EX-99.2 3 a09-29734_2ex99d2.htm EX-99.2

Exhibit 99.2

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The following unaudited pro forma condensed consolidated balance sheet as of June 30, 2009 and the unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2009 and 2008, and for the years ended December 31, 2008, 2007 and 2006 are based on the historical financial statements of Advent Software, Inc. after giving effect to Advent’s disposition of MicroEdge, Inc. (“MicroEdge”) on October 1, 2009 as more fully described at Item 2.01 of this Form 8-K and applying the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed consolidated financial statements.

 

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2009 is presented as if the disposition of MicroEdge had occurred on June 30, 2009.

 

The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2009 and 2008 and year ended December 31, 2008, 2007 and 2006 are presented as if the MicroEdge disposition had occurred on January 1, 2006 and were carried though each of the respective periods.

 

The unaudited pro forma condensed consolidated financial statements have been prepared by management for illustrative purposes only in accordance with Article 11 of SEC Regulation S-X and are not necessarily indicative of the condensed consolidated financial position or results of operations in future periods or the results that actually would have been realized had Advent and MicroEdge not been a combined company during the specified periods. The unaudited pro forma condensed consolidated financial statements, including notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with Advent’s historical consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2008 and its Form 10-Q for the three months ended June 30, 2009.

 


 

ADVENT SOFTWARE, INC.

PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of June 30, 2009

(In thousands)

(Unaudited)

 

 

 

Historical

 

Pro Forma

 

 

 

Advent

 

Adjustments

 

 

 

Advent

 

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

47,038

 

$

26,951

 

(B)

 

$

73,989

 

Accounts receivable, net

 

45,516

 

(3,911

)

(A)

 

41,605

 

Deferred taxes, current

 

13,133

 

(663

)

(A)

 

12,470

 

Prepaid expenses and other

 

17,574

 

(387

)

(A)

 

17,187

 

Total current assets

 

123,261

 

21,990

 

 

 

145,251

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

38,244

 

(2,421

)

(A)

 

35,823

 

Goodwill

 

151,232

 

(7,003

)

(A)

 

144,229

 

Other intangibles, net

 

26,849

 

(1,934

)

(A)

 

24,915

 

Deferred taxes, long-term

 

54,785

 

(619

)

(A)

 

54,166

 

Other assets, net

 

10,642

 

(170

)

(A)

 

10,472

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

405,013

 

$

9,843

 

 

 

$

414,856

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,966

 

$

(356

)

(A)

 

$

3,610

 

Accrued liabilities

 

26,083

 

(1,918

)

(A)

 

24,165

 

Deferred revenues

 

141,131

 

(10,811

)

(A)

 

130,320

 

Income taxes payable

 

6,141

 

(1,462

)

(A)

 

15,008

 

 

 

 

 

10,329

 

(C)

 

 

 

Total current liabilities

 

177,321

 

(4,218

)

 

 

173,103

 

Deferred income taxes

 

280

 

(280

)

(A)

 

—

 

Deferred revenue, long-term

 

6,987

 

(346

)

(A)

 

6,641

 

Other long-term liabilities

 

10,148

 

(782

)

(A)

 

9,366

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

194,736

 

(5,626

)

 

 

189,110

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

Common stock

 

254

 

—

 

 

 

254

 

Additional paid-in capital

 

369,509

 

—

 

 

 

369,509

 

Accumulated deficit

 

(168,216

)

14,265

 

(C)

 

(153,951

)

Accumulated other comprehensive income

 

8,730

 

1,204

 

(A)

 

9,934

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

210,277

 

15,469

 

 

 

225,746

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

405,013

 

$

9,843

 

 

 

$

414,856

 

 

The accompanying notes to Pro Forma Condensed Consolidated Financial Statements are an integral part of these financial statements.

