FactSet Research Systems Inc. (NYSE:FDS) (NASDAQ:FDS), a leading
provider of integrated financial information and analytical
applications, today announced its results for the fourth quarter of
fiscal 2016.
For the quarter ended August 31, 2016, revenues grew to $287.3
million. Operating income rose to $87.7 million compared to $85.7
million in the prior year period. Net income was $144.3 million
versus $62.2 million a year ago. Net income for the fourth quarter
of fiscal 2016 included an after-tax gain of $81.7 million related
to the sale of the Market Metrics business in July 2016. Diluted
earnings per share were $3.55 compared to $1.48 in the same period
of fiscal 2015.
Organic revenues exclude acquired revenue from Portware, the
effects of foreign currency and revenue related to the Market
Metrics business in all periods presented. Adjusted operating
income and margin, adjusted net income and adjusted diluted
earnings per share exclude both deal-related amortization and
non-recurring items. The Company believes that these adjusted
financial measures better reflect the underlying economic
performance of FactSet. A supplementary schedule reconciling
GAAP results to these adjusted financial measures is presented on
page 10 of this earnings release.
Organic revenues grew 8.8% during the fourth quarter of fiscal
2016. Adjusted operating income for the quarter, which excludes
$3.7 million of deal-related amortization and $4.6 million of
non-recurring items related primarily to legal matters, was $96.1
million, up 6.2% over the prior year. Adjusted net income increased
8.5% over the prior year and excludes $2.7 million (after-tax) from
deal-related amortization, $3.3 million (after-tax) from
non-recurring items and the gain of $81.7 million (after-tax)
related to the sale of the Market Metrics business. Adjusted
diluted EPS rose 11.9% to $1.69 and excludes the net effect of
deal-related amortization, non-recurring items and the gain on
sale.
Consolidated Statements of Income
|
(Condensed and
Unaudited) |
Three Months Ended August 31, |
|
(In thousands, except per
share data) |
|
2016 |
|
2015 |
Change |
Revenues |
$ |
287,291 |
$ |
261,779 |
9.7 |
% |
Adjusted operating
income |
$ |
96,098 |
$ |
90,450 |
6.2 |
% |
Adjusted net income |
$ |
68,607 |
$ |
63,247 |
8.5 |
% |
Adjusted diluted earnings
per share |
$ |
1.69 |
$ |
1.51 |
11.9 |
% |
GAAP diluted earnings per
share |
$ |
3.55 |
$ |
1.48 |
NM |
|
Diluted weighted average
shares |
|
40,673 |
|
41,995 |
|
|
|
|
|
|
|
|
|
“We continue to build market share. Our broadening suite of
products allows us to partner with our clients to address an
increasingly larger percentage of their enterprise workflow,” said
Phil Snow, FactSet CEO.
Annual Subscription Value (“ASV”)
ASV was $1.15 billion at August 31, 2016, up
8.8% organically from the prior year. Organic ASV, which excludes
the effects of acquisitions, dispositions and foreign currency,
increased $29.1 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 and sell-side ASV growth rates for the
fourth quarter of fiscal 2016 were 9.0% and 7.6%, respectively.
Buy-side clients account for 82.6% of ASV and the remainder is
derived from sell-side firms that perform mergers and acquisitions
advisory work, capital markets services and equity research.
Supplementary tables covering organic, buy-side and sell-side ASV
growth rates are presented on page 12 of this earnings release.
Financial Highlights – Fourth Quarter of Fiscal 2016
- ASV from U.S. operations was $754.3 million, increasing 8.3%
organically over the prior year. U.S. revenues were $190.4 million.
Excluding acquired revenue from Portware and revenue related to the
Market Metrics business, the U.S. growth rate was
7.4%.
- ASV from international operations grew 10.7% organically to
$395.5 million and now represents 34.4% of total ASV, up from 32.4%
a year ago. International revenues rose to $96.9 million. Excluding
the impact of foreign currency, acquired revenue from Portware and
revenue related to the Market Metrics business, the international
revenue growth rate was 11.7%.
- Adjusted operating margin was 33.4%, compared to 34.6% in the
year ago fourth quarter. Portware’s operations
reduced FactSet’s just completed fourth quarter operating
margin by 110 basis points and was break-even to GAAP EPS.
