updated 2/17/2011 4:15:36 PM ET 2011-02-17T21:15:36

WINDSOR, Conn., Feb. 17, 2011 (GLOBE NEWSWIRE) -- SS&C Technologies Holdings, Inc. (Nasdaq:SSNC), a global provider of software-enabled services and financial services software, today announced its financial results for the fourth quarter and full year ended December 31, 2010.

"2010 was the highest-ever revenue year in SS&C's history and we believe we can continue our success in 2011," said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies Holdings, Inc.

GAAP Results

The Company reported quarterly revenue of $86.1 million for the fourth quarter of 2010, compared to $71.0 million in the fourth quarter of 2009, or an increase of 21.2%. Total annual revenues for the year ended December 31, 2010 were $328.9 million, a 21.4% increase over the $270.9 million in 2009.

GAAP operating income for the fourth quarter of 2010 was $21.0 million, or 24.4% of revenue, up from $19.1 million in 2009's fourth quarter. Operating income for the year ended December 31, 2010 was $79.8 million compared to $67.1 million for 2009.

Net income for the fourth quarter of 2010 was $9.2 million compared to $6.0 million in the fourth quarter of 2009. Net income for the year ended December 31, 2010 was $32.4 million compared to $19.0 million for 2009, a 70.4% increase.

On a fully diluted basis, earnings per share in the fourth quarter of 2010 were $0.12 and represent a 33.3% increase from $0.09 in the fourth quarter of 2009. On a fully diluted basis, earnings per share for the year ended December 31, 2010 were $0.44 and represent a 46.7% increase compared to 2009's $0.30 per diluted share.

Non-GAAP Results

Adjusted Revenue, which is adjusted for one-time purchase accounting adjustments (a non-GAAP measure defined in note 1 to the attached Condensed Consolidated Financial Information), was $86.1 million for the fourth quarter of 2010, an increase of $15.0 million or 21.1% from $71.1 million in the same period for 2009.

Adjusted operating income (a non-GAAP financial measure defined in note 2 to the attached Condensed Consolidated Financial Information) in the fourth quarter of 2010 was $34.1 million, or 39.6% of revenue. This represents a 17.6% increase compared to $29.0 million and 40.8% of revenue, in the fourth quarter of 2009. Adjusted operating income for the year ended December 31, 2010 was $129.2 million. This represents a 21.3% increase compared to adjusted operating income of $106.5 million for 2009.

Adjusted net income (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) for the fourth quarter of 2010 was $18.2 million compared to $13.3 million in 2009's fourth quarter, a 36.6% increase. Adjusted net income for the year ended December 31, 2010 was $65.6 million and represented a 40.7% increase compared to $46.6 million for 2009.

Adjusted diluted earnings per share (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) in the fourth quarter were $0.24 and represent a 14.3% increase from $0.21 in the fourth quarter of 2009. Adjusted diluted earnings per share for the year ended December 31, 2010 were $0.90 and represented a 23.3% increase compared to $0.73 per share in 2009.

Cash Flow

SS&C generated net cash from operating activities of $75.6 million for the year ended December 31, 2010, compared to $59.9 million for the same period in 2009, representing a 26.3% increase. We ended 2010 with $84.8 million of cash on the balance sheet. SS&C's leverage ratio as defined in our credit agreement stood at 1.85 for the year ended 2010, down from 6.8 when we went private in November of 2005.

Annual Run Rate Basis

Annual Run Rate Basis (ARRB) recurring revenue, defined as the addition of maintenance and software-enabled services revenue, was $74.7 million for the fourth quarter of 2010, an annual run-rate of $298.9 million. This represents an increase of 24.5% from $60.0 million and $240.0 million run-rate in the same period in 2009 and an increase of 3.6% from Q3 2010's $72.1 million and $288.6 million run-rate. We believe ARRB of our recurring revenue is a good indicator of visibility.

Acquisitions

The Company acquired three businesses in 2010 including Geller Investment Partnership Services (GIPS), the thinklink business from TD Ameritrade, and TimeShareWare. GIPS provides accounting, reporting, performance, tax and investor services for the private equity industry. The thinklink software platform is an internet-deployed trade order management and execution solution with more than fifty institutional sell-side clients. The TimeShareWare acquisition includes software solutions for shared-ownership resorts and has more than 500 product installations around the world including Marriott, Group RCI, Holiday Inn Vacation Club Vacations, and more.

