Current Report Filing (8-k)
08 May 2015 - 6:23AM
Edgar (US Regulatory)
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
May 7, 2015
Date of Report (date of earliest event reported)
ADVENT SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)
State of Delaware
(State or other jurisdiction of
incorporation or organization) |
|
0-26994
(Commission File Number) |
|
94-2901952
(I.R.S. Employer
Identification Number) |
600 Townsend Street
San Francisco, California 94103
(Address of principal executive offices)
(415) 543-7696
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Table of Contents
TABLE OF CONTENTS
ITEM 2.02 Results of Operations and Financial Condition
On May 7, 2015, the Company announced its results of operations for the first quarter of 2015. A copy of the Companys press release announcing such results dated May 7, 2015 is attached hereto as Exhibit 99.1. This Current Report on Form 8-K and the attached exhibits are furnished to, but not filed with, the U.S. Securities and Exchange Commission (SEC) and shall not be deemed to be incorporated by reference into any of the Companys filings with the SEC under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibits are furnished as part of this Current Report on Form 8-K:
Exhibit No. |
|
Exhibit Description |
99.1 |
|
Press release announcing results of operations dated May 7, 2015 |
99.2 |
|
First quarter 2015 earnings highlights dated May 7, 2015 |
2
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
ADVENT SOFTWARE, INC. |
|
|
|
|
|
By: |
/s/ James S. Cox |
|
|
James S. Cox |
|
|
Executive Vice President and |
|
|
Chief Financial Officer |
|
|
(Principal Financial and Accounting Officer) |
Dated: May 7, 2015
3
Table of Contents
EXHIBIT INDEX
Exhibit No. |
|
Exhibit Description |
99.1 |
|
Press release announcing results of operations dated May 7, 2015 |
99.2 |
|
First quarter 2015 earnings highlights dated May 7, 2015 |
4
Exhibit 99.1
ADVENT SOFTWARE REPORTS FIRST QUARTER
2015 RESULTS
Record Quarterly Revenues of $103 Million, up 7%
SAN FRANCISCO May 7, 2015 Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the global investment management industry, announced today its financial results for the first quarter ended March 31, 2015.
Advents business achieved record quarterly revenue in the first quarter, and we continued to deliver on our commitment to helping our clients thrive with new releases of our flagship products, said Pete Hess, Chief Executive Officer, Advent Software. We look forward to sharing our enhancements and updates at AdventConnect, our annual client conference, in Las Vegas next month.
FIRST QUARTER 2015 RESULTS
GAAP Results for Continuing Operations
The Company reported quarterly revenue of $103.3 million for the first quarter of 2015, compared to $96.8 million in the first quarter of 2014, a 7% increase.
Operating income for the first quarter of 2015 was $10.2 million, or 9.9% of revenue, compared to $19.3 million or 20.0% of revenue for the first quarter of 2014. Advents results for the first quarter of 2015 included transaction-related fees associated with the pending merger with SS&C Technologies Holdings, Inc. These third-party costs, on a pre-tax basis, totaled $8.4 million. Additionally, in the first quarter of 2015, Advents results included $2.6 million in restructuring charges related to personnel and facilities restructuring, and incremental expense of $1.6 million from accelerated depreciation not included in restructuring from the decision to shrink our real estate footprint during 2015.
Net income for the first quarter of 2015 was $5.1 million, compared to $10.9 million in the first quarter of 2014. On a fully diluted basis, earnings per share in the first quarter of 2015 were $0.09, compared to $0.20 in the first quarter of 2014. Net income and earnings per share were also negatively impacted by the additional transaction-related fees, restructuring costs and accelerated depreciation expense incurred in the first quarter of 2015.
Operating cash flow in the first quarter of 2015 was $6.6 million, compared with $20.9 million in the first quarter of 2014. The operating cash flow in the first quarter of 2015 was negatively impacted by the payment of transaction-related fees and by slower collections in February and March of 2015.
Cash, cash equivalents and marketable securities totaled $28 million as of March 31, 2015, compared to $38 million as of December 31, 2014. Total outstanding debt as of March 31, 2015 was $205 million compared to $220 million as of December 31, 2014.
