 | 18,684 | 12.4 | % | 63,349 | 49,608 | 27.7 | % | ||||||||||||||||
Net income
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$ | 47,980 | $ | 43,311 | 10.8 | % | $ | 140,270 | $ | 130,166 | 7.8 | % | ||||||||||||
Diluted earnings per share
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$ | 1.05 | $ | 0.92 | 14.1 | % | $ | 3.05 | $ | 2.75 | 10.9 | % | ||||||||||||
Diluted weighted average shares
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45,736 | 47,154 | 45,971 | 47,418 | ||||||||||||||||||||
Non-GAAP net income
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$ | 52,823 | $ | 48,248 | 9.5 | % | ||||||||||||||||||
Non-GAAP diluted earnings per share
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$ | 1.15 | $ | 1.02 | 12.7 | % |
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·
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ASV from U.S. operations was $549 million and $262 million was related to international operations.
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U.S. revenues were $138.2 million, up 10% from the year ago quarter.
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Non-U.S. revenues also rose 11% to $64.1 million as compared to the same period in fiscal 2011.
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Operating margins were 33.9% for the quarter, up from 33.7% a year ago.
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Free cash flow generated over the last twelve months was $222 million, up 25% compared to the same period a year ago. Quarterly free cash flow was $70.2 million, up from $57.1 million a year ago.
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Cash and investments were $242 million at May 31, 2012.
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Accounts receivable decreased $1.0 million over the last twelve months while ASV is up $70 million over the same period, reflecting an improvement in DSO from 33 to 30 days.
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The effective tax rate was 30.4% as compared to 30.1% a year ago.
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The U.S. Federal R&D tax credit expired on December 31, 2011. The expiration increased the annual effective tax rate by 1.3% and reduced third quarter diluted EPS by $0.02.
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Client count was 2,335 at May 31, a net increase of 11 clients during the quarter.
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Annual client retention was greater than 95% of ASV, consistent with last year. As a percentage of clients, the annual retention rate remained at 92% at May 31, consistent with the year ago quarter.
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Employee count was 5,455 at May 31, up 14% from last year.
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Capital expenditures were $6.2 million.
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The regular quarterly dividend increased 15% from $0.27 to $0.31 per share, beginning with the Company’s dividend payment on June 19, 2012.
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On May 8, 2012, the Board of Directors approved a $200 million expansion to the existing share repurchase program. The Company repurchased 276,000 shares for $27.3 million during the third quarter. At May 31, 2012, $256 million remains authorized for future repurchases.
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Common shares outstanding were 44.8 million at May 31, 2012.
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The Wall Street Journal released its results of the annual Best on the Street Analysts Survey on May 10, 2012, which marked FactSet’s fourth consecutive year as the data provider.
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On June 4, 2012, FactSet announced the integration of bank loan data from Markit to enhance its Fixed Income Portfolio Analysis service. Under the agreement, FactSet will carry Markit's terms and conditions data on bank loans as well as loan market performance data from both of Markit's iBoxx USD Leveraged Loan's Indexes.
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FactSet held its U.S. and European symposiums during the third quarter of fiscal 2012, with over 320 industry professionals in attendance from around the world, including 270 FactSet clients.
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Revenues are expected to range between $204 million and $208 million.
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Operating margin is expected to range between 33.5% and 34.0%.
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The effective tax rate is expected to range between 31.0% and 32.0%.
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GAAP diluted EPS should range between $1.06 and $1.08.
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Non-GAAP diluted EPS should range between $1.15 and $1.17.
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Both GAAP diluted EPS and non-GAAP diluted EPS include a $0.02 reduction to reflect the expiration of the U.S. Federal R&D tax credit on December 31, 2011.
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FactSet Research Systems Inc. | ||||||||||||||||
Consolidated Statements of Income - Unaudited |
Three Months Ended
May 31,
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Nine Months Ended
May 31,
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(In thousands, except per share data)
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2012
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2011
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2012
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2011
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Revenues
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$ | 202,311 | $ | 183,647 | $ | 598,130 | $ | 534,571 | ||||||||
Operating expenses
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Cost of services
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68,878 | 62,224 | 203,243 | 179,146 | ||||||||||||
Selling, general and administrative
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64,939 | 59,600 | 192,524 | 176,080 | ||||||||||||
Total operating expenses
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133,817 | 121,824 | 395,767 | 355,226 | ||||||||||||
Operating income
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68,494 | 61,823 | 202,363 | 179,345 | ||||||||||||
Other income
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483 | 172 | 1,256 | 429 | ||||||||||||
Income before income taxes
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68,977 | 61,995 | 203,619 | 179,774 | ||||||||||||
Provision for income taxes
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20,997 | 18,684 | 63,349 | 49,608 | ||||||||||||
Net income
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$ | 47,980 | $ | 43,311 | $ | 140,270 | $ | 130,166 | ||||||||
Diluted earnings per common share
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$ | 1.05 | $ | 0.92 | $ | 3.05 | $ | 2.75 | ||||||||
Diluted weighted average common shares
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45,736 | 47,154 | 45,971 | 47,418 |
May 31,
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August 31,
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(In thousands)
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2012
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2011
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ASSETS
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Cash and cash equivalents
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$ | 228,530 | $ | 181,685 | ||||
Investments
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13,566 | - | ||||||
Accounts receivable, net of reserves
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66,568 | 75,004 | ||||||
Prepaid taxes
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2,792 | - | ||||||
Deferred taxes
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3,803 | 4,008 | ||||||
Prepaid expenses and other current assets
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13,436 | 12,473 | ||||||
Total current assets
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328,695 | 273,170 | ||||||
