SS&C Technologies Reports Third Quarter 2017 Earnings
Q3 2017 GAAP revenue $418.3 million, up 9.1 percent, Fully Diluted GAAP Earnings Per Share $0.30, up 57.9 percent
Adjusted revenue $419.6 million, up 7.1 percent, Adjusted Diluted Earnings Per Share $0.50, up 19.0 percent
WINDSOR, Conn., Oct. 25, 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 third quarter ended September 30, 2017.
GAAP Results
SS&C reported GAAP revenue of $418.3 million for the third quarter of 2017, up 9.1 percent compared to $383.3 million in the third quarter of 2016. GAAP operating income for the third quarter of 2017 was $103.9 million, or 24.8 percent of GAAP revenue compared to $76.9 million, or 20.1 percent of GAAP revenue in 2016's third quarter, representing a 35.1 percent increase.
GAAP net income for the third quarter of 2017 was $64.2 million, up 65.8 percent compared to $38.7 million in 2016's third quarter. On a fully diluted GAAP basis, earnings per share in the third quarter of 2017 were $0.30 per share, up 57.9 percent compared to $0.19 per share on a fully diluted GAAP basis in the third quarter of 2016.
Adjusted Non-GAAP Results (defined in Notes 1-4 below)
Adjusted revenue was $419.6 million for the third quarter of 2017, up 7.1 percent compared to $391.9 million in the third quarter of 2016. Adjusted operating income for the third quarter of 2017 was $170.1 million, or 40.5 percent of adjusted revenue compared to $150.5 million, or 38.4 percent of adjusted revenue in 2016's third quarter, representing a 13.1 percent increase.
Adjusted net income for the third quarter of 2017 was $105.5 million, up 20.6 percent compared to $87.5 million in 2016's third quarter. Adjusted diluted earnings per share in the third quarter of 2017 were $0.50 per share, up 19.0 percent compared to $0.42 per share in the third quarter of 2016.
Highlights:
-- Adjusted diluted earnings per share were $0.50 for Q3 2017, increasing 19.0 percent from Q3 2016's $0.42 adjusted diluted earnings per share. -- For the nine months of 2017, net cash provided by operating activities was $307.1 million, an increase of 29.6 percent. -- Adjusted consolidated EBITDA increased 14.2 percent to $178.8 million in Q3 2017. Adjusted consolidated EBITDA margin was 42.6 percent for the quarter. -- SS&C paid off $292.8 million of debt in the nine months of 2017, bringing our net debt to consolidated EBITDA leverage ratio to 3.19x.
"We are pleased with our ability to report adjusted diluted earnings per share up 19.0 percent on a 7.1 percent increase in adjusted revenue" says Bill Stone, Chairman and Chief Executive Officer of SS&C Technologies. "We had many deals push to Q4; nevertheless we ramped up our margins with 42.6 percent adjusted consolidated EBITDA margin across the entire business. We expect a solid Q4."
Annual Run Rate Basis
Annual Run Rate Basis (ARRB) recurring revenue, defined as adjusted recurring revenue on an annualized basis, was $1,580.1 million based on adjusted recurring revenue $395.0 million for the third quarter of 2017. This represents an increase of 9.6 percent from $360.3 million and $1,441.3 million run-rate in the same period in 2016 and an increase of 2.0 percent from $387.4 million for the second quarter of 2017, an annual run rate of $1,549.7 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 $307.1 million for the nine months ended September 30, 2017, compared to $237.0 million for the same period in 2016, representing a 29.6 percent increase. SS&C ended the third quarter with $103.3 million in cash and cash equivalents and $2,266.8 million in gross debt, for a net debt balance of $2,163.5 million. SS&C's consolidated net leverage ratio as defined in our credit agreement stood at 3.19 times consolidated EBITDA as of September 30, 2017.
