SS&C Technologies Reports Record Revenue for Q2 2017
Q2 GAAP revenue $411.0 million, up 10.2 percent, Fully Diluted GAAP Earnings Per Share $0.24, up 71.4 percent
Adjusted revenue $414.1 million, up 7.7 percent, Adjusted Diluted Earnings Per Share $0.46, up 17.9 percent
WINDSOR, Conn., July 27, 2017 /PRNewswire/ -- SS&C Technologies Holdings, Inc. (NASDAQ: SSNC), a global provider of investment and financial software-enabled services and software, today announced its financial results for the second quarter ended June 30, 2017.
GAAP Results
SS&C reported GAAP revenue of $411.0 million for the second quarter of 2017, up 10.2 percent compared to $373.1 million in the second quarter of 2016. GAAP operating income for the second quarter of 2017 was $90.0 million, or 21.9 percent of GAAP revenue compared to $66.0 million, or 17.7 percent of GAAP revenue in 2016's second quarter, representing a 36.3 percent increase.
GAAP net income for the second quarter of 2017 was $51.2 million, up 81.3 percent compared to $28.2 million in 2016's second quarter. On a fully diluted GAAP basis, earnings per share in the second quarter of 2017 were $0.24 per share, up 71.4 percent compared to $0.14 per share on a fully diluted GAAP basis in the second quarter of 2016.
Adjusted Non-GAAP Results (defined in Notes 1-4 below)
Adjusted revenue was $414.1 million for the second quarter of 2017, up 7.7 percent compared to $384.4 million in the second quarter of 2016. Adjusted operating income for the second quarter of 2017 was $157.3 million, or 38.0 percent of adjusted revenue compared to $140.5 million, or 36.6 percent of adjusted revenue in 2016's second quarter, representing a 12.0 percent increase.
Adjusted net income for the second quarter of 2017 was $96.2 million, up 21.1 percent compared to $79.4 million in 2016's second quarter. Adjusted diluted earnings per share in the second quarter of 2017 were $0.46 per share, up 17.9 percent compared to $0.39 per share in the second quarter of 2016.
Highlights:
-- SS&C adjusted revenue for Q2 2017 was $414.1 million, up 7.7 percent
from Q2 2016 adjusted revenue of $384.4 million.
-- Adjusted diluted earnings per share were $0.46 for Q2 2017, increasing
17.9 percent from Q2 2016's $0.39 adjusted diluted earnings per share.
-- For the first six months of 2017, net cash provided by operating
activities was $193.8 million, an increase of 39.1 percent.
-- SS&C paid off $208.4 million of debt for the first six months of 2017,
bringing our net debt to consolidated EBITDA leverage ratio to 3.45x.
"Q2 2017 marks our 21(st) straight quarter of revenue growth, growing adjusted revenue 7.7 percent, and, in the first six months we generated $193.8 million in cash flow up 39.1 percent," says Bill Stone, Chairman and Chief Executive Officer of SS&C Technologies. "SS&C's continuous investment in our 8,200 strong workforce and a relentless focus on customer service, delivers a superior customer experience. We have become one of the world's largest financial technology companies and our investments have strengthened our competitive advantage. We have been honored to receive numerous industry awards for technology and service over the past several years, and this quarter SS&C was named to Forbes' America's Best Midsized Employers.
Looking forward we will continue to explore opportunities to reinvent the way we capture, process and deliver investment information. The various consumers of our output rely on us to stay abreast of new financial instruments, tax and financial reporting requirements, and changing investment strategies. SS&C's clients understand our commitment and, during Q2 we spent over $39 million in research and development."
Annual Run Rate Basis
Annual Run Rate Basis (ARRB) recurring revenue, defined as adjusted recurring revenue on an annualized basis, was $1,549.7 million based on adjusted recurring revenue $387.4 million for the second quarter of 2017. This represents an increase of 8.8 percent from $356.1 million and $1,424.3 million run-rate in the same period in 2016 and an increase of 0.1 percent from $387.2 million for the first quarter of 2017, an annual run rate of $1,548.9 million. We believe ARRB of our recurring revenue is a good indicator of visibility into future revenue.
Operating Cash Flow
SS&C generated net cash from operating activities of $193.8 million for the six months ended June 30, 2017, compared to $139.3 million for the same period in 2016, representing a 39.1 percent increase. SS&C ended the quarter with $90.4 million in cash and cash equivalents and $2,351.2 million in gross debt, for a net debt balance of $2,260.8 million. SS&C's leverage ratio as defined in our credit agreement stood at 3.45 times consolidated EBITDA as of June 30, 2017.
Guidance
Q3 2017 FY 2017
Adjusted Revenue ($M) $420.0 - $428.0 $1,669.0 - $1,689.0
Adjusted Net Income ($M) $103.5 - $108.0 $403.0 - $413.0
Cash from Operating Activities
($M) - $485.0 - $500.0
Capital Expenditures (% of - 2.8% -
revenue) 3.2%
Diluted Shares (M) 212.4 - 211.3 -
213.0 212.1
Effective Income Tax Rate (%) 28% 28%
SS&C does not provide reconciliations of guidance for Adjusted Revenues and Adjusted Net Income to comparable GAAP measures, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. SS&C is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial measures. These items include acquisition transactions and integration, foreign exchange rate changes, as well as other non-cash and other adjustments as defined under the Company's Credit agreement, that are difficult to predict in advance in order to include in a GAAP estimate.
Non-GAAP Financial Measures
Adjusted revenue, adjusted operating income, adjusted consolidated EBITDA, adjusted net income and adjusted diluted earnings per share are non-GAAP measures. See the accompanying notes to the attached Condensed Consolidated Financial Information for the reconciliations and definitions for each of these non-GAAP measures and the reasons our management believes these measures provide useful information to investors regarding our financial condition and results of operations.
Earnings Call and Press Release
SS&C's Q2 2017 earnings call will take place at 5:00 p.m. eastern time today, July 27, 2017. The call will discuss Q2 2017 results and our guidance and business outlook. Interested parties may dial 877-312-8798 (US and Canada) or 253-237-1193 (International), and request the "SS&C Technologies Second Quarter 2017 Conference Call"; conference ID #3714534. A replay will be available after 8:00 p.m. eastern time on July 27, 2017, until midnight on August 3, 2017. The dial-in number is 855-859-2056 (US and Canada) or 404-537-3406 (International); access code #3714534. The call will also be available for replay on SS&C's website after July 27, 2017; access: http://investor.ssctech.com/results.cfm.
Certain information contained in this press release relating to, among other things, our financial guidance for the third quarter and full year of 2017 constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words "believes", "anticipates", "plans", "expects", "estimates", "projects", "forecasts", "may", "assume", "anticipates", "intend", "will", "continue", "opportunity", "predict", "potential", "future", "guarantee", "likely", "target", "indicate", "would", "could" and "should" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. Such statements reflect management's best judgment based on factors currently known but are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, the state of the economy and the financial services industry, the Company's ability to finalize large client contracts, fluctuations in customer demand for the Company's products and services, intensity of competition from application vendors, delays in product development, the Company's ability to control expenses, terrorist activities, exposure to litigation, the Company's ability to integrate acquired businesses, the effect of the acquisitions on customer demand for the Company's products and services, the market price of the Company's stock prevailing from time to time, the Company's cash flow from operations, general economic conditions, and those risks discussed in the "Risk Factors" section of the Company's most recent Annual Report on Form 10-K, which is on file with the Securities and Exchange Commission and can also be accessed on our website. The Company cautions investors that it may not update any or all of the foregoing forward-looking statements.
About SS&C Technologies
SS&C is a global provider of investment and financial software-enabled services and software focused exclusively on the global financial services industry. Founded in 1986, SS&C has its headquarters in Windsor, Connecticut and offices around the world. Some 11,000 financial services organizations, from the world's largest institutions to local firms, manage and account for their investments using SS&C's products and services. These clients in the aggregate manage over $44 trillion in assets.