Property, equipment, and leasehold improvements, net
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77,173 | 81,620 | ||||||
Goodwill
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221,757 | 228,265 | ||||||
Intangible assets, net
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38,298 | 46,310 | ||||||
Deferred taxes
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22,344 | 20,166 | ||||||
Other assets
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6,252 | 7,909 | ||||||
TOTAL ASSETS
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$ | 694,519 | $ | 657,440 | ||||
LIABILITIES
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Accounts payable and accrued expenses
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$ | 28,416 | $ | 24,603 | ||||
Accrued compensation
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33,980 | 41,536 | ||||||
Deferred fees
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29,901 | 28,252 | ||||||
Taxes payable
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- | 2,867 | ||||||
Dividends payable
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13,893 | 12,165 | ||||||
Total current liabilities
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106,190 | 109,423 | ||||||
Deferred taxes
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2,536 | 3,712 | ||||||
Taxes payable
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5,249 | 7,204 | ||||||
Deferred rent and other non-current liabilities
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20,158 | 21,913 | ||||||
TOTAL LIABILITIES
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$ | 134,133 | $ | 142,252 | ||||
STOCKHOLDERS’ EQUITY
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Common stock
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$ | 455 | $ | 614 | ||||
Additional paid-in capital
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125,723 | 432,538 | ||||||
Treasury stock, at cost
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(60,559 | ) | (824,382 | ) | ||||
Retained earnings
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524,903 | 912,078 | ||||||
Accumulated other comprehensive loss
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(30,136 | ) | (5,660 | ) | ||||
TOTAL STOCKHOLDERS’ EQUITY
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560,386 | 515,188 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$ | 694,519 | $ | 657,440 |
(In thousands)
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Nine Months Ended
May 31,
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2012
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2011
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CASH FLOWS FROM OPERATING ACTIVITIES
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Net income
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$ | 140,270 | $ | 130,166 | ||||
Adjustments to reconcile net income to net cash provided by operating activities
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Depreciation and amortization
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25,046 | 27,950 | ||||||
Stock-based compensation expense
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17,074 | 15,352 | ||||||
Deferred income taxes
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(3,149 | ) | (483 | ) | ||||
Gain on sale of assets
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(1 | ) | (3 | ) | ||||
Tax benefits from share-based payment arrangements
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(10,441 | ) | (17,073 | ) | ||||
Changes in assets and liabilities
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Accounts receivable, net of reserves
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8,331 | (7,844 | ) | |||||
Accounts payable and accrued expenses
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939 | (1,511 | ) | |||||
Accrued compensation
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(6,587 | ) | (17,179 | ) | ||||
Deferred fees
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1,680 | 4,987 | ||||||
Taxes payable, net of prepaid taxes
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3,093 | 8,919 | ||||||
Prepaid expenses and other assets
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439 | (5,150 | ) | |||||
Deferred rent and other non-current liabilities
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(1,180 | ) | (166 | ) | ||||
Other working capital accounts, net
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(618 | ) | (969 | ) | ||||
Net cash provided by operating activities
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174,896 | 136,996 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchases of investments | (15,000 | ) | - | |||||
Purchases of property, equipment and leasehold improvements, net of proceeds from dispositions
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(16,863 | ) | (22,806 | ) | ||||
Net cash used in investing activities
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(31,863 | ) | (22,806 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
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Dividend payments
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(36,183 | ) | (31,655 | ) | ||||
Repurchase of common stock
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(87,112 | ) | (132,951 | ) | ||||
Proceeds from employee stock plans
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27,476 | 37,936 | ||||||
Tax benefits from share-based payment arrangements
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10,441 | 17,073 | ||||||
Net cash used in financing activities
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(85,378 | ) | (109,597 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents
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(10,810 | ) | 8,334 | |||||
Net increase in cash and cash equivalents
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46,845 | 12,927 | ||||||
Cash and cash equivalents at beginning of period
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181,685 | 195,741 | ||||||
Cash and cash equivalents at end of period
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$ | 228,530 | $ | 208,668 |
(Unaudited)
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Three Months Ended
May 31,
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(In thousands, except per share data)
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2012
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2011
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Change
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GAAP Net income
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$ | 47,980 | $ | 43,311 | ||||||||
Stock-based compensation, net of tax (a)
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3,584 | 3,475 | ||||||||||
Amortization of intangible assets from acquisitions, net of tax (a)
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1,259 | 1,462 | ||||||||||
Non-GAAP net income
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$ | 52,823 | $ | 48,248 | 9.5 | % | ||||||
GAAP Diluted earnings per common share
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$ | 1.05 | $ | 0.92 | ||||||||
Stock-based compensation, net of tax
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0.08 | 0.07 | ||||||||||
Amortization of intangible assets from acquisitions, net of tax
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0.03 | 0.03 | ||||||||||
Non-GAAP diluted earnings per share (b)
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$ | 1.15 | $ | 1.02 | 12.7 | % | ||||||
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(a)
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For the purposes of calculating the non-GAAP measures above, stock-based compensation expense and amortization of intangible assets are taxed at the effective tax rates. For the three months ended May 31, 2012, the effective tax rate was 30.4%. For the three months ended May 31, 2011, the effective tax rate was 30.1%.
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(b)
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The sum of the diluted earnings per share may not equal the totals above due to rounding.
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