SAN FRANCISCO, CA--(Marketwired - July 29, 2013) - Advent Software, Inc. (
"I am pleased to report Advent delivered a strong second quarter with record revenue and non-GAAP profitability, and strong renewals," said Pete Hess, Chief Executive Officer at Advent. "We continue to win new business, while also investing in our solutions, and we're doing it all while ensuring that we deliver the operational efficiency gains we're committed to achieving. It is exciting to see these results as we continue to execute on our strategy and deliver results and value to our shareholders and clients."
SECOND QUARTER 2013 RESULTS
Recapitalization Transaction
As previously announced, the Company entered into a new $425 million senior credit facility and declared a one-time special cash dividend of $9 per share. In connection with the dividend, the Company modified its outstanding equity awards to preserve the pre-dividend economic value. The special dividend was approved by Advent's Board of Directors on June 12, 2013 and paid to stockholders on July 9, 2013. Of the $9 per share distribution, totaling $470 million, Advent currently expects between $2 to $3 per share to be characterized as a dividend for tax purposes, and the remaining amount of the distribution to be characterized as a return of capital.
GAAP Results for Continuing Operations
The Company reported quarterly revenue of $96.1 million for the second quarter of 2013, compared to $89.7 million in the second quarter of 2012, a 7% increase.
Advent's results for the second quarter of 2013 included costs associated with the recapitalization transaction. These costs, on a pre-tax basis, were composed of $6.7 million of third party costs which were not included in capitalized debt issue costs and $21.9 million of stock-based compensation expense associated with the equity award modification.
Operating loss for the second quarter of 2013 was $(5.8) million, or (6.1)% of revenue, compared to operating income of $12.1 million or 13.4% of revenue for the second quarter of 2012.
Net loss for the second quarter of 2013 was $(4.2) million compared to net income of $7.2 million in the second quarter of 2012.
Diluted net loss per share in the second quarter of 2013 was $(0.08), compared to diluted net income per share of $0.14 in the second quarter of 2012.
Operating cash flow in the second quarter of 2013 was $21.9 million, compared with $14.9 million in the second quarter of 2012.
Cash, cash equivalents and marketable securities totaled $404 million as of June 30, 2013, compared to $247 million as of March 31, 2013, a 64% increase. Total outstanding debt as of June 30, 2013 was $225 million compared to $93 million as of March 31, 2013. After payment of the special dividend on July 9th, 2013, total outstanding debt was $350 million. Total deferred revenue as of June 30, 2013 was $174 million, compared to $177 million as of March 31, 2013.
Non-GAAP Results for Continuing Operations
Non-GAAP operating income for the second quarter of 2013 was $31.0 million, or 32.3% of revenue. This represents a 55% increase compared to $20.0 million from continuing operations, or 22.3% of revenue, in the second quarter of 2012. On a fully diluted basis, non-GAAP earnings per share were $0.37 in the second quarter of 2013 and represent a 56% increase from non-GAAP diluted earnings per share of $0.24 in the second quarter of 2012.
The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.
SECOND QUARTER HIGHLIGHTS
- Second Quarter Bookings and Client Success: The annual contract value of our new contract bookings in the second quarter of 2013 will contribute $6.7 million in incremental annual revenue once the contracts are fully implemented. New clients include Income Partners Asset Management, Al Rajhi Capital, DMA Direct, Halkyon Alpha LLC, F-Squared Investment Management, and Tages Capital. Atlantis Investment Management and Heptagon Capital Management, two UK asset managers, have grown their relationships with Advent this quarter, increasing the benefits to their businesses delivered by Advent Portfolio Exchange® and Tamale®, respectively. Saudi Fransi Capital is in production with Geneva®, Moxy® and Tradex® to support their business.
