Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
October 27, 2014
Date of Report (date of earliest event reported)
ADVENT SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)
State of Delaware
(State or other jurisdiction of
incorporation or organization) |
|
0-26994
(Commission File Number) |
|
94-2901952
(I.R.S. Employer
Identification Number) |
600 Townsend Street
San Francisco, California 94103
(Address of principal executive offices)
(415) 543-7696
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Table of Contents
TABLE OF CONTENTS
ITEM 2.02 Results of Operations and Financial Condition
On October 27, 2014, Advent Software, Inc. (the Company) announced its results of operations for the third quarter ended September 30, 2014. A copy of the Companys press release announcing such results dated October 27, 2014 is attached hereto as Exhibit 99.1. This Current Report on Form 8-K and the attached exhibits are furnished to, but not filed with, the U.S. Securities and Exchange Commission (SEC) and shall not be deemed to be incorporated by reference into any of the Companys filings with the SEC under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits
The following exhibits are furnished as part of this Current Report on Form 8-K:
Exhibit No. |
|
Exhibit Description |
99.1 |
|
Press release announcing results of operations dated October 27, 2014 |
99.2 |
|
Third quarter 2014 earnings highlights dated October 27, 2014 |
2
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
ADVENT SOFTWARE, INC. |
|
|
|
|
|
|
By: |
/s/ James S. Cox |
|
|
James S. Cox |
|
|
Executive Vice President and Chief Financial Officer |
|
|
(Principal Financial and Accounting Officer) |
Dated: October 27, 2014
3
Table of Contents
EXHIBIT INDEX
Exhibit No. |
|
Exhibit Description |
99.1 |
|
Press release announcing results of operations dated October 27, 2014 |
99.2 |
|
Third quarter 2014 earnings highlights dated October 27, 2014 |
4
Exhibit 99.1
ADVENT SOFTWARE REPORTS THIRD QUARTER
2014 RESULTS
· GAAP Diluted EPS of $0.22, up 22%
· Non-GAAP Diluted EPS of $0.37, up 18%
· Operating Cash Flow of $28 Million, up 24%
SAN FRANCISCO October 27, 2014 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 third quarter ended September 30, 2014.
Advent posted another solid performance in the quarter, with excellent profitability and robust cash flow, said Pete Hess, Chief Executive Officer of Advent. We had great attendance at AdventConnect, our annual client conference, and clients and prospects responded enthusiastically to the many enhancements we showcased across our solution suite, as evidenced by our strong renewals and healthy bookings this quarter.
THIRD QUARTER 2014 RESULTS
GAAP Results for Continuing Operations
Advent reported quarterly revenue of $99.0 million for the third quarter of 2014, compared to $96.8 million in the third quarter of 2013, a 2% increase.
Operating income for the third quarter of 2014 was $20.2 million, or 20.5% of revenue, compared to operating income of $17.4 million in the third quarter of 2013, a 17% increase.
Net income for the third quarter of 2014 was $12.0 million, compared to net income of $9.8 million in the third quarter of 2013. On a fully diluted basis, earnings per share for the third quarter of 2014 were $0.22 compared to $0.18 in the third quarter of 2013, a 22% increase.
Operating cash flow for the third quarter of 2014 was $28.3 million, compared with $22.8 million in the third quarter of 2013, a 24% increase.
Cash and cash equivalents totaled $37 million as of September 30, 2014, compared to $41 million as of June 30, 2014. Total outstanding debt as of September 30, 2014 was $255 million compared to $280 million as of June 30, 2014.
Deferred revenue as of September 30, 2014 was $184 million, compared to $183 million as of June 30, 2014.
During the quarter, Advents Board of Directors approved a quarterly dividend of $0.13 per share. The cash dividend payment was made on October 15, 2014 to shareholders of record of Advents common stock at the close of business on September 30, 2014.
Non-GAAP Results for Continuing Operations
Non-GAAP operating income for the third quarter of 2014 was $32.1 million, or 32.4% of revenue, an 11% increase compared to $29.0 million, or 30.0% of revenue, in the third quarter of 2013.