Excluding deal-related amortization, the Portware acquisition was
$0.04 accretive to adjusted EPS in the fourth quarter of fiscal
2016.
- The Company’s effective tax rate for the fourth quarter was
27.8%, as compared to 27.7% a year ago. Excluding income tax
benefits from both periods, the current year annual effective tax
rate was 28.3% compared to 30.3% in the prior year period.
- Quarterly free cash flow was $57.0 million.
Operational Highlights – Fourth Quarter of Fiscal 2016
- Client count rose by 17 and totaled 3,092 at August 31, 2016.
This is net of a reduction of 41 clients due to the sale of the
Market Metrics business.
- User count grew 2,120 to 65,655.
- Annual client retention was greater than 95% of ASV. When
expressed as a percentage of clients, annual retention
was 94%, consistent with the prior year fourth quarter.
- Employee count was 8,375 at August 31, 2016, up 1,015 people in
the past 12 months. Excluding the acquired Portware workforce and
employees of the sold Market Metrics business, headcount increased
13.4% from a year ago.
- Capital expenditures were $13.1 million.
- A regular quarterly dividend of $20.0 million, or $0.50 per
share, was paid on September 20, 2016, to common stockholders of
record as of August 31, 2016.
- On July 1, 2016 FactSet entered into an accelerated share
repurchase agreement (the “ASR Agreement”) to repurchase $120.0
million of common stock. The Company received 595,607 shares of its
common stock on that date, which was approximately 80% of the total
number of shares of common stock expected to be repurchased under
the ASR Agreement. The final settlement of the ASR Agreement is
scheduled to occur in the first quarter of fiscal 2017.
- FactSet repurchased 258,000 shares for $42.8 million during the
quarter under the Company’s existing share repurchase program. As
of August 31, 2016, $197.0 million remained authorized for further
repurchases. Over the last 12 months, $431.0 million has been
returned to stockholders in the form of share repurchases and
dividends, funded by cash generated from operations and the sale of
the Market Metrics business.
- Common shares outstanding were 40.0 million at August 31,
2016.
- In July 2016, the Company announced it was strengthening its
alliance with QUICK Corp. by bringing together FactSet’s in-depth
insight and multi-asset class data and analytics with
Japan-specific content such as Nikkei’s Flash News, Nikkei NEEDS
Fundamentals and QUICK market information.
- FactSet was named the “Best Data Analytics Provider” of market
data, research and analytics in the 2016 annual rankings announced
by Waters Technology, a division of Incisive Media. FactSet was
also honored with the “Best Research and Analytics Tool” award at
the annual Systems in the City Awards presented in London by
Goodacre UK, a leading securities industry consultancy.
Full Year Fiscal 2016 Highlights
- ASV rose to $1.15 billion, up 8.8% organically.
- Revenues were $1.13 billion, an organic increase of
9.9%.
- Diluted EPS, excluding the gain from the sale of the Market
Metrics business, rose to $6.18.
- Free cash flow totaled $283.4 million, up $2.6 million from
last year.
- Client count was up 116, while users grew by 3,450.
- FactSet returned $431.0 million to stockholders in the form of
share repurchases and dividends, an increase of 33.5% over the
prior year.
- The Company completed the strategic acquisition of Portware in
October 2015.
- FactSet sold its Market Metrics business in July 2016 and
recognized an after-tax gain of $81.7 million.
- FactSet was ranked #89 on Fortune’s “100 Best Companies to Work
For,” marking the Company’s eighth appearance on the list in the
last nine years.
- FactSet was recognized as one of the UK’s “Best Workplaces” by
the Great Place to Work® Institute UK for the eighth consecutive
year.
- In May 2016, FactSet was awarded “Best Overall Provider,” "Best
Research Provider" and "Best Analytics Provider" by Inside Market
Data.
Business Outlook
The following forward-looking statements reflect
FactSet’s expectations as of today’s date. Given the 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.
First Quarter Fiscal 2017 Expectations:
- Revenues are expected to range between $286 million and $292
million.
- GAAP operating margin is expected to range between 31.0% and
32.0%. Adjusted operating margin is expected to range between 32.5%
and 33.5%.
- The annual effective tax rate is expected to range between
28.0% and 29.0%.
- GAAP diluted EPS is expected to range between $1.62 and $1.66.
