FactSet (the “Company”) (NYSE:FDS) (NASDAQ:FDS), a global provider
of integrated financial information, analytical applications, and
industry-leading service, today announced results for its fourth
quarter ended August 31, 2019.
Fourth Quarter Fiscal 2019
Highlights
- Revenues increased 5.3% or $18.4
million to $364.3 million compared with $345.9 million for the same
period in fiscal 2018. The increase is primarily due to higher
sales of analytics, content and technology solutions (CTS) and
wealth management solutions. Organic revenues grew 5.3% to $365.6
million during the fourth quarter of fiscal 2019 from the prior
year period.
- Annual Subscription Value (ASV)
plus professional services increased to $1.48 billion at August 31,
2019 compared with prior year of $1.41 billion with growth across
all four workflow solutions. The organic growth rate, which
excludes the effects of acquisitions, dispositions, and foreign
currency, was 5.1%. Please see the “ASV + Professional Services”
section of this press release for details.
- Operating margin increased to 30.6%
compared with 25.5% for the same period last year. Adjusted
operating margin improved to 33.9% compared with 31.3% in the prior
year period primarily as a result of improved operating
results.
- Diluted earnings per share (EPS)
increased 32.2% to $2.34 compared with $1.77 for the same period in
fiscal 2018. Adjusted diluted EPS rose 18.6% to $2.61 compared with
$2.20 in the prior period driven primarily by stronger operating
results and a lower tax rate.
- The Company’s effective tax rate
for the fourth quarter was lower at 15.5% compared with 18.0% a
year ago primarily due to the U.S. Tax Cuts and Jobs Act.
- FactSet achieved its 39th
consecutive year of revenue growth and 23rd year of consecutive
adjusted diluted EPS growth.
- FactSet provided annual guidance
for its fiscal 2020. Please see the “Business Outlook” section of
this press release for details.
“FactSet performed well in full year 2019
delivering solid revenue and strong EPS growth, despite market
headwinds,” said Phil Snow, FactSet CEO. “To further our winning
proposition in the marketplace, we will be accelerating critical
investments over the next three years from a position of strength,
capitalizing on industry trends and enhancing our core offerings.
We are making investments today so that FactSet can continue to
deliver long-term value for all our stakeholders.”
|
Key Financial Measures* |
|
(Condensed and Unaudited) |
Three Months EndedAugust 31, |
|
Twelve Months EndedAugust 31, |
(In thousands, except per share
data) |
2019 |
2018 |
Change |
|
2019 |
2018 |
Change |
FY 2019Guidance |
GAAP revenues |
$ |
364,283 |
|
$ |
345,861 |
|
|
5.3% |
|
|
$ |
1,435,351 |
|
$ |
1,350,145 |
|
|
6.3% |
|
$1.42-$1.44b |
|
Organic revenues |
$ |
365,628 |
|
$ |
347,258 |
|
|
5.3% |
|
|
$ |
1,441,521 |
|
$ |
1,357,835 |
|
|
6.2% |
|
|
|
Operating income |
$ |
111,568 |
|
$ |
88,356 |
|
|
26.3% |
|
|
$ |
438,035 |
|
$ |
366,204 |
|
|
19.6% |
|
|
|
Adjusted operating income |
$ |
123,881 |
|
$ |
108,684 |
|
|
14.0% |
|
|
$ |
476,185 |
|
$ |
425,510 |
|
|
11.9% |
|
|
|
Operating margin |
|
30.6% |
|
|
25.5% |
|
|
|
|
|
30.5% |
|
|
27.1% |
|
|
|
30.0%-30.5% |
|
Adjusted operating margin |
|
33.9% |
|
|
31.3% |
|
|
|
|
|
33.2% |
|
|
31.3% |
|
|
|
32.5%-33.0% |
|
Net income |
$ |
91,527 |
|
$ |
68,823 |
|
|
33.0% |
|
|
$ |
352,790 |
|
$ |
267,085 |
|
|
32.1% |
|
|
|
Adjusted net income |
$ |
101,892 |
|
$ |
85,492 |
|
|
19.2% |
|
|
$ |
388,856 |
|
$ |
335,816 |
|
|
15.8% |
|
|
|
Diluted EPS |
$ |
2.34 |
|
$ |
1.77 |
|
|
32.2% |
|
|
$ |
9.08 |
|
$ |
6.78 |
|
|
33.9% |
|
$8.90-$9.00 |
|
Adjusted diluted EPS |
$ |
2.61 |
|
$ |
2.20 |
|
|
18.6% |
|
|
$ |
10.00 |
|
$ |
8.53 |
|
|
17.2% |
|
$9.80-$9.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See reconciliation of U.S. GAAP to adjusted key financial
measures in the back of this press release |
|
“We are pleased with our full year results
especially as we exceeded our guidance on margin and EPS. Our
dedication to operational improvements and cost discipline served
our company well in fiscal 2019, and we plan to build upon this
solid foundation,” said Helen Shan, FactSet CFO. “As we enter our
next phase of growth, we are investing to grow our top line and
continue to drive value creation and efficiency gains for our
clients and higher total shareholder returns for our
investors.”
