SAN FRANCISCO, Oct. 27 /PRNewswire-FirstCall/ -- Advent Software, Inc. ADVS, a leading provider of software and services to the global investment management industry, announced today financial results for the third quarter ended September 30, 2009.
"We are very pleased with Advent's third quarter performance. We achieved strong results in our key financial metrics and saw increased demand across all areas of our business," said Stephanie DiMarco, Founder and Chief Executive Officer of Advent. "Our broad portfolio of products, diverse customer base, financial and competitive strength, and long-term strategy position us well for the future."
THIRD QUARTER RESULTS
In July 2009, the Company entered into a definitive agreement for the sale of its New York-based subsidiary MicroEdge, Inc. to Vista Equity Partners, which was completed on October 1, 2009. All past and future reported results of the MicroEdge business are now reported as discontinued operations of the Company.
GAAP Results for Continuing Operations
The Company reported revenue from continuing operations of $63.8 million for the third quarter of 2009, compared to $58.2 million from continuing operations in the third quarter of 2008, a 10% increase.
Operating income from continuing operations for the third quarter of 2009 was $5.8 million, or 9% of revenue, and represents an increase of 83% compared to $3.2 million from continuing operations, or 5% of revenue, in the third quarter of 2008.
Net income from continuing operations for the third quarter of 2009 was $3.9 million compared to $1.8 million from continuing operations in the third quarter of 2008, a 114% increase.
On a fully diluted basis, earnings per share from continuing operations in the third quarter of 2009 were $0.15 and represent a 127% increase from $0.06 from continuing operations in the third quarter of 2008.
Operating cash flow from continuing operations in the third quarter of 2009 was $19.8 million, compared with $17.5 million from continuing operations in the third quarter of 2008, a 13% increase. Cash and cash equivalents of continuing operations totaled $69.2 million as of September 30, 2009.
Total deferred revenues from continuing operations were $132.7 million as of September 30, 2009, compared to $127.1 million from continuing operations as of September 30, 2008, a 4% increase.
Non-GAAP Results for Continuing Operations
Non-GAAP operating income from continuing operations for the third quarter of 2009 was $12.3 million, or 19% of revenue. This represents a 49% increase compared to $8.3 million from continuing operations, or 14% of revenue, in the third quarter of 2008.
Non-GAAP diluted earnings per share from continuing operations were $0.30 in the third quarter of 2009 and represent a 58% increase from $0.19 from continuing operations in the third quarter of 2008.
The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.
GAAP Results for Discontinued Operations
Net income from discontinued operations for the third quarter of 2009 was $0.8 million, compared to $0.9 million from discontinued operations in the third quarter of 2008.
On a fully diluted basis, earnings per share from discontinued operations in the third quarter of 2009 were $0.03, consistent with the third quarter of 2008.
THIRD QUARTER HIGHLIGHTS
- Customer Momentum: Advent saw continued momentum in customer wins for Advent Portfolio Exchange® (APX), Geneva® and Tamale RMS®. The Company signed 19 APX contracts in the third quarter, which, combined with the third quarter APX outsourcing contracts, brings the total number of global APX contracts signed to more than 500. Advent signed 10 Geneva® contracts in the third quarter. The Company also added one of the largest university endowments to Tamale's list of clients in the third quarter.
- New and Incremental Bookings: The term license contracts signed in the third quarter of 2009 will contribute approximately $6 million in annual revenue ("annual term license contract value" or "ACV") once they are fully implemented.
- Launch of Advent Revenue Center® 3.0: Advent unveiled significant new features to Advent Revenue Center®, its comprehensive billing and revenue management solution. Advent Revenue Center® 3.0 includes revenue forecasting and revenue sharing to help firms maximize revenues, increase efficiency and mitigate operational risk.
- Appointment of Chief Financial Officer: Advent promoted James Cox, previously Vice President and Principal Accounting Officer of Advent, to the position of Senior Vice President and Chief Financial Officer.