Adjusted EPS is expected to range between $1.68 and $1.72. The
midpoint of the adjusted EPS range represents 14.5% growth over the
prior year.
Conference Call
The Company will host a conference call today, September 27,
2016 at 11:00 a.m. Eastern Time to review the fourth quarter
earnings release. To listen, please visit the “Audiocasts” section
on FactSet's Investor Relations website at
http://investor.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 and
margin, net income and diluted earnings per share have been
adjusted. Adjusted operating income during the just completed
fourth quarter excludes $3.7 million of deal-related amortization
and $4.6 million of non-recurring items related primarily to legal
matters. Adjusted net income excludes the after-tax charges of $2.7
million from deal-related amortization and $3.3 million from
non-recurring items and the after-tax gain of $81.7 million related
to the sale of the Market Metrics business. Adjusted diluted EPS of
$1.69 excludes the net effect of deal-related amortization,
non-recurring items and the gain on sale.
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 they permit 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
recently completed fourth quarter was $70.1 million of net cash
provided by operations and $13.1 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 delivers the world's best insight and
information to investment professionals through superior analytics,
service, content, and technology. More than 63,000 users make
smarter investment decisions with FactSet's desktop analytics,
mobile applications, and comprehensive data feeds. FactSet is also
an honoree of Fortune's 100 Best Companies to Work For and a Best
Workplace Award recipient in the United Kingdom and France. FactSet
is listed on the New York Stock Exchange and NASDAQ (NYSE:FDS |
NASDAQ:FDS).
|
|
|
|
|
Consolidated Statements of
Income – Unaudited |
|
|
|
|
|
Three Months Ended August 31, |
|
Twelve Months Ended August 31, |
(In thousands, except
per share data) |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Revenues |
$ |
287,291 |
|
|
$ |
261,779 |
|
|
$ |
1,127,092 |
|
|
$ |
1,006,768 |
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
Cost of services |
|
124,160 |
|
|
|
107,595 |
|
|
|
487,409 |
|
|
|
405,339 |
|
Selling, general and
administrative |
|
75,397 |
|
|
|
68,531 |
|
|
|
290,007 |
|
|
|
269,511 |
|
Total operating expenses |
|
199,557 |
|
|
|
176,126 |
|
|
|
777,416 |
|
|
|
674,850 |
|
|
|
|
|
|
|
|
|
Operating income |
|
87,734 |
|
|
|
85,653 |
|
|
|
349,676 |
|
|
|
331,918 |
|
|
|
|
|
|
|
|
|
Other income
(expense) |
|
|
|
|
|
|
|
|
|
Gain on sale of business |
|
112,453 |
|
|
|
- |
|
|
|
112,453 |
|
|
|
- |
|
Interest (expense), net of interest
income |
|
(371 |
) |
|
|
391 |
|
|
|
(1,136 |
) |
|
|
1,836 |
|
Total other income |
|
112,082 |
|
|
|
391 |
|
|
|
111,317 |
|
|
|
1,836 |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
199,816 |
|
|
|
86,044 |
|
|
|
460,993 |
|
|
|
333,754 |
|
|
|
|
|
|
|
|
|
Provision for income
taxes |
|
55,510 |
|
|
|
23,860 |
|
|
|
122,178 |
|
|
|
92,703 |
|
Net income |
$ |
144,306 |
|
|
$ |
62,184 |
|
|
$ |
338,815 |
|
|
$ |
241,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share |
$ |
3.55 |
|
|
$ |
1.48 |
|
|
$ |
8.19 |
|
|
$ |
5.71 |
|
|
|
|
|
|
|
|
|
Diluted weighted average
common shares |
|
40,673 |
|
|
|
41,995 |
|
|
|
41,365 |
|
|
|
42,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Statements of Comprehensive Income – Unaudited |
|
|
Three Months EndedAugust 31, |
|
Twelve Months EndedAugust 31, |
(In thousands) |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Net income |
$ |
144,306 |
|
|
$ |
62,184 |
|
|
$ |
338,815 |
|
|
$ |
241,051 |
|
|
|
|
|
|
|
|
|
Other comprehensive loss,
net of tax |
|
|
|
|
|
|
|
Net unrealized loss on cash flow
hedges* |
|
(1,086 |
) |
|
|
(579 |
) |
|
|
(857 |
) |
|
|
(868 |
) |
Foreign currency translation
adjustments |
|
(15,777 |
) |
|
|
490 |
|
|
|
(23,644 |
) |
|
|
(25,263 |
) |
Other comprehensive loss |
|
(16,863 |
) |
|
|
(89 |
) |
|
|
(24,501 |
) |
|
|
(26,131 |
) |
Comprehensive income |
$ |
127,443 |
|
|
$ |
62,095 |
|
|
$ |
314,314 |
|
|
$ |
214,920 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*For the three and twelve months ended August 31, 2016, the
unrealized loss on cash flow hedges were net of tax benefits of
$634 and $498, respectively. For the three and twelve months
ended August 31, 2015, the unrealized loss on cash flow hedges were
net of tax benefits of $340 and $512, respectively.
