Company Also Announces Strong Quarterly Operating Cash Flow of $25.8 Million SAN FRANCISCO, July 29
SAN FRANCISCO, July 29 /PRNewswire-FirstCall/ -- Advent Software, Inc.
(Nasdaq: ADVS), a leading provider of software and services to the investment
management industry, announced today its financial results for the second
quarter ended June 30, 2008.
"We are delighted to report that Advent had another outstanding quarter
that included record revenue, as well as strong operating cash flow, term
license contract value and other bookings," said Stephanie DiMarco, Founder
and Chief Executive Officer of Advent. "We are seeing tremendous growth
internationally and continued demand in the U.S. We are in the midst of
another terrific year and believe we are well positioned for future growth and
profitability."
GAAP RESULTS
The Company reported record revenue of $64.0 million for the second
quarter of 2008, compared to $52.4 million in the second quarter of 2007, a
22% increase.
Income from operations for the second quarter of 2008 was $5.1 million, or
8% of revenue, which represented an increase of 67% compared with $3.0
million, or 6% of revenue, in the second quarter of 2007.
Net income for the second quarter of 2008 was $7.4 million compared to net
income of $5.1 million in the second quarter of 2007, a 44% increase.
On a fully diluted basis, earnings per share in the second quarter of 2008
were $0.26 and represent a 43% increase from diluted earnings per share of
$0.18 in the second quarter of 2007.
Cash flow from operations in the second quarter of 2008 was $25.8 million,
compared with $12.0 million in the second quarter of 2007. Cash and cash
equivalents totaled $82.4 million as of June 30, 2008, compared to $58.0
million as of March 31, 2008.
Deferred revenues as of June 30, 2008 were $130.6 million, compared to
$122.9 million as of March 31, 2008.
NON-GAAP RESULTS
Non-GAAP income from operations for the second quarter of 2008 was $9.4
million, resulting in non-GAAP operating margin of 15%. This represents a 27%
increase compared to non-GAAP income from operations of $7.4 million and
non-GAAP operating margin of 14% in the second quarter of 2007.
On a non-GAAP basis, net income for the second quarter of 2008 was $6.2
million, or $0.22 per diluted share, which represented an increase of 26%
compared with $4.9 million, or $0.18 per diluted share, for the second quarter
of 2007.
The reconciliation between GAAP and non-GAAP financial measures is
provided at the end of this press release.
SECOND QUARTER HIGHLIGHTS
-- Operating Cash Flow: Advent's operating cash flow was $25.8 million
for the second quarter of 2008. The four quarter trailing growth rate was
40%. Days sales outstanding (DSO) were 59 days in the second quarter of 2008
versus 67 days during the same period last year.
-- TIAA-CREF: Advent was selected by TIAA-CREF, the leading provider of
retirement services in the academic, medical and cultural fields, to build an
innovative service to address new regulatory challenges faced by 403(b)
retirement plan administrators. The service will leverage Advent's custodial
data infrastructure (ACD) to aggregate data from multiple vendors to help
prevent non-compliant transactions before they occur and enable plan providers
to verify compliance.
-- Term License Growth: Advent's term license contract value (TCV),
including migrations, was $21.2 million for the second quarter of 2008. With
an average term of 3.1 years, the corresponding annual contract value (ACV)
was approximately $6.9 million, an increase of 9% over the same period last
year. When fully implemented, the term license contracts signed in the second
quarter will add an additional $6.9 million to annual term license revenue.
The four quarter trailing growth rates for TCV and ACV were 55% and 47%,
respectively. It should be noted the TIAA-CREF contract is for data services,
rather than a term license, and as such is not included in term license
contract value, however, after meeting certain milestones and acceptance, the
expected total value of that contract exceeds the term license contract value
reported for the second quarter of 2008.
-- Customer Momentum for APX and Geneva(R): Advent saw continued momentum
in customer wins for its award-winning portfolio accounting platforms. The
Company sold a second quarter record of 25 Advent Portfolio Exchange(R)
("APX") contracts, bringing the total number of APX contracts sold to 237
worldwide. Advent also sold 12 new Geneva(R) contracts, bringing the total
number of Geneva(R) contracts sold to 176 worldwide.
Advent has also announced that its Chief Financial Officer, Craig Collins,
has left the Company. Mr. Collins will spend more time with family and pursue
other opportunities. Mr. Collins has made himself available as required to
help in any transition. In the interim, Chief Executive Officer Stephanie
DiMarco will be responsible for the operations of Advent's finance department.
Jim Cox, Advent's Vice President and Corporate Controller, has been named
Advent's Principal Accounting Officer.
FINANCIAL GUIDANCE
All 2008 guidance figures shown in the table below represent increases
from previous guidance.