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SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
2017 2016 2017 2016
---- ---- ---- ----
Revenues:
Software-enabled services $272,518 $244,672 $548,970 $450,319
Maintenance and term licenses 113,614 103,392 224,171 198,512
------- ------- ------- -------
Total recurring revenues 386,132 348,064 773,141 648,831
------- ------- ------- -------
Perpetual licenses 3,822 5,039 6,650 10,254
Professional services 21,026 19,974 38,888 38,123
------ ------ ------ ------
Total non-recurring revenues 24,848 25,013 45,538 48,377
------ ------ ------ ------
Total revenues 410,980 373,077 818,679 697,208
------- ------- ------- -------
Cost of revenues:
Software-enabled services 158,888 146,243 312,894 259,971
Maintenance and term licenses 47,280 46,460 94,265 93,406
------ ------ ------ ------
Total recurring cost of revenues 206,168 192,703 407,159 353,377
------- ------- ------- -------
Perpetual licenses 650 643 1,215 1,141
Professional services 16,874 17,133 32,777 32,645
------ ------ ------ ------
Total non-recurring cost of revenues 17,524 17,776 33,992 33,786
------ ------ ------ ------
Total cost of revenues 223,692 210,479 441,151 387,163
------- ------- ------- -------
Gross profit 187,288 162,598 377,528 310,045
------- ------- ------- -------
Operating expenses:
Selling and marketing 30,121 28,535 60,363 58,396
Research and development 39,079 40,827 77,528 77,274
General and administrative 28,103 27,199 59,935 57,894
------ ------ ------ ------
Total operating expenses 97,303 96,561 197,826 193,564
------ ------ ------- -------
Operating income 89,985 66,037 179,702 116,481
Interest expense, net (26,295) (32,846) (55,315) (65,935)
Other (expense) income, net (1,197) 12 (1,268) (1,835)
Loss on extinguishment of debt - - (2,326) -
--- --- ------ ---
Income before income taxes 62,493 33,203 120,793 48,711
Provision for income taxes 11,342 4,982 21,495 13,485
------ ----- ------ ------
Net income $51,151 $28,221 $99,298 $35,226
======= ======= ======= =======
Basic earnings per share $0.25 $0.14 $0.49 $0.18
Diluted earnings per share $0.24 $0.14 $0.47 $0.17
Basic weighted average number of common shares outstanding 204,550 198,765 203,966 198,143
Diluted weighted average number of common and common equivalent shares outstanding 211,299 204,916 210,478 204,596
Cash dividends declared and paid per common share $0.0625 $0.0625 $0.1250 $0.1250
Net income $51,151 $28,221 $99,298 $35,226
Other comprehensive income (loss), net of tax:
Foreign currency exchange translation adjustment 20,966 (26,793) 31,745 (17,472)
------ ------- ------ -------
Total comprehensive income (loss), net of tax 20,966 (26,793) 31,745 (17,472)
------ ------- ------ -------
Comprehensive income $72,117 $1,428 $131,043 $17,754
======= ====== ======== =======
See Notes to Condensed Consolidated Financial Information.
SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30, December 31,
2017 2016
---- ----
ASSETS
Current assets:
Cash and cash equivalents $90,370 $117,558
Accounts receivable, net 235,811 241,307
Prepaid expenses and other current assets 32,875 31,119
Prepaid income taxes 18,032 23,012
Restricted cash 1,880 2,116
----- -----
Total current assets 378,968 415,112
Property, plant and equipment, net 100,908 80,395
Deferred income taxes 2,136 2,410
Goodwill 3,676,586 3,652,733
Intangible and other assets, net 1,459,803 1,556,321
--------- ---------
Total assets $5,618,401 $5,706,971
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $37,183 $126,144
Accounts payable 32,668 16,490
Income taxes payable - 3,473
Accrued employee compensation and
benefits 60,846 104,118
Interest payable 16,156 21,470
Other accrued expenses 43,044 53,708
Deferred revenue 234,077 235,222
------- -------
Total current liabilities 423,974 560,625
Long-term debt, net of current portion 2,261,791 2,374,986
Other long-term liabilities 81,770 59,227
Deferred income taxes 432,688 453,555
------- -------
Total liabilities 3,200,223 3,448,393
Total stockholders' equity 2,418,178 2,258,578
--------- ---------
Total liabilities and stockholders'
equity $5,618,401 $5,706,971
========== ==========
See Notes to Condensed Consolidated Financial Information.
SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
-------------------------
2017 2016
---- ----
Cash flow from operating activities:
Net income $99,298 $35,226
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 117,213 113,440
Stock-based compensation expense 21,278 27,913
Income tax benefit related to exercise of
stock options - (23,760)
Amortization and write-offs of loan
origination costs 5,281 5,312
Loss on extinguishment of debt 963 -
Loss on sale or disposition of property and
equipment 12 150
Deferred income taxes (14,970) (24,056)
Provision for doubtful accounts 3,218 1,257
Changes in operating assets and liabilities,
excluding effects from acquisitions:
Accounts receivable 3,411 (13,458)
Prepaid expenses and other assets (1,326) (1,516)
Accounts payable 14,895 7,870
Accrued expenses (54,543) (25,851)
Income taxes prepaid and payable 2,562 23,757
Deferred revenue (3,471) 13,052
------ ------
Net cash provided by operating activities 193,821 139,336
------- -------
Cash flow from investing activities:
Additions to property and equipment (19,368) (13,593)
Proceeds from sale of property and equipment 1 43
Cash paid for business acquisitions, net of
cash acquired 1,805 (317,554)
Additions to capitalized software (5,636) (3,306)
Purchase of long-term investment - (1,000)
--- ------
Net cash used in investing activities (23,198) (335,410)
------- --------
Cash flow from financing activities:
Cash received from debt borrowings 45,000 -
Repayments of debt (253,400) (155,325)
Proceeds from exercise of stock options 35,855 19,212
Withholding taxes related to equity award net
share settlement (3,057) (4,615)
Income tax benefit related to exercise of
stock options - 23,760
Purchase of common stock for treasury - (11)
Payment of fees related to refinancing
activities - (222)
Dividends paid on common stock (25,521) (24,790)
------- -------
Net cash used in financing activities (201,123) (141,991)
-------- --------
Effect of exchange rate changes on cash, cash
equivalents and restricted cash 3,076 (872)
----- ----
Net decrease in cash, cash equivalents and
restricted cash (27,424) (338,937)
Cash, cash equivalents and restricted cash,
beginning of period 119,674 436,977
------- -------
Cash, cash equivalents and restricted cash,
end of period $92,250 $98,040
======= =======
See Notes to Condensed Consolidated Financial Information.
SS&C Technologies Holdings, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Information
Note 1. Reconciliation of Revenues to Adjusted Revenues
Adjusted revenues represents revenues adjusted for one-time purchase accounting adjustments to fair value deferred revenue acquired in business combinations. Adjusted revenues are presented because we use this measure to evaluate performance of our business against prior periods and believe it is a useful indicator of the underlying performance of the Company. Adjusted revenues are not a recognized term under generally accepted accounting principles (GAAP). Adjusted revenues does not represent revenues, as that term is defined under GAAP, and should not be considered as an alternative to revenues as an indicator of our operating performance. Adjusted revenues as presented herein is not necessarily comparable to similarly titled measures. Below is a reconciliation between adjusted revenues and revenues, the GAAP measure we believe to be most directly comparable to adjusted revenues.
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
(in thousands) 2017 2016 2017 2016
---- ---- ---- ----
Revenues $410,980 $373,077 $818,679 $697,208
Purchase accounting adjustments to deferred revenue 3,107 11,335 4,927 30,318
----- ------ ----- ------
Adjusted revenues $414,087 $384,412 $823,606 $727,526
======== ======== ======== ========
The following is a breakdown of recurring and non-recurring revenues and adjusted recurring and non-recurring revenues.