Annual Subscription Value (ASV) +
Professional Services and Segment Revenue
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 and excludes
professional services fees billed in the last 12 months, which are
not subscription-based. Professional services are revenues derived
from project-based consulting and implementation.
ASV plus professional services was $1.48 billion
at August 31, 2019. Organic ASV plus professional services was also
$1.48 billion at August 31, 2019, up $71.6 million from the prior
year at a growth rate of 5.1%. Organic ASV, which excludes the
effects of acquisitions, dispositions and foreign currency, plus
professional services, increased $35.1 million over the last three
months.
Buy-side and sell-side ASV growth rates for the
fourth quarter of fiscal 2019 were 4.8% and 6.3%, respectively.
Buy-side clients accounted for 83.7% of organic 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 $909.7 million,
increasing 4.7% over prior year of $868.7 million. U.S. revenues
for the quarter increased to $222.1 million compared with $213.9
million in the fourth quarter last year. Excluding the effects of
acquisitions and dispositions completed in the last 12 months, the
U.S. revenue growth rate was 3.8%. ASV from international
operations was $548.3 million, increasing 4.6% over prior year of
$524.4 million. International revenues were $142.2 million compared
with $131.9 million from the fourth quarter of fiscal 2018.
Excluding the effects of acquisitions and dispositions completed in
the last 12 months and foreign currency, the international revenue
growth rate was 7.8%. Segment ASV does not include professional
services which totaled $22.9 million at August 31, 2019.
Organic ASV plus professional services from
FactSet’s workflow solutions at August 31, 2019 was as follows:
- Research ASV was $640 million
representing 0.7% growth versus the same period a year ago.
- Analytics ASV was $522 million
growing 6.5% year over year.
- Content and Technology Solutions
ASV was $170 million, increasing 15.0% year over year.
- Wealth ASV was $151 million,
increasing 9.6% from the prior year.
Please note that fiscal 2018 Organic ASV
reported numbers for FactSet’s workflow solutions excluded
professional services of $21.6 million. In 2019, professional
services of $22.9 million is included in the workflow solutions
numbers above.
Operational Highlights – Fourth Quarter
Fiscal 2019
- Client count as of August 31, 2019
was 5,574, a net increase of 119 clients in the past three months,
primarily driven by an increase in corporate clients, wealth
management and institutional asset managers. The count includes
clients with ASV of $10,000 and above.
- User count increased by 3,871 to
126,822 in the past three months primarily driven by an increase in
banking and wealth management users.
- Annual client retention was
89%.
- Employee count was 9,681 as of
August 31, 2019, up 1.1% in the past 12 months.
- Net cash provided by operating
activities increased to $121.8 million compared with $106.3 million
for the fourth quarter of 2018. Quarterly free cash flow was $95.3
million compared with $91.2 million a year ago, an increase of 4.6%
primarily due to higher net income partially offset by higher
capital expenditures.
- Capital expenditures increased to
$26.5 million, compared with $15.1 million a year ago primarily due
to new office space build out and technology upgrades.
- A regular quarterly dividend of
$27.3 million, or $0.72 per share, was paid on September 19, 2019,
to common stockholders of record as of August 31, 2019.
- FactSet launched DataRobot’s first
AI investment workflow. DataRobot on FactSet is an automated
machine learning tool that helps financial services professionals
incorporate AI into their investment processes, including building
and deploying machine learning models for factors such as equity
volatility, bond performance, and macroeconomic event
predictions.