Q308 FY08
Total Revenue ($M) $64 - $66$254-$258
Non-GAAP Operating Margin n/a 15% - 17%
Non-GAAP Diluted EPS ($)n/a $0.91 - $1.03
GAAP Diluted EPS ($)n/a $0.58 - $0.70
Operating Cash Flow ($M)n/a $70 - $73
-- The effective tax rate for the full year 2008 remains in the range of
30% to 35%, assuming the R&D tax credit is not renewed by Congress and 35% is
used for the Company's calculations of non-GAAP diluted EPS.
-- Diluted weighted average shares outstanding are still expected to
increase by approximately 0.5% to 1.0% per quarter, excluding the impact of
any potential share repurchase and 0.75% growth in diluted weighted average
shares outstanding is used for guidance purposes.
Please refer to the tables at the end of this release for the
reconciliation between GAAP and non-GAAP financial measures.
INVESTOR CALL
Advent Software, Inc. will host its Q2 2008 quarterly earnings conference
call at 5:00 p.m. Eastern time today. The Q2 2008 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 888-812-3873 and request conference ID
#55226469. A replay will be available through midnight, August 5, 2008, by
calling 800-642-1687 and referencing conference ID #55226469. The conference
call will also be webcast live and then archived on
http://investor.advent.com.
ABOUT ADVENT
Advent Software, Inc. (http://www.advent.com), a global firm, has provided
trusted solutions to the world's leading financial professionals since 1983.
Firms in 60 countries use Advent technology and manage investments totaling
nearly US $18 trillion. 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, our growth
internationally and demand in the US, and 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 results and future growth
rates; continued market acceptance of our APX, Geneva(R) and Moxy(R) products;
the successful development and market acceptance of new products and product
enhancements; continued uncertainties and fluctuations in the financial
markets; the Company's ability to satisfy contractual performance
requirements; 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 2007
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.
The Advent logo, Advent Portfolio Exchange, Geneva and Moxy are registered
trademarks 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)
June 30 December 31
2008 2007
ASSETS
Current assets:
Cash and cash equivalents$82,443 $49,589
Accounts receivable, net 41,40147,574
Deferred taxes, current 10,28810,288
Prepaid expenses and other19,94919,577
Total current assets 154,081 127,028
Property and equipment, net 33,55827,779
Goodwill 108,600 106,520
Other intangibles, net 7,644 9,376
Deferred taxes, long-term 70,98070,981
Other assets, net 11,12210,645
Total assets $385,985 $352,329
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $7,417$4,382
Accrued liabilities 23,73429,328
Deferred revenues124,287 115,398
Income taxes payable 3,065 1,086
Total current liabilities 158,503 150,194
Deferred income taxes 811 998
Deferred revenues, long-term 6,336 4,939
Other long-term liabilities 16,19516,352
Total liabilities 181,845 172,483
Stockholders' equity:
Common stock 268 265
Additional paid-in capital 338,843 326,964
Accumulated deficit (151,695) (161,685)
Accumulated other comprehensive
income 16,72414,302
Total stockholders' equity 204,140 179,846
Total liabilities and stockholders'
equity $385,985 $352,329
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(GAAP, Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2008 2007 2008 2007
Net revenues:
Term license, maintenance and other
recurring $50,838 $42,012 $99,977 $79,736
Perpetual license fees 5,2425,689 10,867 11,616
Professional services and other 7,9474,675 14,6569,003
Total net revenues64,027 52,376 125,500 100,355
Cost of revenues (1):
Term license, maintenance and other
recurring 11,3799,048 22,313 18,080
Perpetual license fees 224 219 541 414
Professional services and other 8,5196,415 16,245 12,288
Amortization of developed technology 732 3221,454 686
Total cost of revenues20,854 16,004 40,553 31,468
Gross margin 43,173 36,372 84,947 68,887
Operating expenses (1):
Sales and marketing 15,626 13,985 31,016 26,874
Product development 13,008 10,816 25,898 20,672
General and administrative 9,2327,837 18,459 16,621
Amortization of other intangibles 242 466 729 940
Restructuring charges (1) 227 55 789
Total operating expenses 38,107 33,331 76,157 65,896
Income from operations 5,0663,0418,7902,991
Interest income and other income, net3,5593,8683,7864,386
Income before income taxes 8,6256,909 12,5767,377
Provision for income taxes 1,2701,8142,5861,843
Net income$7,355 $5,095 $9,990 $5,534
Net income per share:
Basic $0.28$0.19$0.37$0.21
Diluted$0.26$0.18$0.36$0.20
Weighted average shares used to
compute net income per share:
Basic 26,712 26,519 26,641 26,950
Diluted 28,119 27,754 28,046 28,256
(1) Includes stock-based employee
compensation expense as follows:
Cost of term license, maintenance
and other recurring revenues $323 $328 $613 $575
Cost of professional services and
other revenues 258 182 495 357
Total cost of revenues 581 5101,108 932
Sales and marketing1,0991,1672,1372,136
Product development1,009 9001,8801,637
General and administrative 1,1721,0052,1272,123
