Advent Software Announces 2009 Third Quarter Results
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SAN FRANCISCO, Oct. 27 /PRNewswire-FirstCall/ -- Advent Software, Inc. (Nasdaq: 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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