Guidance
Q4 2017 FY 2017 Adjusted Revenue ($M) $427.0 - $437.0 $1,670.2 - $1,680.2 Adjusted Net Income ($M) $110.0 - $113.9 $404.7 - $408.6 Cash from Operating Activities ($M) - $485.0 - $500.0 Capital 2.9% - Expenditures 3.0% (% of revenue) - Diluted Shares 213.2 - 212.8 211.7 - (M) 211.5 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 Q3 2017 earnings call will take place at 5:00 p.m. eastern time today, October 25, 2017. The call will discuss Q3 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 Third Quarter 2017 Conference Call"; conference ID #95952330. A replay will be available after 8:00 p.m. eastern time on October 25, 2017, until midnight on November 2, 2017. The dial-in number is 855-859-2056 (US and Canada) or 404-537-3406 (International); access code #95952330. The call will also be available for replay on SS&C's website after October 25, 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 fourth 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. Forward-looking statements include statements concerning plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance, underlying assumptions, and other statements that are other than statements of historical facts. 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. Forward-looking statements speak only as of the date on which they are made and, except to the extent required by applicable securities laws, we undertake no obligation to update or revise any 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 September 30, Nine Months Ended September 30, -------------------------------- ------------------------------- 2017 2016 2017 2016 ---- ---- ---- ---- Revenues: Software-enabled services $282,133 $248,772 $831,103 $699,091 Maintenance and term licenses 112,819 106,925 336,990 305,437 ------- ------- ------- ------- Total recurring revenues 394,952 355,697 1,168,093 1,004,528 ------- ------- --------- --------- Perpetual licenses 3,576 4,389 10,226 14,643 Professional services 19,723 23,218 58,611 61,341 ------ ------ ------ ------ Total non-recurring revenues 23,299 27,607 68,837 75,984 ------ ------ ------ ------ Total revenues 418,251 383,304 1,236,930 1,080,512 ------- ------- --------- --------- Cost of revenues: Software-enabled services 155,497 143,074 468,391 403,045 Maintenance and term licenses 46,662 45,458 140,927 138,864 ------ ------ ------- ------- Total recurring cost of revenues 202,159 188,532 609,318 541,909 ------- ------- ------- ------- Perpetual licenses 642 608 1,857 1,749 Professional services 17,001 18,887 49,778 51,532 ------ ------ ------ ------ Total non-recurring cost of revenues 17,643 19,495 51,635 53,281 ------ ------ ------ ------ Total cost of revenues 219,802 208,027 660,953 595,190 ------- ------- ------- ------- Gross profit 198,449 175,277 575,977 485,322 ------- ------- ------- ------- Operating expenses: Selling and marketing 28,181 27,328 88,544 85,724 Research and development 37,376 37,701 114,904 114,975 General and administrative 28,975 33,345 88,910 91,239 ------ ------ ------ ------ Total operating expenses 94,532 98,374 292,358 291,938 ------ ------ ------- ------- Operating income 103,917 76,903 283,619 193,384 Interest expense, net (26,250) (31,648) (81,565) (97,583) Other (expense) income, net (2,535) 2,655 (3,803) 820 Loss on extinguishment of debt - - (2,326) - --- --- ------ --- Income before income taxes 75,132 47,910 195,925 96,621 Provision for income taxes 10,905 9,163 32,400 22,648 ------ ----- ------ ------ Net income $64,227 $38,747 $163,525 $73,973 ======= ======= ======== ======= Basic earnings per share $0.31 $0.19 $0.80 $0.37 Diluted earnings per share $0.30 $0.19 $0.77 $0.36 Basic weighted average number of common shares outstanding 205,568 201,782 204,506 199,365 Diluted weighted average number of common and common equivalent 212,359 206,635 211,080 205,334 shares outstanding Cash dividends declared and paid per common share $0.07 $0.0625 $0.195 $0.1875 Net income $64,227 $38,747 $163,525 $73,973 Other comprehensive income (loss), net of tax: Foreign currency exchange translation adjustment 19,951 (12,060) 51,696 (29,532) ------ ------- ------ ------- Total comprehensive income (loss), net of tax 19,951 (12,060) 51,696 (29,532) ------ ------- ------ ------- Comprehensive income $84,178 $26,687 $215,221 $44,441 ======= ======= ======== ======= See Notes to Condensed Consolidated Financial Information.