 


 

ADVENT SOFTWARE, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2009

(In thousands, except per share data)

(Unaudited)

 

 

 

Historical

 

Pro Forma

 

 

 

Advent

 

Adjustments (D)

 

Advent

 

 

 

 

 

 

 

 

 

Net revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

$

120,639

 

$

(9,569

)

$

111,070

 

Perpetual license fees

 

7,225

 

(1,962

)

5,263

 

Professional services and other

 

14,454

 

(1,394

)

13,060

 

 

 

 

 

 

 

 

 

Total net revenues

 

142,318

 

(12,925

)

129,393

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

24,408

 

(1,599

)

22,809

 

Perpetual license fees

 

303

 

(113

)

190

 

Professional services and other

 

16,691

 

(1,129

)

15,562

 

Amortization of developed technology

 

2,963

 

(234

)

2,729

 

 

 

 

 

 

 

 

 

Total cost of revenues

 

44,365

 

(3,075

)

41,290

 

 

 

 

 

 

 

 

 

Gross margin

 

97,953

 

(9,850

)

88,103

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

33,357

 

(2,446

)

30,911

 

Product development

 

26,476

 

(3,127

)

23,349

 

General and administrative

 

18,701

 

(1,405

)

17,296

 

Amortization of other intangibles

 

888

 

(11

)

877

 

Restructuring charges

 

47

 

9

 

56

 

 

 

 

 

 

 

 

 

Total operating expenses

 

79,469

 

(6,980

)

72,489

 

 

 

 

 

 

 

 

 

Income from operations

 

18,484

 

(2,870

)

15,614

 

Interest and other income, net

 

1,824

 

(45

)

1,779

 

 

 

 

 

 

 

 

 

Income before income taxes

 

20,308

 

(2,915

)

17,393

 

Provision for income taxes

 

6,057

 

(1,186

)

4,871

 

 

 

 

 

 

 

 

 

Net income

 

$

14,251

 

$

(1,729

)

$

12,522

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

 

$

0.56

 

 

 

$

0.50

 

Diluted

 

$

0.55

 

 

 

$

0.48

 

 

 

 

 

 

 

 

 

Weighted average shares used to compute basic and diluted net income per share

 

 

 

 

 

 

 

Basic

 

25,265

 

 

 

25,265

 

Diluted

 

26,053

 

 

 

26,053

 

 

The accompanying notes to Pro Forma Condensed Consolidated Financial Statements are an integral part of these financial statements.

 


 

ADVENT SOFTWARE, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Six Months Ended June 30, 2008

(In thousands, except per share data)

(Unaudited)

 

 

 

Historical

 

Pro Forma

 

 

 

Advent

 

Adjustments (D)

 

Advent

 

 

 

 

 

 

 

 

 

Net revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

$

99,977

 

$

(8,575

)

$

91,402

 

Perpetual license fees

 

10,867

 

(2,550

)

8,317

 

Professional services and other

 

14,656

 

(1,132

)

13,524

 

 

 

 

 

 

 

 

 

Total net revenues

 

125,500

 

(12,257

)

113,243

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

22,313

 

(1,827

)

20,486

 

Perpetual license fees

 

541

 

(315

)

226

 

Professional services and other

 

16,245

 

(1,359

)

14,886

 

Amortization of developed technology

 

1,454

 

(348

)

1,106

 

 

 

 

 

 

 

 

 

Total cost of revenues

 

40,553

 

(3,849

)

36,704

 

 

 

 

 

 

 

 

 

Gross margin

 

84,947

 

(8,408

)

76,539

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

31,016

 

(2,867

)

28,149

 

Product development

 

25,898

 

(3,938

)

21,960

 

General and administrative

 

18,459

 

(1,272

)

17,187

 

Amortization of other intangibles

 

729

 

(142

)

587

 

Restructuring charges

 

55

 

—

 

55

 

 

 

 

 

 

 

 

 

Total operating expenses

 

76,157

 

(8,219

)

67,938

 

 

 

 

 

 

 

 

 

Income from operations

 

8,790

 

(189

)

8,601

 

Interest and other income, net

 

3,786

 

1

 

3,787

 

 

 

 

 

 

 

 

 

Income before income taxes

 

12,576

 

(188

)

12,388

 

Provision for income taxes

 

2,586

 

(55

)

2,531

 

 

 

 

 

 

 

 

 

Net income

 

$

9,990

 

$

(133

)

$

9,857

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

 

$

0.37

 

 

 

$

0.37

 

Diluted

 

$

0.36

 

 

 

$

0.35

 

 

 

 

 

 

 

 

 

Weighted average shares used to compute basic and diluted net income per share

 

 

 

 

 

 

 

Basic

 

26,641

 

 

 

26,641

 

Diluted

 

28,046

 

 

 

28,046

 

 

The accompanying notes to Pro Forma Condensed Consolidated Financial Statements are an integral part of these financial statements.

