EX-99.3 6 a2077950zex-99_3.htm EXHIBIT 99.3
QuickLinks -- Click here to rapidly navigate through this document


EXHIBIT 99.3


UNAUDITED PRO FORMA FINANCIAL INFORMATION

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

        The following unaudited pro forma condensed combined financial information has been prepared to give effect to the acquisition by Advent Software, Inc. (Advent) of Kinexus Corporation ("Kinexus") on February 14, 2002. The unaudited pro forma condensed combined financial information is based on the following:

        1.    Our audited historical consolidated financial statements as of December 31, 2001 and for the year then ended;

        2.    Kinexus's audited historical financial statements as of December 31, 2001 and for the year then ended;

        3.    Unaudited pro forma adjustments as described in the accompanying notes.

        The unaudited pro forma condensed combined balance sheet at December 31, 2001 gives effect to the acquisition of Kinexus as if it occurred as of December 31, 2001. The unaudited pro forma condensed combined statement of operations for the year December 31, 2001 gives effect to the acquisition of Kinexus as if it occurred as of January 1, 2001.

        The related adjustments are described in the accompanying notes. The unaudited pro forma condensed combined financial information is based upon available information and certain assumptions set forth in the notes to the unaudited pro forma condensed combined financial information, which have been made solely for purposes of developing such unaudited pro forma financial information. The unaudited pro forma condensed combined financial information does not purport to represent what our results of operations or financial condition would have been had the acquisition of Kinexus occurred as of the pro forma dates specified above, or to project our results of operations or financial condition for any future period or date.

        The unaudited pro forma condensed combined financial information should be read in conjunction with our historical consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2001, Kinexus's historical financial statements and notes, the latter of which are included herein.


ADVENT SOFTWARE, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF DECEMBER 31, 2001
(in thousands)

 
   Advent
   Kinexus
   Pro Forma
Adjustment
    
   Pro Forma
Consolidated
Advent
  
ASSETS                              
Current assets:                              
  Cash, cash equivalents, and short-term investments   $ 288,550   $ 31   $
 (34,003
(3,777		 )
)		 (a)
(b)		   $ 250,801  
  Accounts receivable, net     49,930     468               50,398  
  Prepaid expenses and other     9,451     268     (1,100 ) (c)     8,619  
  Deferred income taxes     10,935     —     5,559   (d)     16,494  
   
 
 
     
 
    Total current assets     358,866     767     (33,321 )       326,312  
Fixed assets, net     26,090     6,313               32,403  
Deferred income taxes     3,147     —     34,248   (d)     37,395  
Goodwill, net     12,650     1,466     32,336
(1,466
)		 (g)
(h)		     44,986  
Identifiable intangibles, net     21,675     —     16,500   (f)     38,175  
Other assets     31,247     1,440     3,777
(415
)		 (b)
(e)		     36,049  
   
 
 
     
 
      Total assets   $ 453,675   $ 9,986   $ 51,659       $ 515,320  
   
 
 
     
 
LIABILITIES AND STOCKHOLDERS' EQUITY                              
Current liabilities:                              
  Accounts payable   $ 2,408   $ 5,300             $ 7,708  
  Accrued liabilities     13,520     14,630   $

 11,101
3,035
817		   (j)
(k)
(n)		     43,103  
  Deferred revenues     25,907     5,089     (1,100 ) (c)     29,896  
  Income taxes payable     5,767     —               5,767  
  Notes payable to related party     —     6,509     (415 ) (e)     6,094  
   
 
 
     
 
    Total current liabilities     47,602     31,528     13,438         92,568  
Long-term liabilities     1,684     —     8,179   (i)     9,863  
   
 
 
     
 
    Total liabilities     49,286     31,528     21,617         102,431  

Redemable preferred stock
 
 
—
 
 
117,392
 
 
(117,392
)
(l)
 
 
—
 

Stockholders' equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Common stock     342     1     (1 ) (l)     342  
  Additional paid-in capital     317,548     17,876     (17,876
8,500		 )
 (l)
(m)		     317,548
8,500		  
  Retained earnings / (accumulated deficit)     86,621     (156,811 )   156,811   (l)     86,621  
  Cumulative other comprehensive income (loss)     (122 )   —               (122 )
   