On a fully diluted basis, non-GAAP earnings per share were $0.37 for the third quarter of 2014 and represent an 18% increase from non-GAAP diluted net income per share of $0.31 in the third quarter of 2013.
The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.
HIGHLIGHTS
· Solid Third Quarter Bookings with Strong Renewals: The Annual Contract Value (ACV) of our new contract bookings in the third quarter of 2014 will contribute $7.2 million in annual revenue once the contracts are fully implemented. The initial renewal rate for the second quarter of 2014 was 95%. The renewal rate from the first quarter of 2014 increased by three points to 97% as additional cash was collected.
· Continued Client Success: New customers added in the third quarter include St. Denis J. Villere & Company, Ziegler Capital Management, LLC, Churchill Management Company, and Prince Street Capital Management, LLC, while Raymond James Investment Services Ltd and Somerset Capital Management Limited deepened their Advent relationships by buying additional products.
· AdventConnect 2014 Showcases Product Upgrades Advent showcased enhancements across its product suite at AdventConnect including: new capabilities within Geneva® to address regulations like FATCA and AIFMD; improved CRM workflow, platform reporting enhancements, and Salesforce integration for APX; and in Black Diamond℠, Advent unveiled the new investor experience, along with upgrades to rebalancing and data mining functionality. The company also further strengthened Moxy® and Advent Rules Manager® with enhanced real-time pricing among many other new capabilities.
· Award-Winning Solutions & Company: Advent Portfolio Exchange® (APX) was awarded Best Client Reporting System at the Systems in the City Awards 2014 ceremony in London.
FINANCIAL GUIDANCE
Advent updates the following financial guidance for the fourth quarter and fiscal year 2014:
Guidance |
|
Q4 2014 |
|
FY 2014 |
Total Revenue ($M) |
|
$99 - $102 |
|
$395 - $398 |
GAAP Operating Margin |
|
n/a |
|
20.5% - 21.0% |
Stock Compensation Expense (% of revenue) |
|
n/a |
|
8.0% |
Amortization of Intangibles (% of revenue) |
|
n/a |
|
2.0% |
Restructuring (% of revenue) |
|
n/a |
|
1.0% |
Non-GAAP Operating Margin |
|
n/a |
|
31.5% - 32.0% |
Operating Cash Flow ($M) |
|
n/a |
|
$105 - $115 |
Capital Expenditures ($M) |
|
n/a |
|
$8 - $11 |
Effective Tax Rate (GAAP) |
|
n/a |
|
35% - 40% |
Effective Tax Rate (non-GAAP) |
|
n/a |
|
35% |
INVESTOR CALL
Advent Software, Inc. will host its Q3 2014 quarterly earnings conference call at 5:00 p.m. Eastern time today. The Q3 2014 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 877-546-5020 and request conference ID # 79682130. Telephone replay will be available through midnight November 6, 2014. The replay number for domestic callers is 888-286-8010, and for international callers is 617-801-6888, with the conference ID of # 32551486. The conference call will also be webcast live and then archived on http://investor.advent.com.
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, weve helped over 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 and Reconciliation of Projected Continuing Operations GAAP Operating Income % to Non-GAAP Operating Income %.
FORWARD-LOOKING STATEMENTS
The financial projections under Financial Guidance and any other forward-looking statements included in this presentation reflect managements 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 products; the successful development, release and market acceptance of new products and product enhancements; uncertainties and fluctuations in the financial markets; the Companys ability to declare future dividends; the Companys 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 2013 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, Geneva®, Advent Portfolio Exchange®, Moxy® and Advent Rules Manager® are registered trademarks, and Black Diamond is a mark, of Advent Software, Inc. Any other company names or marks mentioned herein are those of their respective owners.
CONTACTS
Media Contact:
Kendall Reischl
Advent Software, Inc.