Deferred revenue as of March 31, 2015 was $198 million, compared to $188 million as of March 31, 2014.
Non-GAAP Results for Continuing Operations
Non-GAAP operating income for the first quarter of 2015 was $29.7 million, or 28.8% of revenue. This represents a 2% increase compared to $29.2 million in the first quarter of 2014.
On a fully diluted basis, non-GAAP earnings per share were $0.34 in the first quarter of 2015 and represent a 4% increase from $0.33 in the first quarter of 2014.
Non-GAAP operating income and earnings per share in the first quarter of 2015 were negatively impacted by $1.6 million of accelerated depreciation.
The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.
ABOUT ADVENT
Over the last 30 years of industry change, our core mission to help our clients focus on their unique strategies and deliver exceptional investor service has never wavered. With unparalleled precision and ahead of the curve solutions, weve helped nearly 4,300 firms in more than 50 countries - from established global institutions to small start-up practices - to grow their business and thrive. Advent technology helps firms minimize risk, work together seamlessly, and discover new opportunities in a constantly evolving world. Together with our clients, we are shaping the future of investment management. For more information on Advent products visit http://www.advent.com.
ABOUT NON-GAAP FINANCIAL INFORMATION
This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), please see the accompanying tables entitled Reconciliation of Selected Continuing Operations GAAP Measures to Non-GAAP Measures.
FORWARD-LOOKING STATEMENTS
Any forward-looking statements included in this presentation, including comments regarding product releases, enhancements and updates reflect managements best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties including the pending acquisition of Advent by SS&C Technologies Holdings, Inc., potential fluctuations in new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our products; the successful development, release and market acceptance of new products and product enhancements; uncertainties and fluctuations in the financial markets; the Companys ability to declare future dividends; the Companys ability to satisfy contractual performance requirements and other risks detailed from time to time in our SEC reports including, but not limited to, our quarterly reports on Form 10-Q and our 2014 Annual Report on Form 10-K. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Advent, Advent Software, and the Advent and logo composite are registered trademarks of Advent Software, Inc.
CONTACTS
Media Contact:
Amanda Diamondstein-Cieplinska
Advent Software, Inc.
(415) 645-1668
adiamond@advent.com
Investor Relations Contact:
Justin Ritchie
Advent Software, Inc.
(415) 645-1683
jritchie@advent.com
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(GAAP, Unaudited)
|
|
March 31 |
|
December 31 |
|
|
|
2015 |
|
2014 |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
23,490 |
|
$ |
28,784 |
|
Short-term marketable securities |
|
4,296 |
|
7,298 |
|
Accounts receivable, net |
|
62,495 |
|
61,870 |
|
Deferred taxes, current |
|
31,777 |
|
28,275 |
|
Prepaid expenses and other |
|
29,673 |
|
24,984 |
|
Total current assets |
|
151,731 |
|
151,211 |
|
Property and equipment, net |
|
26,070 |
|
27,995 |
|
Goodwill |
|
198,554 |
|
202,290 |
|
Other intangibles, net |
|
16,736 |
|
18,803 |
|
Long-term marketable securities |
|
|
|
1,874 |
|
Deferred taxes, long-term |
|
18,178 |
|
18,358 |
|
Other assets |
|
12,464 |
|
13,245 |
|
Noncurrent assets of discontinued operation |
|
1,093 |
|
1,093 |
|
|
|
|
|
|
|
Total assets |
|
$ |
424,826 |
|
$ |
434,869 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS DEFICIT |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
11,397 |
|
$ |
12,041 |
|
Dividends payable |
|
|
|
6,750 |
|
