FactSet (the “Company”) (NYSE:FDS) (NASDAQ:FDS), a global provider
of integrated financial information, analytical applications, and
industry-leading service, today announced its results for the first
quarter ended November 30, 2017.
First Quarter 2018 Highlights
- Revenues increased 14.3% or $41.1 million to $329.1 million
compared with $288.1 million for the same period in fiscal 2017.
Organic revenues grew 5.8% to $304.3 million during the first
quarter of 2018 from the prior year period.
- Operating margin decreased to 27.1% compared to 31.4% in the
prior year period. The decrease in operating margin is primarily
related to $7.1 million in restructuring actions initiated by the
Company. Adjusted operating margin decreased to 31.7% compared with
33.0% in the prior year period.
- Diluted earnings per share (“EPS”) increased to $1.77 compared
with $1.66 for the same period in fiscal 2017. Adjusted diluted EPS
for the first quarter rose 16.6% to $2.04 compared with $1.75 in
the prior period. Adjusted diluted EPS for the first quarter of
2018 included a $0.09 impact from the adoption of an accounting
standard update, which impacted the Company’s accounting for
employee share-based payment transactions.
- Annual Subscription Value (“ASV”) increased to $1.32 billion at
November 30, 2017 compared with prior year ASV of $1.17 billion.
Organic ASV, which excludes the effects of acquisitions,
dispositions and foreign currency increased 5.1%.
- The Company’s effective tax rate for the first quarter was
18.3%, as compared to 25.9% a year ago primarily due to the
aforementioned accounting standard update and income tax benefits
related to settlements with taxing authorities. Excluding income
tax benefits, the current year annual effective tax rate was 24.9%,
a decrease from 25.9% a year ago.
- FactSet issued annual guidance for fiscal 2018 and discontinued
quarterly guidance on a go forward basis. Organic ASV growth for
fiscal 2018 is expected to be in the range of 4.9% to 6.5%. Please
see “Business Outlook” section of this press release for detailed
guidance metrics.
- The Company plans to host an investor day on April 17, 2018 in
New York City.
“We are making meaningful progress in
integrating our new acquisitions and are excited about our
expanding suite of workflow-based solutions. We enter fiscal year
2018 with strong earnings growth and we see positive ASV momentum
in our second quarter,” said Phil Snow, FactSet CEO.
Key Financial Measures*
(Condensed and Unaudited) |
|
Three Months Ended November 30, |
(In thousands, except
per share data) |
|
2017 |
|
|
2016 |
|
Change |
|
|
|
|
|
|
|
|
|
|
|
GAAP revenues |
$ |
329,141 |
|
$ |
288,063 |
|
|
14.3 |
% |
Organic revenues |
$ |
304,267 |
|
$ |
287,638 |
|
|
5.8 |
% |
Adjusted operating
income |
$ |
105,121 |
|
$ |
95,029 |
|
|
10.6 |
% |
Adjusted operating
margin |
|
31.7 |
% |
|
33.0 |
% |
|
|
Adjusted net
income |
$ |
80,866 |
|
$ |
70,073 |
|
|
15.4 |
% |
Adjusted diluted
EPS |
$ |
2.04 |
|
$ |
1.75 |
|
|
16.6 |
% |
|
|
|
|
|
|
|
* See reconciliation of U.S. GAAP to adjusted metrics
measures in the back of this press release
Maurizio Nicolelli, FactSet CFO added, “We are providing annual
guidance for fiscal 2018 that is reflective of our healthy sales
pipeline. We believe we have the sales strategy and products to
achieve our ASV targets, increase earnings and return value to
shareholders.”
Annual Subscription Value (ASV) and Segment Revenue
ASV was $1.32 billion at November 30, 2017, up
5.1% or $59.3 million organically from the prior year. ASV excludes
professional services fees billed in the last 12 months, which are
not subscription-based. Organic ASV, which excludes the effects of
acquisitions, dispositions and foreign currency, increased $1.3
million over the last three months. ASV at any given point in
time represents the forward-looking revenues for the next twelve
months from all subscription services currently supplied to
clients.