SS&C Technologies Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (in thousands) (unaudited) September 30, December 31, 2017 2016 ---- ---- ASSETS Current assets: Cash and cash equivalents $103,279 $117,558 Accounts receivable, net 238,677 241,307 Prepaid expenses and other current assets 32,688 31,119 Prepaid income taxes 13,832 23,012 Restricted cash 592 2,116 --- ----- Total current assets 389,068 415,112 Property, plant and equipment, net 103,580 80,395 Deferred income taxes 2,166 2,410 Goodwill 3,692,573 3,652,733 Intangible and other assets, net 1,411,234 1,556,321 --------- --------- Total assets $5,598,621 $5,706,971 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current portion of long-term debt $39,527 $126,144 Accounts payable 27,776 16,490 Income taxes payable - 3,473 Accrued employee compensation and benefits 73,521 104,118 Interest payable 7,344 21,470 Other accrued expenses 45,087 53,708 Deferred revenue 212,811 235,222 ------- ------- Total current liabilities 406,066 560,625 Long-term debt, net of current portion 2,177,681 2,374,986 Other long-term liabilities 85,767 59,227 Deferred income taxes 421,468 453,555 ------- ------- Total liabilities 3,090,982 3,448,393 Total stockholders' equity 2,507,639 2,258,578 --------- --------- Total liabilities and stockholders' equity $5,598,621 $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) Nine Months Ended September 30, ------------------------------- 2017 2016 ---- ---- Cash flow from operating activities: Net income $163,525 $73,973 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 176,879 170,910 Stock-based compensation expense 31,572 40,402 Income tax benefit related to exercise of stock options - (44,975) Amortization and write-offs of loan origination costs 7,915 7,994 Loss on extinguishment of debt 963 - Loss on sale or disposition of property and equipment 730 159 Deferred income taxes (24,661) (39,712) Provision for doubtful accounts 2,829 2,684 Changes in operating assets and liabilities, excluding effects from acquisitions: Accounts receivable 1,820 (14,603) Prepaid expenses and other assets 1,416 (2,595) Accounts payable 8,597 2,610 Accrued expenses (45,644) (18,429) Income taxes prepaid and payable 6,781 44,840 Deferred revenue (25,632) 13,758 ------- ------ Net cash provided by operating activities 307,090 237,016 ------- ------- Cash flow from investing activities: Additions to property and equipment (29,779) (18,870) Proceeds from sale of property and equipment 1 69 Cash paid for business acquisitions, net of cash acquired 1,805 (309,432) Additions to capitalized software (8,168) (6,137) Purchase of long-term investment - (1,000) --- ------ Net cash used in investing activities (36,141) (335,370) ------- -------- Cash flow from financing activities: Cash received from debt borrowings 45,000 - Repayments of debt (337,800) (268,550) Proceeds from exercise of stock options 46,278 34,767 Withholding taxes related to equity award net share settlement (4,090) (7,051) Income tax benefit related to exercise of stock options - 44,975 Purchase of common stock for treasury - (13) Payment of fees related to refinancing activities - (503) Dividends paid on common stock (39,917) (37,452) ------- ------- Net cash used in financing activities (290,529) (233,827) -------- -------- Effect of exchange rate changes on cash, cash equivalents and restricted cash 3,777 (880) ----- ---- Net decrease in cash, cash equivalents and restricted cash (15,803) (333,061) Cash, cash equivalents and restricted cash, beginning of period 119,674 436,977 ------- ------- Cash, cash equivalents and restricted cash, end of period $103,871 $103,916 ======== ======== Supplemental disclosure of non-cash activities: Property and equipment acquired through tenant improvement allowances $10,846 $ - 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 Nine Months Ended September 30, September 30, ------------- ------------- (in thousands) 2017 2016 2017 2016 ---- ---- ---- ---- Revenues $418,251 $383,304 $1,236,930 $1,080,512 Purchase accounting adjustments to deferred revenue 1,314 8,562 6,241 38,880 ----- ----- ----- ------ Adjusted revenues $419,565 $391,866 $1,243,171 $1,119,392 ======== ======== ========== ==========
The following is a breakdown of recurring and non-recurring revenues and adjusted recurring and non-recurring revenues.