- FactSet was selected by Hermes
Asset Management as its multi-asset risk provider. This deployment
reflects the Company’s momentum as it continues to expand its
multi-asset-class offering in the risk space.
Full Year 2019 Highlights
- Organic ASV plus professional
services rose to $1.48 billion, up 5.1% organically.
- Revenues increased 6.3% to $1.44
billion, up 6.2% organically.
- Diluted EPS increased 33.9% to
$9.08. Adjusted diluted EPS increased 17.2% to $10.00.
- Net cash provided by operating
activities totaled $427.1 million. Free cash flow increased 4.4% to
$367.8 million.
- Client count increased by 8.4% or
432 during the year, while users grew by 27.5% or 34,925 from the
prior year.
- In May 2019, FactSet increased its
quarterly dividend by $0.08 or 12.5% per share to $0.72 marking the
14th consecutive year the Company has increased dividends,
highlighting its continued commitment to returning value to
shareholders.
- FactSet returned $320.4 million to
stockholders in the form of share repurchases and dividends during
the fiscal year. This return represents an average cash return of
65%, as a percentage of free cash flow and proceeds from employee
stock plans as the prior year utilized cash repatriated from
foreign earnings for a higher share repurchase.
- The Company appointed Franck
Gossieaux as Executive Vice President, Global Head of Sales and
Client Solutions, in June 2019. In this role, Gossieaux is
responsible for overseeing all global sales and client activities
for FactSet.
- FactSet won multiple awards,
including Best Data Provider to the Sell-Side, Best Performance
Measurement and Attribution System Provider, and Best Client
Reporting System at the Waters Technology Awards, Best Alternative
Data Initiative and Best Data Analytics Provider at the Inside
Market Data Awards, Best FX Order/Execution Management System at
the FX Week e-FX Awards, and Best Market Data Solution at the Asian
Private Banker Technology Awards. FactSet was also ranked 19th on
the RiskTech® 2019 by Chartis Research, moving up two spots from
2018.
- FactSet celebrated the first
anniversary of its office in Shanghai expanding its client base in
the Asia Pacific region.
- The Company launched a Global
Robotics and Automation Index licensed to Sumitomo Mitsui Trust
Asset Management Co., Ltd., marking the Company’s entry in the
Japanese index mutual fund market.
- FactSet grew its data offering
within CTS, on the Open:FactSet Marketplace, which now includes
over a 100 content and solution sets, including new data feeds from
Mastercard and IHS Markit.
Share Repurchase Program
FactSet repurchased 221,292 shares for $62.1
million during the fourth quarter under the Company’s existing
share repurchase program.
On June 24, 2019, the Board of Directors of
FactSet approved an increase of $210 million to the existing share
repurchase program. Including this increase. As of August 31, 2019,
$239 million is currently available for share repurchases.
Annual Business Outlook
FactSet is providing its outlook for fiscal
2020. 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 2020 Expectations
- Organic ASV plus professional
services is expected to increase in the range of $65 million and
$85 million over fiscal 2019.
- GAAP revenue is expected to be in
the range of $1.49 billion and $1.50 billion.
- GAAP operating margin is expected
to be in the range of 28.5% and 29.5%.
- Adjusted operating margin is
expected to be in the range of 31.5% and 32.5%.
- FactSet’s annual effective tax rate
is expected to be in the range of 17.0% and 17.5%.
- GAAP diluted EPS is expected to be
in the range of $8.70 and $9.00. Adjusted diluted EPS is expected
to be in the range of $9.85 and $10.15.
Both GAAP operating margin and GAAP diluted EPS
guidance do not include certain effects of any non-recurring
benefits or charges that may arise in fiscal 2020. Please see the
back of this press release for a reconciliation of GAAP to adjusted
metrics.
|
Conference Call |
|
The Company will host a conference call today, September 26, 2019
at 11:00 a.m. Eastern Time to discuss the fourth quarter results.
The call will be webcast live at FactSet Investor Relations. The
following information is provided for those who would like to
participate: |
|
|
|
U.S. Participants: |
|
833.231.8259 |
International
Participants: |
|
647.689.4104 |
Passcode: |
|
4365756 |
|
|
|
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 October 3, 2019 via the following telephone
numbers: 800.585.8367 in the U.S. and 416.621.4642 internationally
using passcode 4365756. |
|
Forward-looking Statements
This news release contains forward-looking
statements based on management's current expectations, estimates,
forecasts and projections about industries in which FactSet
operates and the beliefs and assumptions of management. All
statements that address expectations, guidance, outlook or
projections about the future, including statements about the
Company's strategy for growth, product development, revenues,
future financial results, anticipated growth, market position,
subscriptions, expected expenditures, trends in FactSet’s business
and financial results, are forward-looking statements.