Buy-side and sell-side ASV growth rates for the
first quarter of fiscal 2018 were 5.3% and 3.9%, respectively.
Buy-side clients accounted for 84.2% of ASV while 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 may be found on the last page of this earnings
release.
ASV from U.S. operations was $824.9 million,
increasing 7.8% over prior year of $765.3 million and 3.9%
organically. U.S. revenues for the quarter were $208.8 million
compared with $190.6 million. Excluding the effects of acquisitions
and dispositions completed in the last 12 months, the U.S. revenue
growth rate was 4.8%. ASV from international operations was $495.0
million, increasing 22.2% over prior year of $405.1 million and
7.3% organically. International ASV now represents 37.5% of total
ASV, up from 34.6% a year ago. International revenues were $120.4
million compared with $97.5 million from the first quarter of 2017.
Excluding the effects of acquisitions and dispositions completed in
the last 12 months and foreign currency, the international revenue
growth rate was 7.7%.
Operational Highlights – First Quarter of Fiscal 2018
- Client count as of November 30, 2017 was 4,809, a net increase
of 65 clients in the past three months. The count includes clients
with ASV of $10,000 and above.
- User count decreased 253 to 88,593 in the past three months
primarily due to StreetAccount user cancellations. FactSet defines
users as workstation and StreetAccount users.
- Annual client retention was greater than 95% of ASV. When
expressed as a percentage of clients, annual retention was
90%.
- Employee count was 9,421 at November 30, 2017, up 8.1% in the
past 12 months. Excluding workforces acquired in fiscal 2017,
headcount increased 2.9% from a year ago.
- Quarterly free cash flow was $55.2 million compared with $38.6
million a year ago. Net cash provided by operating activities for
the first quarter was $61.1 million compared with $51.1 million for
the first quarter of 2017.
- Capital expenditures decreased to $5.9 million, compared with
$12.5 million a year ago. Prior year capital expenditures were
higher primarily due to the build out of new office space in
Chicago and New York City.
- A regular quarterly dividend of $21.9 million, or $0.56 per
share, was paid on December 19, 2017, to common stockholders of
record as of November 30, 2017.
- FactSet enhanced its multi asset class risk offering, adding a
linear factor risk model to its existing Monte Carlo offering to
support clients looking to align their risk decomposition with
variables used both to generate risk factor attribution and
optimization.
- FactSet won nine awards including Excellence in Asset
Management and Servicing, Data and Technology at the CIO Industry
Innovation Awards, Best Overall Technology Provider at the Buy-Side
Technology Awards from Waters Technology and Data Vendor of the
Year at the Risk.Net Market Technology Awards. Additionally,
FactSet was ranked 21 on the RiskTech100® 2018, the flagship report
of Chartis Research.
Share Repurchase Program
FactSet repurchased 164,920 shares for $30.9 million during the
first quarter under the Company’s existing share repurchase
program. Over the last 12 months, FactSet has returned $291 million
to stockholders in the form of share repurchases and dividends,
funded by cash generated from operations. As of November 30, 2017,
$213.2 million remained for future share repurchases under the
share repurchase program.
Business Outlook
Starting with the first quarter of fiscal 2018,
the Company will provide annual guidance and discontinue quarterly
guidance. 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.
Fiscal 2018 Expectations:
- Organic ASV is expected to increase in the range of $65 million
and $85 million over fiscal 2017 implying a growth rate in the
range of 4.9% to 6.5%.
- GAAP Revenues are expected to be in the range of $1.34 billion
and $1.36 billion.
- GAAP operating margin is expected to be in the range of 28.5%
and 30.0%. Adjusted operating margin is expected to be in the range
of 31.0% and 32.5%.
- The annual effective tax rate is expected to be in the range of
21.0% and 22.5%. This guidance incorporates the impact from an
accounting standard update, which affects the accounting for
employee share-based payment transactions, including income taxes
and classification of excess tax benefits in the statement of cash
flows. The projected tax rate range does not incorporate any impact
from the pending U.S. corporate tax reform bill.
- GAAP diluted EPS is expected to be in the range of $7.60 and
$7.80. Adjusted diluted EPS is expected to be in the range of $8.25
and $8.45. The midpoint of the adjusted EPS range represents 14%
growth over the prior year. Adjusted diluted EPS for the fiscal
2018 includes an estimated $0.26 impact from the aforementioned
accounting standard update.
Both GAAP operating margin and GAAP diluted EPS
guidance do not include the effects of any non-recurring benefits
or charges that may arise in the next three quarters of fiscal
2018.
Investor Day
The Company plans to host an investor day on
April 17, 2018, in New York City. Details about this event
including how to register will be announced in early 2018.
Conference Call
The Company will host a conference call today,
December 19, 2017 at 11:00 a.m. Eastern Time to discuss the first
quarter results with investment professionals. The call will be
webcast live at FactSet Investor Relations. The following
information is provided for investors who would like to
participate:
U.S.
Participants: |
|
|
|
833.231.8259 |
International
Participants: |
|
|
|
647.689.4104 |
Passcode: |
|
|
|
6789898 |
Moderator:
|
|
|
|
Rima Hyder, Vice
President, Investor Relations |
An archived webcast with the accompanying slides
will be available at investor.factset.com for one year after the
conclusion of the live event. The earnings call transcript will
also be available via FactSet CallStreet. An audio replay of this
conference will also be available until December 26, 2017 via the
following telephone numbers: 800.585.8367 in the U.S. and
416.621.4642 internationally using passcode 6789898.
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 and
reputation; 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 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 Non-GAAP Financial Measures
Financial measures in accordance with U.S. GAAP
including revenue, operating income and margin, net income, diluted
earnings per share and cash provided by operating activities have
been adjusted.
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.
Organic revenues exclude the effects of
acquisitions and dispositions completed in the last 12 months and
foreign currency in all periods presented. Adjusted operating
income and margin, adjusted net income and adjusted diluted
earnings per share exclude both intangible asset amortization and
non-recurring items. The Company believes that these adjusted
financial measures better reflect the underlying economic
performance of FactSet.
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. 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 (NYSE:FDS) (NASDAQ:FDS) delivers superior analytics,
service, content, and technology to help more than 88,000 users see
and seize opportunity sooner. We are committed to giving investment
professionals the edge to outperform, with fresh perspectives,
informed insights, and the industry-leading support of our
dedicated specialists. We're proud to have been recognized with
multiple awards for our analytical and data-driven solutions and
repeatedly ranked as one of Fortune's 100 Best Companies to Work
For and a Best Workplace in the United Kingdom and France.
Subscribe to our thought leadership blog to get fresh insight
delivered daily at insight.factset.com. Learn more
at www.factset.com and follow on
Twitter: www.twitter.com/factset.
Consolidated Statements
of Income (Unaudited) |
|
|
Three Months EndedNovember 30, |
|
|
|
|
|
|
|
|
(In thousands, except
per share data) |
|
2017 |
|
|
|
2016 |
|
|
|
|
|
Revenues |
$ |
329,141 |
|
|
$ |
288,063 |
|
|
|
|
|
Operating expenses |
|
|
|
Cost of
services |
|
161,524 |
|
|
|
127,250 |
|
Selling,
general and administrative |
|
78,519 |
|
|
|
70,494 |
|
Total
operating expenses |
|
240,043 |
|
|
|
197,744 |
|
|
|
|
|
Operating income |
|
89,098 |
|
|
|
90,319 |
|
|
|
|
|
Other expense |
|
|
|
|
|
|
|
Interest
expense, net of interest income |
|
(2,919 |
) |
|
|
(499 |
) |
Total other expense |
|
(2,919 |
) |
|
|
(499 |
) |
|
|
|
|
Income before income
taxes |
|
86,179 |
|
|
|
89,820 |
|
|
|
|
|
Provision for income
taxes |
|
15,800 |
|
|
|
23,237 |
|
Net
income |
$ |
70,379 |
|
|
$ |
66,583 |
|
|
|
|
|
Diluted earnings per
common share |
$ |
1.77 |
|
|
$ |
1.66 |
|
|
|
|
|
Diluted weighted
average common shares |
|
39,680 |
|
|
|
40,100 |
|
Consolidated Statements of Comprehensive Income (Unaudited) |
|
Three Months EndedNovember 30, |
(In thousands) |
|
2017 |
|
|
|
2016 |
|
|
|
|
|
Net income |
$ |
70,379 |
|
|
$ |
66,583 |
|
|
|
|
|
Other comprehensive
income (loss), net of tax |
|
|
|
Net
unrealized (loss) gain on cash flow hedges* |
|
(476 |
) |
|
|
447 |
|
Foreign
currency translation adjustments |
|
8,466 |
|
|
|
(11,497 |
) |
Other
comprehensive income (loss) |
|
7,990 |
|
|
|
(11,050 |
) |
Comprehensive
income |
$ |
78,369 |
|
|
$ |
55,533 |
|
|
|
|
|
*For the three months ended November 30, 2017, the unrealized
loss on cash flow hedges was net of tax benefits of $288. For
the three months ended November 30, 2016 the unrealized gain on
cash flow hedges was net of tax expense of $261.
Consolidated Balance Sheets (Unaudited) |
|
|
|
|
November 30, |
|
|
|
|
|
|
|
August 31, |
|
|
(In
thousands) |
|
|
2017 |
|
|
|
|
|
|
|
2017 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
221,933 |
|
|
|
|
|
|
$ |
194,731 |
|
|
Investments |
|
|
31,677 |
|
|
|
|
|
|
|
32,444 |
|
|
Accounts receivable, net of reserves |
|
|
144,848 |
|
|
|
|
|
|
|
148,331 |
|
|
Prepaid taxes |
― |
|
|
|
|
|
|
|
7,076 |
|
|
Deferred taxes |
― |
|
|
|
|
|
|
|
2,668 |
|
|
Prepaid expenses and other current assets |
|
|
28,554 |
|
|
|
|
|
|
|
24,126 |
|
|
Total current assets |
|
|
427,012 |
|
|
|
|
|
|
|
409,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, equipment, and leasehold improvements, net |
|
|
98,731 |
|
|
|
|
|
|
|
100,454 |
|
|
Goodwill |
|
|
712,476 |
|
|
|
|
|
|
|
707,560 |
|
|
Intangible assets, net |
|
|
168,874 |
|
|
|
|
|
|
|
173,543 |
|
|
Deferred taxes |
|
|
6,975 |
|
|
|
|
|
|
|
7,412 |
|
|
Other assets |
|
|
16,534 |
|
|
|
|
|
|
|
14,970 |
|
|
Total Assets |
|
$ |
1,430,602 |
|
|
|
|
|
|
$ |
1,413,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
67,669 |
|
|
|
|
|
|
$ |
59,214 |
|
|
Accrued compensation |
|
|
20,658 |
|
|
|
|
|
|
|
61,083 |
|
|
Deferred fees |
|
|
43,423 |
|
|
|
|
|
|
|
47,495 |
|
|
Taxes payable |
|
|
7,948 |
|
|
|
|
|
|
|
9,112 |
|
|
Deferred taxes |
― |
|
|
|
|
|
|
|
2,382 |
|
|
Dividends payable |
|
|
21,902 |
|
|
|
|
|
|
|
21,853 |
|
|
Total current liabilities |
|
|
161,600 |
|
|
|
|
|
|
|
201,139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred taxes |
|
|
25,028 |
|
|
|
|
|
|
|
24,892 |
|
|
Deferred fees |
|
|
4,713 |
|
|
|
|
|
|
|
3,921 |
|
|
Taxes payable |
|
|
9,465 |
|
|
|
|
|
|
|
11,484 |
|
|
Long-term debt |
|
|
574,666 |
|
|
|
|
|
|
|
575,000 |
|
|
Deferred rent and other non-current liabilities |
|
|
36,913 |
|
|
|
|
|
|
|
37,188 |
|
|
Total Liabilities |
|
$ |
812,385 |
|
|
|
|
|
|
$ |
853,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock |
|
$ |
521 |
|
|
|
|
|
|
$ |
518 |
|
|
Additional paid-in capital |
|
|
775,509 |
|
|
|
|
|
|
|
741,748 |
|
|
Treasury stock, at cost |
|
|
(1,638,384 |
) |
|
|
|
|
|
|
(1,606,678 |
) |
|
Retained earnings |
|
|
1,507,301 |
|
|
|
|
|
|
|
1,458,823 |
|
|
Accumulated other comprehensive loss |
|
|
(26,730 |
) |
|
|
|
|
|
|
(34,720 |
) |
|
Total Stockholders’ Equity |
|
|
618,217 |
|
|
|
|
|
|
|
559,691 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
1,430,602 |
|
|
|
|
|
|
$ |
1,413,315 |
|
|
Consolidated Statements of Cash Flows (Unaudited) |
|
(In
thousands) |
Three Months EndedNovember 30, |
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
CASH FLOWS
FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
Net
income |
|
$ |
