Advent Software Reports First Quarter 2012 Results

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Monday, April 30th 2012
Company Achieves Record Quarterly Revenue of $87 Million and Record First Quarter Bookings of Over $7 Million
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SAN FRANCISCO, CA -- (Marketwire) -- 04/30/12 -- Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the global investment management industry, announced today its financial results for the first quarter ended March 31, 2012.

"I'm very proud of Advent's terrific first quarter financial performance," said Stephanie DiMarco, Founder and Chief Executive Officer of Advent. "Headlining our financial results was our best first quarter ever for new bookings with annual contract value of $7.4 million, a 45% increase over the same period last year. By staying focused on our strategy of broadening our product portfolio and growing our addressable market, 2012 is off to a great start, and we remain confident about the market opportunity ahead of us."

FIRST QUARTER 2012 RESULTS

GAAP Results for Continuing Operations
The Company reported quarterly revenue of $86.9 million for the first quarter of 2012, compared to $75.3 million in the first quarter of 2011, a 15% increase.

Operating income for the first quarter of 2012 was $11.8 million, or 14% of revenue, compared to $11.5 million or 15% of revenue for the first quarter of 2011.

Net income for the first quarter of 2012 was $7.3 million compared to $7.9 million in the first quarter of 2011.

On a fully diluted basis, earnings per share in the first quarter of 2012 were $0.14 and flat when compared to the first quarter of 2011.

Operating cash flow in the first quarter of 2012 was $13.6 million, compared with $11.6 million in the first quarter of 2011, a 17% increase. Cash, cash equivalents and marketable securities totaled $141.1 million as of March 31, 2012, compared to $136.3 million as of December 31, 2011, a 3% increase.

The Company repurchased approximately 267,500 shares in the first quarter of 2012 at an average price of $25.38 per share.

Total deferred revenue as of March 31, 2012 was $174.3 million, compared to $174.9 million as of December 31, 2011.

Non-GAAP Results for Continuing Operations
Non-GAAP operating income for the first quarter of 2012 was $19.6 million, or 23% of revenue. This represents an 11% increase over the same period last year. On a fully diluted basis, non-GAAP earnings per share were $0.24 in the first quarter of 2012 and represent a 14% increase from non-GAAP diluted earnings per share of $0.21 in the first quarter of 2011.

The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.

FIRST QUARTER HIGHLIGHTS

  • Continued Business Momentum in Key Metrics: The Annual Contract Value (ACV) of our new contract bookings in the first quarter of 2012 will contribute $7.4 million in annual revenue once the contracts are fully implemented. Recurring revenues reached 91% of total revenue in the first quarter and our reported renewal rates are among the highest since the fourth quarter of 2008.

  • Client Success: Advent saw continued success across all of its client segments, from large hedge fund managers and their service providers, to institutional asset managers, family offices, and independent advisory firms. New clients included: Driehaus Capital Management of Chicago and Hong Kong's Myriad Asset Management Limited. Existing clients that expanded their relationship with Advent or migrated to a new Advent platform from Axys® included: The Butterfield Fulcrum Group, Emery Howard Portfolio Management, Fifth Third Asset Management, Northside Capital Management, Sands Capital Management, Scout Investments, and Willis Investment Council. Additionally, Azentus Capital Management, a Hong Kong-based hedge fund led by former Goldman Sachs executives, went live on Geneva and Tamale RMS® in the first quarter.

  • Enhanced Functionality Across Product Lines: The Company launched a major new release of its platform for asset management today, which is comprised of Advent Portfolio Exchange®, Moxy®, Advent Rules Manager®, and Advent Revenue Center®. Enhancements include a new user experience, business intelligence reporting, dashboards, and more seamless integration across all of the products. Advent also released Syncova Essentials, a lighter, cloud-based version of the Syncova product which delivers automated data aggregation and management of margin and financing costs across multiple counterparties.

  • Award-Winning Solutions: Advent continues to win accolades around the world. Recent awards include: FTF News's Most Innovative Mobile Technology award for Advent's Black Diamond platform; HFMWeek named Advent as Best Technology for Start-Up Funds; and the Company was named Best IT Provider in the 2012 Hedge Fund Journal Service Provider Awards.