- Award-Winning Solutions & Company: Advent's solutions continued to receive industry awards and win honors around the world this quarter. Advent was named "Technology Vendor of the Year" by Citywealth magazine in the UK; the FSO Knowledge Exchange named Advent Rules Manager®, one of Advent Portfolio Exchange's associated products, for "Excellence in Risk Management & Compliance"; Advent was awarded the "Best Fund Accounting and Reporting Software" for the HFMWeek European award; and the UK Systems in the City Awards recognized Advent for "Best Research Management Tool" for Tamale RMS®. Advent also continues to win accolades among industry analysts. Advent was recognized as Best-in-Class across three categories for the Advisor Desktop analysis by leading industry analyst -- CEB TowerGroup -- and Best-in-Class for the Performance Measurement analysis. Advent also made the list of San Francisco Business Times' Top Corporate Givers.
FINANCIAL GUIDANCE
Advent updates the following financial guidance for the third quarter and fiscal year 2013:
| Guidance | Q3 2013 | FY 2013 | |||
| Total Revenue ($M) | $93-$95 | $375-$379 | |||
| YoY Revenue Growth | 3% - 5% | 5% - 6% | |||
| GAAP Operating Margin | n/a | 10.0% - 10.5% | |||
| Amortization of Intangibles (% of revenue) | n/a | 3.0% | |||
| Stock Compensation Expense (% of revenue) | n/a | 13.0% | |||
| Restructuring Charges (% of revenue) | n/a | 1.0% | |||
| Recapitalization Costs (% of revenue) | n/a | 1.5% | |||
| Non-GAAP Operating Margin | n/a | 28.5% - 29.0% | |||
| Operating Cash Flow ($M) | n/a | $93-$97 | |||
| Capital Expenditures ($M) | n/a | $10-$12 | |||
| Effective Tax Rate (GAAP) | n/a | 30% - 35% | |||
| Effective Tax Rate (non-GAAP) | n/a | 35% | |||
INVESTOR CALL
Advent Software, Inc. will host its Q2 2013 quarterly earnings conference call at 5:00 p.m. Eastern time today. The Q2 2013 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) 706-7745 and request conference ID #45297160. Telephone replay will be available through midnight August 5, 2013. The replay number for domestic callers is (888) 286-8010, and for international callers is (617) 801-6888, with the conference ID of #97701426.
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 in the United States of America (U.S. GAAP), please see the accompanying tables entitled "Reconciliation of Selected Continuing Operations' GAAP Measures to Non-GAAP Measures."
FORWARD-LOOKING STATEMENTS
The financial projections under Financial Guidance, and statements regarding our momentum and market opportunities, the tax characterization of our special dividend, 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 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 achieving organizational objectives 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 2012 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 Rules Manager, Advent Portfolio Exchange, Tamale, and Tamale RMS, are registered trademarks of Advent Software, Inc. Tradex is a registered mark of Advent Norway AS in Norway and the European Union. 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 | |||||||||
| 2013 | 2012 | |||||||||
| ASSETS | ||||||||||
| Current assets: | ||||||||||
| Cash and cash equivalents | $ | 388,743 | $ | 58,217 | ||||||
| Short-term marketable securities | 6,013 | 111,192 | ||||||||
| Accounts receivable, net | 55,375 | 61,069 | ||||||||
| Deferred taxes, current | 18,931 | 18,934 | ||||||||
| Prepaid expenses and other | 34,152 | 25,868 | ||||||||