Accrued liabilities |
|
37,548 |
|
36,541 |
|
Deferred revenues |
|
191,740 |
|
197,144 |
|
Income taxes payable |
|
1,233 |
|
132 |
|
Current portion of long-term debt |
|
20,000 |
|
20,000 |
|
Current liabilities of discontinued operation |
|
614 |
|
572 |
|
Total current liabilities |
|
262,532 |
|
273,180 |
|
Deferred revenues, long-term |
|
6,273 |
|
6,972 |
|
Long-term income taxes payable |
|
9,513 |
|
9,513 |
|
Long-term debt |
|
185,000 |
|
200,000 |
|
Other long-term liabilities |
|
9,555 |
|
7,821 |
|
Noncurrent liabilities of discontinued operation |
|
2,008 |
|
2,170 |
|
|
|
|
|
|
|
Total liabilities |
|
474,881 |
|
499,656 |
|
|
|
|
|
|
|
Stockholders deficit: |
|
|
|
|
|
Common stock |
|
527 |
|
519 |
|
Additional paid-in capital |
|
75,925 |
|
61,455 |
|
Accumulated deficit |
|
(125,186 |
) |
(130,234 |
) |
Accumulated other comprehensive (loss) income |
|
(1,321 |
) |
3,473 |
|
Total stockholders deficit |
|
(50,055 |
) |
(64,787 |
) |
|
|
|
|
|
|
Total liabilities and stockholders deficit |
|
$ |
424,826 |
|
$ |
434,869 |
|
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(GAAP, Unaudited)
|
|
Three Months Ended March 31 |
|
|
|
2015 |
|
2014 |
|
Net revenues: |
|
|
|
|
|
Recurring revenues |
|
$ |
96,174 |
|
$ |
89,129 |
|
Non-recurring revenues |
|
7,090 |
|
7,675 |
|
|
|
|
|
|
|
Total net revenues |
|
103,264 |
|
96,804 |
|
|
|
|
|
|
|
Cost of revenues (1): |
|
|
|
|
|
Recurring revenues |
|
21,501 |
|
18,627 |
|
Non-recurring revenues |
|
7,431 |
|
8,055 |
|
Amortization of developed technology |
|
1,570 |
|
1,800 |
|
|
|
|
|
|
|
Total cost of revenues |
|
30,502 |
|
28,482 |
|
|
|
|
|
|
|
Gross margin |
|
72,762 |
|
68,322 |
|
|
|
|
|
|
|
Operating expenses (1): |
|
|
|
|
|
Sales and marketing |
|
19,664 |
|
19,729 |
|
Product development |
|
19,557 |
|
17,639 |
|
General and administrative |
|
11,457 |
|
10,558 |
|
Amortization of other intangibles |
|
798 |
|
909 |
|
Transaction-related fees |
|
8,444 |
|
|
|
Restructuring charges |
|
2,643 |
|
174 |
|
|
|
|
|
|
|
Total operating expenses |
|
62,563 |
|
49,009 |
|
|
|
|
|
|
|
Income from continuing operations |
|
10,199 |
|
19,313 |
|
Interest and other income (expense), net |
|
(897 |
) |
(2,225 |
) |
|
|
|
|
|
|
Income from continuing operations before income taxes |
|
9,302 |
|
17,088 |
|
Provision for income taxes |
|
4,226 |
|
6,181 |
|
|
|
|
|
|
|
Net income from continuing operations |
|
$ |
5,076 |
|
$ |
10,907 |
|
|
|
|
|
|
|
Discontinued operation: |
|
|
|
|
|
Net loss from discontinued operation (net of applicable taxes of $(5) and $(14), respectively) |
|
(28 |
) |
(21 |
) |
|
|
|
|
|
|
Net income |
|
$ |
5,048 |
|
$ |
10,886 |
|
|
|
|
|
|
|
Basic net income (loss) per share (2): |
|
|
|
|
|
Continuing operations |
|
$ |
0.10 |
|
$ |
0.21 |
|
Discontinued operation |
|
(0.00 |
) |
(0.00 |
) |
Total operations |
|
$ |
0.10 |
|
$ |
0.21 |
|
|
|
|
|
|
|
Diluted net income (loss) per share (2): |
|
|
|
|
|
Continuing operations |
|
$ |
0.09 |
|
$ |
0.20 |
|
Discontinued operation |
|
(0.00 |
) |
(0.00 |
) |
Total operations |
|
$ |
0.09 |
|
$ |
0.20 |
|
|
|
|
|
|
|
Weighted average shares used to compute net income (loss) per share: |
|
|
|
|
|
Basic |
|
52,411 |
|
51,358 |
|
Diluted |
|
55,106 |
|
53,807 |
|
|
|
|
|
|
|
(1) Includes stock-based employee compensation expense as follows: |
|
|
|
|
|
|
|
|
|
|
|
Cost of recurring revenues |
|
$ |
753 |
|
$ |
842 |
|
Cost of non-recurring revenues |
|
311 |
|
375 |
|
Total cost of revenues |
|
1,064 |
|
1,217 |
|
|
|
|
|
|
|
Sales and marketing |
|
2,380 |
|
2,635 |
|
Product development |
|
1,502 |
|
1,925 |
|
General and administrative |
|
1,659 |
|
1,851 |
|
Total operating expenses |
|
5,541 |
|
6,411 |
|
|
|
|
|
|
|
Total stock-based employee compensation expense |
|
$ |
6,605 |
|
$ |
7,628 |
|
(2) Net income (loss) per share is based on actual calculated values and totals may not sum due to rounding.