Three Months Ended Nine Months Ended September 30, September 30, ------------- ------------- (in thousands) 2017 2016 2017 2016 ---- ---- ---- ---- Software-enabled services $282,133 $248,772 $831,103 $699,091 Maintenance and term licenses 112,819 106,925 336,990 305,437 ------- ------- ------- ------- Total recurring revenues 394,952 355,697 1,168,093 1,004,528 ------- ------- --------- --------- Perpetual licenses 3,576 4,389 10,226 14,643 Professional services 19,723 23,218 58,611 61,341 ------ ------ ------ ------ Total non-recurring revenues 23,299 27,607 68,837 75,984 ------ ------ ------ ------ Total revenues $418,251 $383,304 $1,236,930 $1,080,512 ======== ======== ========== ========== Software-enabled services $282,133 $248,809 $831,103 $699,358 Maintenance and term licenses 112,903 111,527 338,582 332,801 ------- ------- ------- ------- Total adjusted recurring revenues 395,036 360,336 1,169,685 1,032,159 ------- ------- --------- --------- Perpetual licenses 3,576 4,389 10,226 14,643 Professional services 20,953 27,141 63,260 72,590 ------ ------ ------ ------ Total adjusted non-recurring revenues 24,529 31,530 73,486 87,233 ------ ------ ------ ------ Total adjusted revenues $419,565 $391,866 $1,243,171 $1,119,392 ======== ======== ========== ==========
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 Nine Months Ended September 30, September 30, ------------- ------------- (in thousands) 2017 2016 2017 2016 ---- ---- ---- ---- Operating income $103,917 $76,903 $283,619 $193,384 Amortization of intangible assets 52,874 51,539 158,024 153,214 Stock-based compensation 10,294 12,489 31,572 40,402 Capital-based taxes 250 1,000 1,000 1,472 Purchase accounting adjustments (1) 777 5,573 3,782 29,831 Other (2) 2,005 2,966 4,901 7,885 ----- ----- ----- ----- Adjusted operating income $170,117 $150,470 $482,898 $426,188 ======== ======== ======== ======== (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 Nine Months Ended Twelve September 30, September 30, Months Ended September 30, ------------- (in thousands) 2017 2016 2017 2016 2017 ---- ---- ---- ---- ---- Net income $64,227 $38,747 $163,525 $73,973 $220,548 Interest expense, net 26,250 31,648 81,565 97,583 112,436 Provision for income tax 10,905 9,163 32,400 22,648 42,372 Depreciation and amortization 59,666 57,470 176,879 170,910 234,652 ------ ------ ------- ------- ------- EBITDA 161,048 137,028 454,369 365,114 610,008 Stock-based compensation 10,294 12,489 31,572 40,402 41,734 Capital-based taxes 250 1,000 1,000 1,472 1,010 Acquired EBITDA and cost savings (1) 365 - 3,581 5,814 6,859 Non-cash portion of straight-line rent expense 1,933 269 2,479 1,822 2,855 Loss on extinguishment of debt - - 2,326 - 2,326 Purchase accounting adjustments (2) 777 5,573 3,782 29,831 5,570 Other (3) 4,540 311 8,704 7,065 7,530 ----- --- ----- ----- ----- Consolidated EBITDA $179,207 $156,670 $507,813 $451,520 $677,892 Less: acquired EBITDA (365) - (3,581) (5,814) (6,859) ---- --- ------ ------ ------ Adjusted Consolidated EBITDA $178,842 $156,670 $504,232 $445,706 $671,033 ======== ======== ======== ======== ======== (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 Nine Months Ended September 30, September 30, ------------- ------------- (in thousands, except per share data) 2017 2016 2017 2016 ---- ---- ---- ---- GAAP - Net income $64,227 $38,747 $163,525 $73,973 Plus: Amortization of intangible assets 52,874 51,539 158,024 153,214 Plus: Amortization of deferred financing costs and original issue discount 2,634 2,682 7,915 7,994 Plus: Stock-based compensation 10,294 12,489 31,572 40,402 Plus: Capital-based taxes 250 1,000 1,000 1,472 Plus: Loss on extinguishment of debt - - 2,326 - Plus: Purchase accounting adjustments (1) 777 5,573 3,782 29,831 Plus: Other (2) 4,540 311 8,704 7,065 Income tax effect (3) (30,115) (24,858) (82,189) (71,600) ------- ------- ------- ------- Adjusted net income $105,481 $87,483 $294,659 $242,351 ======== ======= ======== ======== Adjusted diluted earnings per share $0.50 $0.42 $1.40 $1.18 GAAP diluted earnings per share $0.30 $0.19 $0.77 $0.36 Diluted weighted-average shares outstanding 212,359 206,635 211,080 205,334 (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