70,379 |
|
|
$ |
66,583 |
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities |
|
|
|
|
Depreciation and amortization |
|
14,286 |
|
|
|
10,016 |
|
|
Stock-based compensation expense |
|
7,481 |
|
|
|
6,385 |
|
|
Deferred income taxes |
|
875 |
|
|
|
4,907 |
|
|
Loss
on sale of assets |
|
17 |
|
|
|
― |
|
|
Tax
benefits from share-based payment arrangements |
|
― |
|
|
|
(5,511 |
) |
|
Changes in assets and liabilities, net of effects of
acquisitions |
|
|
|
|
Accounts receivable, net of reserves |
|
|
|
3,511 |
|
|
|
(9,985 |
) |
|
Accounts payable and accrued expenses |
|
|
|
8,604 |
|
|
|
2,043 |
|
|
Accrued compensation |
|
(40,384 |
) |
|
|
(34,261 |
) |
|
Deferred fees |
|
(3,531 |
) |
|
|
(3,118 |
) |
|
Taxes payable, net of prepaid taxes |
|
7,401 |
|
|
|
13,786 |
|
|
Prepaid expenses and other assets |
|
(6,716 |
) |
|
|
(2,805 |
) |
|
Deferred rent and other non-current liabilities |
|
(845 |
) |
|
|
3,225 |
|
|
Other working capital accounts, net |
|
65 |
|
|
|
(152 |
) |
|
Net cash provided by operating activities |
|
61,143 |
|
|
|
51,113 |
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS
FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired |
― |
|
|
|
(71,689 |
) |
|
Purchases
of investments |
(6,942 |
) |
|
|
(16,700 |
) |
|
Proceeds
from sales of investments |
7,409 |
|
|
|
19,501 |
|
|
Purchases
of property, equipment and leasehold improvements, net of proceeds
from dispositions |
|
(5,912 |
) |
|
|
(12,537 |
) |
|
Net cash used in investing activities |
|
|
(5,445 |
) |
|
|
(81,425 |
) |
|
CASH FLOWS
FROM FINANCING ACTIVITIES |
|
|
|
|
|
Dividend
payments |
|
(21,682 |
) |
|
|
(19,867 |
) |
|
Repurchase
of common stock |
|
(31,706 |
) |
|
|
(84,860 |
) |
|
Proceeds
from debt |
|
|
― |
|
|
|
65,000 |
|
|
Purchase of
business |
|
|
|
442 |
|
|
|
― |
|
|
Proceeds
from employee stock plans |
|
|
22,132 |
|
|
|
16,685 |
|
|
Tax
benefits from share-based payment arrangements |
|
|
― |
|
|
|
5,511 |
|
|
Net cash used in financing activities |
|
|
(30,814 |
) |
|
|
(17,531 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
2,318 |
|
|
|
(7,276 |
) |
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash
equivalents |
|
|
27,202 |
|
|
|
(55,119 |
) |
|
|
|
|
|
|
|
|
Cash and
cash equivalents at beginning of period |
|
|
194,731 |
|
|
|
228,407 |
|
|
Cash and
cash equivalents at end of period |
|
$ |
221,933 |
|
|
$ |
173,288 |
|
|
Reconciliation of U.S. GAAP Results to Adjusted Financial
Measures
Financial measures in accordance with U.S. GAAP
including revenues, operating income and margin, net income,
diluted EPS and cash provided by operating activities 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.