FINANCIAL GUIDANCE
Advent updates the following financial guidance for the second quarter and fiscal year 2012:


----------------------------------------------------------------------------
                 Guidance                   Q2 2012          FY 2012
----------------------------------------------------------------------------
Total Revenue ($M)                          $88-$90         $361-$368
----------------------------------------------------------------------------
  YoY Revenue Growth                       10% - 12%        11% - 13%
----------------------------------------------------------------------------
GAAP Operating Margin                         n/a         14.0% - 14.5%
----------------------------------------------------------------------------
Amortization of Intangibles (% of revenue)    n/a               3%
----------------------------------------------------------------------------
Stock Compensation Expense (% of revenue)     n/a               6%
----------------------------------------------------------------------------
Non-GAAP Operating Margin                     n/a         23.0% - 23.5%
----------------------------------------------------------------------------
Operating Cash Flow ($M)                      n/a            $90-$96
----------------------------------------------------------------------------
Capital Expenditures ($M)                     n/a            $13-$15
----------------------------------------------------------------------------
Growth of Weighted Average Shares
 Outstanding, excluding any share
 repurchases                                  n/a    0.25%-0.75% per quarter
----------------------------------------------------------------------------
Effective Tax Rate (GAAP)                     n/a           35% - 40%
----------------------------------------------------------------------------
Effective Tax Rate (non-GAAP)                 n/a              35%
----------------------------------------------------------------------------


INVESTOR CALL
Advent Software, Inc. will host its Q1 2012 quarterly earnings conference call at 5:00 p.m. Eastern time today. The Q1 2012 earnings presentation and trended disclosures file, which include highlights and detailed financial information, are currently available at http://investor.advent.com. To participate via phone, please dial (800) 265-0241 and request conference ID #41807332. Telephone replay will be available through midnight May 7, 2012. The replay number for domestic callers is (888) 286-8010, and for international callers is (617) 801-6888, with the conference ID of #12436350.

The conference call will also be webcast live and then archived on http://investor.advent.com.

ABOUT ADVENT
Advent Software, Inc. (www.advent.com), a global firm, has provided trusted solutions to the world's leading financial professionals since 1983. Firms in more than 60 countries use Advent technology. Advent's quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling costs. Advent is the only financial services software company to be awarded the Service Capability and Performance certification for being a world-class support organization. For more information on Advent products visit http://www.advent.com/about/resources/demos/pr.

ABOUT NON-GAAP FINANCIAL INFORMATION
This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP), please see the accompanying tables entitled "Reconciliation of Selected GAAP Measures to Non-GAAP Measures."

FORWARD-LOOKING STATEMENTS
The financial projections under Financial Guidance, and statements regarding our momentum and market opportunities, and any other forward-looking statements included in this presentation reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties include: potential fluctuations in new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our Advent Portfolio Exchange®, Geneva®, and Moxy® products; the successful development, release and market acceptance of new products and product enhancements; uncertainties and fluctuations in the financial markets; the Company's ability to satisfy contractual performance requirements; difficulties in integrating merged businesses, such as Syncova Solutions Limited and Black Diamond Performance Reporting LLC, and achieving expected synergies and results; and other risks detailed from time to time in our SEC reports including, but not limited to, our quarterly reports on Form 10-Q and our 2011 annual report on Form 10-K. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Advent, the Advent logo, Advent Software, Advent Portfolio Exchange, Axys, Geneva and Moxy are registered trademarks of Advent Software, Inc., and Syncova is a mark of Advent Software, Inc. All other company names or marks mentioned herein are those of their respective owners.