(415) 645-1771
kendall.reischl@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)
|
|
September 30 |
|
December 31 |
|
|
|
2014 |
|
2013 |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
36,692 |
|
$ |
33,828 |
|
Accounts receivable, net |
|
55,280 |
|
58,717 |
|
Deferred taxes, current |
|
24,897 |
|
24,898 |
|
Prepaid expenses and other |
|
24,724 |
|
30,114 |
|
Current assets of discontinued operation |
|
|
|
100 |
|
Total current assets |
|
141,593 |
|
147,657 |
|
Property and equipment, net |
|
28,502 |
|
31,698 |
|
Goodwill |
|
205,178 |
|
207,818 |
|
Other intangibles, net |
|
21,004 |
|
27,392 |
|
Deferred taxes, long-term |
|
21,213 |
|
23,020 |
|
Other assets |
|
14,055 |
|
17,372 |
|
Noncurrent assets of discontinued operation |
|
1,337 |
|
1,337 |
|
|
|
|
|
|
|
Total assets |
|
$ |
432,882 |
|
$ |
456,294 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS DEFICIT |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
10,155 |
|
$ |
5,348 |
|
Dividends payable |
|
6,712 |
|
|
|
Accrued liabilities |
|
34,677 |
|
41,625 |
|
Deferred revenues |
|
176,288 |
|
186,107 |
|
Current portion of long-term debt |
|
20,000 |
|
20,000 |
|
Current liabilities of discontinued operation |
|
632 |
|
600 |
|
Total current liabilities |
|
248,464 |
|
253,680 |
|
Deferred revenues, long-term |
|
7,250 |
|
7,809 |
|
Long-term income taxes payable |
|
7,667 |
|
7,667 |
|
Long-term debt |
|
235,000 |
|
285,000 |
|
Other long-term liabilities |
|
8,447 |
|
11,171 |
|
Noncurrent liabilities of discontinued operation |
|
2,324 |
|
2,782 |
|
|
|
|
|
|
|
Total liabilities |
|
509,152 |
|
568,109 |
|
|
|
|
|
|
|
Stockholders deficit: |
|
|
|
|
|
Common stock |
|
516 |
|
513 |
|
Additional paid-in capital |
|
58,394 |
|
42,533 |
|
Accumulated deficit |
|
(142,765 |
) |
(165,870 |
) |
Accumulated other comprehensive income |
|
7,585 |
|
11,009 |
|
Total stockholders deficit |
|
(76,270 |
) |
(111,815 |
) |
|
|
|
|
|
|
Total liabilities and stockholders deficit |
|
$ |
432,882 |
|
$ |
456,294 |
|
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(GAAP, Unaudited)
|
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
|
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
Net revenues: |
|
|
|
|
|
|
|
|
|
Recurring revenues |
|
$ |
90,689 |
|
$ |
88,116 |
|
$ |
272,352 |
|
$ |
260,862 |
|
Non-recurring revenues |
|
8,293 |
|
8,651 |
|
23,804 |
|
24,518 |
|
|
|
|
|
|
|
|
|
|
|
Total net revenues |
|
98,982 |
|
96,767 |
|
296,156 |
|
285,380 |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (1): |
|
|
|
|
|
|
|
|
|
Recurring revenues |
|
20,088 |
|
17,782 |
|
59,304 |
|
52,173 |
|
Non-recurring revenues |
|
8,106 |
|
11,501 |
|
23,675 |
|
31,088 |
|
Amortization of developed technology |
|
1,690 |
|
2,508 |
|
5,178 |
|
7,405 |
|
|
|
|
|
|
|
|
|
|
|
Total cost of revenues |
|
29,884 |
|
31,791 |
|
88,157 |
|
90,666 |
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
69,098 |
|
64,976 |
|
207,999 |
|
194,714 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (1): |
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
17,658 |
|
18,546 |
|
55,687 |
|
58,967 |
|
Product development |
|
16,962 |
|
17,369 |
|
51,805 |
|
52,254 |
|
General and administrative |
|
10,846 |
|
10,894 |
|
32,115 |
|
43,895 |
|
Amortization of other intangibles |
|
809 |
|
953 |
|
2,588 |
|
2,863 |
|
Recapitalization costs |
|
|
|
|
|
|
|
6,041 |
|
Restructuring charges (benefit) |
|
2,579 |
|
(157 |