FINANCIAL GUIDANCE
Advent announces the following financial guidance for Q4 and FY 2009:
Guidance Q409 Continuing FY09 Continuing Operations Operations -------- --------------- --------------- Total Revenue ($M) $64-$66 $257-$259 ------------------ ------- --------- GAAP Operating Margin n/a 10%-11% --------------------- --- ------ Amortization of Intangibles n/a 1%-2% (% of revenue) ------------- --- ---- Stock Compensation Expense (% of revenue) n/a 7%-8% ---------------------- --- ---- Non-GAAP Operating Margin n/a 19%-20% ------------------------- --- ------ Operating Cash Flow ($M) n/a $70-$75 ----------------------- --- ------- Capital Expenditures ($M) n/a $7-$9 ------------------------ --- -----
INVESTOR CALL
Advent Software, Inc. will host its Q3 2009 quarterly earnings conference call at 5:00 p.m. ET today. The Q3 2009 earnings presentation and trended disclosures file, which include highlights and detailed financial information, are currently available at http://investor.advent.com. To participate via phone, please dial 888-823-1020 and request conference ID #34021948. A replay will be available through midnight, November 4, 2009, by calling 800-642-1687 and referencing conference ID #34021948. The conference call will also be webcast live and then archived on http://investor.advent.com.
ABOUT ADVENT
Advent Software, Inc., a global firm, has provided trusted solutions to the world's financial professionals since 1983. Firms in 60 countries rely on Advent technology to run their mission-critical operations. Advent's quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling costs. Advent is the only financial services software company to be awarded the Service Capability and Performance certification for being a world-class support and services organization. For more information on Advent products visit http://www.advent.com/about/resources/demos/pr.
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 (GAAP), please see the accompanying tables entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures."
FORWARD-LOOKING STATEMENTS
The financial projections under Financial Guidance, our revenue growth, market acceptance, increased demand for our products and new product releases, the anticipated benefits of our sale of MicroEdge, anticipated benefits of our acquisition of Tamale Software, our competitive position, market conditions and their impact on our business, and the momentum of the business, and other forward-looking statements included in this presentation 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 include: potential fluctuations in new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our Advent Portfolio Exchange®, Geneva® and Moxy® products; the successful development, release and market acceptance of new products and product enhancements; continued uncertainties and fluctuations in the financial markets; the Company's ability to satisfy contractual performance requirements; difficulties in integrating merged businesses, such as Tamale Software, and achieving expected synergies and results; the anticipated proceeds and financial impact of divesting our MicroEdge subsidiary 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 2008 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, the Advent logo, Advent Software, Advent Portfolio Exchange, Advent Revenue Center, Geneva, Moxy and Tamale RMS are registered trademarks of Advent Software, Inc. All other company names or marks mentioned herein are those of their respective owners.
ADVENT SOFTWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (GAAP, Unaudited) September 30 December 31 2009 2008 ---- ---- ASSETS Current assets: Cash and cash equivalents $69,164 $45,098 Accounts receivable, net 38,570 46,564 Deferred taxes, current 12,466 12,458 Prepaid expenses and other 15,593 19,732 Current assets of discontinued operation 5,414 9,443 ----- ----- Total current assets 141,207 133,295 Property and equipment, net 34,738 39,150 Goodwill 145,144 143,044 Other intangibles, net 23,856 27,217 Deferred taxes, long-term 54,159 54,166 Other assets, net 8,261 11,419 Noncurrent assets of discontinued operation 12,143 11,303 ------ ------ Total assets $419,508 $419,594 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $5,452 $5,312 Accrued liabilities 26,840 25,781 Deferred revenues 126,336 135,217 Income taxes payable 6,228 978 Current liabilities of discontinued operation 13,002 13,953 ------ ------ Total current liabilities 177,858 181,241 Long-term debt - 25,000 Deferred income taxes 6 6 Deferred revenues, long-term 6,329 6,083 Other long-term liabilities 8,842 10,066 Noncurrent liabilities of discontinued operation 1,527 1,375 ----- ----- Total liabilities 194,562 223,771 ------- ------- Stockholders' equity: Common stock 256 257 Additional paid-in capital 378,407 365,351 Accumulated deficit (163,543) (176,484) Accumulated other comprehensive income 9,826 6,699 ----- ----- Total stockholders' equity 224,946 195,823 ------- ------- Total liabilities and stockholders' equity $419,508 $419,594 ======== ========