Total operating expenses 3,2803,0726,1445,896
Total stock-based employee
compensation expense $3,861 $3,582 $7,252 $6,828
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(GAAP, Unaudited)
Six Months Ended June 30
2008 2007
Cash flows from operating activities:
Net income$9,990 5,534
Adjustments to reconcile net income to net
cash provided by operating activities:
Stock-based compensation 7,252 6,828
Depreciation and amortization6,220 5,426
Loss on dispositions of fixed assets 2 49
Provision for doubtful accounts485 51
Provision for (reduction of) sales returns 4 (315)
Gain on investments (3,393)(4,265)
Other-than-temporary loss on private
equity investment - 585
Deferred income taxes (187) (132)
Other3 (5)
Effect of statement of operations
adjustments10,386 8,222
Changes in operating assets and
liabilities:
Accounts receivable5,688 2,704
Prepaid and other assets(571)(2,833)
Accounts payable 3,034599
Accrued liabilities (5,870) (685)
Deferred revenues 10,282 10,695
Income taxes payable 2,100 1,556
Effect of changes in operating
assets and liabilities 14,663 12,036
Net cash provided by operating activities 35,039 25,792
Cash flows from investing activities:
Net cash used in acquisitions- (1,022)
Purchases of property and equipment (9,777)(5,337)
Capitalized software development costs (420) (514)
Proceeds from sale of private equity
investments 3,393 11,621
Sales and maturities of marketable
securities - 24,921
Change in restricted cash (248) (359)
Net cash provided by (used in) investing
activities (7,052)29,310
Cash flows from financing activities:
Proceeds from exercises of employee stock
options 3,240 13,074
Withholding taxes related to equity award
net share settlement (1,271) (33)
Proceeds from common stock issued under
the employee stock purchase plan 2,576 1,829
Repurchase of common stock - (91,157)
Proceeds from long term borrowing- 25,000
Net cash provided by (used in) financing
activities 4,545(51,287)
Effect of exchange rate changes on
cash and cash equivalents 322 58
Net change in cash and cash equivalents 32,854 3,873
Cash and cash equivalents at beginning
of period 49,589 30,187
Cash and cash equivalents at end of
period$82,443$34,060
ADVENT SOFTWARE, INC.
RECONCILIATION OF SELECTED 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 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.
Three Months Ended June 30, 2008
GrossGrossOperating Operating Net
Margin Margin % Income Income % Income
GAAP $43,17367% $5,066 8% $7,355
Amortization of acquired
developed technology 198198 198
Amortization of other
acquired intangibles - 242 242
Stock-based compensation - cost
of revenues581581 581
Stock-based compensation -
operating expenses -3,2803,280
Restructuring charges - (1) (1)
Equity investment adjustment-- (3,393)
Income tax adjustment for
non-GAAP (1) -- (2,066)
Non-GAAP $43,95269% $9,36615%$6,196
Diluted net income per share
GAAP $0.26
Non-GAAP $0.22
Shares used to compute diluted net
income per share 28,119
Three Months Ended June 30, 2007
GrossGrossOperating Operating Net
Margin Margin % Income Income % Income
GAAP $36,372 69%$3,041 6% $5,095
Amortization of acquired
developed technology 7272 72
Amortization of other
acquired intangibles- 466 466
Stock-based compensation
- cost of revenues 510 510 510
Stock-based compensation -
operating expenses - 3,0723,072
Restructuring charges -227 227
Equity investment adjustment - -(3,662)
Income tax adjustment for
non-GAAP (1) - - (844)
Non-GAAP$36,95471%$7,388 14% $4,936
Diluted net income per share
GAAP $0.18
Non-GAAP $0.18
Shares used to compute diluted
net income per share 27,754
(1) The estimated non-GAAP effective tax rate was 35% for the three months
ended June 30, 2008 and 2007, respectively, and has been used to
adjust the provision for income taxes for non-GAAP purposes.
Advent Software, Inc.
Reconciliation of Projected GAAP Operating Income % and Diluted Earnings
Per Share to Non-GAAP Operating Income % and Diluted Earnings Per Share
(Preliminary and unaudited)
Advent provides projections of non-GAAP measures of operating income and
diluted earnings per share, 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 GAAP results are made with the intent of
providing 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 projections are among the information
management uses as a basis for planning and forecasting of future periods.
These 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.
Twelve Months Ended December 31, 2008
Operating Income % Diluted Earnings Per Share
Projected GAAP 8% to 10% $0.58 to $0.70
Projected amortization of
acquired developed technology
and other acquired intangible
asset adjustment 1% $0.07
Projected stock based
compensation adjustment 6% $0.54
Projected restructuring charges
adjustment0% $0.00
Projected in-process research
and development adjustment0% $0.01
Projected investment activity
adjustment n/a $(0.12)
Projected income tax adjustment
for non-GAAP (1) n/a $(0.17)
Projected non-GAAP15% to 17% $0.91 to $1.03
(1) The projected estimated non-GAAP effective tax rate is 35% for the
twelve months ended December 31, 2008 is 35% and has been used to
adjust the projected provision for income taxes for non-GAAP purposes.
SOURCE Advent Software, Inc.