                           ADVENT SOFTWARE, INC.
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                               (In thousands)
                             (GAAP, Unaudited)

                                                     March 31   December 31
                                                       2012         2011
                                                   -----------  -----------
ASSETS
Current assets:
  Cash and cash equivalents                        $    70,828  $    65,525
  Short-term marketable securities                      70,258       69,908
  Accounts receivable, net                              59,518       62,125
  Deferred taxes, current                               16,300       16,294
  Prepaid expenses and other                            26,697       23,660
                                                   -----------  -----------
    Total current assets                               243,601      237,512
Property and equipment, net                             41,482       42,301
Goodwill                                               206,476      204,621
Other intangibles, net                                  46,749       49,521
Long-term marketable securities                              -          917
Deferred taxes, long-term                               30,747       30,751
Other assets                                            13,986       15,927
Noncurrent assets of discontinued operation              2,006        2,006
                                                   -----------  -----------

    Total assets                                   $   585,047  $   583,556
                                                   ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                 $    10,993  $    10,558
  Accrued liabilities                                   30,772       40,029
  Deferred revenues                                    166,270      166,945
  Income taxes payable                                   5,225        2,972
  Short-term debt                                        5,000        5,000
  Current liabilities of discontinued operation            475          488
                                                   -----------  -----------
    Total current liabilities                          218,735      225,992
Deferred revenues, long-term                             8,068        7,926
Long-term debt                                          43,750       45,000
Other long-term liabilities                             17,147       16,944
Noncurrent liabilities of discontinued operation         4,527        4,633
                                                   -----------  -----------

    Total liabilities                                  292,227      300,495
                                                   -----------  -----------


Stockholders' equity:
  Common stock                                             509          510
  Additional paid-in capital                           434,885      429,734
  Accumulated deficit                                 (151,825)    (154,053)
  Accumulated other comprehensive income                 9,251        6,870
                                                   -----------  -----------
    Total stockholders' equity                         292,820      283,061
                                                   -----------  -----------

    Total liabilities and stockholders' equity     $   585,047  $   583,556
                                                   ===========  ===========



                            ADVENT SOFTWARE, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share data)
                              (GAAP, Unaudited)


                                                 Three Months Ended March 31
                                                ----------------------------
                                                     2012           2011
                                                -------------  -------------

Net revenues:
Recurring revenues                              $      78,720  $      67,327
Non-recurring revenues                                  8,184          7,999
                                                -------------  -------------

  Total net revenues                                   86,904         75,326

Cost of revenues (1):
Recurring revenues                                     16,926         14,788
Non-recurring revenues                                  9,668          7,239
Amortization of developed technology                    2,541          1,516
                                                -------------  -------------

  Total cost of revenues                               29,135         23,543
                                                -------------  -------------

  Gross margin                                         57,769         51,783

Operating expenses (1):
Sales and marketing                                    18,446         18,184
Product development                                    16,799         12,642
General and administrative                              9,669          9,084
Amortization of other intangibles                         956            320
Restructuring charges                                     104             26
                                                -------------  -------------

  Total operating expenses                             45,974         40,256
                                                -------------  -------------

Income from continuing operations                      11,795         11,527
Interest income and other income (expense), net          (172)            31
                                                -------------  -------------

Income from continuing operations before income
 taxes                                                 11,623         11,558
Provision for income taxes                              4,306          3,654
                                                -------------  -------------

  Net income from continuing operations         $       7,317  $       7,904

Discontinued operation:
  Net income (loss) from discontinued operation
   (net of applicable taxes of $(15) and
   $1,344, respectively)                                  (23)         1,824
                                                -------------  -------------

Net income                                      $       7,294  $       9,728
                                                =============  =============

Basic net income per share:
  Continuing operations                         $        0.14  $        0.15
  Discontinued operation                                    -           0.03
                                                -------------  -------------
    Total operations                            $        0.14  $        0.19
                                                =============  =============

Diluted net income per share:
  Continuing operations                         $        0.14  $        0.14
  Discontinued operation                                    -           0.03
                                                -------------  -------------
    Total operations                            $        0.14  $        0.18
                                                =============  =============

Weighted average shares used to compute net
 income per share:
  Basic                                                51,024         52,201
  Diluted                                              53,363         55,339

(1) Includes stock-based employee compensation
 expense as follows:

  Cost of recurring revenues                    $         585  $         503
  Cost of non-recurring revenues                          331            247
                                                -------------  -------------
    Total cost of revenues                                916            750

  Sales and marketing                                   1,657          1,500
  Product development                                   1,460          1,175
  General and administrative                              856          1,034
                                                -------------  -------------
    Total operating expenses                            3,973          3,709
                                                -------------  -------------