ADVENT SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (GAAP, Unaudited) Three Months Nine Months Ended September 30 Ended September 30 ------------------ ------------------ 2009 2008 2009 2008 ---- ---- ---- ---- Net revenues: Term license, maintenance and other recurring $55,346 $46,931 $166,416 $138,333 Perpetual license fees 2,370 3,168 7,633 11,485 Professional services and other 6,066 8,053 19,126 21,577 ----- ----- ------ ------ Total net revenues 63,782 58,152 193,175 171,395 Cost of revenues (1): Term license, maintenance and other recurring 11,920 11,095 34,729 31,581 Perpetual license fees 65 142 255 368 Professional services and other 7,628 10,453 23,190 25,339 Amortization of developed technology 1,416 575 4,145 1,681 ----- --- ----- ----- Total cost of revenues 21,029 22,265 62,319 58,969 ------ ------ ------ ------ Gross margin 42,753 35,887 130,856 112,426 Operating expenses (1): Sales and marketing 15,627 14,142 46,538 42,291 Product development 12,179 9,357 35,528 31,317 General and administrative 8,636 9,029 25,932 26,216 Amortization of other intangibles 438 134 1,315 721 Restructuring charges 36 41 92 96 -- -- -- -- Total operating expenses 36,916 32,703 109,405 100,641 ------ ------ ------- ------- Income from continuing operations 5,837 3,184 21,451 11,785 Interest income and other income (expense), net (194) (154) 1,585 3,633 ---- ---- ----- ----- Income from continuing operations before income taxes 5,643 3,030 23,036 15,418 Provision for income taxes 1,741 1,207 6,612 3,738 ----- ----- ----- ----- Net income from continuing operations $3,902 $1,823 $16,424 $11,680 Discontinued operation: Net income from discontinued operation (net of applicable taxes of $223, $640, $1,409 and $695, respectively) 770 889 2,499 1,022 ------ ------ ------- ------- Net income $4,672 $2,712 $18,923 $12,702 ====== ====== ======= ======= Basic net income per share Continuing operations $0.15 $0.07 $0.65 $0.44 Discontinued operation 0.03 0.03 0.10 0.04 ---- ---- ---- ---- Total operations $0.18 $0.10 $0.75 $0.48 ===== ===== ===== ===== Diluted net income per share Continuing operations $0.15 $0.06 $0.63 $0.41 Discontinued operation 0.03 0.03 0.10 0.04 ---- ---- ---- ---- Total operations $0.18 $0.10 $0.72 $0.45 ===== ===== ===== ===== Weighted average shares used to compute net income per share: Basic 25,527 26,788 25,352 26,690 Diluted 26,630 28,198 26,244 28,199 (1) Includes stock-based employee compensation expense as follows: Cost of term license, maintenance and other recurring revenues $498 $340 $1,333 $906 Cost of professional services and other revenues 336 266 967 739 --- --- --- --- Total cost of revenues 834 606 2,300 1,645 Sales and marketing 1,650 1,278 4,265 3,316 Product development 1,326 1,028 3,641 2,784 General and administrative 1,388 1,939 3,769 4,038 ----- ----- ----- ----- Total operating expenses 4,364 4,245 11,675 10,138 ----- ----- ------ ------ Total stock-based employee compensation expense $5,198 $4,851 $13,975 $11,783 ====== ====== ======= =======
ADVENT SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (GAAP, Unaudited) Nine Months Ended September 30 ------------------ 2009 2008 ---- ---- Cash flows from continuing operations' operating activities: Net income from continuing operations $16,424 11,680 ------- ------ Adjustments to reconcile continuing operations' net income to net cash provided by operating activities: Stock-based compensation 13,975 11,783 Depreciation and amortization 12,432 8,119 Loss on disposition of fixed assets 9 4 Provision for doubtful accounts 268 529 Provision for sales returns 454 61 Gain on investments (2,056) (3,393) Deferred income taxes (1) 124 Other 116 7 --- - Effect of statement of operations adjustments 25,197 17,234 Changes in operating assets and liabilities: Accounts receivable 7,717 (661) Prepaid and other assets 5,688 835 Accounts payable 483 6,037 Accrued liabilities (93) (4,536) Deferred revenues (9,089) 16,524 Income taxes payable 5,250 2,984 ----- ----- Effect of changes in operating assets and liabilities 9,956 21,183 ----- ------ Net cash provided by continuing operations' operating activities 51,577 50,097 Cash flows from continuing operations' investing activities: Net cash used in acquisitions - (1,000) Purchases of property and equipment (2,860) (17,396) Capitalized software development costs (2,000) (1,641) Proceeds from sale of private equity investments 2,056 3,393 Proceeds from disposition of fixed assets 37 - Change in restricted cash 1,534 (248) ----- ---- Net cash used in continuing operations' investing activities (1,233) (16,892) Cash flows from continuing operations' financing