Fourth Quarter Highlights                                

  • Continued Software-Enabled Services Growth: SS&C increased its software-enabled services business to $56.1 million, an increase of 32.2% over $42.5 million in the same period in 2009. Revenues from software-enabled services accounted for 65.2% of total revenue in the fourth quarter of 2010.
  • Record Quarter for Revenues: A 20.4% increase in license revenue in the fourth quarter of 2010 over the same period in 2009 combined with a 32.2% increase in software-enabled services led to SS&C's highest-ever quarterly revenue of $86.1 million in the fourth quarter of 2010.    
  • New York City Office Consolidation: SS&C renegotiated and added to its space in mid-town Manhattan to support growth in fund administration, financial training, and municipal finance businesses, and bringing in Geller Investment Partnership Services private equity fund administration business.
  • TimeShareWare Acquisition: SS&C extended its real estate property offering with TimeShareWare's platform technology based on a three-tier Service Oriented Architecture (SOA) to manage all aspects of resort industry management.
  • Key Client Wins: SS&C signed key Q4 client deals including a global bank's Corporate Trust and Agency Services for SS&C's Money Market Manager; a U.S.-based financial services organization will use LMS Loan Suite to manage its US$14 billion loan portfolio; a large U.S. independent broker/dealer selected SS&C's Recon, Fiera Capital Management expanded its relationship with SS&C and chose its Global Wealth Platform; a large Canadian bank licensed SS&C MarginMan to process precious metals and foreign exchange, and Solmar Hotels & Resorts selected SS&C's TimeShareWare Professional to manage sales and marketing, lead management, property management, and online rental operations.
  • SAS No. 70 and CICA 5970 Audits: In the fourth quarter, SS&C completed 14 independent audits of its selected controls, processes and procedures in compliance with the American Institute of Certified Public Accountants' (AICPA) (SAS) No. 70 for service organizations and the Canadian Institute of Chartered Accountants (CICA) Section 5970. Completion of the SAS 70 designation acknowledges that SS&C's processes and controls have been evaluated and tested by an independent service auditor: PricewaterhouseCoopers. The examinations included its data centers, the Company's SaaS solutions and its full service fund administration and institutional outsourcing services platform.

Guidance

SS&C announces the following financial guidance for the first quarter and fiscal year 2011:

Guidance Q1 2011 FY 2011
Total Revenue ($M) $87.0 -- $88.5      $362.0 -- $369.0
Adjusted Net Income ($M) $18.6 -- $19.2 $81.8 -- $84.8
Cash from Operating Activities ($M) N/A $82.0 -- $ 86.0
Capital Expenditures (% of revenue)        N/A 1.9% - 2.1%

Results of SS&C Technologies, Inc.

Our operating subsidiary, SS&C Technologies, Inc., posted the same revenues and net income for the fourth quarter of 2010 and year ended December 31, 2010 as the Company.

Non-GAAP Financial Measures

Adjusted revenue, adjusted operating income, adjusted consolidated EBITDA, adjusted net income and adjusted diluted earnings per share are non-GAAP measures. See the accompanying notes to the attached Condensed Consolidated Financial Information for the reconciliations and definitions for each of these non-GAAP measures and the reasons our management believes that these measures provide useful information to investors regarding our financial condition and results of operations.

Earnings Call and Press Release

SS&C's Q4 and Fiscal Year 2010 earnings call will take place at 5:00 p.m. eastern time today, February 17, 2011. The call will discuss Q4 and 2010 results. Interested parties may dial 877-312-8798 (U.S. and Canada) or 253-237-1193 (International) and request the "SS&C Fourth Quarter and 2010 Earnings Call," conference ID #43918491. A replay will be available after 8:00 p.m. eastern time on February 17, until midnight on February 24, 2011. The dial-in number is 800-642-1687 (U.S. and Canada) 706-645-9291 (International); access code #43918491. The call will also be available for replay on SS&C's website after February 18, 2011: http://investor.ssctech.com/results.cfm .