| Current assets of discontinued operation | - | 88 | ||||||||
| Total current assets | 503,214 | 275,368 | ||||||||
| Property and equipment, net | 32,917 | 37,269 | ||||||||
| Goodwill | 204,417 | 206,932 | ||||||||
| Other intangibles, net | 32,858 | 38,205 | ||||||||
| Long-term marketable securities | 9,230 | 61,552 | ||||||||
| Deferred taxes, long-term | 23,509 | 24,524 | ||||||||
| Other assets | 16,816 | 12,994 | ||||||||
| Noncurrent assets of discontinued operation | 1,609 | 1,609 | ||||||||
| Total assets | $ | 824,570 | $ | 658,453 | ||||||
| LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 8,773 | $ | 5,190 | ||||||
| Accrued liabilities | 40,159 | 37,096 | ||||||||
| Deferred revenues | 166,284 | 174,388 | ||||||||
| Income taxes payable | - | 5,593 | ||||||||
| Current portion of long-term debt | 20,000 | 10,000 | ||||||||
| Dividends payable | 470,133 | - | ||||||||
| Current liabilities of discontinued operation | 610 | 262 | ||||||||
| Total current liabilities | 705,959 | 232,529 | ||||||||
| Deferred revenues, long-term | 8,107 | 8,787 | ||||||||
| Long-term income taxes payable | 5,335 | 5,335 | ||||||||
| Long-term debt | 205,000 | 85,000 | ||||||||
| Other long-term liabilities | 11,910 | 13,139 | ||||||||
| Noncurrent liabilities of discontinued operation | 3,072 | 3,804 | ||||||||
| Total liabilities | 939,383 | 348,594 | ||||||||
| Stockholders' (deficit) equity: | ||||||||||
| Common stock | 522 | 505 | ||||||||
| Additional paid-in capital | 24,582 | 453,585 | ||||||||
| Accumulated deficit | (146,271 | ) | (154,261 | ) | ||||||
| Accumulated other comprehensive income | 6,354 | 10,030 | ||||||||
| Total stockholders' (deficit) equity | (114,813 | ) | 309,859 | |||||||
| Total liabilities and stockholders' (deficit) equity | $ | 824,570 | $ | 658,453 | ||||||
| ADVENT SOFTWARE, INC. | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||||
| (GAAP, Unaudited) | ||||||||||||||||||
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Net revenues: | ||||||||||||||||||
| Recurring revenues | $ | 88,263 | $ | 80,942 | $ | 172,746 | $ | 159,662 | ||||||||||
| Non-recurring revenues | 7,860 | 8,782 | 15,867 | 16,966 | ||||||||||||||
| Total net revenues | 96,123 | 89,724 | 188,613 | 176,628 | ||||||||||||||
| Cost of revenues (1): | ||||||||||||||||||
| Recurring revenues | 17,979 | 17,820 | 34,391 | 34,746 | ||||||||||||||
| Non-recurring revenues | 10,019 | 10,936 | 19,587 | 20,604 | ||||||||||||||
| Amortization of developed technology | 2,398 | 2,573 | 4,897 | 5,114 | ||||||||||||||
| Total cost of revenues | 30,396 | 31,329 | 58,875 | 60,464 | ||||||||||||||
| Gross margin | 65,727 | 58,395 | 129,738 | 116,164 | ||||||||||||||
| Operating expenses (1): | ||||||||||||||||||
| Sales and marketing | 23,217 | 19,711 | 40,421 | 38,157 | ||||||||||||||
| Product development | 17,923 | 16,501 | 34,885 | 33,300 | ||||||||||||||
| General and administrative | 22,641 | 9,198 | 33,001 | 18,867 | ||||||||||||||
| Amortization of other intangibles | 953 | 956 | 1,910 | 1,912 | ||||||||||||||
| Recapitalization costs | 6,041 | - | 6,041 | - | ||||||||||||||
| Restructuring charges | 801 | (34 | ) | 3,116 | 70 | |||||||||||||
| Total operating expenses | 71,576 | 46,332 | 119,374 | 92,306 | ||||||||||||||
| (Loss) income from continuing operations | (5,849 | ) | 12,063 | 10,364 | 23,858 | |||||||||||||
| Interest and other income (expense), net | (1,330 | ) | (803 | ) | (1,633 | ) | (975 | ) | ||||||||||
| (Loss) income from continuing operations before income taxes | (7,179 | ) | 11,260 | 8,731 | 22,883 | |||||||||||||
