EX-99.1 2 d873022dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

Q4 GAAP Diluted Earnings per Share of $0.42 up 35.5%, Adjusted Diluted Earnings Per Share of $0.62, up 17.0%

WINDSOR, CT, February 12, 2015 (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, 2014.

Financial Highlights:

 

    Fourth quarter GAAP net income of $36.6 million up 36.2 percent, and GAAP diluted EPS of $0.42 up 35.5 percent

 

    Adjusted diluted EPS (defined in Note 4) increased 17.0 percent to $0.62 in the fourth quarter 2014. For full year 2014, adjusted diluted EPS increased 19.8 percent to $2.36

 

    Adjusted revenue (defined in Note 1) increased to $201.2 million in the fourth quarter 2014 and to $768.4 million for the full year 2014, up 7.8 percent

 

    Net cash from operating activities was $252.5 million for year ended December 31, 2014, an increase of 21.2 percent

 

    SS&C completed its acquisition of DST Global Solutions, including their HiPortfolio and Anova products, for $95 million

“We have just completed our 5th year as a public company. I am happy to report our 5th year of record adjusted revenue and adjusted diluted EPS,” said Bill Stone, Chairman and CEO of SS&C Technologies. “We have expanded our range of products and services, won big mandates, and focused on delighting our customers. SS&C has reached over 300 Regulatory Solution’s customers in its two-year lifespan, and has a newly formed REIT Servicing group where we have six of the leading mortgage REITs. In December 2014, we announced the acquisition of DST Global Solutions, which includes industry-leading products HiPortfolio and Anova, and just last week, we announced our plan to acquire Advent Software. 2014 was an exceptional year. We look forward to 2015 as a period of intense customer focus.”

GAAP Results

SS&C reported GAAP revenue of $200.7 million for the fourth quarter of 2014, up 10.0 percent compared to $182.5 million in the fourth quarter of 2013. Revenue for the year ended December 31, 2014 was $767.9 million, up 7.7 percent over $712.7 million in 2013. GAAP operating income for the fourth quarter of 2014 was $53.6 million, up 12.1 percent from $47.8 million in 2013’s fourth quarter. GAAP operating income for the year ended December 31, 2014 was $200.4 million, up 9.5 percent from $183.0 million for 2013. On a fully diluted GAAP basis, earnings per share in the fourth quarter of 2014 was $0.42 compared to fully diluted GAAP earnings per share of $0.31 in the fourth quarter of 2013, an increase of 35.5 percent. On a fully diluted basis, GAAP earnings per share for the year ended December 31, 2014, was $1.50, an 8.7 percent increase over 2013’s $1.38 per share.

Adjusted Non-GAAP Results (defined in Notes 1-4 below)

Adjusted revenue in the fourth quarter of 2014 was $201.2 million, up 10.3 percent compared to $182.5 million in the fourth quarter of 2013. Adjusted revenue for the year ended December 31, 2014 was $768.4 million, up 7.8 percent over $712.8 million for 2013. Adjusted operating income in the fourth quarter of 2014 was $80.2 million, or 39.9 percent of adjusted revenue. This represents an 11.1 percent increase compared to adjusted operating income of $72.2 million and 39.6 percent of adjusted revenue in the fourth quarter of 2013. Adjusted operating income for the year ended December 31, 2014 was $305.5 million, up 10.3 percent from adjusted operating income of $276.9 million in 2013.


Adjusted net income for the fourth quarter of 2014 was $54.7 million, up 18.9 percent compared to $46.0 million in 2013’s fourth quarter. Adjusted net income for the year ended December 31, 2014 was $205.8 million, up 21.8% percent compared to $169.0 million for 2013. Adjusted diluted earnings per share in the fourth quarter of 2014 was $0.62 per share, up 17.0 percent compared to $0.53 per share in the fourth quarter of 2013. Adjusted diluted earnings per share for the year ended December 31, 2014 was $2.36, up 19.8 percent compared to $1.97 for 2013.

Annual Run Rate Basis

Annual Run Rate Basis (ARRB) recurring revenue, defined as the sum of maintenance and software-enabled services revenue on an annualized basis, was $724.4 million based on maintenance and software-enabled services revenue of $181.1 million for the fourth quarter of 2014. This represents an increase of 8.8 percent from $166.5 million and $665.8 million run-rate in the same period in 2013 and an increase of 3.6 percent from $174.9 million for the third quarter of 2014, an annual run rate of $699.5 million. We believe ARRB of our recurring revenue is a good indicator of visibility into future revenue.