  Total stock-based employee compensation
   expense                                      $       4,889  $       4,459
                                                =============  =============



                           ADVENT SOFTWARE, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (In thousands)
                                (Unaudited)


                                                Three Months Ended March 31
                                               ----------------------------
                                                    2012           2011
                                               -------------  -------------
Cash flows from operating activities:
  Net income                                   $       7,294  $       9,728
  Adjustment to net income for discontinued
   operation                                              23         (1,824)
                                               -------------  -------------
  Net income from continuing operations        $       7,317  $       7,904

  Adjustments to reconcile net income to net
   cash providedby operating activities from
   continuing operations:
    Stock-based compensation                           4,889          4,459
    Excess tax benefit from stock-based
     compensation                                     (1,493)        (1,344)
    Depreciation and amortization                      6,377          4,417
    Amortization of debt issuance costs                   95              -
    Provision for doubtful accounts                       52             71
    Provision for (reduction of) sales returns           497           (706)
    Deferred income taxes                                (27)           (72)
    Other                                               (151)            38
                                               -------------  -------------
        Effect of statement of operations
         adjustments                                  10,239          6,863
    Changes in operating assets and
     liabilities:
      Accounts receivable                              2,471            509
      Prepaid and other assets                        (1,264)        (1,453)
      Accounts payable                                   434           (670)
      Accrued liabilities                             (8,325)        (5,773)
      Deferred revenues                               (1,029)           961
      Income taxes payable                             3,746          3,252
                                               -------------  -------------
        Effect of changes in operating assets
         and liabilities                              (3,967)        (3,174)
                                               -------------  -------------

Net cash provided by operating activities from
 continuing operations                                13,589         11,593

Cash flows from investing activities:
  Cash used in acquisitions, net of cash
   acquired                                             (700)       (24,648)
  Purchases of property and equipment                 (1,951)        (1,436)
  Capitalized software development costs                (342)        (1,612)
  Purchases of marketable securities                 (33,595)       (26,140)
  Sales and maturities of marketable
   securities                                         34,224         29,408
                                               -------------  -------------

Net cash used in investing activities from
 continuing operations                                (2,364)       (24,428)

Cash flows from financing activities:
  Proceeds from common stock issued from
   exercises of stock options                          1,267          3,161
  Withholding taxes related to equity award
   net share settlement                                 (782)        (2,608)
  Repurchase of common stock                          (6,788)             -
  Repayment of loan borrowing                         (1,250)             -
  Excess tax benefits from stock-based
   compensation                                        1,493          1,344
                                               -------------  -------------

Net cash provided by (used in) financing
 activities from continuing operations                (6,060)         1,897

Net cash transferred from (to) discontinued
 operation                                              (142)         3,078

Effect of exchange rate changes on cash and
 cash equivalents                                        280            213
                                               -------------  -------------

Net change in cash and cash equivalents from
 continuing operations                                 5,303         (7,647)
Cash and cash equivalents of continuing
 operations at beginning of period                    65,525         81,948
                                               -------------  -------------

Cash and cash equivalents of continuing
 operations at end of period                   $      70,828  $      74,301
                                               =============  =============


                                                Three Months Ended March 31
                                               ----------------------------
                                                    2012           2011
                                               -------------  -------------
Supplemental disclosure of cash flow
 information
  Cash flow from discontiued operation:
  Net cash used in operating activities        $        (142) $          74
  Net cash provided by investing activities                -          3,004
  Net cash transferred from (to) continuing
   operations                                            142         (3,078)
  Effect of exchange rates on cash and cash
   equivalents                                             -              -
                                               -------------  -------------
  Net change in cash and cash equivalents from
   discontinued operations                                 -              -
  Cash and cash equivalents of discontinued
   operation at beginning of period                        -              -
                                               -------------  -------------
  Cash and cash equivalents of discontinued
   operation at end of period                  $           -  $           -
                                               =============  =============



                            ADVENT SOFTWARE, INC.
 RECONCILIATION OF SELECTED CONTINUING OPERATIONS' GAAP MEASURES TO NON-GAAP
                                  MEASURES
                    (In thousands, except per share data)
                                 (Unaudited)

To supplement our condensed consolidated financial statements presented on a GAAP basis, Advent uses non-GAAP measures of continuing operations' operating income, net income and net income per share, which are adjusted to exclude certain costs, expenses, gains and losses we believe appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our current period GAAP results are made with the intent of providing both management and investors a more complete understanding of Advent's underlying operational results and trends and our marketplace performance. In addition, these adjusted non-GAAP results are among the information management uses as a basis for our planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States of America.