Revenues (Details may not sum to total due
to rounding) |
|
|
|
(Unaudited) |
|
Three Months EndedNovember 30, |
(In thousands) |
|
|
2017 |
|
|
2016 |
|
Change |
|
GAAP Revenues |
|
$ |
329,141 |
|
$ |
288,063 |
|
14.3 |
% |
Deferred revenue fair
value adjustment (a) |
|
|
2,719 |
|
|
― |
|
|
Acquired revenues
(b) |
|
|
(26,975 |
) |
|
(425 |
) |
|
Currency impact
(c) |
|
|
(618 |
) |
|
― |
|
|
Organic
revenues |
|
$ |
304,267 |
|
$ |
287,638 |
|
5.8 |
% |
(a) The adjustment for the first quarter of fiscal 2018 relates
to the deferred revenue fair value adjustments from purchase
accounting.
(b) Acquired revenues from acquisitions and divestitures
completed within the last 12 months.
(c) The impact from foreign currency movements over the past 12
months.
Operating Income, Margin, Net Income and Diluted
EPS (Details may not sum to total due to
rounding) |
|
|
|
(Unaudited) |
|
Three Months Ended November 30, |
(In thousands, except
per share data) |
|
|
2017 |
|
|
2016 |
|
Change |
|
|
GAAP Operating
income |
|
$ |
89,098 |
|
$ |
90,319 |
|
(1.4 |
)% |
|
Intangible asset
amortization (a) |
|
|
6,158 |
|
|
3,756 |
|
|
|
Deferred revenue fair
value adjustment (b) |
|
|
2,719 |
|
|
― |
|
|
|
Other
non-recurring items (c) |
|
|
7,146 |
|
|
954 |
|
|
|
Adjusted
operating income |
|
$ |
105,121 |
|
$ |
95,029 |
|
10.6 |
% |
|
Adjusted operating margin (d) |
|
|
31.7 |
% |
|
33.0 |
% |
|
|
|
|
|
|
|
|
GAAP Net income |
|
$ |
70,379 |
|
$ |
66,583 |
|
5.7 |
% |
|
Intangible asset
amortization (a)(e) |
|
|
4,625 |
|
|
2,783 |
|
|
|
Deferred revenue fair
value adjustment (b)(e) |
|
|
2,042 |
|
|
― |
|
|
|
Other
non-recurring items (c)(e) |
|
|
5,367 |
|
|
707 |
|
|
|
Income tax benefits
(f) |
|
|
(1,547 |
) |
|
― |
|
|
|
Adjusted net income |
|
$ |
80,866 |
|
$ |
70,073 |
|
15.4 |
% |
|
|
|
|
|
|
|
GAAP Diluted earnings
per common share |
|
$ |
1.77 |
|
$ |
1.66 |
|
6.6 |
% |
|
Intangible asset
amortization (a)(e) |
|
|
0.12 |
|
|
0.07 |
|
|
|
Deferred revenue fair
value adjustment (b)(e) |
|
|
0.05 |
|
|
― |
|
|
|
Other non-recurring
items (c)(e) |
|
|
0.14 |
|
|
0.02 |
|
|
|
Income tax benefits
(f) |
|
|
(0.04 |
) |
|
― |
|
|
|
Adjusted
diluted earnings per common share (g) |
|
$ |
2.04 |
|
$ |
1.75 |
|
16.6 |
% |
|
Weighted average common
shares (Diluted) |
|
|
39,680 |
|
|
40,100 |
|
|
|
(a) GAAP operating income in the first quarter
of fiscal 2018 was adjusted to exclude $6.2 million of pre-tax
intangible asset amortization, which reduced net income by $4.6
million and diluted earnings per share by $0.12. GAAP operating
income in the first quarter of fiscal 2017 was adjusted to exclude
$3.8 million of pre-tax intangible asset amortization, which
reduced net income by $2.8 million and diluted earnings per share
by $0.07.
(b) The adjustment for the first quarter of fiscal 2018 relates
to the deferred revenue fair value adjustments from purchase
accounting.