Operating Cash Flow

SS&C ended the year with $109.6 million in cash, and $645.0 million in gross debt for a net debt balance of $535.4 million. SS&C generated net cash from operating activities of $252.5 million for the year ended December 31, 2014, compared to $208.3 million for the same period in 2013, an increase of 21.2 percent.

SS&C Acquisition of DST Global Solutions

SS&C expanded its global offering of investment management software and services with the acquisition of DST Global Solutions in December 2014 for $95 million in cash. SS&C financed $75 million of the purchase price by drawing down on its line of credit. This marks SS&C’s 40th completed acquisition since inception, and adds industry leading platforms HiPorfolio and Anova to SS&C’s suite of investment management products. This acquisition adds over 150 clients across the globe, and 90 percent of all revenue is generated in EMEA and Asia Pacific.

Guidance

 

     Q1 2015    FY 2015

Adjusted Revenue ($M)

   $204.0 – $210.0    $852.0 – $872.0
  

 

  

 

Adjusted Net Income ($M)

$50.9 – $53.0 $229.0 – $240.0
  

 

  

 

Cash from Operating Activities ($M)

N/A $260.0 – $275.0
  

 

  

 

Capital Expenditures (% of revenue)

N/A 2.5% – 3.0%
  

 

  

 

Diluted Shares (M)

88.4 – 88.8 88.9 – 89.7
  

 

  

 

Effective Income Tax Rate (%)

28% 28%
  

 

  

 

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 Q4 and Full Year 2014 earnings call will take place at 5:00 p.m. eastern time today, February 12, 2015. The call will discuss Q4 and Full Year 2014 results and our guidance and business outlook. Interested parties may dial 877-312-8798 (US and Canada) or 253-237-1193 (International), and request the “SS&C Technologies Fourth Quarter and 2014 Earnings Conference Call”; conference ID# 74865368. A replay will be available after 8:00 p.m. eastern time on February 12, 2015, until midnight on February 18, 2015. The dial-in number is 855-859-2056 (US and Canada) or 404-537-3406 (International); access code # 74865368. The call will also be available for replay on SS&C’s website after February 12, 2015; access: http://investor.ssctech.com/results.cfm.

Certain information contained in this press release relating to, among other things, our financial guidance for the first quarter and full year of 2014 and our intention to repurchase shares of our common stock from time to time and the intended use of any repurchased shares, constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words “believes”, “anticipates”, “plans”, “expects”, “estimates”, “projects”, “forecasts”, “may” and “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. 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, exposure to litigation, the Company’s ability to integrate acquired businesses, the effect of the acquisitions on customer demand for the Company’s products and services, the market price of the Company’s stock prevailing from time to time, the Company’s cash flow from operations, general economic conditions, and those risks discussed in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K, which is on file with the Securities and Exchange Commission and can also be accessed on our website. 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. Some 6,900 financial services organizations, from the world’s largest institutions to local firms, manage and account for their investments using SS&C’s products and services. These clients in the aggregate manage over $26 trillion in assets.

Follow SS&C on Twitter, Linkedin and Facebook. The SS&C Technologies logo is available at

www.globenewswire.com/newsroom/prs/?pkgid=8587

For more information

Patrick Pedonti

Chief Financial Officer

Tel: +1-860-298-4738

E-mail: InvestorRelations@sscinc.com

Justine Stone

Investor Relations

Tel: +1-212-367-4705

E-mail: Justine.stone@sscinc.com


SS&C Technologies Holdings, Inc. and Subsidiaries

Condensed Consolidated Statements of Operation

(in thousands, except per share data)

 

     Three Months Ended     Year Ended  
     December 31,
2014
    December 31,
2013
    December 31,
2014
    December 31,
2013
 

Revenues:

        

Software-enabled services

   $ 152,313      $ 140,656      $ 592,528      $ 552,565   

Software licenses

     9,778        7,807        36,339        28,687   

Maintenance

     28,786        25,806        105,598        103,409   

Professional services

     9,854        8,253        33,396        28,041   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

  200,731      182,522      767,861      712,702   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues:

Software-enabled services

  85,916      81,872      342,625      322,719   

Software licenses

  1,152      1,394      3,701      5,302   

Maintenance

  11,256      10,093      41,254      41,046   

Professional services

  7,292      5,044      23,151      19,733   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