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
Three Months Ended March 31 |
|
|
|
2015 |
|
2014 |
|
Cash flows from operating activities: |
|
|
|
|
|
Net income |
|
$ |
5,048 |
|
$ |
10,886 |
|
Adjustment to net income for discontinued operation net loss |
|
28 |
|
21 |
|
Net income from continuing operations |
|
5,076 |
|
10,907 |
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: |
|
|
|
|
|
Stock-based compensation |
|
6,605 |
|
7,628 |
|
Excess tax benefit from stock-based compensation |
|
(4,162 |
) |
(3,348 |
) |
Depreciation and amortization |
|
6,499 |
|
5,475 |
|
Amortization of debt issuance costs |
|
367 |
|
354 |
|
Reduction of doubtful accounts |
|
(20 |
) |
(12 |
) |
Reduction of sales reserves |
|
(96 |
) |
(250 |
) |
Deferred income taxes |
|
697 |
|
(135 |
) |
Other |
|
(538 |
) |
130 |
|
Effect of statement of operations adjustments |
|
9,352 |
|
9,842 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(604 |
) |
9,633 |
|
Prepaid and other assets |
|
(4,062 |
) |
2,094 |
|
Accounts payable |
|
(650 |
) |
(1,999 |
) |
Accrued liabilities |
|
2,405 |
|
(8,151 |
) |
Deferred revenues |
|
(6,007 |
) |
(5,852 |
) |
Income taxes payable |
|
1,101 |
|
4,401 |
|
Effect of changes in operating assets and liabilities |
|
(7,817 |
) |
126 |
|
|
|
|
|
|
|
Net cash provided by operating activities from continuing operations |
|
6,611 |
|
20,875 |
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Purchases of property and equipment |
|
(2,026 |
) |
(2,085 |
) |
Capitalized software development costs |
|
(490 |
) |
(472 |
) |
Change in restricted cash |
|
(197 |
) |
|
|
Purchases of marketable securities |
|
(2,000 |
) |
|
|
Sales and maturities of marketable securities |
|
6,831 |
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities from continuing operations |
|
2,118 |
|
(2,557 |
) |
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
Proceeds from common stock issued from exercises of stock options |
|
5,000 |
|
1,246 |
|
Excess tax benefits from stock-based compensation |
|
4,162 |
|
3,348 |
|
Withholding taxes related to equity award net share settlement |
|
(811 |
) |
(1,581 |
) |
Repayment of debt |
|
(15,000 |
) |
(10,000 |
) |
Payment of cash dividend |
|
(6,750 |
) |
|
|
|
|
|
|
|
|
Net cash used in financing activities from continuing operations |
|
(13,399 |
) |
(6,987 |
) |
|
|
|
|
|
|
Net cash transferred to discontinued operation |
|
(147 |
) |
(161 |
) |
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(477 |
) |
(34 |
) |
|
|
|
|
|
|
Net change in cash and cash equivalents from continuing operations |
|
(5,294 |
) |
11,136 |
|
Cash and cash equivalents of continuing operations at beginning of period |
|
28,784 |
|
33,828 |
|
|
|
|
|
|
|
Cash and cash equivalents of continuing operations at end of period |
|
$ |
23,490 |
|
$ |
44,964 |
|
|
|
Three Months Ended March 31 |
|
|
|
2015 |
|
2014 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
Noncash investing activities: |
|
|
|
|
|
Capital expenditures included in accounts payable |
|
$ |
892 |
|
$ |
469 |
|
|
|
|
|
|
|
Cash flows from discontinued operation of MicroEdge, Inc.: |
|
|
|
|
|
Net cash used in operating activities |
|
$ |
(147 |
) |
$ |
(161 |
) |
Net cash transferred from continuing operations |
|
147 |
|
161 |
|
ADVENT SOFTWARE, INC.
