SS&C Technologies Announces Record Revenue Numbers for 2005.WINDSOR, Conn. -- SS&C Technologies, Inc.(www.ssctech.com), a global provider of financial services software and outsourcing solutions, today announced record revenue results for the fourth quarter and full year ended December 31, 2005. Reported revenue on a GAAP basis for the fourth quarter and the year 2005 was $47.4 million and $161.6 million, respectively. Included in reported revenue for the fourth quarter and the year 2005 is a $0.7 million reduction in revenue caused by purchase accounting Purchase accounting Method of accounting for a merger that treats the acquirer as having purchased the assets and assumed the liabilities of the acquiree, which are then written up or down to their respective fair market values. The difference between the purchase price and the net assets acquired is attributed to goodwill. adjustments to reflect November 23, 2005 deferred
revenue at its estimated fair value. Excluding the purchase accounting
adjustment, revenue for the fourth quarter of 2005 was $48.1 million, a
78% increase from the fourth quarter of 2004. Revenue for the year 2005
was $162.4 million, an increase of 69% over 2004. Net loss, on a GAAP
basis, for the fourth quarter and the year 2005, was $23.5 million and
$3.9 million, respectively. Merger costs related to the sale of SS&C
were $44.7 million in the quarter and $45.8 million for the year 2005.Adjusted operating income (as defined in note 1 to the Consolidated Financial Information) was $17.2 million for the three months ended December 31, 2005, compared to $9.4 million in the fourth quarter of the prior year. GAAP operating loss in the fourth quarter of 2005 was $31.5 million and includes amortization of $3.4 million, merger costs of $44.7 million and deferred revenue adjustment and other purchase accounting items of $0.6 million. GAAP operating income in the fourth quarter of 2004 was $8.7 million and includes amortization of $0.7 million. Adjusted operating income for the year 2005 was $54.9 million, compared to $31.8 million for the year 2004. GAAP operating income for 2005 was $0.3 million and includes amortization of $8.2 million, merger costs of $45.8 million and purchase accounting adjustments of $0.6 million. Consolidated EBITDA (as defined in note 2 of the Consolidated Financial Information) for the fourth quarter of 2005 was $20.0 million, compared to $16.7 million in the fourth quarter of 2004. Consolidated EBITDA was $73.6 million for the year 2005, compared to $60.5 million for the year 2004. On November 23, 2005, SS&C Technologies, Inc. was acquired by Sunshine Acquisition Corporation, a corporation affiliated with The Carlyle Group, a global private equity firm. Bill Stone, SS&C's Chairman and CEO stated, "Being a privately-held company allows us to channel all of our resources on growing our business and continuing to produce excellent financial results." Stone, commenting on recent results said, "Throughout 2005 we stayed focused on our business and executed on our strategy. We have extended our market reach, broadened our product offerings and improved our position in the global marketplace. As a result, we had an outstanding year with record revenue numbers quarter after quarter. We are realizing the benefits of many of our acquisitions as they are integrated, which is reflected in our strong fourth quarter numbers. All revenue segments showed significant growth for both Q4 and all of 2005, with outsourcing revenues clearly outperforming every other revenue segment," Stone continued, "In all business lines, we are seeing positive results and, as we integrate our acquisitions, we have been able to capitalize on cross-sell and up-sell opportunities, take advantage of our broader geographic reach, and realize cost-savings from several economy-of-scale initiatives." Software "Across the board, license revenues increased," said Stone. "In Q4 2005, license revenues were $5.9 million, a 22% increase over Q4, 2004. Total 2005 license revenues were $23.7 million, a 38% increase over 2004. We had an increase in licenses for CAMRA CAMRA - Campaign for Real Ale CAMRa - Chilbolton Advanced Meteorological Radar, LMS, Altair, AdvisorWare and SKYLINE. With the introduction of LMS Loan Suite, LMS license sales have taken hold, and in 2005, showed a 261% increase over 2004 LMS license sales, proving our commitment to R&D and our ability to respond effectively to market needs. Acquisitions also made a healthy contribution to license revenue growth, particularly Pages, Recon, Sylvan, FundRunner, and MarginMan." Outsourcing Solutions "Insurance companies, asset managers and hedge funds all continue to look to outsourcing as a way to implement cost-savings and shift some of their accounting and systems burden to a third party," said Stone. "Our expertise in each of these industries, as well as our technology, specifically designed for these markets, has given us a global, competitive advantage. Outsourcing revenues in 2005 were $75 million, an increase of 143% over 2004. In 2005, outsourcing revenues represented 46% of total revenues. In November, 2005, the Hedge Fund Manager Survey ranked SS&C Fund Services as the tenth largest hedge fund administrator, and the fastest growing fund administrator." Acquisitions/Integration "In 2005, SS&C completed six acquisitions, and we are very