) |
4,494 |
|
2,959 |
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
48,854 |
|
47,605 |
|
146,689 |
|
166,979 |
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
20,244 |
|
17,371 |
|
61,310 |
|
27,735 |
|
Interest and other income (expense), net |
|
(1,423 |
) |
(2,977 |
) |
(5,596 |
) |
(4,610 |
) |
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes |
|
18,821 |
|
14,394 |
|
55,714 |
|
23,125 |
|
Provision for income taxes |
|
6,818 |
|
4,561 |
|
20,149 |
|
5,390 |
|
|
|
|
|
|
|
|
|
|
|
Net income from continuing operations |
|
$ |
12,003 |
|
$ |
9,833 |
|
$ |
35,565 |
|
$ |
17,735 |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operation: |
|
|
|
|
|
|
|
|
|
Net (loss) income from discontinued operation (net of applicable taxes of $(14), $(16), $(38) and $45, respectively) |
|
(20 |
) |
(20 |
) |
(57 |
) |
68 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
11,983 |
|
$ |
9,813 |
|
$ |
35,508 |
|
$ |
17,803 |
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share (2): |
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.23 |
|
$ |
0.19 |
|
$ |
0.69 |
|
$ |
0.35 |
|
Discontinued operation |
|
(0.00 |
) |
(0.00 |
) |
(0.00 |
) |
0.00 |
|
Total operations |
|
$ |
0.23 |
|
$ |
0.19 |
|
$ |
0.69 |
|
$ |
0.35 |
|
|
|
|
|
|
|
|
|
|
|
Diluted net income (loss) per share (2): |
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
0.22 |
|
$ |
0.18 |
|
$ |
0.66 |
|
$ |
0.33 |
|
Discontinued operation |
|
(0.00 |
) |
(0.00 |
) |
(0.00 |
) |
0.00 |
|
Total operations |
|
$ |
0.22 |
|
$ |
0.18 |
|
$ |
0.66 |
|
$ |
0.33 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
51,579 |
|
51,576 |
|
51,464 |
|
51,241 |
|
Diluted |
|
53,877 |
|
53,937 |
|
53,574 |
|
53,329 |
|
|
|
|
|
|
|
|
|
|
|
Cash dividends declared per common share |
|
$ |
0.13 |
|
|
|
$ |
0.26 |
|
|
|
(1) Includes stock-based employee compensation expense as follows:
Cost of recurring revenues |
|
$ |
793 |
|
$ |
853 |
|
$ |
2,469 |
|
$ |
2,647 |
|
Cost of non-recurring revenues |
|
293 |
|
578 |
|
1,022 |
|
2,690 |
|
Total cost of revenues |
|
1,086 |
|
1,431 |
|
3,491 |
|
5,337 |
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
2,461 |
|
2,874 |
|
7,757 |
|
10,920 |
|
Product development |
|
2,005 |
|
2,083 |
|
5,853 |
|
6,941 |
|
General and administrative |
|
1,707 |
|
2,003 |
|
5,470 |
|
17,399 |
|
Total operating expenses |
|
6,173 |
|
6,960 |
|
19,080 |
|
35,260 |
|
|
|
|
|
|
|
|
|
|
|
Total stock-based employee compensation expense |
|
$ |
7,259 |
|
$ |
8,391 |
|
$ |
22,571 |
|
$ |
40,597 |
|
(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)
|
|
Nine Months Ended September 30 |
|
|
|
2014 |
|
2013 |
|
Cash flows from operating activities: |
|
|
|
|
|
Net income |
|
$ |
35,508 |
|
$ |
17,803 |
|
Adjustment to net income for discontinued operation net loss (income) |
|
57 |
|
(68 |
) |
Net income from continuing operations |
|
35,565 |
|
17,735 |
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: |
|
|
|
|
|
Stock-based compensation |
|
22,571 |
|
40,597 |
|
Excess tax benefit from stock-based compensation |
|
(9,003 |
) |
(4,220 |
) |
Depreciation and amortization |
|
16,138 |
|
18,903 |
|
Amortization of debt issuance costs |
|
1,079 |
|
593 |
|
Loss on disposal of fixed assets |
|
2,786 |
|
|
|
(Reduction of) provision for doubtful accounts |
|
(6 |
) |
290 |
|
Reduction of sales reserves |
|
(538 |
) |
(196 |
) |
Deferred income taxes |
|
10,370 |
|
6,281 |
|