Forward-looking statements may be identified by words like
"expects," "believes, " "anticipates," "plans," "intends, "
"estimates, " "projects," "should," "indicates," "continues," "may"
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 ability to
integrate newly acquired companies, clients and businesses; strains
on resources as a result of growth, the volatility and stability of
global securities markets, including declines in equity or fixed
income returns impacting the buying power of investment management
clients; the ability to hire and retain qualified personnel; the
maintenance of the Company's leading technological position and
reputation; failure to maintain or improve FactSet’s competitive
position in the marketplace; fraudulent, misappropriation or
unauthorized data access, including cyber-security and privacy
breaches; failures or disruptions of telecommunications, data
centers, network systems, facilities, or the Internet; uncertainty,
consolidation and business failures in the global investment
banking industry; the continued shift from active to passive
investing, the negotiation of contract terms with vendors, data
suppliers and landlords; the retention of clients and the
attraction of new ones; the absence of U.S. or foreign governmental
regulation restricting international business; the unfavorable
resolution of tax assessments and legal proceedings; and
legislative and regulatory changes in the environments in which
FactSet and its clients operate. Forward-looking statements speak
only as of the date they are made, and FactSet assumes no duty to
and does not undertake to update forward-looking statements. Actual
results could differ materially from those anticipated in
forward-looking statements and future results could differ
materially from historical performance.
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 content, analytics, and flexible technology to help more
than 126,000 users see and seize opportunity sooner. We give
investment professionals the edge to outperform with informed
insights, workflow solutions across the portfolio lifecycle, and
industry-leading support from 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.
FactSetMedia & Investor Relations
Contact:Rima Hyder857.265.7523rima.hyder@factset.com
|
|
|
Consolidated
Statements of Income (Unaudited) |
|
|
|
|
|
|
Three Months EndedAugust 31, |
Twelve Months EndedAugust 31, |
|
|
|
(In thousands, except per share data) |
2019 |
2018 |
2019 |
2018 |
|
|
|
|
|
Revenues |
$ 364,283 |
$ 345,861 |
$ 1,435,351 |
$ 1,350,145 |
|
|
|
|
|
Operating expenses |
|
|
|
|
Cost of services |
167,730 |
169,467 |
663,446 |
659,296 |
Selling, general and administrative |
84,985 |
88,038 |
333,870 |
324,645 |
Total operating expenses |
252,715 |
256,505 |
997,316 |
983,941 |
|
|
|
|
|
Operating income |
111,568 |
88,356 |
438,035 |
366,204 |
|
|
|
|
|
Other expense |
|
|
|
|
Interest expense, net of interest income |
(3,279) |
(4,421) |
(16,070) |
(14,366) |
Total other expense |
(3,279) |
(4,421) |
(16,070) |
(14,366) |
|
|
|
|
|
Income before income
taxes |
108,289 |
83,935 |
421,965 |
351,838 |
|
|
|
|
|
Provision for income
taxes |
16,762 |
15,112 |
69,175 |
84,753 |
Net income |
$ 91,527 |
$ 68,823 |
$ 352,790 |
$ 267,085 |
|
|
|
|
|
Diluted earnings per common
share |
$ 2.34 |
$ 1.77 |
$ 9.08 |
$ 6.78 |
|
|
|
|
|
Diluted weighted average
common shares |
39,056 |
38,879 |
38,873 |
39,377 |
Consolidated Balance Sheets (Unaudited) |
|
|
|
|
|
|
August 31, |
August 31, |
(In thousands) |
2019 |
2018 |
|
|
|
ASSETS |
|
|
Cash and cash equivalents |
$ 359,799 |
$ 208,623 |
Investments |
25,813 |
29,259 |
Accounts receivable, net of reserves |
146,309 |
156,639 |
Prepaid taxes |
15,033 |
6,274 |
Prepaid expenses and other current assets |
36,858 |
30,121 |
Total current assets |
583,812 |
430,916 |
Property, equipment, and leasehold improvements, net |
121,042 |
100,545 |
Goodwill |
685,729 |
701,833 |
Intangible assets, net |
120,551 |
148,935 |
Deferred taxes |
7,571 |
9,716 |
Other assets |
29,943 |
27,502 |
Total Assets |
$ 1,548,648 |
$ 1,419,447 |
|
|
|
LIABILITIES |
|
|
Accounts payable and accrued expenses |
$ 68,138 |
$ 72,059 |
Accrued compensation |
64,202 |
66,479 |
Deferred fees |
47,656 |
49,700 |
Taxes payable |
- |
8,453 |
Dividends payable |
27,445 |
24,443 |
Total current liabilities |
207,441 |
221,134 |
Deferred taxes |
16,391 |
21,190 |
Deferred fees |
10,088 |
7,833 |
Taxes payable |
26,292 |
29,626 |
Long-term debt |
574,174 |
574,775 |
Deferred rent and other non-current liabilities |
42,006 |
38,989 |
Total Liabilities |
$ 876,392 |
$ 893,547 |
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
Total Stockholders’ Equity |
$ 672,256 |
$ 525,900 |
Total Liabilities and Stockholders’ Equity |
$ 1,548,648 |
$ 1,419,447 |
Consolidated
Statements of Cash Flows (Unaudited) |
|
|
|
(In thousands) |
Twelve Months EndedAugust 31, |
|
|
|
2019 |
2018 |
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
$ 352,790 |
$ 267,085 |
Adjustments to reconcile net
income to net cash provided by operating activities |
|
|
Depreciation and amortization |
60,463 |
57,285 |
Stock-based compensation expense |
32,400 |
31,516 |
Deferred income taxes |
(2,278) |
(1,910) |
Loss on sale of assets |
196 |
140 |
Changes in assets and liabilities, net of effects of
acquisitions |
|
|
Accounts receivable, net of reserves |
10,205 |
(8,417) |
Accounts payable and accrued expenses |
(2,290) |
12,077 |
Accrued compensation |
(1,743) |
5,735 |
Deferred fees |
458 |
6,035 |
Taxes payable, net of prepaid taxes |
(19,238) |
27,659 |
Other, net |
(3,827) |
(11,537) |
Net cash provided by operating activities |
427,136 |
385,668 |
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
Acquisition of businesses and
investments, net of cash and cash equivalents acquired |
― |
(15,000) |
Purchases of investments |
(11,135) |
(12,470) |
Proceeds from sales of
investments |
14,405 |
12,459 |
Purchases of property,
equipment and leasehold improvements, net of proceeds from
dispositions |
(59,370) |
(33,520) |
Net cash used in investing activities |
(56,100) |
(48,531) |
|
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
Dividend payments |
(100,052) |
(89,408) |
Repurchase of common
stock |
(220,372) |
(303,955) |
Proceeds from employee stock
plans |
107,051 |
71,610 |
Repayment of debt |
(575,000) |
― |
Proceeds from debt |
575,000 |
― |
Other financing
activities |
(901) |
1,716 |
Net cash used in financing activities |
(214,274) |
(320,037) |
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
(5,586) |
(3,208) |
Net increase in cash and cash equivalents |
151,176 |
13,892 |
|
|
|
Cash and cash equivalents at
beginning of period |
208,623 |
194,731 |
Cash and cash equivalents at
end of period |
$ 359,799 |
$ 208,623 |
|
|
|
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 |
|
|
|
(Unaudited) |
Three Months EndedAugust 31, |
(In thousands) |
2019 |
2018 |
Change |
GAAP revenues |
$ 364,283 |
$ 345,861 |
5.3% |
Deferred revenue fair value
adjustment (a) |
1,262 |
1,397 |
|
Currency impact (b) |
83 |
― |
|
Organic revenues |
$ 365,628 |
$ 347,258 |
5.3% |
|
(a) The adjustment relates to deferred revenue fair value
adjustments from purchase accounting. |
|
(b) The impact from foreign currency movements over the past
12 months. |
(Unaudited) |
Twelve Months EndedAugust 31, |
(In thousands) |
2019 |
2018 |
Change |
GAAP revenues |
$ 1,435,351 |
$ 1,350,145 |
6.3% |
Deferred revenue fair value
adjustment (a) |
5,185 |
7,691 |
|
Currency impact (b) |
985 |
― |
|
Organic revenues |
$ 1,441,521 |
$ 1,357,836 |
6.2% |
|
(a) The adjustment relates to deferred revenue fair value
adjustments from purchase accounting. |
|
(b) The impact from foreign currency movements over the past
12 months. |
Operating Income, Margin, Net Income and Diluted
EPS |
|
(Unaudited) |
Three Months EndedAugust 31, |
(In thousands, except per share data) |
2019 |
2018 |
Change |
GAAP Operating income |
$ 111,568 |
$ 88,356 |
26.3% |
Intangible asset amortization
(a) |
7,260 |
6,079 |
|
Deferred revenue fair value
adjustment (b) |
1,262 |
1,397 |
|
Other non-recurring items
(c) |
3,791 |
12,852 |
|
Adjusted operating income |
$ 123,881 |
$ 108,684 |
14.0% |
Adjusted operating margin (d) |
33.9% |
31.3% |
|
|
|
|
|
GAAP Net income |
$ 91,527 |
$ 68,823 |
33.0% |
Intangible asset amortization
(a)(e) |
5,931 |
4,985 |
|
Deferred revenue fair value
adjustment (b)(e) |
1,031 |
1,146 |
|
Other non-recurring items
(c)(e) |
3,097 |
10,538 |
|
Income tax benefits (f) |
306 |
- |
|
Adjusted net income |
$ 101,892 |
$ 85,492 |
19.2% |
|
|
|
|
GAAP Diluted earnings per
common share |
$2.34 |
$1.77 |
32.2% |
Intangible asset amortization
(a)(e) |
0.15 |
0.13 |
|
Deferred revenue fair value
adjustment (b)(e) |
0.03 |
0.03 |
|
Other non-recurring items
(c)(e) |
0.08 |
0.27 |
|
Income tax benefits (f) |
0.01 |
- |
|
Adjusted diluted earnings per common share |
$ 2.61 |
$ 2.20 |
18.6% |
Weighted average common shares
(Diluted) |
39,056 |
38,879 |
|
|
(a) GAAP operating income in the fourth quarter of fiscal 2019 was
adjusted to exclude $7.3 million of pre-tax intangible asset
amortization, which reduced net income by $5.9 million and diluted
earnings per share by $0.15. GAAP operating income in the fourth
quarter of fiscal 2018 was adjusted to exclude $6.1 million of
pre-tax intangible asset amortization, which reduced net income by
$5.0 million and diluted earnings per share by $0.13. The income
tax effect related to intangible asset amortization was $1.3
million in the fourth quarter of fiscal 2019 compared with $1.1
million for the same period in fiscal 2018. |
|
(b) The adjustment relates to deferred revenue fair value
adjustments from purchase accounting. The income tax effect related
to deferred revenue fair value adjustments was $0.2 million in the
fourth quarter of fiscal 2019 and $0.3 million for the prior year
period. |
|
(c) GAAP operating income in the fourth quarter of fiscal 2019 was
adjusted to exclude $3.8 million of pre-tax net expenses primarily
related to severance, stock-based compensation acceleration,
professional fees to related to infrastructure upgrade activities,
a prior period adjustment related to data costs and occupancy
costs, which reduced net income by $3.1 million and diluted
earnings per share by $0.08. GAAP operating income in the fourth
quarter of fiscal 2018 was adjusted to exclude $12.9 million of
pre-tax expenses primarily related to severance, stock-based
compensation acceleration, other restructuring actions and legal
matters, which reduced net income by $10.5 million and diluted
earnings per share by $0.27. The income tax effect related to the
other non-recurring items was $0.7 million in the fourth quarter of
fiscal 2019 compared with $2.3 million for the same period in
fiscal 2018. |
|
(d) Adjusted operating margin 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 18.3% for fiscal 2019
and 18.0% for fiscal 2018. |
|
(f) GAAP net income in the fourth quarter of fiscal 2019 was