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
(in thousands) 2017 2016 2017 2016
---- ---- ---- ----
Software-enabled services $272,518 $244,672 $548,970 $450,319
Maintenance and term licenses 113,614 103,392 224,171 198,512
------- ------- ------- -------
Total recurring revenues 386,132 348,064 773,141 648,831
------- ------- ------- -------
Perpetual licenses 3,822 5,039 6,650 10,254
Professional services 21,026 19,974 38,888 38,123
------ ------ ------ ------
Total non-recurring revenues 24,848 25,013 45,538 48,377
------ ------ ------ ------
Total revenues $410,980 $373,077 $818,679 $697,208
======== ======== ======== ========
Software-enabled services $272,518 $244,763 $548,970 $450,549
Maintenance and term licenses 114,916 111,324 225,679 221,274
------- ------- ------- -------
Total adjusted recurring revenues 387,434 356,087 774,649 671,823
------- ------- ------- -------
Perpetual licenses 3,822 5,039 6,650 10,254
Professional services 22,831 23,286 42,307 45,449
------ ------ ------ ------
Total adjusted non-recurring revenues 26,653 28,325 48,957 55,703
------ ------ ------ ------
Total adjusted revenues $414,087 $384,412 $823,606 $727,526
======== ======== ======== ========
Note 2. Reconciliation of Operating Income to Adjusted Operating Income
Adjusted operating income represents operating income adjusted for amortization of intangible assets, stock-based compensation, purchase accounting adjustments for deferred revenue and related costs and other expenses. Adjusted operating income is presented because we use this measure to evaluate performance of our business and believe it is a useful indicator of the underlying performance of the Company. Adjusted operating income is not a recognized term under 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.
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
(in thousands) 2017 2016 2017 2016
---- ---- ---- ----
Operating income $89,985 $66,037 $179,702 $116,481
Amortization of intangible assets 52,742 51,995 105,150 101,675
Stock-based compensation 10,378 12,566 21,278 27,913
Capital-based taxes 375 - 750 472
Purchase accounting adjustments (1) 2,653 8,630 3,005 24,258
Other (2) 1,212 1,301 2,896 4,919
----- ----- ----- -----
Adjusted operating income $157,345 $140,529 $312,781 $275,718
======== ======== ======== ========
(1) Purchase accounting adjustments
include (a) an adjustment to
increase revenues by the amount
that would have been recognized
if deferred revenue were not
adjusted to fair value at the
date of acquisitions and (b) an
adjustment to increase personnel
and commissions expense by the
amount that would have been
recognized if prepaid commissions
and deferred personnel costs were
not adjusted to fair value at the
date of the acquisitions.
(2) Other includes expenses and income
that are permitted to be excluded
per the terms of our Credit
Agreement from Consolidated
EBITDA, a financial measure used
in calculating our covenant
compliance. These include
expenses and income related to
currency transactions, facilities
and workforce restructuring,
legal settlements and business
combinations, among other
infrequently occurring
transactions.
Note 3. Reconciliation of Net Income to EBITDA, Consolidated EBITDA and Adjusted Consolidated EBITDA
EBITDA represents net income before interest expense, income taxes, depreciation and amortization. Consolidated EBITDA, defined under our Credit Agreement entered into in July 2015, as amended, is used in calculating covenant compliance, and is EBITDA adjusted for certain items. Consolidated EBITDA is calculated by subtracting from or adding to EBITDA items of income or expense described below. Adjusted consolidated EBITDA is calculated by subtracting acquired EBITDA from consolidated EBITDA. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are presented because we use these measures to evaluate performance of our business and believe them to be useful indicators of an entity's debt capacity and its ability to service debt. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are not recognized terms under GAAP and should not be considered in isolation or as alternatives to operating income, net income or cash flows from operating activities as indicators of our operating performance. The following is a reconciliation of EBITDA, consolidated EBITDA and adjusted consolidated EBITDA to net income.
Three Months Ended Six Months Ended Twelve
June 30, June 30, Months Ended
June 30,
--------
(in thousands) 2017 2016 2017 2016 2017
---- ---- ---- ---- ----
Net income $51,151 $28,221 $99,298 $35,226 $195,068
Interest expense, net 26,295 32,846 55,315 65,935 117,834
Provision for income tax 11,342 4,982 21,495 13,485 40,630
Depreciation and amortization 58,656 58,167 117,213 113,440 232,456
------ ------ ------- ------- -------
EBITDA 147,444 124,216 293,321 228,086 585,988
Stock-based compensation 10,378 12,566 21,278 27,913 43,929
Capital-based taxes 375 - 750 472 1,760
Acquired EBITDA and cost savings (1) 81 1,046 889 5,814 6,274
Non-cash portion of straight-line rent expense 478 769 546 1,553 1,191
Loss on extinguishment of debt - - 2,326 - 2,326
Purchase accounting adjustments (2) 2,653 8,630 3,005 24,258 10,366
Other (3) 2,409 1,289 4,164 6,754 3,301
----- ----- ----- ----- -----
Consolidated EBITDA $163,818 $148,516 $326,279 $294,850 $655,135
Less: acquired EBITDA (81) (1,046) (889) (5,814) (6,274)
--- ------ ---- ------ ------
Adjusted Consolidated EBITDA $163,737 $147,470 $325,390 $289,036 $648,861
======== ======== ======== ======== ========
(1) Acquired EBITDA reflects the
EBITDA impact of significant
businesses that were acquired
during the period as if the
acquisition occurred at the
beginning of the period, as well
as cost savings enacted in
connection with acquisitions.