Other |
|
(500 |
) |
(45 |
) |
Effect of statement of operations adjustments |
|
42,897 |
|
62,203 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
3,443 |
|
4,181 |
|
Prepaid and other assets |
|
7,789 |
|
(860 |
) |
Accounts payable |
|
3,919 |
|
3,843 |
|
Accrued liabilities |
|
(12,279 |
) |
(9,801 |
) |
Deferred revenues |
|
(9,841 |
) |
(10,210 |
) |
Income taxes payable |
|
84 |
|
(5,190 |
) |
Effect of changes in operating assets and liabilities |
|
(6,885 |
) |
(18,037 |
) |
|
|
|
|
|
|
Net cash provided by operating activities from continuing operations |
|
71,577 |
|
61,901 |
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
Purchases of property and equipment |
|
(6,845 |
) |
(2,161 |
) |
Capitalized software development costs |
|
(1,427 |
) |
(2,556 |
) |
Change in restricted cash |
|
(173 |
) |
|
|
Purchases of marketable securities |
|
|
|
(57,863 |
) |
Sales and maturities of marketable securities |
|
|
|
228,619 |
|
|
|
|
|
|
|
Net cash (used in) provided by investing activities from continuing operations |
|
(8,445 |
) |
166,039 |
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
Proceeds from common stock issued from exercises of stock options |
|
3,171 |
|
18,382 |
|
Proceeds from common stock issued under the employee stock purchase plan |
|
3,493 |
|
3,211 |
|
Excess tax benefits from stock-based compensation |
|
9,003 |
|
4,220 |
|
Withholding taxes related to equity award net share settlement |
|
(5,665 |
) |
(8,043 |
) |
Proceeds from debt |
|
|
|
375,000 |
|
Repayment of debt |
|
(50,000 |
) |
(120,000 |
) |
Payment of cash dividend |
|
(6,693 |
) |
(470,133 |
) |
Repurchase of common stock |
|
(12,878 |
) |
(41,256 |
) |
Debit issuance costs |
|
|
|
(5,725 |
) |
|
|
|
|
|
|
Net cash used in financing activities from continuing operations |
|
(59,569 |
) |
(244,344 |
) |
|
|
|
|
|
|
Net cash transferred to discontinued operation |
|
(383 |
) |
(358 |
) |
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
|
(316 |
) |
(75 |
) |
|
|
|
|
|
|
Net change in cash and cash equivalents from continuing operations |
|
2,864 |
|
(16,837 |
) |
Cash and cash equivalents of continuing operations at beginning of period |
|
33,828 |
|
58,217 |
|
|
|
|
|
|
|
Cash and cash equivalents of continuing operations at end of period |
|
$ |
36,692 |
|
$ |
41,380 |
|
|
|
Nine Months Ended September 30 |
|
|
|
2014 |
|
2013 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
Noncash investing activities: |
|
|
|
|
|
Capital expenditures included in accounts payable |
|
$ |
1,019 |
|
$ |
738 |
|
|
|
|
|
|
|
Cash flows from discontinued operation of MicroEdge, Inc.: |
|
|
|
|
|
Net cash used in operating activities |
|
$ |
(383 |
) |
$ |
(358 |
) |
Net cash transferred from continuing operations |
|
383 |
|
358 |
|
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 Advents 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 September 30 |
|
|
|
2014 |
|
2013 |
|
|
|
Amount |
|
% of Net Revenues |
|
Amount |
|
% of Net Revenues |
|
|
|
|
|
|
|
|
|
|
|
GAAP gross margin |
|
$ |
69,098 |
|
69.8% |
|
$ |
64,976 |
|
67.1% |
|
Amortization of acquired intangibles |
|
1,194 |
|
|
|
1,883 |
|
|
|
Stock-based compensation |
|
1,087 |
|
|
|
1,431 |
|
|
|
Non-GAAP gross margin |
|
$ |
71,379 |
|
72.1% |
|
$ |
68,290 |
|
70.6% |
|
|
|
|
|
|
|
|
|
|
|
GAAP operating income |
|
$ |
20,244 |
|
20.5% |
|
$ |
17,371 |
|
18.0% |
|
Amortization of acquired intangibles |
|
