EX-99.1 2 a15-10926_1ex99d1.htm EX-99.1

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.

 

“Advent’s 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.  Advent’s 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, Advent’s 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, we’ve 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 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 Company’s ability to declare future dividends; the Company’s 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 Advent’s 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.