Consolidated
Balance Sheets - Unaudited |
|
|
|
|
|
|
|
|
|
August 31, |
|
August 31, |
|
(In
thousands) |
|
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
228,407 |
|
|
$ |
158,914 |
|
|
Investments |
|
24,217 |
|
|
|
23,497 |
|
|
Accounts receivable,
net of reserves |
|
97,797 |
|
|
|
95,064 |
|
|
Prepaid taxes |
|
|
- |
|
|
|
4,808 |
|
|
Deferred taxes |
|
|
3,158 |
|
|
|
2,105 |
|
|
Prepaid expenses and
other current assets |
|
|
15,697 |
|
|
|
19,786 |
|
|
|
Total current
assets |
|
|
369,276 |
|
|
|
304,174 |
|
|
Property, equipment,
and leasehold improvements, net |
|
84,622 |
|
|
|
59,264 |
|
|
Goodwill |
|
|
|
452,915 |
|
|
|
308,287 |
|
|
Intangible assets,
net |
|
|
|
93,161 |
|
|
|
40,052 |
|
|
Deferred taxes |
|
|
|
13,406 |
|
|
|
20,599 |
|
|
Other assets |
|
|
|
5,781 |
|
|
|
4,295 |
|
|
|
Total
Assets |
|
|
$ |
1,019,161 |
|
|
$ |
736,671 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
Accounts payable and
accrued expenses |
$ |
45,836 |
|
|
$ |
33,880 |
|
|
Accrued
compensation |
|
|
51,036 |
|
|
|
44,916 |
|
|
Deferred fees |
|
|
33,247 |
|
|
|
38,488 |
|
|
Taxes payable |
|
|
7,781 |
|
|
|
3,755 |
|
|
Deferred taxes |
|
|
291 |
|
|
|
562 |
|
|
Dividends payable |
|
|
20,019 |
|
|
|
18,179 |
|
|
|
Total current
liabilities |
|
|
158,210 |
|
|
|
139,780 |
|
|
Deferred taxes |
|
|
|
1,708 |
|
|
|
1,697 |
|
|
Taxes payable |
|
|
|
8,782 |
|
|
|
6,776 |
|
|
Long-term debt |
|
300,000 |
|
|
|
35,000 |
|
|
Deferred rent and
other non-current liabilities |
|
33,080 |
|
|
|
21,834 |
|
|
|
Total
Liabilities |
|
$ |
501,780 |
|
|
$ |
205,087 |
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
Common
stock |
|
$ |
512 |
|
|
$ |
503 |
|
|
|
Additional
paid-in capital |
|
623,195 |
|
|
|
542,355 |
|
|
|
Treasury
stock, at cost |
|
|
(1,321,700 |
) |
|
|
(988,873 |
) |
|
|
Retained
earnings |
|
|
1,283,927 |
|
|
|
1,021,651 |
|
|
|
Accumulated
other comprehensive loss |
|
|
|
(68,553 |
) |
|
|
(44,052 |
) |
|
|
Total Stockholders’
Equity |
|
|
517,381 |
|
|
|
531,584 |
|
|
|
Total Liabilities And
Stockholders’ Equity |
$ |
1,019,161 |
|
|
$ |
736,671 |
|
|
|
|
Consolidated
Statements of Cash Flows – Unaudited |
|
(In
thousands) |
Twelve Months EndedAugust 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
CASH FLOWS
FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
Net
income |
|
$ |
338,815 |
|
|
$ |
241,051 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities |
|
|
|
Depreciation and
amortization |
|
38,052 |
|
|
|
31,349 |
|
Stock-based
compensation expense |
|
29,793 |
|
|
|
26,371 |
|
Gain on sale of
business |
|
(112,453 |
) |
|
|
- |
|
Deferred income
taxes |
|
4,528 |
|
|
|
(969 |
) |
Loss (gain) on sale of
assets |
|
8 |
|
|
|
(34 |
) |
Tax benefits from
share-based payment arrangements |
|
(18,205 |
) |
|
|
(28,948 |
) |
Changes in assets and
liabilities, net of effects of acquisitions |
|
|
|
Accounts receivable,
net of reserves |
|
|
|
(3,541 |
) |
|
|
(4,300 |
) |
Accounts payable and
accrued expenses |
|
|
|
5,525 |
|
|
|
8,123 |
|
Accrued
compensation |
|
3,961 |
|
|
|
3,516 |
|
Deferred fees |
|
700 |
|
|
|
53 |
|
Taxes payable, net of
prepaid taxes |
|
30,270 |
|
|
|
30,437 |
|
Prepaid expenses and
other assets |
|
7 |
|
|
|
(4,523 |
) |
Deferred rent and other
non-current liabilities |
|
13,674 |
|
|
|
4,322 |
|
Other working capital
accounts, net |
|
6 |
|
|
|
(6 |
) |
Net cash provided by
operating activities |
|
|
331,140 |
|
|
|
306,442 |
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES |
|
|
|
|
Acquisition of
businesses, net of cash acquired |
|
(262,909 |
) |
|
|
(34,758 |
) |
Proceeds from
sale of business, net |
|
153,137 |
|
|
|
- |
|
Purchases of
investments |
|
(18,137 |
) |
|
|
(24,264 |
) |
Proceeds from
sales of investments |
|
17,241 |
|
|
|
19,827 |
|
Purchases of
property, equipment and leasehold improvements, net of proceeds
from dispositions |
|
(47,740 |
) |
|
|
(25,682 |
) |
Net cash used in
investing activities |
|
(158,408 |
) |
|
|
(64,877 |
) |
|
|
|
|
CASH FLOWS
FROM FINANCING ACTIVITIES |
|
|
|
Dividend
payments |
|
(74,218 |
) |
|
|
(66,551 |
) |
Repurchase of
common stock |
|
(356,828 |
) |
|
|
(256,217 |
) |
Proceeds from
debt |
|
|
265,000 |
|
|
|
35,000 |
|
Debt issuance
costs |
|
|
(12 |
) |
|
|
(32 |
) |
Proceeds from
employee stock plans |
|
|
56,851 |
|
|
|
71,526 |
|
Tax benefits
from share-based payment arrangements |
|
|
18,205 |
|
|
|
28,948 |
|
Net cash used in
financing activities |
|
|
(91,002 |
) |
|
|
(187,326 |
) |
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
(12,237 |
) |
|
|
(11,703 |
) |
|
|
|
|
|
Net increase in cash
and cash equivalents |
|
|
69,493 |
|
|
|
42,536 |
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period |
|
|
158,914 |
|
|
|
116,378 |
|
Cash and cash
equivalents at end of period |
|
$ |
228,407 |
|
|
$ |
158,914 |
|
|
Reconciliation of GAAP Results to Adjusted Financial
Measures
Financial measures in accordance with U.S. GAAP including
operating income and margin, 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 they permit 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 August 31, |
|
|
(In thousands, except
per share data) |
|
2016 |
|
|
2015 |
|
Change |
GAAP Operating income |
$ |
87,734 |
|
$ |
85,653 |
|
|
|
Deal-related amortization
(a) |
|
3,732 |
|
|
1,787 |
|
|
|
Non-recurring items
(b) |
|
4,632 |
|
|
3,010 |
|
|
|
|
|
|
|
|
Adjusted operating income |
$ |
96,098 |
|
$ |
90,450 |
|
6.2 |
% |
Adjusted operating margin |
|
33.4 |
% |
|
34.6 |
% |
|
|
|
|
|
|
|
GAAP Net income |
$ |
144,306 |
|
$ |
62,184 |
|
|
|
Deal-related amortization
(a)(d) |
|
2,675 |
|
|
1,246 |
|
|
|
Non-recurring items
(b)(d) |
|
3,320 |
|
|
2,097 |
|
|
|
Gain on sale of business
(c) |
|
(81,694 |
) |
|
- |
|
|
|
Income tax benefits
(e) |
|
- |
|
|
(2,280 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income |
$ |
68,607 |
|
$ |
63,247 |
|
8.5 |
% |
|
|
|
|
|
Adjusted Diluted earnings
per common share (f) |
$ |
1.69 |
|
$ |
1.51 |
|
11.9 |
% |
Weighted average common shares (Diluted) |
|
40,673 |
|
|
41,995 |
|
|
|
(a) GAAP operating income in the fourth quarter of fiscal 2016
was adjusted to exclude $3.7 million of pre-tax deal-related
amortization, which reduced diluted earnings per share by $0.07.