(c) GAAP operating income in the first quarter
of fiscal 2018 was adjusted to exclude $7.1 million of pre-tax
expenses primarily related to restructuring actions initiated by
the Company, which reduced net income by $5.4 million and diluted
earnings per share by $0.14. GAAP operating income in the first
quarter of fiscal 2017 was adjusted to exclude $1.0 million of
pre-tax non-recurring items primarily related to legal matters,
which reduced net income by $0.7 million and diluted earnings per
share by $0.02.
(d) Adjusted operating margin for the first
quarter of fiscal 2018 is calculated as adjusted operating income
divided by GAAP revenues plus the deferred revenue fair value
adjustment.
(e) For purposes of calculating adjusted net
income and adjusted diluted earnings per share, intangible asset
amortization, deferred revenue fair value adjustments and other
non-recurring items were taxed at the annual effective tax rates of
24.9% for fiscal 2018 and 25.9% for fiscal 2017.
(f) Current year GAAP net income was adjusted to
exclude $1.5 million or $0.04 per share of income tax benefits
primarily from settlements with taxing authorities.
(g) Adjusted diluted EPS for the first quarter
of 2018 included a $0.09 impact from an accounting standard update,
which impacted the accounting for employee share-based payment
transactions.
Free Cash
Flow (Details may not sum to total due to
rounding) |
|
|
|
|
|
|
|
(Unaudited) |
|
Three Months Ended November 30, |
|
(In thousands) |
|
|
2017 |
|
|
2016 |
|
Change |
|
Net cash provided by
operating activities |
|
$ |
61,143 |
|
$ |
51,113 |
|
|
Capital
expenditures |
|
|
(5,912 |
) |
|
(12,537 |
) |
|
Free cash
flow |
|
$ |
55,231 |
|
$ |
38,576 |
|
43.2 |
% |
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.
|
Q1’18 |
Q4’17 |
Q3’17 |
Q2’17 |
Q1’17 |
Q4’16 |
% of ASV from buy-side clients |
84.2 |
% |
84.1 |
% |
84.4 |
% |
83.2 |
% |
83.0 |
% |
82.6 |
% |
% of ASV from sell-side clients |
15.8 |
% |
15.9 |
% |
15.6 |
% |
16.8 |
% |
17.0 |
% |
17.4 |
% |
|
|
|
|
|
|
|
ASV Growth rate from buy-side clients |
5.3 |
% |
5.9 |
% |
5.7 |
% |
6.8 |
% |
8.3 |
% |
9.0 |
% |
ASV Growth rate from sell-side clients |
3.9 |
% |
4.6 |
% |
5.8 |
% |
4.9 |
% |
6.3 |
% |
7.6 |
% |
Total Organic ASV Growth Rate |
5.1 |
% |
5.7 |
% |
5.7 |
% |
6.5 |
% |
7.9 |
% |
8.8 |
% |
The following table presents the calculation of the
above-mentioned ASV growth rates from all clients.
(Details may
not sum to total due to rounding) |
|
|
|
|
|
(In millions) |
Q1’18 |
Q1’17 |
As reported ASV (a) |
$ |
1,319.9 |
|
$ |
1,170.4 |
|
Acquired ASV (b) |
|
(88.1 |
) |
|
― |
|
Professional services fees (c) |
|
― |
|
|
(5.5 |
) |
Currency impact (d) |
|
(2.0 |
) |
|
5.6 |
|
Organic ASV total |
$ |
1,229.8 |
|
$ |
1,170.5 |
|
Total Organic ASV Growth Rate |
|
5.1 |
% |
|
(a) Beginning with the fiscal third quarter of 2017, FactSet
excluded professional services fees billed within the last 12
months, which are not subscription based. ASV at the end of the
first quarter of 2018 excludes $17.4 million in professional
services fees.
(b) Acquired ASV from acquisitions completed within the last 12
months.
(c) The organic ASV for the first quarter of fiscal 2017 was
adjusted to exclude professional services fees.
(d) The impact from foreign currency movements was excluded
above to calculate total organic ASV.
Contact: Rima HyderFactSet 857.265.7523
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