RECONCILIATION OF SELECTED CONTINUING OPERATIONS GAAP MEASURES TO NON-GAAP MEASURES
(In thousands, except per share data)
(Unaudited)
To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the United States of America (or GAAP), Advent uses non-GAAP measures of continuing operations gross margin, operating income, net income and net income per share, which are adjusted to exclude certain costs, expenses and income we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Advents underlying operational results and trends and our marketplace performance. In addition, these non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP.
|
|
Three Months Ended March 31 |
|
|
|
2015 |
|
2014 |
|
|
|
Amount |
|
% of Net Revenues |
|
Amount |
|
% of Net Revenues |
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin |
|
$ |
72,762 |
|
70.5 |
% |
$ |
68,322 |
|
70.6 |
% |
Amortization of acquired intangibles |
|
1,050 |
|
|
|
1,186 |
|
|
|
Stock-based compensation |
|
1,064 |
|
|
|
1,217 |
|
|
|
Non-GAAP gross margin |
|
$ |
74,876 |
|
72.5 |
% |
$ |
70,725 |
|
73.1 |
% |
|
|
|
|
|
|
|
|
|
|
GAAP operating income |
|
$ |
10,199 |
|
9.9 |
% |
$ |
19,313 |
|
20.0 |
% |
Amortization of acquired intangibles |
|
1,848 |
|
|
|
2,095 |
|
|
|
Stock-based compensation |
|
6,605 |
|
|
|
7,628 |
|
|
|
Restructuring charges |
|
2,643 |
|
|
|
174 |
|
|
|
Transaction-related fees |
|
8,444 |
|
|
|
|
|
|
|
Non-GAAP operating income |
|
$ |
29,739 |
|
28.8 |
% |
$ |
29,210 |
|
30.2 |
% |
|
|
|
|
|
|
|
|
|
|
GAAP net income |
|
$ |
5,076 |
|
|
|
$ |
10,907 |
|
|
|
Amortization of acquired intangibles |
|
1,848 |
|
|
|
2,095 |
|
|
|
Stock-based compensation |
|
6,605 |
|
|
|
7,628 |
|
|
|
Restructuring charges |
|
2,643 |
|
|
|
174 |
|
|
|
Transaction-related fees |
|
8,444 |
|
|
|
|
|
|
|
Income tax adjustment (1) |
|
(5,869 |
) |
|
|
(3,264 |
) |
|
|
Non-GAAP net income |
|
$ |
18,747 |
|
|
|
$ |
17,540 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income |
|
$ |
5,076 |
|
|
|
$ |
10,907 |
|
|
|
Net interest |
|
1,335 |
|
|
|
2,136 |
|
|
|
Provision for income taxes |
|
4,226 |
|
|
|
6,181 |
|
|
|
Depreciation expense |
|
4,130 |
|
|
|
2,766 |
|
|
|
Amortization expense |
|
2,368 |
|
|
|
2,709 |
|
|
|
Stock-based compensation |
|
6,605 |
|
|
|
7,628 |
|
|
|
Adjusted EBITDA |
|
$ |
23,740 |
|
|
|
$ |
32,327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share |
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
0.09 |
|
|
|
$ |
0.20 |
|
|
|
Non-GAAP |
|
$ |
0.34 |
|
|
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute diluted net income per share |
|
55,106 |
|
|
|
53,807 |
|
|
|
(1) The estimated non-GAAP effective tax rate was 35% for the three months ended March 31, 2015 and 2014, respectively, and has been used to adjust the provision for income taxes for non-GAAP net income and non-GAAP diluted net income per share purposes.
Exhibit 99.2
|
Advent Software, Inc. First Quarter 2015 Earnings Highlights May 7, 2015 Advent Investor Relations Contact: InvestorRelations@advent.com |
|
ADVS Forward-Looking Statements Any forward-looking statements included in this presentation, including comments regarding product releases, enhancements and updates reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties including the pending acquisition of Advent by SS&C Technologies Holdings, Inc., potential fluctuations in new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our products; the successful development, release and market acceptance of new products and product enhancements; uncertainties and fluctuations in the financial markets; the Companys ability to declare future dividends; the Companys ability to satisfy contractual performance requirements and other risks detailed from time to time in our SEC reports including, but not limited to, our quarterly reports on Form 10-Q and our 2014 Annual Report on Form 10-K. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 2 |
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ADVS Q115 Highlights Quarterly revenue of $103.3M; increase of 7% over prior year 18% of revenue was from international sources 93% of revenue was categorized as recurring Annualized Recurring Run Rate was $394.2M at March 31, 2015; increase of 5% over March 31, 2014 Non-GAAP Operating Income of $29.7M, or 28.8% of revenue; increase of 2% compared to $29.2M. Non-GAAP Diluted EPS of $0.34; increase of 4% over prior year Q3 14 updated renewal rate of 94%; increase of 1 point over initial rate 3 |
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ADVS Q115 Financial Highlights Metric Q114 Q115 $ +/- % +/- Annual Contract Value ($M) $5.1 $4.2 ($0.9) (17%) Annualized Recurring Run Rate at 3/31 ($M) $375.8 $394.2 $18.4 5% Revenue ($M) $96.8 $103.3 $6.5 7% Operating Cash Flow ($M)2,3 $20.9 $6.6 ($14.3) (68%) GAAP Operating Margin 2,3 20.0% 9.9% (10.1 pts) (50%) GAAP Diluted EPS3 $0.20 $0.09 ($0.11) (55%) Non-GAAP Operating Margin1,3 30.2% 28.8% (1.4pts) (5%) Adjusted EBITDA ($M)1,2 $32.3 $23.7 ($8.6) (27%) Non-GAAP Diluted EPS1,3 $0.33 $0.34 $0.01 4% 1 See reconciliation of GAAP to Non-GAAP measures on slide 9 2Advents results for the first quarter of 2015 included transaction-related fees associated with the pending merger with SS&C Technologies Holdings, Inc. These third-party costs, on a pre-tax basis, totaled $8.4 million. Additionally, in the first quarter of 2015, Advents results included $2.6 million in restructuring charges related to personnel and facilities restructuring. 3Advents results for the first quarter of 2015 includes incremental expense of $1.6 million from accelerated depreciation not included in restructuring from the decision to shrink our real estate footprint during 2015. Totals, $+/- and % +/ - may not recalculate due to rounding 4 |
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5 ADVS Operating Metrics ($ in millions) 5 Annual Contract Value Annualized Recurring Run Rate Renewals $30 The annual contribution to revenue once contracts are signed for Term License, Advent OnDemand, and Black Diamond. The annualized run rate of all of our contracted recurring revenue streams as of a point in time. The metric includes the combined effects of ACV, renewals and the existing run rate of recurring revenues into a single metric. Client contract renewals compared to the same quarter in the previous year based on cash collections and reported one quarter in arrears. *Annualized Recurring Run Rate is not intended to be forward looking. 94% 92% 97% 95% 94% 95% 93% 93% 99% 95% 100% 101% 99% 98% 94% 50% 60% 70% 80% 90% 100% 110% 120% Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2-14 Q3-14 Q4-14 Initially reported renewal/run rate Subsequently updated renewal/run rate $5 $4 $8 $7 $10 $- $5 $10 $15 $20 $25 $30 $35 2014 2015 Q1 Q2 Q3 Q4 352.9 356.6 353.9 359.2 375.8 366.1 375.5 383.4 394.2 $200 $250 $300 $350 $400 $450 3/31/2013 6/30/2013 9/30/2013 12/31/2013 3/31/2014 6/30/2014 9/30/2014 12/31/2014 3/31/2015 |