2,002 |
|
|
|
2,836 |
|
|
|
Stock-based compensation |
|
7,259 |
|
|
|
8,391 |
|
|
|
Restructuring charges (benefit) |
|
2,579 |
|
|
|
(157 |
) |
|
|
Transaction related fees |
|
|
|
|
|
565 |
|
|
|
Non-GAAP operating income |
|
$ |
32,084 |
|
32.4% |
|
$ |
29,006 |
|
30.0% |
|
|
|
|
|
|
|
|
|
|
|
GAAP net income |
|
$ |
12,003 |
|
|
|
$ |
9,833 |
|
|
|
Amortization of acquired intangibles |
|
2,002 |
|
|
|
2,836 |
|
|
|
Stock-based compensation |
|
7,259 |
|
|
|
8,391 |
|
|
|
Restructuring charges (benefit) |
|
2,579 |
|
|
|
(157 |
) |
|
|
Transaction related fees |
|
|
|
|
|
565 |
|
|
|
Income tax adjustment (1) |
|
(3,914 |
) |
|
|
(4,549 |
) |
|
|
Non-GAAP net income |
|
$ |
19,929 |
|
|
|
$ |
16,919 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income |
|
$ |
12,003 |
|
|
|
$ |
9,833 |
|
|
|
Net interest |
|
1,741 |
|
|
|
2,631 |
|
|
|
Provision for income taxes |
|
6,818 |
|
|
|
4,561 |
|
|
|
Depreciation expense |
|
2,825 |
|
|
|
2,771 |
|
|
|
Amortization expense |
|
2,499 |
|
|
|
3,460 |
|
|
|
Stock-based compensation |
|
7,259 |
|
|
|
8,391 |
|
|
|
Adjusted EBITDA |
|
$ |
33,145 |
|
|
|
$ |
31,647 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per share |
|
|
|
|
|
|
|
|
|
GAAP |
|
$ |
0.22 |
|
|
|
$ |
0.18 |
|
|
|
Non-GAAP |
|
$ |
0.37 |
|
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute diluted net income per share |
|
53,877 |
|
|
|
53,937 |
|
|
|
(1) The estimated non-GAAP effective tax rate was 35% for the three months ended September 30, 2014 and 2013, 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.
ADVENT SOFTWARE, INC.
RECONCILIATION OF PROJECTED CONTINUING OPERATIONS GAAP OPERATING INCOME %
TO NON-GAAP OPERATING INCOME %
(Preliminary and unaudited)
Advent provides projections for the non-GAAP measure of its continuing operations operating income percentage. This non-GAAP measure excludes certain costs and expenses which we believe is appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. Adjustments to our projected continuing operations GAAP results are made with the intent of providing management and investors a more complete understanding of Advents 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 of America.
|
|
Twelve Months Ending December 31, 2014 |
|
|
|
Continuing Operations |
|
|
|
Operating Income % |
|
|
|
|
|
|
|
|
|
Projected GAAP |
|
20.5 |
% |
to |
|
21.0 |
% |
|
|
|
|
|
|
|
|
Projected stock-based compensation adjustment |
|
|
|
8.0% |
|
|
|
Projected amortization of acquired developed technology and other acquired intangible asset adjustment |
|
|
|
2.0% |
|
|
|
Projected restructuring charge adjustment |
|
|
|
1.0% |
|
|
|
|
|
|
|
|
|
|
|
Projected non-GAAP |
|
31.5 |
% |
to |
|
32.0 |
% |
Exhibit 99.2
|
Advent
Software, Inc. Third Quarter 2014 Earnings Highlights October 27, 2014 Advent
Investor Relations Contact: InvestorRelations@advent.com
|
|
ADVS
Forward-Looking Statements The financial projections under Financial Guidance
and any other forward-looking statements included in this presentation
reflect management's best judgment based on factors currently known and
involve risks and uncertainties and 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 products; the
successful development, release and market acceptance of new products and
product enhancements; uncertainties and fluctuations in the financial
markets; the Companys 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
2013 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. 2
|
|
ADVS Q314
Highlights Operating Metrics Annualized Recurring Run Rate was $375.5M at
September 30, 2014; increase of 6% over prior year Q1 14 updated renewal rate
of 97%; increase of 3 points over initial rate Q2 14 initially reported
renewal rate of 95%; increase of 3 points over prior year Annual Contract
Value (ACV) from term license, Advent OnDemand, and Black Diamond contracts
was $7.2M Financial Metrics Quarterly revenue of $99.0M; increase of 2% over
prior year Non-GAAP Operating Income of $32.1M, or 32% of revenue; increase
of 11% compared to $29.0M, or 30% in prior year Non-GAAP Diluted EPS of
$0.37; increase of 18% over prior year Operating cash flows of $28.3M,
increase of 24% over prior year 3
|
|
ADVS Q314
Financial Highlights Metric Q313 Q314 $ +/- % +/- Annualized Recurring Run
Rate at 9/30 ($M) $353.9 $375.5 +$21.6 +6% Revenue ($M) $96.8 $99.0 +$2.2 +2%
Operating Cash Flow ($M) $22.8 $28.3 +$5.4 +24% GAAP Operating Margin 18.0% 20.5%
+2.5pts +14% GAAP Diluted EPS $0.18 $0.22 +$0.04 +22% Non-GAAP Operating
Margin1 30.0% 32.4% +2.4pts +8% Adjusted EBITDA ($M)1 $31.6 $33.1 +$1.5 +5%
Non-GAAP Diluted EPS1 $0.31 $0.37 +$0.06 +18% 1 See reconciliation of GAAP to
Non-GAAP measures on slide #10 * Totals, $+/- and % +/ - may not recalculate
due to rounding 4
|
|
5 ADVS
Operating Metrics ($ in millions) 5 Annual Contract Value Annualized
Recurring Run Rate Renewals $31 The annual contribution to revenue once
contracts are signed for Term License, Advent OnDemand, and Black Diamond.
The annualized run rate of all of our contracted recurring revenue streams as
of a point in time. The metric includes the combined effects of ACV, renewals
and the existing run rate of recurring revenues into a single metric. Client
contract renewals compared to the same quarter in the previous year based on
cash collections and reported one quarter in arrears. *Annualized Recurring
Run Rate is not intended to be forward looking.
|
|
ADVS Revenue ($ in millions) * Totals, $+/- and % +/ - may not recalculate due to rounding 6
|
|
ADVS Q314
Revenue Components ($ in millions) Q313 Q314 $ +/- % +/- Recurring $88.1
$90.7 +$2.6 +3% Term License Revenue $47.1 $48.6 +$1.5 +3% Perpetual
Maintenance $16.6 $15.8 ($0.9) -5% Other Recurring 1 $24.4 $26.4 +$2.0 +8%
Non-Recurring $8.7 $8.3 ($0.4) -4% Total Revenue $96.8 $99.0 $2.2 +2% 1
Includes OnDemand, Data Services, Black Diamond, and asset based fees. *
Totals, $+/- and % +/ - may not recalculate due to rounding 7
|
|
Deferred
revenue represents invoiced bookings, not yet recognized as revenue Backlog
represents contractual bookings, not yet invoiced (disclosed annually) 8
Deferred Revenue ADVS Deferred Revenue and Backlog ($ in millions) Deferred
Revenue/Backlog
|
|
Guidance Q414
FY14 Operating Measures: Total Revenue ($M) $99 - $102 $395 - $398 GAAP
Operating Margin 20.5% - 21.0% Stock Compensation Expense (% of revenue) 8.0%
Amortization of Intangibles (% of revenue) 2.0% Restructuring (% of revenue)
1.0% Non-GAAP Operating Margin * 31.5% - 32.0% Tax and Cash Measures:
Effective Tax Rate (GAAP) 35% 40% Effective Tax Rate (Non-GAAP) 35%
Operating Cash Flow ($M) $105 - $115 Capital Expenditures, incl. capd SW
devel. ($M) $8 - $11 ADVS 2014 Guidance *See reconciliation of GAAP to
Non-GAAP guidance on slide #11 9
|
|
Q314
Reconciliation of GAAP to Non-GAAP 10
|
|
Reconciliation
of GAAP to Non-GAAP Guidance 11
|