adjusted to exclude $0.3 million or $0.01 per share of income tax
expenses primarily related to prior years' toll tax charge as a
result of the U.S. Tax Jobs and Cuts Acts partially offset by
one-time items. |
(Unaudited) |
Twelve Months EndedAugust 31, |
(In thousands, except per share data) |
2019 |
2018 |
Change |
GAAP Operating income |
$ 438,035 |
$ 366,204 |
19.6% |
Intangible asset amortization
(a) |
24,920 |
24,665 |
|
Deferred revenue fair value
adjustment (b) |
5,185 |
7,691 |
|
Other non-recurring items
(c) |
8,045 |
26,950 |
|
Adjusted operating income |
$ 476,185 |
$ 425,510 |
11.9% |
Adjusted operating margin (d) |
33.2% |
31.3% |
|
|
|
|
|
GAAP Net income |
$ 352,790 |
$ 267,085 |
32.1% |
Intangible asset amortization
(a)(e) |
20,262 |
19,723 |
|
Deferred revenue fair value
adjustment (b)(e) |
4,215 |
6,084 |
|
Other non-recurring items
(c)(e) |
6,315 |
21,614 |
|
Income tax items (f) |
5,274 |
21,310 |
|
Adjusted net income |
$ 388,856 |
$ 335,816 |
15.8% |
|
|
|
|
GAAP Diluted earnings per
common share |
$ 9.08 |
$ 6.78 |
33.9% |
Intangible asset amortization
(a)(e) |
0.52 |
0.50 |
|
Deferred revenue fair value
adjustment (b)(e) |
0.11 |
0.15 |
|
Other non-recurring items
(c)(e) |
0.15 |
0.56 |
|
Income tax benefits (f) |
0.14 |
0.53 |
|
Adjusted diluted earnings per common share |
$ 10.00 |
$ 8.53 |
17.2% |
Weighted average common shares
(Diluted) |
38,873 |
39,377 |
|
|
(a) GAAP operating income in fiscal 2019 was adjusted to exclude
$24.9 million of pre-tax intangible asset amortization, which
reduced net income by $20.3 million and diluted earnings per share
by $0.52. GAAP operating income in fiscal 2018 was adjusted to
exclude $24.7 million of pre-tax intangible asset amortization,
which reduced net income by $19.7 million and diluted earnings per
share by $0.50. The income tax effect related to intangible asset
amortization was $4.7 million in fiscal 2019 compared with $4.9
million for the same period in fiscal 2018. |
|
(b) The adjustment relates to deferred revenue fair value
adjustments from purchase accounting. The income tax effect related
to deferred revenue fair value adjustments was $1.0 million in
fiscal 2019 and $1.6 million for the prior year period. |
|
(c) GAAP operating income in fiscal 2019 was adjusted to exclude
$8.0 million of pre-tax net expenses primarily related to a $5
million non-core transaction related revenue, offset by severance,
stock-based compensation acceleration, professional fees to related
to infrastructure upgrade activities, a prior period adjustment
related to data costs and occupancy costs, which reduced net income
by $6.3 million and diluted earnings per share by $0.15. GAAP
operating income in fiscal 2018 was adjusted to exclude $27.0
million of pre-tax expenses primarily related to severance,
stock-based compensation acceleration, other restructuring actions
and legal matters, which reduced net income by $21.6 million and
diluted earnings per share by $0.56. The income tax effect related
to the other non-recurring items was $1.7 million in fiscal 2019
compared with $5.6 million for the same period in fiscal 2018. |
|
(d) Adjusted operating margin is calculated as adjusted operating
income divided by GAAP revenues plus the deferred revenue fair
value adjustment minus the aforementioned non-core transaction
related revenue. |
|
(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 18.3% for fiscal 2019
and 18.0% for fiscal 2018. |
|
(f) GAAP net income in fiscal 2019 was adjusted to exclude $5.3
million or $0.14 per share of income tax expenses primarily related
to finalizing prior years' tax returns and other discrete items.