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ADVS Revenue ($ in millions) * Totals, $+/- and % +/ - may not recalculate due to rounding 6 $75 $87 $92 $97 $103 $80 $90 $96 $100 $85 $90 $97 $99 $86 $92 $98 $101 $- $100 $200 $300 $400 2011 2012 2013 2014 2015 Q1 Revenue Q2 Revenue Q3 Revenue Q4 Revenue $326 $359 $383 $397 82% 18% Q115 Revenue Breakdown by Region Domestic International 93% 7% Q115 Revenue Breakdown by Type Recurring Non-recurring |
|
ADVS Q115 Revenue Components ($ in millions) Q114 Q115 $ +/- % +/- Recurring $89.1 $96.2 $7.0 8% Term License Revenue $47.0 $52.4 $5.4 11% Perpetual Maintenance $16.1 $15.3 ($0.9) (5%) Other Recurring 1 $25.9 $28.5 $2.6 10% Non-Recurring $7.7 $7.1 ($0.6) (8%) Total Revenue $96.8 $103.3 $6.5 7% 1 Includes OnDemand, Data Services, Black Diamond, and asset based fees. * Totals, $+/- and % +/ - may not recalculate due to rounding 7 |
|
Deferred revenue represents invoiced bookings, not yet recognized as revenue Backlog represents contractual bookings, not yet invoiced (disclosed annually) 8 Deferred Revenue ADVS Deferred Revenue and Backlog ($ in millions) Deferred Revenue/Backlog $175 $183 $194 $204 $198 $133 $129 $165 $157 $- $50 $100 $150 $200 $250 12/31/11 12/31/12 12/31/13 12/31/14 3/31/15 Deferred Revenue Backlog $28 $29 $26 $39 $42 $42 100 $108 $107 21 $26 $23 0 50 100 150 200 250 3/31/14 12/31/14 3/31/15 Other Recurring Deferred Revenue Term License Deferred Revenue Term Implementations Deferred Revenue Perpetual License/Maintenance Deferred Revenue $188 $204 $198 |
|
ADVENT SOFTWARE, INC. RECONCILIATION OF SELECTED CONTINUING OPERATIONS' GAAP MEASURES TO NON-GAAP MEASURES (In thousands, except per share data) (Unaudited) To supplement our condensed consolidated financial statements presented in accordance with generally accepted accounting principles in the United States of America (or GAAP), Advent uses non-GAAP measures of continuing operations' gross margin, operating income, net income and net income per share, which are adjusted to exclude certain costs, expenses and income we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Advents underlying operational results and trends and our marketplace performance. In addition, these non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Three Months Ended March 31 2015 2014 Amount % of Net Revenues Amount % of Net Revenues GAAP gross margin $ 72,762 70.5% $ 68,322 70.6% Amortization of acquired intangibles 1,050 1,186 Stock-based compensation 1,064 1,217 Non-GAAP gross margin $ 74,876 72.5% $ 70,725 73.1% GAAP operating income $ 10,199 9.9% $ 19,313 20.0% Amortization of acquired intangibles 1,848 2,095 Stock-based compensation 6,605 7,628 Restructuring charges 2,643 174 Transaction-related fees 8,444 - Non-GAAP operating income $ 29,739 28.8% $ 29,210 30.2% GAAP net income $ 5,076 $ 10,907 Amortization of acquired intangibles 1,848 2,095 Stock-based compensation 6,605 7,628 Restructuring charges 2,643 174 Transaction-related fees 8,444 - Income tax adjustment (1) (5,869) (3,264) Non-GAAP net income $ 18,747 $ 17,540 GAAP net income $ 5,076 $ 10,907 Net interest 1,335 2,136 Provision for income taxes 4,226 6,181 Depreciation expense 4,130 2,766 Amortization expense 2,368 2,709 Stock-based compensation 6,605 7,628 Adjusted EBITDA $ 23,740 $ 32,327 Diluted net income per share GAAP $ 0.09 $ 0.20 Non-GAAP $ 0.34 $ 0.33 Shares used to compute diluted net income per share 55,106 53,807 (1) The estimated non-GAAP effective tax rate was 35% for the three months ended March 31, 2015 and 2014, respectively, and has been used to adjust the provision for income taxes for non-GAAP net income and non-GAAP diluted net income per share purposes. |