                           Three Months Ended March 31, 2012 for Continuing
                                              Operations
                           ------------------------------------------------
                             Gross    Gross    Operating Operating    Net
                            Margin  Margin %    Income    Income %   Income
                           -------- --------  ---------- ---------  -------

GAAP                       $ 57,769       66% $   11,795        14% $ 7,317

  Amortization of acquired
   developed technology       1,896                1,896              1,896
  Amortization of other
   acquired intangibles           -                  956                956
  Stock-based compensation
   - cost of revenues           916                  916                916
  Stock-based compensation
   - operating expenses           -                3,973              3,973
  Restructuring charges           -                  104                104
  Income tax adjustment
   for non-GAAP (1)               -                    -             (2,508)

                           --------           ----------            -------
Non-GAAP                   $ 60,581       70% $   19,640        23% $12,654
                           ========           ==========            =======

Diluted net income per
 share
  GAAP                                                              $  0.14
  Non-GAAP                                                          $  0.24

Shares used to compute
 diluted net income per
 share                                                               53,363

                           Three Months Ended March 31, 2011 for Continuing
                                              Operations
                           ------------------------------------------------
                             Gross    Gross    Operating Operating    Net
                            Margin  Margin %    Income    Income %   Income
                           -------- --------  ---------- ---------  -------

GAAP                       $ 51,783       69% $   11,527        15% $ 7,904

  Amortization of acquired
   developed technology         916                  916                916
  Amortization of other
   acquired intangibles           -                  320                320
  Stock-based compensation
   - cost of revenues           750                  750                750
  Stock-based compensation
   - operating expenses           -                3,709              3,709
  Acquisition related
   expenses                       -                  450                450
  Restructuring charges           -                   26                 26
  Income tax adjustment
   for non-GAAP (1)               -                    -             (2,551)

                           --------           ----------            -------
Non-GAAP                   $ 53,449       71% $   17,698        23% $11,524
                           ========           ==========            =======

Diluted net income per
 share
  GAAP                                                              $  0.14
  Non-GAAP                                                          $  0.21

Shares used to compute
 diluted net income per
 share                                                               55,339

(1) The estimated non-GAAP effective tax rate was 35% for the three months
    ended March 31, 2012 and 2011, respectively, and has been used to adjust
    the provision for income taxes for non-GAAP purposes.



                            Advent Software, Inc.
 Reconciliation of Projected Continuing Operations' GAAP Operating Income %
                       to Non-GAAP Operating Income %
                         (Preliminary and unaudited)

Advent provides projections of non-GAAP measures of its continuing operations' operating income, which exclude certain costs, expenses, gains and losses which it believes is appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. These adjustments to our projected continuing operations' GAAP results are made with the intent of providing management and investors a more complete understanding continuing operations' underlying operational results and trends and our marketplace performance. In addition, these adjusted non-GAAP projections are among the information management uses as a basis for planning and forecasting of future periods. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with generally accepted accounting principles in the United States of America.


                                                       Twelve Months Ended
                                                        December 31, 2012
                                                      Continuing Operations
                                                       Operating Income %
                                                    ------------------------

Projected GAAP                                        14.0%    to     14.5%
                                                    ========================

  Projected amortization of acquired developed
   technologyand other acquired intangible asset
   adjustment                                                  3%
  Projected stock-based compensation adjustment                6%

                                                    ------------------------
Projected non-GAAP                                    23.0%    to     23.5%
                                                    ========================


CONTACT
Media Contact:
Smita Topolski
Advent Software, Inc.
(415) 645-1668
Email Contact

Investor Relations Contact:
Heidi Flaherty
Advent Software, Inc.
(415) 645-1145
Email Contact

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