| (Benefit) provision for income taxes | (3,024 | ) | 4,063 | 829 | 8,369 | |||||||||||||
| Net (loss) income from continuing operations | $ | (4,155 | ) | $ | 7,197 | $ | 7,902 | $ | 14,514 | |||||||||
| Discontinued operation: | ||||||||||||||||||
| Net income from discontinued operation (net of applicable taxes of $76, $162, $61 and $147, respectively) | 110 | 245 | 88 | 222 | ||||||||||||||
| Net (loss) income | $ | (4,045 | ) | $ | 7,442 | $ | 7,990 | $ | 14,736 | |||||||||
| Basic net (loss) income per share (2): | ||||||||||||||||||
| Continuing operations | $ | (0.08 | ) | $ | 0.14 | $ | 0.15 | $ | 0.29 | |||||||||
| Discontinued operation | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||
| Total operations | $ | (0.08 | ) | $ | 0.15 | $ | 0.16 | $ | 0.29 | |||||||||
| Diluted net (loss) income per share (2): | ||||||||||||||||||
| Continuing operations | $ | (0.08 | ) | $ | 0.14 | $ | 0.15 | $ | 0.27 | |||||||||
| Discontinued operation | 0.00 | 0.00 | 0.00 | 0.00 | ||||||||||||||
| Total operations | $ | (0.08 | ) | $ | 0.14 | $ | 0.15 | $ | 0.28 | |||||||||
| Weighted average shares used to compute net (loss) income per share: | ||||||||||||||||||
| Basic | 51,639 | 50,754 | 51,101 | 50,887 | ||||||||||||||
| Diluted | 51,639 | 52,977 | 52,243 | 53,117 | ||||||||||||||
| (1) Includes stock-based employee compensation expense as follows: | ||||||||||||||||||
| Cost of recurring revenues | $ | 1,306 | $ | 610 | $ | 1,794 | $ | 1,195 | ||||||||||
| Cost of non-recurring revenues | 1,730 | 264 | 2,112 | 595 | ||||||||||||||
| Total cost of revenues | 3,036 | 874 | 3,906 | 1,790 | ||||||||||||||
| Sales and marketing | 6,523 | 1,729 | 8,046 | 3,386 | ||||||||||||||
| Product development | 3,532 | 1,438 | 4,858 | 2,898 | ||||||||||||||
| General and administrative | 14,098 | 1,043 | 15,396 | 1,899 | ||||||||||||||
| Total operating expenses | 24,153 | 4,210 | 28,300 | 8,183 | ||||||||||||||
| Total stock-based employee compensation expense | $ | 27,189 | $ | 5,084 | $ | 32,206 | $ | 9,973 | ||||||||||
| (2) Net income per share is based on actual calculated values and totals may not sum due to rounding. | ||||||||||||||||||
| ADVENT SOFTWARE, INC. | ||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| (In thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| Six Months Ended June 30 | ||||||||||||
| 2013 | 2012 | |||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net income | $ | 7,990 | $ | 14,736 | ||||||||
| Adjustment to net income for discontinued operation net income | (88 | ) | (222 | ) | ||||||||
| Net income from continuing operations | 7,902 | 14,514 | ||||||||||
| Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: | ||||||||||||
| Stock-based compensation | 32,206 | 9,973 | ||||||||||
| Excess tax benefit from stock-based compensation | (2,783 | ) | (3,118 | ) | ||||||||
| Depreciation and amortization | 12,673 | 12,851 | ||||||||||
| Amortization of debt issuance costs | 239 | 190 | ||||||||||
| Gain on disposal of fixed assets | - | (16 | ) | |||||||||
| Provision for doubtful accounts | 411 | 200 | ||||||||||
| Provision for (reduction of) sales reserves | (150 | ) | 735 | |||||||||
| Deferred income taxes | 1,791 | 2,588 | ||||||||||
| Other | (148 | ) | (144 | ) | ||||||||
| Effect of statement of operations adjustments | 44,239 | 23,259 | ||||||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | 5,282 | 5,109 | ||||||||||
| Prepaid and other assets | (4,643 | ) | 277 | |||||||||
| Accounts payable | 3,582 | 532 | ||||||||||