(2) Purchase accounting adjustments
include (a) an adjustment to
increase revenues by the amount
that would have been recognized
if deferred revenue were not
adjusted to fair value at the
date of acquisitions and (b) an
adjustment to increase personnel
and commissions expense by the
amount that would have been
recognized if prepaid commissions
and deferred personnel costs were
not adjusted to fair value at the
date of the acquisitions.
(3) Other includes expenses and income
that are permitted to be excluded
per the terms of our Credit
Agreement from Consolidated
EBITDA, a financial measure used
in calculating our covenant
compliance. These include
expenses and income related to
currency transactions, facilities
and workforce restructuring,
legal settlements and business
combinations, among other
infrequently occurring
transactions.
Note 4. Reconciliation of Net Income to Adjusted Net Income and Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share
Adjusted net income and adjusted diluted earnings per share represent net income and earnings per share before amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes and other unusual and non-recurring items. Adjusted net income and adjusted diluted earnings per share are not recognized terms under GAAP, do not represent net income or diluted earnings per share, as those terms are defined under GAAP, and should not be considered as alternatives to net income or diluted earnings per share as indicators of our operating performance. Adjusted net income and adjusted diluted earnings per share are important to management and investors because they represent our operational performance exclusive of the effects of amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes, other unusual and non-recurring items, purchase accounting adjustments, and loss on extinguishment of debt that are not operational in nature or comparable to those of our competitors. The following is a reconciliation between adjusted net income and adjusted diluted earnings per share and net income and diluted earnings per share.
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- -------------------------
(in thousands, except per share data) 2017 2016 2017 2016
---- ---- ---- ----
GAAP - Net income $51,151 $28,221 $99,298 $35,226
Plus: Amortization of intangible assets 52,742 51,995 105,150 101,675
Plus: Amortization of deferred financing costs and original issue discount 2,625 2,659 5,281 5,312
Plus: Stock-based compensation 10,378 12,566 21,278 27,913
Plus: Capital-based taxes 375 - 750 472
Plus: Loss on extinguishment of debt - - 2,326 -
Plus: Purchase accounting adjustments (1) 2,653 8,630 3,005 24,258
Plus: Other (2) 2,409 1,289 4,164 6,754
Income tax effect (3) (26,087) (25,914) (52,074) (46,742)
------- ------- ------- -------
Adjusted net income $96,246 $79,446 $189,178 $154,868
======= ======= ======== ========
Adjusted diluted earnings per share $0.46 $0.39 $0.90 $0.76
GAAP diluted earnings per share $0.24 $0.14 $0.47 $0.17
Diluted weighted-average shares outstanding 211,299 204,916 210,478 204,596
(1) Purchase accounting adjustments
include (a) an adjustment to
increase revenues by the amount
that would have been recognized
if deferred revenue were not
adjusted to fair value at the
date of acquisitions and (b) an
adjustment to increase personnel
and commissions expense by the
amount that would have been
recognized if prepaid commissions
and deferred personnel costs were
not adjusted to fair value at the
date of the acquisitions.
(2) Other includes expenses and income
that are permitted to be excluded
per the terms of our Credit
Agreement from Consolidated
EBITDA, a financial measure used
in calculating our covenant
compliance. These include
expenses and income related to
currency transactions, facilities
and workforce restructuring,
legal settlements and business
combinations, among other
infrequently occurring
transactions.
(3) An estimated normalized effective
tax rate of 28% has been used to
adjust the provision for income
taxes for the purpose of
computing adjusted net income.
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SOURCE SS&C