 


 

ADVENT SOFTWARE, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2008

(In thousands, except per share data)

(Unaudited)

 

 

 

Historical

 

Pro Forma

 

 

 

Advent

 

Adjustments (D)

 

Advent

 

 

 

 

 

 

 

 

 

Net revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

$

209,365

 

$

(17,921

)

$

191,444

 

Perpetual license fees

 

22,727

 

(5,919

)

16,808

 

Professional services and other

 

32,740

 

(3,108

)

29,632

 

 

 

 

 

 

 

 

 

Total net revenues

 

264,832

 

(26,948

)

237,884

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

47,343

 

(3,545

)

43,798

 

Perpetual license fees

 

915

 

(427

)

488

 

Professional services and other

 

37,439

 

(3,281

)

34,158

 

Amortization and impairment of developed technology

 

4,497

 

(1,436

)

3,061

 

 

 

 

 

 

 

 

 

Total cost of revenues

 

90,194

 

(8,689

)

81,505

 

 

 

 

 

 

 

 

 

Gross margin

 

174,638

 

(18,259

)

156,379

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

63,539

 

(5,600

)

57,939

 

Product development

 

50,154

 

(7,257

)

42,897

 

General and administrative

 

38,144

 

(2,257

)

35,887

 

Amortization of other intangibles

 

1,315

 

(155

)

1,160

 

Acquired in-process research and development

 

400

 

—

 

400

 

Restructuring charges

 

360

 

(259

)

101

 

 

 

 

 

 

 

 

 

Total operating expenses

 

153,912

 

(15,528

)

138,384

 

 

 

 

 

 

 

 

 

Income from operations

 

20,726

 

(2,731

)

17,995

 

 

 

 

 

 

 

 

 

Interest expense

 

(584

)

—

 

(584

)

Interest income and other, net

 

314

 

55

 

369

 

Gain on sale of equity investments, net

 

3,393

 

—

 

3,393

 

 

 

 

 

 

 

 

 

Income before income taxes

 

23,849

 

(2,676

)

21,173

 

Provision for income taxes

 

4,954

 

(1,097

)

3,857

 

 

 

 

 

 

 

 

 

Net income

 

$

18,895

 

$

(1,579

)

$

17,316

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

 

$

0.71

 

 

 

$

0.65

 

Diluted

 

$

0.68

 

 

 

$

0.62

 

 

 

 

 

 

 

 

 

Weighted average shares used to compute basic and diluted net income per share

 

 

 

 

 

 

 

Basic

 

26,640

 

 

 

26,640

 

Diluted

 

27,893

 

 

 

27,893

 

 

The accompanying notes to Pro Forma Condensed Consolidated Financial Statements are an integral part of these financial statements.

 


 

ADVENT SOFTWARE, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2007

(In thousands, except per share data)

(Unaudited)

 

 

 

Historical

 

Pro Forma

 

 

 

Advent

 

Adjustments (D)

 

Advent

 

 

 

 

 

 

 

 

 

Net revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

$

166,540

 

$

(14,893

)

$

151,647

 

Perpetual license fees

 

26,504

 

(6,270

)

20,234

 

Professional services and other

 

22,259

 

(2,570

)

19,689

 

 

 

 

 

 

 

 

 

Total net revenues

 

215,303

 

(23,733

)

191,570

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

38,008

 

(2,710

)

35,298

 

Perpetual license fees

 

851

 

(486

)

365

 

Professional services and other

 

27,464

 

(2,479

)

24,985

 

Amortization of developed technology

 

1,567

 

(158

)

1,409

 

 

 

 

 