| Accrued liabilities | (3,472 | ) | (7,020 | ) | ||||||||
| Deferred revenues | (8,634 | ) | (12,000 | ) | ||||||||
| Income taxes payable | (5,190 | ) | 3,847 | |||||||||
| Effect of changes in operating assets and liabilities | (13,075 | ) | (9,255 | ) | ||||||||
| Net cash provided by operating activities from continuing operations | 39,066 | 28,518 | ||||||||||
| Cash flows from investing activities: | ||||||||||||
| Cash used in acquisition | - | (700 | ) | |||||||||
| Purchases of property and equipment | (1,611 | ) | (3,720 | ) | ||||||||
| Capitalized software development costs | (1,916 | ) | (1,700 | ) | ||||||||
| Purchases of marketable securities | (57,863 | ) | (72,270 | ) | ||||||||
| Sales and maturities of marketable securities | 213,444 | 60,344 | ||||||||||
| Net cash provided by (used in) investing activities from continuing operations | 152,054 | (18,046 | ) | |||||||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from common stock issued from exercises of stock options | 16,212 | 3,269 | ||||||||||
| Proceeds from common stock issued under the employee stock purchase plan | 3,211 | 3,448 | ||||||||||
| Excess tax benefits from stock-based compensation | 2,783 | 3,118 | ||||||||||
| Withholding taxes related to equity award net share settlement | (6,509 | ) | (4,610 | ) | ||||||||
| Proceeds from debt | 225,000 | - | ||||||||||
| Repayment of debt | (95,000 | ) | (2,500 | ) | ||||||||
| Debt issuance costs | (5,725 | ) | - | |||||||||
| Repurchase of common stock | - | (26,125 | ) | |||||||||
| Net cash provided by (used in) financing activities from continuing operations | 139,972 | (23,400 | ) | |||||||||
| Net cash transferred to discontinued operation | (208 | ) | (337 | ) | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | (358 | ) | (10 | ) | ||||||||
| Net change in cash and cash equivalents from continuing operations | 330,526 | (13,275 | ) | |||||||||
| Cash and cash equivalents of continuing operations at beginning of period | 58,217 | 65,525 | ||||||||||
| Cash and cash equivalents of continuing operations at end of period | $ | 388,743 | $ | 52,250 | ||||||||
| Six Months Ended June 30 | ||||||||||||
| 2013 | 2012 | |||||||||||
| Supplemental disclosure of cash flow information | ||||||||||||
| Cash flows from discontinued operation: | ||||||||||||
| Net cash used in operating activities | $ | (208 | ) | $ | (337 | ) | ||||||
| Net cash provided by investing activities | - | - | ||||||||||
| Net cash transferred from continuing operations | 208 | 337 | ||||||||||
| Net change in cash and cash equivalents from discontinued operation | - | - | ||||||||||
| Cash and cash equivalents of discontinued operation at beginning of period | - | - | ||||||||||
| Cash and cash equivalents of discontinued operation at end of period | $ | - | $ | - | ||||||||
| The cash flows from the discontinued operation, as presented in the condensed consolidated statement of cash flows, relate to the operations of MicroEdge, Inc. | ||||||||||||
| ADVENT SOFTWARE, INC. | ||||||||||||||||||
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||||||||||||
| (In thousands) | ||||||||||||||||||
| (GAAP, Unaudited) | ||||||||||||||||||
| Accumulated | ||||||||||||||||||
| Additional | Other | Total | ||||||||||||||||
| Common Stock | Paid-In | Accumulated | Comprehensive | Stockholders' | ||||||||||||||
| Shares | Amount | Capital | Deficit | Income | Equity (Deficit) | |||||||||||||
| Balances, December 31, 2011 | 50,997 | $ | 510 | $ | 429,734 | $ | (154,053 | ) | $ | 6,870 | $ | 283,061 | ||||||