focused on the synergies of our merger and acquisition decisions," Stone commented. "We constantly work on improving our integration processes and each acquisition is integrated as quickly as possible. This year we added significant strength in asset management with the acquisition of Financial Models Company Inc. Our financial institutions added breadth with MarginMan and Open Information Systems. Our hedge fund business has added expertise with EisnerFast, and technology with Financial Interactive. Achievement Technologies adds a new dimension to SKYLINE and a new product offering for the real estate market. We expect to continue to pursue acquisitions that are a good fit for SS&C, adding more great people, products and services, clients, and prospects." On March 6, 2006, SS&C announced the acquisition of Cogent Management Inc. Cogent, located in New Rochelle, New York, provides hedge fund management services, with a particular expertise in U.S.-based hedge funds. Stone commented on the acquisition, "We welcome the Cogent team and Cogent clients to SS&C and look forward to creating new opportunities for everyone." Earnings Call SS&C's Q4 2005 earnings call will take place at 5:00 p.m. Eastern Time today, March 7, 2006. The call will discuss Q4 and 2005 year-end results. Interested parties may dial 706-643-7858 (US, Canada and International) and request the "SS&C Fourth Quarter Earnings Call", conference ID #6135561. A replay will be available after 8:00 pm on March 7th, until midnight on April 7, 2006. To hear the replay, dial 706-645-9291 and enter the access code 6135561. A replay of the call will also be available after March 8, 2006 on our website at www.ssctech.com/about/investor.asp.
SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
Combined Predecessor Combined Predecessor
Three Three
Months Months Year
Ended Ended Ended Year Ended
December December December December
31, 2005 31, 2004 31, 2005 31, 2004
--------- ----------- --------- -----------
Revenues:
Software licenses $ 5,850 $ 4,806 $ 23,734 $ 17,250
Maintenance 12,698 9,691 47,765 36,433
Professional services 5,520 3,770 15,085 11,320
Outsourcing 23,327 8,785 75,050 30,885
-------- ---------- -------- ----------
Total revenues 47,395 27,052 161,634 95,888
-------- ---------- -------- ----------
Cost of revenues:
Software licenses 1,552 628 3,819 2,258
Maintenance 3,668 2,300 11,892 8,462
Professional services 2,333 1,764 8,710 6,606
Outsourcing 13,402 4,743 42,210 16,444
-------- ---------- -------- ----------
Total cost of
revenues 20,955 9,435 66,631 33,770
-------- ---------- -------- ----------
Gross profit 26,440 17,617 95,003 62,118
-------- ---------- -------- ----------
Operating expenses:
Selling and marketing 3,958 2,943 14,498 10,734
Research and development 6,075 3,746 21,270 13,957
General and
administrative 3,270 2,229 13,084 8,014
Merger costs related to
the sale of SS&C 44,677 - 45,848 -
-------- ---------- -------- ----------
Total operating
expenses 57,980 8,918 94,700 32,705
-------- ---------- -------- ----------
Operating income (loss) (31,540) 8,699 303 29,413
Interest income (expense) (5,395) 691 (5,951) 1,528
Other income, net 587 120 913 99
-------- ---------- -------- ----------
Income (loss) before
income taxes (36,348) 9,510 (4,735) 31,040
Provision (benefit) for
income taxes (12,854) 3,526 (794) 12,030
-------- ---------- -------- ----------
Net income (loss) $(23,494) $ 5,984 $ (3,941) $ 19,010
======== ========== ======== ==========
See Notes to Consolidated Condensed Financial Information.
SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
Predecessor Successor
----------------- ---------
Combined
Period
from Period
January from
Year 1, 2005 December Year
ended through 1, 2005 ended
December November through December
31, 30, December 31,
2004 2005 31, 2005 2005
-------- -------- --------- --------
Revenues:
Software licenses $17,250 $20,147 $3,587 $23,734
Maintenance 36,433 44,064 3,701 47,765
Professional services 11,320 12,565 2,520 15,085
Outsourcing 30,885 67,193 7,857 75,050
-------- -------- --------- --------
Total revenues 95,888 143,969 17,665 161,634
-------- -------- --------- --------
Cost of revenues:
Software licenses 2,258 2,963 856 3,819
Maintenance 8,462 10,393 1,499 11,892
Professional services 6,606 7,849 861 8,710
Outsourcing 16,444 37,799 4,411 42,210
-------- -------- --------- --------
Total cost of revenues 33,770 59,004 7,627 66,631
-------- -------- --------- --------
Gross profit 62,118 84,965 10,038 95,003
-------- -------- --------- --------
Operating expenses:
Selling and marketing 10,734 13,134 1,364 14,498
Research and development 13,957 19,199 2,071 21,270
General and administrative 8,014 11,944 1,140 13,084
Merger costs related to the
sale of SS&C - 45,848 - 45,848
-------- -------- --------- --------
Total operating expenses 32,705 90,125 4,575 94,700
-------- -------- --------- --------
Operating income (loss) 29,413 (5,160) 5,463 303
Interest income (expense) 1,528 (1,061) (4,890) (5,951)
Other income, net 99 655 258 913
-------- -------- --------- --------
Income (loss) before income taxes 31,040 (5,566) 831 (4,735)
Provision (benefit) for income
taxes 12,030 (510) (284) (794)
-------- -------- --------- --------
Net income (loss) $19,010 $(5,056) $1,115 $(3,941)
======== ======== ========= ========
See Notes to Consolidated Condensed Financial Information.
SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands)
Predecessor Successor
------------------ ---------
Combined
Period Period
Three from from Three
months October December months
ended 1, 2005 1, 2005 ended
December through through December
31, November December 31,
2004 30, 2005 31, 2005 2005
-------- --------- --------- ---------
Revenues:
Software licenses $4,806 $2,263 $3,587 $5,850
Maintenance 9,691 8,997 3,701 12,698
Professional services 3,770 3,000 2,520 5,520
Outsourcing 8,785 15,470 7,857 23,327
-------- --------- --------- ---------
Total revenues 27,052 29,730 17,665 47,395
-------- --------- --------- ---------
Cost of revenues:
Software licenses 628 696 856 1,552
Maintenance 2,300 2,169 1,499 3,668
Professional services 1,764 1,472 861 2,333
Outsourcing 4,743 8,991 4,411 13,402
-------- --------- --------- ---------
Total cost of revenues 9,435 13,328 7,627 20,955
-------- --------- --------- ---------
Gross profit 17,617 16,402 10,038 26,440
-------- --------- --------- ---------
Operating expenses:
Selling and marketing 2,943 2,594 1,364 3,958
Research and development 3,746 4,004 2,071 6,075
General and administrative 2,229 2,130 1,140 3,270
Merger costs related to the
sale of SS&C - 44,677 - 44,677
-------- --------- --------- ---------
Total operating expenses 8,918 53,405 4,575 57,980
-------- --------- --------- ---------
Operating income (loss) 8,699 (37,003) 5,463 (31,540)
Interest income (expense) 691 (505) (4,890) (5,395)
Other income, net 120 329 258 587
-------- --------- --------- ---------
Income (loss) before income
taxes 9,510 (37,179) 831 (36,348)
Provision (benefit) for income
taxes 3,526 (12,570) (284) (12,854)
-------- --------- --------- ---------
Net income (loss) $5,984 $(24,609) $1,115 $(23,494)
======== ========= ========= =========
See Notes to Consolidated Condensed Financial Information.
SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
Predecessor Successor
----------- -----------
December December
31, 31,
2004 2005
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 28,913 $ 15,584
Investments in marketable securities 101,922 -
Accounts receivable, net 13,545 32,862
Income taxes receivable - 8,346
Prepaid expenses and other current assets 1,607 6,236
---------- ----------
Total current assets 145,987 63,028
Property and equipment, net 5,353 10,289
Deferred income taxes 5,894 -
Intangible and other assets, net 28,429 1,100,056
---------- ----------
Total assets $ 185,663 $1,173,373
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long term debt $ - $ 10,438
Accounts payable 1,073 2,367
Income taxes payable 609 -
Accrued employee compensation and benefits 6,248 9,048
Other accrued expenses 3,549 13,109
Deferred income taxes 188 1,097
Dividend payable 1,850 -
Deferred maintenance and other revenue 16,052 20,566
---------- ----------
Total current liabilities 29,569 56,625
Long-term debt - 478,143
Deferred income taxes - 81,188
---------- ----------
Total liabilities 29,569 615,956
---------- ----------
Total stockholders' equity before treasury
stock 209,514 557,417
Less: cost of common stock in treasury 53,420 -
---------- ----------
Total stockholders' equity 156,094 557,417
---------- ----------
Total liabilities and stockholders'
equity $ 185,663 $1,173,373
========== ==========
See Notes to Consolidated Condensed Financial Information.
SS&C Technologies, Inc. and Subsidiaries
Note to Consolidated Condensed Financial Information
Note 1. Reconciliation of Operating Income (Loss) to Adjusted
Operating Income (Loss)
Adjusted operating income represents operating income (loss)
adjusted for amortization of acquisition-related intangible assets,
merger costs and purchase accounting adjustments for deferred revenue
and other expenses. Adjusted operating income is presented because we
use this measure to evaluate performance of our business because we
believe it is a useful indicator of the underlying performance of the
Company. Adjusted operating income is not a recognized term under
generally accepted accounting principles (GAAP). Adjusted operating
income does not represent operating income, as that term is defined
under GAAP, and should not be considered as an alternative to
operating income as an indicator of our operating performance.