 

 

 

 

Total cost of revenues

 

67,890

 

(5,833

)

62,057

 

 

 

 

 

 

 

 

 

Gross margin

 

147,413

 

(17,900

)

129,513

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

55,422

 

(5,264

)

50,158

 

Product development

 

41,869

 

(5,307

)

36,562

 

General and administrative

 

34,799

 

(2,506

)

32,293

 

Amortization of other intangibles

 

1,879

 

(435

)

1,444

 

Acquired in-process research and development

 

150

 

(150

)

—

 

Restructuring charges

 

965

 

—

 

965

 

 

 

 

 

 

 

 

 

Total operating expenses

 

135,084

 

(13,662

)

121,422

 

 

 

 

 

 

 

 

 

Income from operations

 

12,329

 

(4,238

)

8,091

 

 

 

 

 

 

 

 

 

Interest expense

 

(1,181

)

—

 

(1,181

)

Interest income and other, net

 

1,966

 

(3

)

1,963

 

Gain on sale of equity investments, net

 

3,680

 

—

 

3,680

 

 

 

 

 

 

 

 

 

Income before income taxes

 

16,794

 

(4,241

)

12,553

 

Provision for income taxes

 

4,163

 

(1,656

)

2,507

 

 

 

 

 

 

 

 

 

Net income

 

$

12,631

 

$

(2,585

)

$

10,046

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

 

$

0.48

 

 

 

$

0.38

 

Diluted

 

$

0.45

 

 

 

$

0.36

 

 

 

 

 

 

 

 

 

Weighted average shares used to compute basic and diluted net income per share

 

 

 

 

 

 

 

Basic

 

26,495

 

 

 

26,495

 

Diluted

 

28,067

 

 

 

28,067

 

 

The accompanying notes to Pro Forma Condensed Consolidated Financial Statements are an integral part of these financial statements.

 


 

ADVENT SOFTWARE, INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Year Ended December 31, 2006

(In thousands, except per share data)

(Unaudited)

 

 

 

Historical

 

Pro Forma

 

 

 

Advent

 

Adjustments (D)

 

Advent

 

 

 

 

 

 

 

 

 

Net revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

$

138,104

 

$

(12,978

)

$

125,126

 

Perpetual license fees

 

27,098

 

(5,476

)

21,622

 

Professional services and other

 

18,891

 

(2,728

)

16,163

 

 

 

 

 

 

 

 

 

Total net revenues

 

184,093

 

(21,182

)

162,911

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

Term license, maintenance and other recurring

 

32,968

 

(2,085

)

30,883

 

Perpetual license fees

 

817

 

(456

)

361

 

Professional services and other

 

23,817

 

(2,502

)

21,315

 

Amortization of developed technology

 

1,200

 

(210

)

990

 

 

 

 

 

 

 

 

 

Total cost of revenues

 

58,802

 

(5,253

)

53,549

 

 

 

 

 

 

 

 

 

Gross margin

 

125,291

 

(15,929

)

109,362

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Sales and marketing

 

50,177

 

(4,825

)

45,352

 

Product development

 

34,859

 

(5,040

)

29,819

 

General and administrative

 

32,936

 

(1,745

)

31,191

 

Amortization of other intangibles

 

3,866

 

(433

)

3,433

 

Restructuring charges

 

3,735

 

—

 

3,735

 

 

 

 

 

 

 

 

 

Total operating expenses

 

125,573

 

(12,043

)

113,530

 

 

 

 

 

 

 

 

 

Loss from operations

 

(282

)

(3,886

)

(4,168

)

 

 

 

 

 

 

 

 

Interest expense

 

(90

)

—

 

(90

)

Interest income and other, net

 

3,943

 

—

 

3,943

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

3,571

 

(3,886

)

(315

)

Benefit from income taxes

 

(79,031

)

(426

)

(79,457

)

 

 

 

 

 

 

 

 

Net income

 

$

82,602

 

$

(3,460

)

$

79,142

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

Basic

 

$

2.85

 

 

 

$

2.73

 

Diluted

 

$

2.70

 

 

 

$

2.59

 

 

 

 

 

 

 

 

 

Weighted average shares used to compute basic and diluted net income per share

 

 

 

 

 

 

 

Basic

 

29,003

 

 

 

29,003

 

Diluted

 

30,537

 

 

 

30,537

 

 

The accompanying notes to Pro Forma Condensed Consolidated Financial Statements are an integral part of these financial statements.