GAAP operating income in the fourth quarter of fiscal 2015 was
adjusted to exclude $1.8 million of pre-tax deal-related
amortization, which reduced diluted earnings per share by
$0.03.
(b) GAAP operating income in the fourth quarter of fiscal 2016
was adjusted to exclude $4.6 million of pre-tax non-recurring items
related primarily to legal matters, which reduced net income by
$3.3 million and diluted earnings per share by $0.08. GAAP
operating income in the fourth quarter of fiscal 2015 was adjusted
to exclude $3.0 million of pre-tax non-recurring items related
primarily to the vesting of performance-based equity instruments.
The vesting of performance-based equity instruments increased
stock-based compensation, net of tax, by $2.1 million, and reduced
diluted earnings per share by $0.05.
(c) GAAP net income in the fourth quarter of fiscal 2016 was
adjusted to exclude an after-tax gain of $81.7 million related to
the sale of the Market Metrics business in July 2016, net of tax of
$30.8 million. The gain on sale was taxed at an effective tax rate
of 27.4% and increased diluted earnings per share by
$2.01.
(d) For the purposes of calculating adjusted net income and
adjusted diluted earnings per share, deal-related amortization and
non-recurring items were taxed at the effective tax rates of 28.3%
for fiscal 2016 and 30.3% for fiscal 2015.
(e) GAAP net income in the year ago fourth quarter was adjusted
to exclude $2.3 million of income tax benefits related to
finalizing prior year tax returns and other discrete items and GAAP
diluted EPS was adjusted to exclude $0.05 from these same income
tax benefits.
(f) The sum of the non-GAAP diluted earnings per share may not
equal the totals above due to rounding.
Supplementary Schedule of Historical Adjusted Financial
Measures
The following table presents adjusted operating income and
margin, adjusted net income and adjusted diluted earnings per
share, and may be useful to facilitate historical comparisons.
(Unaudited) (In thousands, except per share data) |
Q4’16 |
Q3’16 |
Q2’16 |
Q1’16 |
Q4’15 |
Q3’15 |
Q2‘15 |
Q1‘15 |
GAAP Operating income |
$ |
87,734 |
|
$ |
89,290 |
|
$ |
85,344 |
|
$ |
87,308 |
|
$ |
85,653 |
|
$ |
85,356 |
|
$ |
80,648 |
|
$ |
80,260 |
|
Deal-related amortization |
|
3,732 |
|
|
4,085 |
|
|
4,078 |
|
|
2,922 |
|
|
1,787 |
|
|
2,284 |
|
|
2,048 |
|
|
2,101 |
|
Non-recurring items |
|
4,632 |
|
|
1,394 |
|
|
3,838 |
|
|
690 |
|
|
3,010 |
|
|
- |
|
|
3,154 |
|
- |
|
Adjusted operating income |
$ |
96,098 |
|
$ |
94,769 |
|
$ |
93,260 |
|
$ |
90,920 |
|
$ |
90,450 |
|
$ |
87,640 |
|
$ |
85,850 |
|
$ |
82,361 |
|
Adjusted operating margin |
|
33.4 |
% |
|
33.0 |
% |
|
33.1 |
% |
|
33.6 |
% |
|
34.6 |
% |
|
34.4 |
% |
|
34.6 |
% |
|
33.9 |
% |
|
|
|
|
|
|
|
|
|