activities: Proceeds from exercises of employee stock options 6,318 4,892 Withholding taxes related to equity award net share settlement (2,026) (2,000) Proceeds from common stock issued under the employee stock purchase plan 2,946 2,576 Repurchase of common stock (14,578) (15,032) Repayment of long term borrowing (25,000) - ------- - Net cash used in continuing operations' financing activities (32,340) (9,564) Net cash transferred from discontinued operation 5,662 1,623 Effect of exchange rate changes on cash and cash equivalents 400 (127) --- ---- Net change in continuing operations' cash and cash equivalents 24,066 25,137 Cash and cash equivalents of continuing operations at beginning of period 45,098 48,809 ------ ------ Cash and cash equivalents of continuing operations at end of period $69,164 $73,946 ======= ======= Supplemental disclosure of cash flow information Cash flow from discontinued operation: Net cash provided by operating activities $4,283 $4,069 Net cash used in investing activities (715) (1,048) Net cash transferred to continuing operations (5,662) (1,623) Effect of exchange rates on cash and cash equivalents (8) (2) -- -- Net change in cash and cash equivalents from discontinued operations (2,102) 1,396 Cash and cash equivalents of discontinued operation at beginning of period 3,253 780 ----- --- Cash and cash equivalents of discontinued operation at end of period $1,151 $2,176 ====== ======
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 on a GAAP basis, Advent uses non-GAAP measures of continuing operations' operating income, net income and net income per share, which are adjusted to exclude certain costs, expenses, gains and losses 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 adjusted 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 generally accepted accounting principles in the United States. Three Months Ended September 30, 2009 for Continuing Operations ----------------------------------------- Gross Gross Operating Operating Net Margin Margin % Income Income % Income ------ -------- ------ -------- ------ GAAP $42,753 67% $5,837 9% $3,902 Amortization of acquired developed technology 782 782 782 Amortization of other acquired intangibles - 438 438 Stock-based compensation - cost of revenues 834 834 834 Stock-based compensation - operating expenses - 4,364 4,364 Restructuring charges - 36 36 Income tax adjustment for non-GAAP (1) - - (2,493) ------- ------- ------ Non-GAAP $44,369 70% $12,291 19% $7,863 ======= ======= ====== Diluted net income per share GAAP $0.15 Non-GAAP $0.30 Shares used to compute diluted net income per share 26,630 Three Months Ended September 30, 2008 for Continuing Operations ----------------------------------------- Gross Gross Operating Operating Net Margin Margin % Income Income % Income ------ -------- ------ -------- ------ GAAP $35,887 62% $3,184 5% $1,823 Amortization of acquired developed technology 52 52 52 Amortization of other acquired intangibles - 134 134 Stock-based compensation - cost of revenues 606 606 606 Stock-based compensation - operating expenses - 4,245 4,245 Restructuring charges - 41 41 Income tax adjustment for non-GAAP (1) - - (1,631) ------- ------ ------ Non-GAAP $36,545 63% $8,262 14% $5,270 ======= ====== ====== Diluted net income per share GAAP $0.06 Non-GAAP $0.19 Shares used to compute diluted net income per share 28,198 (1) The estimated non-GAAP effective tax rate was 35% for the three months ended September 30, 2009 and 2008, respectively, and has been used to adjust the provision for income taxes for non-GAAP purposes.
Advent Software, Inc. Reconciliation of Projected Continuing Operations' GAAP Operating Income % to Non-GAAP Operating Income % (Preliminary and unaudited) Advent provides projections of non-GAAP measures of its continuing operations' operating income, which exclude certain costs, expenses, gains and losses which it believes is appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our projected continuing operations' GAAP results are made with the intent of providing management and investors a more complete understanding continuing operations' underlying operational results and trends and our marketplace performance. In addition, these adjusted non-GAAP projections are among the information management uses as a basis for 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 generally accepted accounting principles in the United States. Twelve Months Ended December 31, 2009 Continuing Operations Operating Income % ------------------ Projected GAAP 10% to 11% == == == Projected amortization of acquired developed technology and other acquired intangible asset adjustment 1% to 2% Projected stock based compensation adjustment 7% to 8% -- -- -- Projected non-GAAP 19% to 20% == == ==
SOURCE Advent Software, Inc.
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