GAAP net income in fiscal 2018 was adjusted to exclude $21.3
million of tax charges primarily related to
the one-time deemed repatriation tax on foreign earnings. This
reduced diluted earnings per share by $0.53. |
Business Outlook Operating Margin, Net Income and Diluted
EPS |
|
(Unaudited) |
|
|
Annual Fiscal 2020 Guidance |
(In thousands, except per share data) |
Low end of range |
High end of range |
GAAP Operating margin |
28.5% |
29.5% |
Intangible asset amortization
(a) |
1.6% |
1.6% |
Deferred revenue fair value
adjustment (b) |
0.3% |
0.3% |
Other non-recurring items
(c) |
1.1% |
1.1% |
Adjusted operating margin |
31.5% |
32.5% |
|
|
|
|
|
|
GAAP Net income |
$ 337,000 |
$ 349,000 |
Intangible asset amortization
(a) |
19,485 |
19,485 |
Deferred revenue fair value
adjustment (b) |
3,900 |
3,900 |
Other non-recurring items
(c) |
21,150 |
21,150 |
Adjusted net income |
$ 381,535 |
$ 393,535 |
|
|
|
GAAP Diluted earnings per
common share |
$8.70 |
$9.00 |
Intangible asset amortization
(a) |
0.50 |
0.50 |
Deferred revenue fair value
adjustment (b) |
0.10 |
0.10 |
Other non-recurring items
(c) |
0.55 |
0.55 |
Adjusted diluted earnings per common share |
$ 9.85 |
$ 10.15 |
|
(a) GAAP operating income for the full fiscal 2020 year is
adjusted to exclude $23.5 million of pre-tax intangible asset
amortization, which reduced the GAAP operating margin by 1.6%, GAAP
net income by $19.5 million and GAAP diluted earnings per share by
$0.50. The income tax effect related to intangible asset
amortization is $4.0 million for the period presented above. |
|
(b) The adjustment relates to deferred revenue fair value
adjustments from purchase accounting. The income tax effect related
to deferred revenue fair value adjustments was $0.8 million for the
period presented above. |
|
(c) GAAP operating income for the full fiscal 2019 year is
adjusted to exclude $25.5 million of pre-tax expenses related to
several one-time items, which reduced net income by $21.2 million
and diluted earnings per share by $0.55. The income tax effect
related to other non-recurring items is $4.3 million for the period
presented above. |
Free Cash Flow |
|
(Unaudited) |
Three Months EndedAugust 31, |
(In thousands) |
2019 |
2018 |
Change |
Net cash provided by operating
activities |
$ 121,811 |
$ 106,324 |
|
Capital expenditures |
(26,464) |
(15,145) |
|
Free cash flow |
$ 95,347 |
$ 91,179 |
4.6% |
(Unaudited) |
Twelve Months EndedAugust 31, |
(In thousands) |
2019 |
2018 |
Change |
Net cash provided by operating
activities |
$ 427,136 |
$ 385,668 |
|
Capital expenditures |
(59,370) |
(33,520) |
|
Free cash flow |
$ 367,766 |
$ 352,148 |
4.4% |
|
|
|
|
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. The numbers below do not
include professional services. |
|
|
Q4’19 |
Q3’19 |
Q2’19 |
Q1’19 |
Q4’18 |
Q3’18 |
Q2’18 |
Q1’18 |
% of ASV
from buy-side clients |
83.7% |
84.2% |
83.9% |
83.9% |
83.9% |
84.4% |
84.4% |
84.2% |
% of ASV
from sell-side clients |
16.3% |
15.8% |
16.1% |
16.1% |
16.1% |
15.6% |
15.6% |
15.8% |
|
|
|
|
|
|
|
|
|
ASV
Growth rate from buy-side clients |
4.8% |
5.2% |
5.3% |
5.9% |
5.4% |
5.3% |
6.0% |
5.3% |
ASV
Growth rate from sell-side clients |
6.3% |
6.8% |
9.2% |
8.6% |
7.3% |
5.0% |
4.6% |
3.9% |
Total Organic ASV Growth Rate |
5.0% |
5.4% |
5.9% |
6.3% |
5.7% |
5.3% |
5.8% |
5.1% |
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) |
Q4’19 |
Q4’18 |
As reported ASV (a) |
$ 1,458.0 |
|
$ 1,393.1 |
|
Currency impact (b) |
0.2 |
|
(5.1) |
|
Organic
ASV total |
$ 1,458.2 |
|
$ 1,388.0 |
|
Total Organic ASV Growth Rate |
5.0% |
|
|
(a) ASV excludes $22.9 million and $21.6
million, respectively, in professional services fees as of August
31, 2019 and 2018.
(b) The impact from foreign currency movements
was excluded above to calculate total organic ASV.
FactSet Research Systems (NYSE:FDS)
Historical Stock Chart
From Mar 2024 to Apr 2024
FactSet Research Systems (NYSE:FDS)
Historical Stock Chart
From Apr 2023 to Apr 2024