GAAP Net income |
$ |
144,306 |
|
$ |
66,781 |
|
$ |
67,763 |
|
$ |
59,965 |
|
$ |
62,184 |
|
$ |
61,409 |
|
$ |
61,598 |
|
$ |
55,860 |
|
Deal-related amortization |
|
2,675 |
|
|
2,925 |
|
|
2,903 |
|
|
2,004 |
|
|
1,246 |
|
|
1,597 |
|
|
1,425 |
|
|
1,454 |
|
Non-recurring items |
|
(78,374 |
) |
|
(2,161 |
) |
|
(4,585 |
) |
|
474 |
|
|
(183 |
) |
|
(1,408 |
) |
|
(2,883 |
) |
- |
|
Adjusted net income |
$ |
68,607 |
|
$ |
67,545 |
|
$ |
66,081 |
|
$ |
62,443 |
|
$ |
63,247 |
|
$ |
61,598 |
|
$ |
60,140 |
|
$ |
57,314 |
|
|
|
|
|
|
|
|
|
|
Adjusted Diluted earnings per common share |
$ |
1.69 |
|
$ |
1.64 |
|
$ |
1.59 |
|
$ |
1.48 |
|
$ |
1.51 |
|
$ |
1.46 |
|
$ |
1.42 |
|
$ |
1.35 |
|
Weighted average common shares (Diluted) |
|
40,673 |
|
|
41,189 |
|
|
41,536 |
|
|
42,063 |
|
|
41,995 |
|
|
42,297 |
|
|
42,306 |
|
|
42,340 |
|
Supplementary Schedules of Historical ASV by Client Type
The following table presents the percentages and growth rates of
organic ASV by client type, excluding currency, and may be useful
to facilitate historical comparisons. Organic ASV excludes
acquisitions and dispositions completed within the last 12 months
and the effects of foreign currency.
|
Q4’16 |
Q3’16 |
Q2’16 |
Q1’16 |
Q4’15 |
%
of ASV from buy-side clients |
|
82.6 |
% |
|
83.0 |
% |
|
82.8 |
% |
|
82.4 |
% |
|
82.6 |
% |
%
of ASV from sell-side clients |
|
17.4 |
% |
|
17.0 |
% |
|
17.2 |
% |
|
17.6 |
% |
|
17.4 |
% |
|
|
|
|
|
|
ASV
Growth rate from buy-side clients |
|
9.0 |
% |
|
10.3 |
% |
|
9.9 |
% |
|
9.5 |
% |
|
9.4 |
% |
ASV
Growth rate from sell-side clients |
|
7.6 |
% |
|
8.1 |
% |
|
10.0 |
% |
|
10.3 |
% |
|
9.4 |
% |
Total Organic ASV Growth Rate |
|
8.8 |
% |
|
9.9 |
% |
|
9.9 |
% |
|
9.7 |
% |
|
9.4 |
% |
The following table presents the calculation of the
above-mentioned ASV growth rates from all clients.
(In millions) |
Q4’16 |
Q3’16 |
Q2’16 |
Q1’16 |
Q4’15 |
|
As
reported ASV |
$ |
1,149.9 |
|
$ |
1,156.3 |
|
$ |
1,139.2 |
|
$ |
1,108.7 |
|
$ |
1,057.8 |
|
|
Less acquired ASV (a) |
|
(39.3 |
) |
|
(39.3 |
) |
|
(39.7 |
) |
|
(49.0 |
) |
- |
|
|
Less Market Metrics ASV |
- |
|
|
(36.8 |
) |
|
(38.2 |
) |
|
(38.7 |
) |
|
(39.0 |
) |
|
Less Currency impact (b) |
|
(2.2 |
) |
|
(0.6 |
) |
|
0.8 |
|
|
1.8 |
|
|
0.1 |
|
|
Organic ASV total |
$ |
1,108.4 |
|
$ |
1,079.6 |
|
$ |
1,062.1 |
|
$ |
1,022.8 |
|
$ |
1,018.9 |
|
|
Total Organic ASV Growth Rate |
|
8.8 |
% |
|
9.9 |
% |
|
9.9 |
% |
|
9.7 |
% |
|
9.4 |
% |
|
(a)
Acquired ASV from acquisitions completed within the last 12
months. |
|
(b) The impact from foreign currency movements over the past
12 months was excluded above to calculate total organic ASV. |
Contact:
Rachel Stern
FactSet Research Systems Inc.
203.810.1000
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