 
 
     
 
    Total stockholders' equity     404,389     (138,934 )   147,434         412,889  
   
 
 
     
 
      Total liabilities and stockholders' equity   $ 453,675   $ 9,986   $ 51,659       $ 515,320  
   
 
 
     
 

2


ADVENT SOFTWARE, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2001
(in thousands, except per share data)

 
   Advent
   Kinexus
   Pro Forma
Adjustments
    
   Pro Forma
Consolidated
Advent
  
Revenues:                              
License and development fees   $ 83,587   $ —             $ 83,587  
Maintenance and other recurring     67,699     8,865   $ (176 ) (o)     76,388  
Professional services and other     18,929     —               18,929  
   
 
 
     
 
  Net revenues     170,215     8,865     (176 )       178,904  
   
 
 
     
 
Cost of revenues:                              
License and development fees     6,497     —               6,497  
Maintenance and other recurring     16,955     16,101     (176 ) (o)     32,880  
Professional services and other     6,190     —               6,190  
   
 
 
     
 
  Total cost of revenues     29,642     16,101     (176 )       45,567  
   
 
 
     
 
  Gross margin     140,573     (7,236 )   —         133,337  
   
 
 
     
 
Operating expenses:                              
Sales and marketing     52,229     5,063               57,292  
Product development     27,426     14,426               41,852  
General and administrative     14,824     11,356               26,180  
Restructuring           5,559               5,559  
Amortization of intangibles     4,694     879     (879
5,583		 )
 (p)
(q)		     10,277  
   
 
 
     
 
  Total operating expenses     99,173     37,283     4,704         141,160  
   
 
 
     
 
    Income (loss) from operations     41,400     (44,519 )   (4,704 )       (7,823 )

Interest and other income, net
 
 
6,273
 
 
176
 
 
(1,427
)
(r)
 
 
5,022
 
   
 
 
     
 
    Income (loss) before income taxes     47,673     (44,343 )   (6,131 )       (2,801 )

Provision for (benefit from) income taxes
 
 
16,208
 
 
—
 
 
(17,356
)
(s)
 
 
(1,148
)
   
 
 
     
 
    Net income (loss)   $ 31,465   $ (44,343 ) $ 11,225       $ (1,653 )
   
 
 
     
 

Net income (loss) per share data:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Basic:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Net income (loss) per share
 
$
0.98
 
 
 
 
 
 
 
 
 
$
(0.05
)
   
                 
 
Shares used in per share calculations     32,148                     32,148  
   
                 
 
Diluted:                              

Net income (loss) per share
 
$
0.89
 
 
 
 
 
 
 
 
 
$
(0.05
)
   
                 
 
Shares used in per share calculations     35,383                     32,148  
   
                 
 

3


ADVENT SOFTWARE, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

NOTE 1—BASIS OF PRESENTATION

        On February 14, 2002, Advent acquired the Kinexus Corporation ("Kinexus"), which provides internal account aggregation, and manual data management services which will be used in our Advent TrustedNetwork service. The acquisition has been accounted for using the purchase method of accounting and accordingly, the purchase price has been allocated to the tangible and intangible assets and liabilities acquired on the basis of their respective fair values on the acquisition date. We acquired Kinexus at amounts exceeding the tangible and identifiable intangible fair values of assets and liabilities resulting in goodwill of $29.5 million in order to further increase our deployment of Advent TrustedNetwork.

        The total purchase price of approximately $45.5 million consisted of cash upon closing of $34.0 million, a warrant to purchase 165,176 shares of our common stock valued at $8.5 million and acquisition costs of $3 million. The warrant has an exercise price of $0.01 per share, is immediately exercisable, and expires on January 1, 2003. The fair value of the warrant was calculated using the Black-Scholes method using the following assumptions: fair value of common stock of $51.34 per share, interest rate of 3%, volatility of 65.9% and a dividend rate of zero. There is $3.8 million of additional contingent consideration that is held in escrow for 14 months, which if released will be recorded as additional goodwill. There is also a potential additional earn-out distribution to shareholders of up to $115 million over the next two years in cash and stock under a formula based on revenue and expenses, which if earned will be recorded as additional goodwill. The preliminary allocation of the purchase price to tangible and intangible assets and liabilities at February 14, 2002 is summarized below:

Description
   Estimated Remaining
Useful Life
   Balance at
February 14, 2002
  
 
    
   (in thousands)

  
Goodwill       $ 29,388  
Existing Technologies   3 years     3,900  
Existing Technologies—Internal   2 years     500  
Core Technologies   3 years     2,100  
Trade Name / Trademarks   3 years     600  
Contracts and Customer Relationships   3 years     9,400  
Tangible Assets         3,591  
Net Deferred Tax Assets         39,807  
Liabilities Assumed         (43,748 )
       
 
Total Purchase Price       $ 45,538  
       
 

        Liabilities assumed of $43.7 million include cash advances from Advent of $4.9 million and estimated change-in-control separation obligations of $11.1 million. The purchase price is subject to further refinement and change over the next year due primarily to assessing the liabilities assumed. The amount allocated to intangibles was determined based on management's estimates using established valuation techniques.

NOTE 2—UNAUDITED PRO FORMA ADJUSTMENTS

    (a)
    Reflects the cash we paid to Kinexus shareholders as of the acquisition date.

    (b)
    Reflects the amount deposited in escrow of contingent consideration to be paid to Kinexus at the end of 14 months if conditions are met.

4

    (c)
    Reflects the elimination of prepaid services that we purchased from Kinexus/GreenTrak and that were reflected as Kinexus deferred revenue.

    (d)
    Reflects the net deferred tax assets realizable by us in future years.

    (e)
    Reflects the elimination of a cash advance we made to Kinexus as of December 31, 2001. At February 14, 2002, the cash advances amounted to $4.9 million.

    (f)
    Reflects the estimated identifiable intangible assets resulting from the acquisition of Kinexus based on the purchase price allocation described in Note 1.

    (g)
    Reflects the estimated goodwill resulting from the acquisition of Kinexus based on the purchase price allocation described in Note 1. The goodwill calculated in Note 1 is not the same as the unaudited pro forma adjustment goodwill as it is based on the net assets and liabilities on the acquisition date of February 14, 2002 versus the pro forma date of acquisition of December 31, 2001.

    (h)
    Reflects the elimination of Kinexus's historical goodwill related to its acquisition of GreenTrak, Inc.

    (i)
    Reflects the long-term portion of estimated accrued lease exit costs for Kinexus' lease commitment assumed as part of the acquisition, which have no future benefit to us.

    (j)
    Reflects the estimated change-in-control separation obligations that were a result of the Kinexus acquisition.

    (k)
    Reflects the acquisition cost we incurred as part of the acquisition.

    (l)
    Reflects the elimination of Kinexus' equity and redeemable preferred stock.

    (m)
    Reflects the issuance of a warrant to purchase our common stock issued as part of acquisition of Kinexus as described in Note 1.

    (n)
    Reflects the short-term portion of estimated accrued lease exit costs for Kinexus' lease commitment assumed as part of the acquisition, which have no future benefit to us.

    (o)
    Reflects the elimination of inter-company revenue and expense.

    (p)
    Reflects the elimination of Kinexus' amortization of historical goodwill.

    (q)
    Reflects the amortization of identifiable intangible assets resulting from the Kinexus acquisition over their estimated useful lives of two to three years, as if the acquisition had occurred on January 1, 2001.

    (r)
    Reflects the elimination of interest income related to the cash used in the acquisition of Kinexus. The assumed interest rate was 2.7%, which is based upon the current estimated rate of return on our short-term investments.

    (s)
    Reflects the estimated adjustment required to reflect the pro forma tax benefit on the unaudited pro forma pre tax loss using a federal and state combined statutory tax rate of 41%.

5



QuickLinks

UNAUDITED PRO FORMA FINANCIAL INFORMATION
ADVENT SOFTWARE, INC. UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET AS OF DECEMBER 31, 2001 (in thousands)
ADVENT SOFTWARE, INC. UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2001 (in thousands, except per share data)
ADVENT SOFTWARE, INC. NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION