- ASV grew to $1 billion, up 8.5% organically
- Adjusted EPS rose to $1.39, up 13.9%
- Philip Snow to become CEO on July 1, 2015; Philip Hadley
remains Chairman of the Board
- FactSet veteran Mark J. Hale promoted to Chief Operating
Officer (COO) as of March 16, 2015
FactSet Research Systems Inc. (NYSE:FDS) (Nasdaq:FDS), a leading
provider of integrated global financial information and analytical
applications to the investment community, today announced its
results for the second quarter of fiscal 2015.
For the quarter ended February 28, 2015, revenues advanced
to $247.8 million, up 9.2% over the prior year. Included in this
total was $0.5 million related to the acquisition of Code Red, Inc.
Operating income was $80.6 million compared to $75.1 million in the
year ago quarter. Net income was $61.6 million versus $52.4 million
a year ago. Diluted earnings per share were $1.46 compared to $1.22
in the same period of fiscal 2014.
Adjusted operating income for the quarter was $83.8
million, up 11.7% over the prior year. Adjusted operating income
during the just completed second quarter excludes a $3.2 million
pre-tax charge primarily from changes in the senior leadership of
the Company's sales teams. Adjusted net income advanced 12.0% and
excludes the after-tax charge of $2.2 million related to those
senior leadership changes and $5.1 million in income tax benefits
primarily from the reenactment of the U.S. Federal R&D tax
credit, retroactive to January 1, 2014 and extended to the end of
the 2014 calendar year. Adjusted diluted EPS rose 13.9% to $1.39.
Adjusted diluted EPS excludes the net effect of the $0.12 benefit
from the reenactment of the U.S. Federal R&D tax credit and the
$0.05 detriment from the senior leadership changes within the sales
organization.
A reconciliation between GAAP and adjusted financial measures is
presented on page 9 of this press release.
Consolidated Statements
of Income |
|
(Condensed and Unaudited) |
Three Months Ended |
|
February 28, |
(In thousands, except per share
data) |
2015 |
2014 |
Change |
Revenues |
$247,792 |
$226,934 |
9.2% |
Adjusted Operating income |
$83,802 |
$75,054 |
11.7% |
Adjusted Net income |
$58,715 |
$52,426 |
12.0% |
Adjusted Diluted earnings per share |
$1.39 |
$1.22 |
13.9% |
Diluted weighted average shares |
42,306 |
43,107 |
|
|
"FactSet performed very well during the just completed quarter
as ASV, revenue, client and user count, and EPS all grew to record
highs," said Philip Hadley, Chairman and CEO. "The first half of
fiscal 2015 was our strongest first half in ASV growth since 2011
and our 14% EPS increase represented our 19th consecutive quarter
of double-digit EPS growth. I am also pleased we acquired Code Red
in February 2015, a leading provider of research management
technologies to the investment community."
Annual Subscription Value ("ASV")
ASV was $1.005 billion at February 28, 2015, up 8.5% organically
over the prior year. Excluding $9.3 million from the acquisition of
Code Red and the effects of foreign currency, ASV increased $25.4
million over the last three months. ASV at any given point in time
represents the forward-looking revenues for the next 12 months from
all services currently being supplied to clients. Buy-side clients
account for 82.8% of ASV and the remainder from sell-side firms
that perform Mergers & Acquisitions ("M&A") advisory work,
capital markets services and equity research. The buy-side and
sell-side ASV growth rates were 8.7% and 7.9%, respectively.
Supplementary tables covering buy-side and sell-side ASV growth
rates are presented on page 10 of this press release.
Financial Highlights – Second Quarter of Fiscal
2015
- ASV from U.S. operations was $680 million and $325 million was
related to international operations.
- U.S. revenues were $166.5 million, up 8.0% from the year ago
second quarter. Excluding incremental revenue from the acquisition
of Code Red, the U.S. growth rate was 7.6%.
- Non-U.S. revenues rose to $81.3 million. Excluding the impact
of foreign currency, the international growth rate was 13.0%.
- Adjusted operating margin was 33.8% compared to 33.1% a year
ago. This adjusted financial measure excludes the $3.2 million
pre-tax charge primarily from changes in the senior leadership
responsible for the Company's sales function.
- Quarterly free cash flow was $42.6 million, an increase of
12.2% over the prior year.
- The U.S. Federal R&D tax credit, which had previously
expired on December 31, 2013, was reinstated during the second
quarter of fiscal 2015. The R&D tax credit was retroactive to
January 1, 2014 and extended to the end of the 2014 calendar year.
This resulted in a discrete income tax benefit of $5.1 million or
$0.12 per diluted share and reduced the Company's annual effective
tax rate to 30.4%.
- In February 2015, FactSet borrowed $35 million at an interest
rate of one month LIBOR plus 0.50% under a revolving credit
facility with Bank of America. The credit facility has a three-year
term and may be expanded up to an aggregate amount of $300
million.
Operational Highlights – Second Quarter of Fiscal
2015
- Annual client retention was greater than 95% of ASV and 93% of
clients, up from 92% a year ago.
- Client count rose by 106, including 50 new clients acquired
from Code Red and totaled 2,868 at February 28, 2015.
- Excluding acquisitions, users of the FactSet workstation grew
10.7% and totaled 57,408 professionals at February 28, 2015. This
user count growth was driven by the Company's highest ever quarter
for buy-side user additions.
- Employee count was 6,978 at February 28, 2015, up 7.6% over
last year.
- Capital expenditures were $7.0 million.
- A regular quarterly dividend of $16.2 million or $0.39 per
share was paid on March 17, 2015.
- The Company repurchased 390,000 shares for $55.8 million during
the second quarter. At February 28, 2015, $282.9 million remains
authorized for further repurchases. In the past 12 months, FactSet
has returned $240 million to stockholders in the form of share
repurchases, funded entirely by cash generated from
operations.
- Common shares outstanding were 41.6 million at February 28,
2015.
- Effective January 21, 2015, FactSet appointed Scott Miller as
the Company's new Executive Vice President, Global Director of
Sales. Mr. Miller succeeds Michael Frankenfield and will report
directly to Philip Snow. Scott Miller's global experience and deep
understanding of the financial technology and data business
complements the Company's business model and enables him to be
well-positioned to drive the next phase of FactSet's growth.
- FactSet was ranked #48 on Fortune's "100 Best Companies to Work
For," marking the Company's seventh appearance on the list in the
last eight years.
- Markit's comprehensive set of exchange traded funds data and
analytics was added to the FactSet workstation during January 2015,
which adds to the breadth of content available to asset and wealth
managers who rely on FactSet's tools.
- In January 2015, FactSet released a new Fixed Income Ownership
data feed, which covers 136,000 fixed income securities and 18,000
funds. With this release, FactSet now has the ability to leverage
its ownership content across multiple asset classes.
Philip Snow to become CEO on July 1, 2015; Mark J. Hale
promoted to COO
FactSet is announcing today that Chairman and CEO, Philip
Hadley, will step down after a successful tenure as CEO, but will
remain with the Company as Chairman of the Board of Directors. Mr.
Hadley, 52, has served as FactSet's CEO since September 2000,
during which time the Company has grown ASV from $151 million to $1
billion.
The Company's current President, 19-year FactSet veteran Philip
Snow, will become FactSet's next CEO, effective July 1, 2015. Mr.
Snow has also been elected to FactSet's Board of Directors,
effective March 16, 2015.
"We're all excited for Phil Snow and the opportunities for
FactSet under his leadership," said Mr. Hadley. "During his career,
he has held many roles within the global sales organization and
executed on growth strategies to consistently improve the
performance of FactSet. Most recently, as President, Phil has
demonstrated strong leadership and strategic insight to ensure that
FactSet continues its long track record of success. His leadership
acumen combines a deep knowledge of our clients, a commitment to
our employees, and a vision for our Company's growth."
FactSet also announces the promotion of Mark J. Hale to Chief
Operating Officer, effective March 16, 2015. Mark joined FactSet as
a software engineer from Carnegie Mellon in 1995. During his
20-year tenure at FactSet, Mark has held several positions of
increasing responsibility including Head of Software Engineering,
and most recently, Senior Vice President, Director of Content
Operations. Mark has been instrumental in building out FactSet's
expansive content operations and making content collection a core
competency for FactSet.
As COO, Mark's teams will focus on product development,
technology and content collection. Peter Walsh, FactSet's former
COO, will work with Mark to ensure a successful transition. Mr.
Walsh will continue as a full-time employee until August 31, 2015,
after which he will remain employed on a part-time basis focusing
on various growth projects.
Mr. Snow commented, "I'm thrilled at the chance to step into the
FactSet CEO role. My appreciation of the power of our business
model, our blue chip client base, our talented employees and our
opportunity has only grown over my years at FactSet. I'm surrounded
by a seasoned team that averages approximately 20 years of industry
experience and understands every corner of our Company. I'm also
personally excited to collaborate with Mark and other senior
managers as we enter into our next phase of growth."
"While we believe it is the right time to bring change to our
most senior leadership positions at FactSet, I'd like to personally
thank Michael Frankenfield and Peter Walsh for their tremendous
contributions to the Company," said Philip Hadley. "As members of
senior management, both Mike and Peter have had a major impact on
many initiatives, which helped FactSet grow to $1 billion in ASV
during their tenure. I am also pleased with the execution of our
senior management transition and look forward to working with Phil
and Mark in my role as the Company's Chairman of the Board."
Code Red Acquisition
On February 6, 2015, FactSet acquired Code Red, Inc. for $35
million. Code Red provides research management technologies to the
investment community, including endowments and foundations,
institutional asset managers, sovereign wealth funds, pensions, and
hedge funds. With the addition of Code Red to FactSet's existing
research management solutions, FactSet now offers an RMS for all
its clients' workflows. At the time of acquisition, Code Red
employed 32 individuals in the U.S. and Europe and had annual
subscriptions of $9.3 million. The results of Code Red did not have
a material impact on FactSet's second quarter and is expected to be
breakeven to diluted EPS during the second half of fiscal 2015.
Business Outlook
The following forward-looking statements reflect FactSet's
expectations as of today's date. Given the number of risk factors,
uncertainties and assumptions discussed below, actual results may
differ materially. FactSet does not intend to update its
forward-looking statements until its next quarterly results
announcement, other than in publicly available statements.
Third Quarter Fiscal 2015 Expectations
- Revenues are expected to range between $251 million and $256
million.
- Operating margin is expected to range between 33.0% and 34.0%,
which reflects a margin guidance increase of 20 basis points from
the first quarter, but also includes a 40 basis point reduction
from the recent acquisition of Code Red.
- The annual effective tax rate is expected to range between
30.0% and 31.0%.
- Diluted EPS should range between $1.40 and $1.42. The midpoint
of this range represents 12.8% growth over the prior year.
Conference Call
The Company will host a conference call today, March 17, 2015 at
11:00 a.m. (Eastern Time) to review the second quarter fiscal 2015
earnings release. To listen, please visit the investor relations
section of the Company's website at www.factset.com.
Forward-looking Statements
This news release contains forward-looking statements based on
management's current expectations, estimates and projections. All
statements that address expectations or projections about the
future, including statements about the Company's strategy for
growth, product development, market position, subscriptions,
expected expenditures and financial results are forward-looking
statements. Forward-looking statements may be identified by words
like "expects," "anticipates," "plans," "intends," "projects,"
"should," "indicates," "continues," "subscriptions" and similar
expressions. These statements are not guarantees of future
performance and involve a number of risks, uncertainties and
assumptions. Many factors, including those discussed more fully
elsewhere in this release and in FactSet's filings with the
Securities and Exchange Commission, particularly its latest annual
report on Form 10-K and quarterly reports on Form 10-Q, as well as
others, could cause results to differ materially from those stated.
These factors include, but are not limited to: the current status
of the global economy; the ability to integrate newly acquired
companies and businesses; the stability of global securities
markets; the ability to hire qualified personnel; the maintenance
of the Company's leading technological position; the impact of
global market trends on the Company's revenue growth rate and
future results of operations; the negotiation of contract terms
with corporate vendors, data suppliers and potential landlords; the
retention of key clients; the successful resolution of ongoing
audits by tax authorities; the continued employment of key
personnel; the absence of U.S. or foreign governmental regulation
restricting international business; and the sustainability of
historical levels of profitability and growth rates in cash flow
generation.
About Adjusted Financial Measures
Financial measures in accordance with U.S. generally
accepted accounting principles ("GAAP") including operating income,
net income and diluted earnings per share have been adjusted.
Adjusted operating income during the just completed second quarter
of fiscal 2015 excludes a pre-tax charge primarily from changes in
the senior leadership of the Company's sales teams and $5.1 million
of income tax benefits related to the reenactment of the U.S.
Federal R&D credit. The second quarter fiscal 2015 pre-tax
charge reduced GAAP operating income by $3.2 million, GAAP
operating margin by 130 basis points and GAAP diluted earnings per
share by $0.05. Together, the pre-tax charge primarily from changes
in the senior leadership of the Company's sales function and income
tax benefits from the reenactment of the U.S. Federal R&D
credit increased GAAP net income by $2.9 million and GAAP diluted
EPS by $0.07 per share. FactSet uses these adjusted financial
measures, both in presenting its results to stockholders and the
investment community, and in its internal evaluation and management
of the business. The Company believes that these adjusted financial
measures and the information they provide are useful to investors
because it permits investors to view the Company's performance
using the same tools that management uses to gauge progress in
achieving its goals. Investors may benefit from referring to these
adjusted financial measures in assessing the Company's performance
and when planning, forecasting and analyzing future periods and may
also facilitate comparisons to its historical performance. The
presentation of this financial information is not intended to be
considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.
About Non-GAAP Free Cash Flow
The GAAP financial measure, cash flows provided by operating
activities, has been adjusted to report non-GAAP free cash flow
that includes the cash cost for taxes and changes in working
capital, less capital expenditures. Included in the just completed
second quarter was $49.6 million of net cash provided by operations
and $7.0 million of capital expenditures. The presentation of free
cash flow is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with GAAP. FactSet uses this financial measure, both in
presenting its results to stockholders and the investment
community, and in the Company's internal evaluation and management
of the business. Management believes that this financial measure is
useful to investors because it permits investors to view the
Company's performance using the same metric that management uses to
gauge progress in achieving its goals and is an indication of cash
flow that may be available to fund further investments in future
growth initiatives.
About FactSet
FactSet, a leading provider of financial information and
analytics, helps the world's best investment professionals
outperform. More than 50,000 users stay ahead of global market
trends, access extensive company and industry intelligence, and
monitor performance with FactSet's desktop analytics, mobile
applications, and comprehensive data feeds. The Company has been
included in FORTUNE's Top 100 Best Companies to Work For, the
United Kingdom's Great Places to Work and France's Best Workplaces.
FactSet is listed on the New York Stock Exchange and NASDAQ
(NYSE:FDS) (Nasdaq:FDS). Learn more at www.factset.com, and follow
us on Twitter: www.twitter.com/factset.
|
|
|
|
|
FactSet Research Systems
Inc. |
Consolidated
Statements of Income – Unaudited |
|
Three Months Ended
February 28, |
Six Months Ended February
28, |
(In thousands, except per share data) |
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Revenues |
$247,792 |
$226,934 |
$490,468 |
$449,909 |
|
|
|
|
|
Operating expenses |
|
|
|
|
Cost of services |
99,516 |
87,254 |
197,059 |
170,504 |
Selling, general and administrative |
67,628 |
64,626 |
132,501 |
129,610 |
Total operating expenses |
167,144 |
151,880 |
329,560 |
300,114 |
|
|
|
|
|
Operating income |
80,648 |
75,054 |
160,908 |
149,795 |
|
|
|
|
|
Other income, net |
534 |
344 |
964 |
685 |
Income before income taxes |
81,182 |
75,398 |
161,872 |
150,480 |
|
|
|
|
|
Provision for income taxes |
19,584 |
22,972 |
44,414 |
45,876 |
Net income |
$ 61,598 |
$ 52,426 |
$117,458 |
$104,604 |
|
|
|
|
|
Diluted earnings per common share |
$ 1.46 |
$ 1.22 |
$ 2.78 |
$ 2.41 |
|
|
|
|
|
Diluted weighted average common shares |
42,306 |
43,107 |
42,324 |
43,432 |
|
|
|
|
|
|
|
|
|
|
FactSet Research Systems Inc. |
|
|
|
|
Consolidated Statements of Comprehensive
Income – Unaudited |
|
|
|
|
|
|
|
|
|
|
Three Months Ended
February 28, |
Six Months Ended
February 28, |
(In thousands) |
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Net income |
$61,598 |
$52,426 |
$117,458 |
$104,604 |
|
|
|
|
|
Other comprehensive (loss) income, net of
tax |
|
|
|
|
Net unrealized gain on cash flow
hedges* |
843 |
387 |
731 |
3,284 |
Foreign currency translation
adjustments |
(8,011) |
3,506 |
(21,566) |
11,654 |
Other comprehensive (loss)
income |
(7,168) |
3,893 |
(20,835) |
14,938 |
Comprehensive income |
$54,430 |
$56,319 |
$96,623 |
$119,542 |
|
|
|
|
|
* For the three
and six months ended February 28, 2015, the unrealized gain on cash
flow hedges was net of tax expense of $501 and $434, respectively.
The unrealized gain on cash flow hedges disclosed above for the
three and six months ended February 28, 2014, was net of tax
expense of $231 and $1,961, respectively. |
|
|
|
FactSet Research Systems Inc. |
|
|
Consolidated Balance Sheets - Unaudited |
|
|
|
|
|
|
February 28, |
August 31, |
(In thousands) |
2015 |
2014 |
|
|
|
ASSETS |
|
|
Cash and cash equivalents |
$122,070 |
$116,378 |
Investments |
25,335 |
20,008 |
Accounts receivable, net of reserves |
100,038 |
90,354 |
Prepaid taxes |
15,282 |
6,532 |
Deferred taxes |
1,617 |
1,841 |
Prepaid expenses and other current
assets |
17,583 |
14,662 |
Total current assets |
281,925 |
249,775 |
|
|
|
Property, equipment, and leasehold
improvements, net |
56,693 |
57,641 |
Goodwill |
305,893 |
285,608 |
Intangible assets, net |
43,313 |
41,855 |
Deferred taxes |
16,782 |
22,377 |
Other assets |
4,966 |
5,956 |
TOTAL
ASSETS |
$709,572 |
$663,212 |
|
|
|
LIABILITIES |
|
|
Accounts payable and accrued
expenses |
$31,175 |
$26,971 |
Accrued compensation |
28,074 |
42,481 |
Deferred fees |
40,577 |
36,504 |
Taxes payable |
4,590 |
5,036 |
Deferred taxes |
1,047 |
-- |
Dividends payable |
16,234 |
16,299 |
Total current
liabilities |
121,697 |
127,291 |
Deferred taxes |
2,097 |
2,921 |
Taxes payable |
6,907 |
5,501 |
Long-term debt |
35,000 |
-- |
Deferred rent and other non-current
liabilities |
14,787 |
16,417 |
TOTAL
LIABILITIES |
$180,488 |
$152,130 |
|
|
|
STOCKHOLDERS' EQUITY |
|
|
Common stock |
$497 |
$491 |
Additional paid-in capital |
471,805 |
413,754 |
Treasury stock, at cost |
(838,972) |
(734,746) |
Retained earnings |
934,510 |
849,504 |
Accumulated other comprehensive loss |
(38,756) |
(17,921) |
TOTAL STOCKHOLDERS'
EQUITY |
529,084 |
511,082 |
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
$709,572 |
$663,212 |
|
|
|
|
|
|
FactSet Research Systems Inc. |
|
|
Consolidated Statements of Cash Flows -
Unaudited |
|
|
|
|
|
|
Six Months Ended |
(In thousands) |
February 28, |
|
2015 |
2014 |
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
Net income |
$117,458 |
$104,604 |
Adjustments to reconcile net income to net
cash provided by operating activities |
|
|
Depreciation and amortization |
16,222 |
17,442 |
Stock-based compensation expense |
11,037 |
10,616 |
Deferred income taxes |
2,697 |
(1,157) |
Gain on sale of assets |
(4) |
(64) |
Tax benefits from share-based payment
arrangements |
(11,743) |
(4,984) |
Changes in assets and liabilities, net of
effects of acquisitions |
|
|
Accounts receivable, net of
reserves |
(9,280) |
(20,466) |
Accounts payable and
accrued expenses |
5,091 |
(2,909) |
Accrued compensation |
(13,638) |
(15,949) |
Deferred fees |
2,624 |
2,460 |
Taxes payable, net of
prepaid taxes |
3,139 |
9,754 |
Prepaid expenses and other
assets |
(1,664) |
(331) |
Deferred rent and other
non-current liabilities |
(1,172) |
(389) |
Other working capital
accounts, net |
(27) |
100 |
Net cash provided by operating
activities |
120,740 |
98,727 |
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
Acquisition of businesses, net of cash
acquired |
(30,133) |
(47,170) |
Purchases of investments |
(12,437) |
(7,487) |
Proceeds from sales of investments |
7,535 |
6,871 |
Purchases of property, equipment and
leasehold improvements, net of proceeds from dispositions |
(11,764) |
(8,032) |
Net cash used in investing activities |
(46,799) |
(55,818) |
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
Dividend payments |
(32,286) |
(30,011) |
Repurchase of common stock |
(106,317) |
(146,184) |
Proceeds from debt |
35,000 |
-- |
Debt issuance costs |
(32) |
-- |
Proceeds from employee stock plans |
34,393 |
16,881 |
Tax benefits from share-based payment
arrangements |
11,743 |
4,984 |
Net cash used in financing activities |
(57,499) |
(154,330) |
|
|
|
Effect of exchange rate changes on cash and
cash equivalents |
(10,750) |
3,584 |
|
|
|
Net increase (decrease) in cash and cash
equivalents |
5,692 |
(107,837) |
|
|
|
Cash and cash equivalents at beginning of
period |
116,378 |
196,627 |
Cash and cash equivalents at end of
period |
$122,070 |
$88,790 |
|
|
|
Reconciliation of GAAP to Adjusted Financial
Measures
Financial measures in accordance with U.S. GAAP including
operating income, net income and diluted earnings per share have
been adjusted below. FactSet uses these adjusted financial
measures, both in presenting its results to stockholders and the
investment community, and in its internal evaluation and management
of the business. The Company believes that these adjusted financial
measures and the information they provide are useful to investors
because it permits investors to view the Company's performance
using the same tools that management uses to gauge progress in
achieving its goals. Adjusted measures may also facilitate
comparisons to FactSet's historical performance.
|
(Unaudited) |
Three Months Ended |
|
|
February 28, |
|
(In thousands, except per share
data) |
2015 |
2014 |
Change |
GAAP Operating income |
$80,648 |
$75,054 |
|
Changes in the senior leadership of the
Company's sales teams (a) |
3,154 |
-- |
|
Adjusted
Operating income |
$83,802 |
$75,054 |
11.7% |
|
|
|
|
GAAP Net income |
$61,598 |
$52,426 |
|
Changes in the senior leadership of the
Company's sales teams (a) |
2,196 |
-- |
|
Income tax benefits primarily from the U.S.
Federal R&D tax credit (b) |
(5,079) |
-- |
|
Adjusted Net income |
$58,715 |
$52,426 |
12.0% |
|
|
|
|
Adjusted Diluted earnings per common share
(b) |
$1.39 |
$1.22 |
13.9% |
Weighted average common shares
(Diluted) |
42,306 |
43,107 |
|
|
|
|
|
(a) GAAP operating income for
fiscal 2015 was adjusted to exclude a pre-tax charge of $3.2
million primarily from changes in the senior leadership responsible
for the Company's salesforce. This incremental expense was $2.2
million net of tax and reduced diluted earnings per share by
$0.05. |
|
|
|
|
(b) On December 16, 2014,
the U.S. Congress passed the Tax Increase Prevention Act of 2014
(the "ACT"), which President Obama signed into law on December 19,
2014. The ACT reinstated the U.S. Federal R&D tax credit, which
had previously expired on December 31, 2013. The reenactment of the
credit was retroactive to January 1, 2014 and extended to the end
of the 2014 calendar year. Prior to the reenactment of the tax
credit, FactSet had not been permitted to factor it into its
effective tax rate because it was not currently enacted tax law.
The reenactment of the tax credit resulted in discrete income tax
benefits $5.1 million or $0.12 per diluted share during the second
quarter of fiscal 2015. |
The following table presents the percentages and growth rates of
ASV by client type, excluding currency, and can be useful to
facilitate historical comparisons.
|
Q2'15 |
Q1'15 |
Q4'14 |
Q3'14 |
Q2'14 |
Q1'14 |
Q4'13 |
% of ASV from buy-side clients |
82.8% |
82.5% |
82.6% |
83.1% |
82.7% |
82.2% |
81.6% |
% of ASV from sell-side clients |
17.2% |
17.5% |
17.4% |
16.9% |
17.3% |
17.8% |
18.4% |
|
|
|
|
|
|
|
|
ASV Growth rate from buy-side clients |
8.7% |
8.9% |
8.5% |
8.0% |
6.4% |
6.2% |
6.4% |
ASV Growth rate from sell-side clients |
7.9% |
6.7% |
1.6% |
0.0% |
(0.5%) |
(2.7%) |
0.7% |
The following table presents the calculation of the
above-mentioned growth rates by client type for the second quarter
of fiscal 2015.
(In thousands) |
February 28,
2015 2014 |
Q2 2015 ASV Growth Rate |
As reported ASV |
$1,004.6 |
$ 920.1 |
|
Less acquired ASV (a) |
(9.3) |
-- |
|
Currency impact (b) |
3.2 |
-- |
|
Organic ASV total |
$ 998.5 |
$ 920.1 |
8.5% |
Buy-side |
$ 826.8 |
$ 760.9 |
8.7% |
Sell-side |
$ 171.7 |
$ 159.2 |
7.9% |
|
(a) Acquired ASV from Code Red, Inc. on February 6, 2015 |
(b) The
negative impact from foreign currency movements over the past 12
months was added back in order to calculate total organic ASV. The
foreign currency effect was primarily from ASV billed in Japanese
Yen, which was negatively impacted by a decline in the Japanese Yen
vs. the U.S. dollar. |
Reconciliation of Non-GAAP Financial
Measures
Financial measures in accordance with U.S. GAAP including
operating income, net income and diluted earnings per share have
been adjusted below.
|
|
|
Three Months Ended February 28,
2015 |
|
|
|
|
|
(Condensed and Unaudited) |
GAAP |
Changes in Senior Leadership (a) |
U.S. Federal R&D Tax Credit
(b) |
Adjusted |
YoY % Change |
Stock-Based Compensation |
Amortization of
Intangible Assets |
Non-GAAP |
Operating Income |
$ 80,648 |
$ 3,154 |
-- |
$ 83,802 |
11.7% |
$ 5,760 |
$ 2,048 |
$ 91,610 |
Net Income (c) |
$ 61,598 |
$ 2,196 |
$ (5,079) |
$ 58,715 |
12.0% |
$ 4,009 |
$ 1,425 |
$ 64,149 |
Diluted EPS (d) |
$ 1.46 |
$ 0.05 |
$ (0.12) |
$ 1.39 |
13.9% |
$ 0.09 |
$ 0.03 |
$ 1.52 |
Weighted Average Shares |
42,306 |
|
|
42,306 |
|
|
|
42,306 |
|
|
|
|
|
|
|
|
|
(a) GAAP operating income for fiscal 2015 was adjusted to
exclude a pre-tax charge of $3.2 million primarily from changes in
the senior leadership of the Company's sales teams. This
incremental expense was $2.2 million net of tax and reduced diluted
earnings per share by $0.05. |
(b) GAAP net income was adjusted to exclude income tax benefits
primarily from the reenactment of the U.S. Federal R&D tax
credit, which had previously expired on December 31, 2013. The tax
credit was retroactive to January 1, 2014 and extended to the end
of the 2014 calendar year. The reenactment of the tax credit
resulted in discrete income tax benefits of $5.1 million or $0.12
per diluted share and reduced the Company's annual effective tax
rate to 30.4%. |
(c) For the purposes of calculating non-GAAP net income and
non-GAAP diluted EPS, stock-based compensation expense and
amortization of intangible assets were taxed at the current year
annual effective tax rate of 30.4%. |
(d) The sum of the non-GAAP diluted earnings per share may not
equal the totals above due to rounding. |
CONTACT: Rachel Stern
FactSet Research Systems Inc.
203.810.1000
FactSet Research Systems (NYSE:FDS)
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