  105,616      98,403      410,731      388,800   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

  95,115      84,119      357,130      323,902   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

Selling and marketing

  12,910      11,009      48,592      41,885   

Research and development

  15,826      13,304      57,287      53,862   

General and administrative

  12,784      11,990      50,879      45,187   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

  41,520      36,303      156,758      140,934   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

  53,595      47,816      200,372      182,968   

Interest expense, net

  (5,734   (7,954   (25,472   (41,279

Other income, net

  1,967      1,092      2,754      3,498   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

  49,828      40,954      177,654      145,187   

Provision for income taxes

  13,221      14,073      46,527      27,292   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

$ 36,607    $ 26,881    $ 131,127    $ 117,895   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share

$ 0.44    $ 0.33    $ 1.57    $ 1.45   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic weighted average number of common shares outstanding

  83,869      82,428      83,314      81,195   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

$ 0.42    $ 0.31    $ 1.50    $ 1.38   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted weighted average number of common and common equivalent shares outstanding

  87,799      86,716      87,331      85,616   
  

 

 

   

 

 

   

 

 

   

 

 

 

See Notes to Condensed Consolidated Financial Information.


SS&C Technologies Holdings, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

 

     December 31,
2014
     December 31,
2013
 

ASSETS

  

  

Current assets:

     

Cash

   $ 109,577       $ 84,470   

Accounts receivable, net

     94,359         91,221   

Prepaid income taxes

     11,857         19,932   

Deferred income taxes

     2,975         6,526   

Prepaid expenses and other current assets

     14,927         16,567   

Restricted cash

     1,477         2,460   
  

 

 

    

 

 

 

Total current assets

  235,172      221,176   

Property and equipment, net

  54,277      51,697   

Deferred income taxes

  1,135      1,077   

Goodwill

  1,571,375      1,541,386   

Intangible and other assets, net

  423,911      459,988   
  

 

 

    

 

 

 

Total assets

$ 2,285,870    $ 2,275,324   
  

 

 

    

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current portion of long-term debt

$ 20,470    $ 23,212   

Accounts payable

  12,004      8,368   

Income taxes payable

  1,116      2,169   

Accrued employee compensation and benefits

  53,975      44,664   

Deferred taxes

  110      —     

Other accrued expenses

  30,666      26,028   

Deferred maintenance and other revenue

  73,254      62,561   
  

 

 

    

 

 

 

Total current liabilities

  191,595      167,002   

Long-term debt, net of current portion

  618,435      751,295   

Other long-term liabilities

  26,446      14,913   

Deferred income taxes

  102,724      110,406   
  

 

 

    

 

 

 

Total liabilities

  939,200      1,043,616   

Total stockholders’ equity

  1,346,670      1,231,708   
  

 

 

    

 

 

 

Total liabilities and stockholders’ equity

$ 2,285,870    $ 2,275,324   
  

 

 

    

 

 

 

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,
2014
    December 31,
2013
 

Cash flow from operating activities:

    

Net income

   $ 131,127      $ 117,895   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization

     99,831        99,780   

Stock-based compensation expense

     11,483        8,386   

Income tax benefit related to exercise of stock options

     (15,484     (24,194

Amortization and write-offs of loan origination costs

     5,839        5,830   

Loss on sale or disposition of property and equipment

     687        317   

Deferred income taxes

     (14,620     (11,069

Provision for doubtful accounts

     610        666   

Changes in operating assets and liabilities, excluding effects from acquisitions:

    

Accounts receivable

     3,902        814   

Prepaid expenses and other assets

     (5,382     (4,695

Accounts payable

     1,525        (4,032

Accrued expenses

     10,140        1,695   

Income taxes prepaid and payable

     21,560        18,060   

Deferred maintenance and other revenue

     1,284        (1,184
  

 

 

   

 

 

 

Net cash provided by operating activities

  252,502      208,269   
  

 

 

   

 

 

 

Cash flow from investing activities:

Additions to property and equipment

  (15,040   (11,921

Proceeds from sale of property and equipment

  42      67   

Cash paid for business acquisitions, net of cash acquired

  (86,911   (3,657

Additions to capitalized software

  (3,517   (2,399

Net changes in restricted cash

  983      —     
  

 

 

   

 

 

 

Net cash used in investing activities

  (104,443   (17,910
  

 

 

   

 

 

 

Cash flow from financing activities:

Cash received from debt borrowings, net of loan origination costs

  75,000      —     

Repayments of debt

  (212,000   (239,000

Proceeds from exercise of stock options

  24,110      27,817   

Income tax benefit related to exercise of stock options

  15,484      24,194   

Payment of fees related to refinancing activities

  (512   (1,917

Payment of contingent consideration

  (500   —     

Purchase of common stock for treasury

  (11,223   (943

Common stock dividends

  (10,494   —     
  

 

 

   

 

 

 

Net cash used in financing activities

  (120,135   (189,849
  

 

 

   

 

 

 

Effect of exchange rate changes on cash

  (2,817   (2,200
  

 

 

   

 

 

 

Net increase (decrease) in cash

  25,107      (1,690

Cash, beginning of period

  84,470      86,160   
  

 

 

   

 

 

 

Cash, end of period

$ 109,577    $ 84,470   
  

 

 

   

 

 

 

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)    2014      2013      2014      2013  

Revenue

   $ 200,731       $ 182,522       $ 767,861       $ 712,702   

Purchase accounting adjustments to deferred revenue

     503         —           503         136   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted revenue

$ 201,234    $ 182,522    $ 768,364    $ 712,838   
  

 

 

    

 

 

    

 

 

    

 

 

 

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)    2014      2013      2014      2013  

Operating income

   $ 53,595       $ 47,816       $ 200,372       $ 182,968   

Amortization of intangible assets

     21,557         21,597         85,486         85,036   

Stock-based compensation

     2,929         2,376         11,483         8,386   

Capital-based taxes

     —           182         6         182   

Unusual or non-recurring charges

     1,611         286         7,630         377   

Purchase accounting adjustments

     503         (46      476         (52
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted operating income

$ 80,195    $ 72,211    $ 305,453    $ 276,897   
  

 

 

    

 

 

    

 

 

    

 

 

 

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 March 2012, 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 as indicators of our operating performance. The following is a reconciliation of EBITDA, consolidated EBITDA and adjusted consolidated EBITDA to net income.


     Three Months Ended
December 31,
     Year Ended
December 31,
 
(in thousands)    2014      2013      2014      2013  

Net income

   $ 36,607       $ 26,881       $ 131,127       $ 117,895   

Interest expense, net

     5,734         7,954         25,472         41,279   

Taxes

     13,221         14,073         46,527         27,292   

Depreciation and amortization

     25,338         25,339         99,831         99,780   
  

 

 

    

 

 

    

 

 

    

 

 

 

EBITDA

  80,900      74,247      302,957      286,246   

Stock-based compensation

  2,929      2,376      11,483      8,386   

Capital-based taxes

  —        182      6      182   

Acquired EBITDA and cost savings

  1,835      —        5,467      890   

Unusual or non-recurring charges

  (355   (806   4,876      (3,121

Purchase accounting adjustments

  503      (46   476      (52

Other

  114      56      315      235   
  

 

 

    

 

 

    

 

 

    

 

 

 

Consolidated EBITDA

  85,926      76,009      325,580      292,766   

Less: acquired EBITDA

  (1,835   —        (5,467   (890
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted Consolidated EBITDA

$ 84,091    $ 76,009    $ 320,113    $ 291,876   
  

 

 

    

 

 

    

 

 

    

 

 

 

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)    2014      2013      2014      2013  

GAAP – Net income

   $ 36,607       $ 26,881       $ 131,127       $ 117,895   

Plus: Amortization of intangible assets

     21,557         21,597         85,486         85,036   

Plus: Amortization of deferred financing costs and original issue discount

     1,442         1,422         5,839         5,830   

Plus: Stock-based compensation

     2,929         2,376         11,483         8,386   

Plus: Capital-based taxes

     —           182         6         182   

Plus: Unusual and non-recurring items

     (355      (806      4,876         (3,121

Plus: Purchase accounting adjustments

     503         (46      476         (52

Income tax effect (1)

     (8,032      (5,631      (33,501      (45,142
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted net income

$ 54,651    $ 45,975    $ 205,792    $ 169,014   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted diluted earnings per share

$ 0.62    $ 0.53    $ 2.36    $ 1.97   

GAAP diluted earnings per share

$ 0.42    $ 0.31    $ 1.50    $ 1.38   

Diluted weighted-average shares outstanding

  87,799      86,716      87,331      85,616   

 

(1) An estimated normalized effective tax rate of 28% has been used to adjust the provision for income taxes for the purpose of computing adjusted net income.