This press release contains forward-looking statements relating to, among other things, our financial guidance for the first quarter of 2011 and full year 2011. Such statements reflect management's best judgment based on factors currently known but are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, the state of the economy and the financial services industry, the Company's ability to finalize large client contracts, fluctuations in customer demand for the Company's products and services, intensity of competition from application vendors, delays in product development, the Company's ability to control expenses, terrorist activities, the Company's ability to integrate acquired businesses, the effect of the acquisitions on customer demand for the Company's products and services, and those risks described in the Company's publicly available filings with the Securities and Exchange Commission. The Company cautions investors that it may not update any or all of the foregoing forward-looking statements.

About SS&C Technologies Holdings, Inc.

SS&C is a leader in the delivery of investment and financial management software and related services focused exclusively on the global financial services industry. Founded in 1986, SS&C has its headquarters in Windsor, Connecticut and offices around the world. 5,000 financial services organizations, from the world's largest to local financial services organizations, manage and account for their investments using SS&C's products and services. These clients in the aggregate manage over $16 trillion in assets. Additional information about SS&C (Nasdaq:SSNC) is available at www.ssctech.com .

Follow SS&C on Twitter at @ssctechnologies.

The SS&C Technologies logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8587

SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operation
(in thousands, except per share data)
         
         
  Three Months Ended Year Ended
  December 31,

2010
December 31,

2009
December 31,

2010
December 31,

2009
Revenues:        
Software licenses $6,054 $5,029 $23,683 $20,661
Maintenance 18,573 17,534 72,703 66,099
Professional services 5,343 6,017 20,727 20,889
Software-enabled services 56,140 42,465 211,792 163,266
Total revenues 86,110 71,045 328,905 270,915
         
Cost of revenues:        
Software licenses 1,996 2,195 7,750 8,499
Maintenance  8,407 7,207 32,712 27,559
Professional services 3,711 3,495 13,954 14,154
Software-enabled services 29,379 22,449 111,516 87,528
Total cost of revenues 43,493 35,346 165,932 137,740
         
Gross profit 42,617 35,699 162,973 133,175
         
Operating expenses:        
Selling and marketing 6,319 5,133 25,229 20,362
Research and development 7,956 6,920 31,442 26,513
General and administrative 7,297 4,514 26,462 19,197
Total operating expenses 21,572 16,567 83,133 66,072
         
Operating income 21,045 19,132 79,840 67,103
         
Interest expense, net  (6,594)  (9,072)  (30,412)  (36,863)
Other income (expense), net   (154)  (162)  499  (1,418)
Loss on extinguishment of debt   --   --   (5,480)  -- 
         
Income before income taxes 14,297 9,898 44,447 28,822
Provision for income taxes  5,121 3,876 12,034 9,804
         
Net income $9,176 $6,022 $32,413 $19,018
         
Basic earnings per share $0.13 $0.10 $0.47 $0.31
         
Basic weighted average number of

common shares outstanding
72,316 60,392 69,027 60,381
         
Diluted earnings per share $0.12 $0.09 $0.44 $0.30
         
Diluted weighted average number

of common and common equivalent

shares outstanding
76,594 64,542 73,079 63,653
         
See Notes to Condensed Consolidated Financial Information.
 
 
SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
     
  December 31,

2010
December 31,

2009
ASSETS    
Current assets:    
Cash and cash equivalents $84,843 $19,055
Accounts receivable, net  45,531 41,600
Prepaid income taxes 2,242 669
Deferred income taxes 1,142 1,780
Prepaid expenses and other current assets 5,932 6,164
Total current assets 139,690 69,268
     
Property and equipment, net 13,570 14,036
     
Deferred income taxes 686 499
Goodwill 926,668 885,517
Intangible and other assets, net  195,112 216,321
     
Total assets $1,275,726 $1,185,641
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Current portion of long-term debt $1,702 $4,270
Accounts payable 3,790 4,804
Income taxes payable --  703
Accrued employee compensation and benefits 16,854 14,693
Other accrued expenses 11,052 16,938
Interest payable 1,305 2,070
Deferred maintenance and other revenue 41,671 40,400
Total current liabilities 76,374 83,878
     
Long-term debt, net of current portion 289,092 392,989
Other long-term liabilities 12,343 12,779
Deferred income taxes 40,734 50,008
Total liabilities 418,543 539,654
     
Total stockholders' equity 857,183 645,987
     
Total liabilities and stockholders' equity $1,275,726 $1,185,641
     
See Notes to Condensed Consolidated Financial Information.
 