 


 

NOTES TO PRO FORMA

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

Note 1—Basis of Presentation

 

On October 1, 2009, Advent Software, Inc. (the “Company”) completed the sale of MicroEdge, Inc. (“MicroEdge”) a wholly-owned subsidiary of the Company, pursuant to an Agreement and Plan of Merger (the “Agreement”) entered on July 27, 2009, by and among the Company, Microedge Holdings, LLC (“Purchaser”), a Delaware limited liability company and an affiliate of Vista Equity Partners III, LLC, Microedge Merger Sub, LLC, a New York limited liability company and a wholly-owned subsidiary of Purchaser (“Merger Sub”), MicroEdge, and, with respect to Article VII, Article VIII and Article IX thereof only, U.S. Bank National Association as escrow agent. Pursuant to the Agreement, MicroEdge merged with and into Merger Sub.

 

The total consideration received by the Company in connection with the disposition was approximately $30 million in cash, of which approximately $27 million in cash was paid on the closing date. Approximately $3 million of the Purchase Price has been placed in escrow for eighteen (18) months following the close to be held as security for losses that may be incurred by the Purchaser in the event of certain breaches of the representations and warranties contained in the Agreement or certain other events.

 

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2009 is presented to give effect to Advent’s disposition of MicroEdge as if the transaction had been consummated on that date. The unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2009 and 2008 and years ended December 31, 2008, 2007 and 2006 are presented as if Advent’s disposition of MicroEdge had been consummated on January 1, 2006 and applying the assumptions and adjustments described in the accompanying notes to these unaudited pro forma condensed consolidated financial statements.

 

Note 2—Pro Forma Adjustments

 

The accompanying unaudited pro forma condensed consolidated financial statements reflect the following pro forma adjustments:

 

(A)       To reflect the elimination of asset, liability and accumulated other comprehensive loss amounts associated with the discontinued operations of MicroEdge in accordance with FASB Accounting Standards Codification (“ASC”) ASC 360, “Property, Plant, and Equipment” and ASC 205-20 “Discontinued Operations”, as if the sale had been consummated on June 30, 2009.

 

(B)       To reflect the portion of the sale proceeds received less transaction costs paid on October 1, 2009, as if the sale had been consummated on June 30, 2009.

 

(C)       To reflect the preliminary gain on sale, net of tax, and pro forma taxes payable as if the sale had been consummated on June 30, 2009. The Company applied the statutory tax rate of 42% for pro forma purposes. The gain on sale is preliminary because final analyses of the sale consideration, asset, liability, and other comprehensive loss amounts as well as the effective tax rate are not yet complete. When the final accounting for the gain is made, a significant portion of the income tax related to the sale will reduce deferred tax assets rather than increase income taxes payable. A final determination of the gain on sale, and the underlying tax impact, including whether any amounts are payable, will be made when the Company reports its results for the fourth quarter of 2009.

 

(D)       To eliminate the financial results of operations associated with the discontinued operations of MicroEdge in accordance with FASB Accounting Standards Codification (“ASC”) ASC 360, “Property, Plant, and Equipment” and ASC 205-20, “Discontinued Operations”, as if the sale had been consummated on January 1, 2006.

 

The accompanying unaudited pro forma condensed consolidated financial statements do not reflect the following:

 

·                  The Purchase Price proceeds of $3 million that are being held in escrow for eighteen months following the close of sale. Due to the uncertainty regarding the realization of this asset which is being held as security for losses that may be incurred by the Purchaser, the Company has excluded this item from its pro forma condensed consolidated financial statements.

 

·                  Estimated restructuring charges of $4 million, consisting primarily of facility exit costs, related to Advent’s vacating of its leased property located at 619 West 54th Street in New York, New York on October 1, 2009.