Adjusted operating income as presented herein is not necessarily
comparable to similarly titled measures. The following is a
reconciliation between adjusted operating income and operating income,
the GAAP measure we believe to be most directly comparable to adjusted
operating income.
Predecessor Successor
------------------ ---------
Combined
Period Period
Three from from Three
months October December months
ended 1, 2005 1, 2005 ended
December through through December
31, November December 31,
(in thousands) 2004 30, 2005 31, 2005 2005
-------- --------- --------- ---------
Operating income (loss) $ 8,699 $(37,003) $ 5,463 $(31,540)
Purchase accounting
adjustments - - 616 616
Merger costs - 44,677 - 44,677
Amortization of intangible
assets 680 1,570 1,870 3,440
------- -------- -------- --------
Adjusted operating income $ 9,379 $ 9,244 $ 7,949 $ 17,193
======= ======== ======== ========
Predecessor Successor
----------------- ---------
Combined
Period
from Period
January from
Year 1, 2005 December Year
ended through 1, 2005 ended
December November through December
31, 30, December 31,
(in thousands) 2004 2005 31, 2005 2005
-------- -------- --------- --------
Operating income (loss) $29,413 $(5,160) $ 5,463 $ 303
Purchase accounting adjustments - - 616 616
Merger costs - 45,848 - 45,848
Amortization of intangible assets 2,400 6,288 1,870 8,158
------- ------- -------- -------
Adjusted operating income $31,813 $46,976 $ 7,949 $54,925
======= ======= ======== =======
Note 2. Reconciliation of Net Income (Loss) to EBITDA and
Consolidated EBITDA
EBITDA represents net income (loss) before interest (income)
expense, income taxes, depreciation and amortization. Consolidated
EBITDA, defined under our Credit Agreement entered in November 2005
and is used in calculating covenant compliance, is EBITDA adjusted for
certain items. Consolidated EBITDA is calculated by subtracting from
or adding to EBITDA items of income or expense described below. EBITDA
and Consolidated EBITDA are presented because we use these measures to
evaluate performance of our business because we believe them to be
useful indicators of an entity's debt capacity and its ability to
service debt. EBITDA and Consolidated EBITDA are not recognized terms
under GAAP and should not be considered in isolation or as an
alternative to operating income (loss), net income (loss) or cash
flows from operating activities. EBITDA and Consolidated EBITDA do not
represent net income (loss), as that term is defined under GAAP, and
should not be considered as an alternative to net income (loss) as an
indicator of our operating performance.
Predecessor Successor
------------------ ---------
Combined
Period Period
Three from from Three
months October December months
ended 1, 2005 1, 2005 ended
December through through December
31, November December 31,
(in thousands) 2004 30, 2005 31, 2005 2005
-------- --------- --------- ---------
Net income (loss) $ 5,984 $(24,609) $ 1,115 $(23,494)
Interest (income) expense (691) 505 4,890 5,395
Income Taxes 3,526 (12,570) (284) (12,854)
Depreciation and amortization 1,271 2,299 2,301 4,600
------- -------- -------- --------
EBITDA $10,090 $(34,375) $ 8,022 $(26,353)
Purchase accounting adjustments - - 616 616
Merger costs - 44,677 - 44,677
Unusual or non-recurring
charges (118) (329) (242) (571)
Acquired EBITDA and cost
savings 6,742 1,456 85 1,541
Other - - 107 107
------- -------- -------- --------
Consolidated EBITDA $16,714 $ 11,429 $ 8,588 $ 20,017
======= ======== ======== ========
Predecessor Successor
----------------- ---------
Combined
Period
from Period
January from
Year 1, 2005 December Year
ended through 1, 2005 ended
December November through December
31, 30, December 31,
(in thousands) 2004 2005 31, 2005 2005
-------- -------- --------- --------
Net income (loss) $19,010 $(5,056) $ 1,115 $(3,941)
Interest (income) expense (1,528) 1,061 4,890 5,951
Income Taxes 12,030 (510) (284) (794)
Depreciation and amortization 4,592 9,575 2,301 11,876
------- ------- -------- -------
EBITDA 34,104 5,070 8,022 13,092
Purchase accounting adjustments - - 616 616
Merger costs - 45,848 - 45,848
Unusual or non-recurring charges (81) (737) (242) (979)
Acquired EBITDA and cost savings 26,495 14,808 85 14,893
Other - - 107 107
------- ------- -------- -------
Consolidated EBITDA $60,518 $64,989 $ 8,588 $73,577
======= ======= ======== =======
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