 
SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
   Year Ended
  December 31,

2010
December 31,

2009
Cash flow from operating activities:    
Net income $32,413 $19,018
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 40,728 36,028
Stock-based compensation expense 13,254 5,607
Amortization of loan origination costs 3,392 2,306
(Gain) loss on sale or disposition of property and equipment  (9)  13
Deferred income taxes  (13,700)  (8,861)
Provision for doubtful accounts 831 213
Changes in operating assets and liabilities, excluding effects from acquisitions:    
Accounts receivable 1,066 3,360
Prepaid expenses and other assets  (133)  (284)
Accounts payable  (1,041)  1,549
Accrued expenses and other liabilities   (2,660)  1,646
Income taxes prepaid and payable  2,073  (5,236)
Deferred maintenance and other revenues  (647)  4,493
Net cash provided by operating activities 75,567 59,852
     
Cash flow from investing activities:    
Additions to property and equipment  (4,834)  (2,559)
Proceeds from sale of property and equipment 59 3
Cash paid for business acquisitions, net of cash acquired  (45,815)  (51,477)
Additions to capitalized software and other intangibles  (509)  (101)
Net cash used in investing activities  (51,099)  (54,134)
     
Cash flow from financing activities:    
Cash received from other borrowings -- 2,000
Repayment of debt   (108,120)  (19,679)
Proceeds from exercise of stock options 10,813 1,998
Income tax benefit related to exercise of stock options 5,064 --
Proceeds from common stock issuance, net 134,558 --
Purchase of common stock for treasury  (1,169)  (2,215)
Net cash provided by (used in) financing activities 41,146  (17,896)
     
Effect of exchange rate changes on cash and cash equivalents 174 1,934
     
Net increase in cash and cash equivalents 65,788  (10,244)
Cash and cash equivalents, beginning of period 19,055 29,299
Cash and cash equivalents, end of period $84,843 $19,055
     
See Notes to Condensed Consolidated Financial Information.

SS&C Technologies Holdings, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Information

Note 1. Reconciliation of Revenue to Adjusted Revenue

Adjusted revenue represents revenue adjusted for one-time purchase accounting adjustments to fair value deferred revenue acquired in business combinations. Adjusted revenue is presented because we use this measure to evaluate performance of our business against prior periods and believe it is a useful indicator of the underlying performance of the Company. Adjusted revenue is not a recognized term under generally accepted accounting principles (GAAP). Adjusted revenue does not represent revenue, as that term is defined under GAAP, and should not be considered as an alternative to revenue as an indicator of our operating performance. Adjusted revenue as presented herein is not necessarily comparable to similarly titled measures. The following is a reconciliation between adjusted revenue and revenue, the GAAP measure we believe to be most directly comparable to adjusted revenue.

  Three months ended

December 31,
 Year ended

December 31,
(in thousands) 2010 2009 2010 2009
Revenue $86,110 $71,045 $328,905 $270,915
Purchase accounting adjustments to deferred revenue 11 48 189 48
Adjusted revenue $86,121 $71,093 $329,094 $270,963

Note 2. Reconciliation of Operating Income to Adjusted Operating Income

Adjusted operating income represents operating income adjusted for amortization of acquisition-related intangible assets and purchase accounting adjustments for deferred revenue and other expenses. Adjusted operating income is presented because we use this measure to evaluate performance of our business and believe it is a useful indicator of the underlying performance of the Company. Adjusted operating income is not a recognized term under GAAP. Adjusted operating income does not represent operating income, as that term is defined under GAAP, and should not be considered as an alternative to operating income as an indicator of our operating performance. Adjusted operating income as presented herein is not necessarily comparable to similarly titled measures. The following is a reconciliation between adjusted operating income and operating income, the GAAP measure we believe to be most directly comparable to adjusted operating income.

  Three months ended

December 31,
Year ended

December 31,
(in thousands) 2010 2009 2010 2009
Operating income  $21,045 $19,132 $79,840 $67,103
Amortization of intangible assets 8,950 8,037 35,085 31,129
Stock-based compensation 4,073 1,244 13,254 5,607
Capital-based taxes 230 123 1,091 795
Unusual or non-recurring charges  (30) 149 174 776
Purchase accounting adjustments  (114)  70  (238)  (93)
Other  (75)  224  39  1,201
Adjusted operating income $34,079 $28,979 $129,245 $106,518

Note 3. Reconciliation of Net Income to EBITDA, Consolidated EBITDA and Adjusted Consolidated EBITDA

EBITDA represents net income before interest expense, income taxes, depreciation and amortization. Consolidated EBITDA, defined under our Credit Agreement entered into in November 2005, is used in calculating covenant compliance, and is EBITDA adjusted for certain items. Consolidated EBITDA is calculated by subtracting from or adding to EBITDA items of income or expense described below. Adjusted consolidated EBITDA is calculated by subtracting acquired EBITDA from consolidated EBITDA. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are presented because we use these measures to evaluate performance of our business and believe them to be useful indicators of an entity's debt capacity and its ability to service debt. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are not recognized terms under GAAP and should not be considered in isolation or as an alternative to operating income, net income or cash flows from operating activities. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA do not represent net income, as that term is defined under GAAP, and should not be considered as an alternative to net income as an indicator of our operating performance. The following is a reconciliation between EBITDA, consolidated EBITDA and adjusted consolidated EBITDA and net income.

     
  Three months ended

December 31,
Year ended 

December 31,
(in thousands) 2010 2009 2010 2009
Net income $9,176 $6,022 $32,413 $19,018
Interest expense, net 6,594 9,072 35,892 36,863
Taxes 5,121 3,876 12,034 9,804
Depreciation and amortization 10,372 9,321 40,728 36,028
EBITDA 31,263 28,291 121,067 101,713
Stock-based compensation 4,073 1,244 13,254 5,607
Capital-based taxes 230 123 1,091 795
Acquired EBITDA and cost savings 329 1,774 6,392 8,053
Unusual or non-recurring charges  124  307  (325)  1,990
Purchase accounting adjustments  (114)  70  (238)  (93)
Other  (75) 224 39 1,201
Consolidated EBITDA 35,830 32,033 141,280 119,266
Less: acquired EBITDA  (329)  (1,774)  (6,392)  (8,053)
Adjusted Consolidated EBITDA    $35,501 $30,259 $134,888 $111,213

Note 4. Reconciliation of Net Income to Adjusted Net Income and Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share

Adjusted net income and adjusted diluted earnings per share represent net income and earnings per share before amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes and other unusual and non-recurring items. Adjusted net income and adjusted diluted earnings per share are not recognized terms under GAAP, do not represent net income or diluted earnings per share, as those terms are defined under GAAP, and should not be considered as alternatives to net income or diluted earnings per share as indicators of our operating performance. Adjusted net income and adjusted diluted earnings per share are important to management and investors because it represents our operational performance exclusive of the effects of amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes and other unusual and non-recurring items that are not operational in nature or comparable to those of our competitors. The following is a reconciliation between adjusted net income and adjusted diluted earnings per share and net income and diluted earnings per share.

  Three months ended

December 31,
Year ended

December 31,
 (in thousands, except per share data) 2010 2009 2010 2009
GAAP – Net income $9,176 $6,022 $32,413 $19,018
Plus: Amortization of intangible assets 8,950 8,037 35,085 31,129
Plus: Amortization of deferred financing costs 496 582 2,127 2,306
Plus: Stock-based compensation 4,073 1,244 13,254 5,607
Plus: Capital-based taxes 230 123 1,091 795
Plus: Unusual and non-recurring items  124  307  (325)  1,990
Plus: Loss on extinguishment of debt  --   --   5,480  -- 
Plus: Purchase accounting adjustments  (114)  70  (238)  (93)
Plus: Other  (75)  224  39  1,201
Income tax effect (1)  (4,672)  (3,294)  (23,301)  (15,311)
Adjusted net income $18,188 $13,315 $65,625 $46,642
         
Adjusted diluted earnings per share $0.24 $0.21 $0.90 $0.73
         
GAAP diluted earnings per share $0.12 $0.09 $0.44 $0.30
         
Diluted weighted-average shares outstanding  76,594 64,542 73,079 63,653
         
(1) An estimated normalized effective tax rate of 35% has been used to adjust the provision for income taxes for

the purposes of computing adjusted net income.
CONTACT: Patrick Pedonti
         Chief Financial Officer
         Tel: +1-860-298-4738
         E-mail: investorrelations@sscinc.com

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