| Stock-based award activity | 556 | 5 | (1,333 | ) | - | - | (1,328 | ) | ||||||||||
| Common stock repurchased and retired | (1,012 | ) | (10 | ) | (6,515 | ) | (19,599 | ) | - | (26,124 | ) | |||||||
| Common stock issued under employee stock | ||||||||||||||||||
| purchase plan | 155 | 2 | 3,446 | - | - | 3,448 | ||||||||||||
| Stock-based compensation | - | - | 10,148 | - | - | 10,148 | ||||||||||||
| Tax benefit from exercise of stock options | - | - | 3,118 | - | - | 3,118 | ||||||||||||
| Net income | - | - | - | 14,736 | - | 14,736 | ||||||||||||
| Unrealized loss on marketable securities | - | - | - | - | (16 | ) | (16 | ) | ||||||||||
| Foreign currency translation adjustments | - | - | - | - | (537 | ) | (537 | ) | ||||||||||
| Balances, June 30, 2012 | 50,696 | $ | 507 | $ | 438,598 | $ | (158,916 | ) | $ | 6,317 | $ | 286,506 | ||||||
| Balances, December 31, 2012 | 50,457 | $ | 505 | $ | 453,585 | $ | (154,261 | ) | $ | 10,030 | $ | 309,859 | ||||||
| Stock-based award activity | 1,606 | 15 | 9,691 | - | - | 9,706 | ||||||||||||
| Common stock issued under employee stock | ||||||||||||||||||
| purchase plan | 174 | 2 | 3,209 | - | - | 3,211 | ||||||||||||
| Stock-based compensation | - | - | 26,621 | - | - | 26,621 | ||||||||||||
| Tax shortfall from exercise of stock options | - | - | (1,174 | ) | - | - | (1,174 | ) | ||||||||||
| Tax benefit from exercise of stock options | - | - | 2,783 | - | - | 2,783 | ||||||||||||
| Cash dividends declared on common stock | - | - | (470,133 | ) | - | - | (470,133 | ) | ||||||||||
| Net income | - | - | - | 7,990 | - | 7,990 | ||||||||||||
| Unrealized loss on marketable securities | - | - | - | - | (26 | ) | (26 | ) | ||||||||||
| Foreign currency translation adjustments | - | - | - | - | (3,650 | ) | (3,650 | ) | ||||||||||
| Balances, June 30, 2013 | 52,237 | $ | 522 | $ | 24,582 | $ | (146,271 | ) | $ | 6,354 | $ | (114,813 | ) | |||||
| 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 in accordance with generally accepted accounting principles in the United States of America (or GAAP), Advent uses non-GAAP measures of continuing operations' gross margin, operating income, net income and net income per share, which are adjusted to exclude certain costs, expenses, income, 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 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 GAAP.
| Three Months Ended June 30 | |||||||||||||||
| 2013 | 2012 | ||||||||||||||
| Amount | % of Net Revenues | Amount | % of Net Revenues | ||||||||||||
| GAAP gross margin | $ | 65,727 | 68.4 | % | $ | 58,395 | 65.1 | % | |||||||
| Amortization of acquired intangibles | 1,883 | 1,901 | |||||||||||||
| Stock-based compensation | 3,036 | 874 | |||||||||||||
| Non-GAAP gross margin | $ | 70,646 | 73.5 | % | $ | 61,170 | 68.2 | % | |||||||
| GAAP operating (loss) income | $ | (5,849 | ) | (6.1 | )% | $ | 12,063 | 13.4 | % | ||||||
| Amortization of acquired intangibles | 2,836 | 2,857 | |||||||||||||
| Stock-based compensation | 27,189 | 5,084 | |||||||||||||
| Restructuring charges (benefit) | 801 | (34 | ) | ||||||||||||
| Recapitalization costs | 6,041 | - | |||||||||||||
| Non-GAAP operating income | $ | 31,018 | 32.3 | % | $ | 19,970 | 22.3 | % | |||||||
| GAAP net (loss) income | $ | (4,155 | ) | $ | 7,197 | ||||||||||
| Amortization of acquired intangibles | 2,836 | 2,857 | |||||||||||||
| Stock-based compensation | 27,189 | 5,084 | |||||||||||||
| Restructuring charges (benefit) | 801 | (34 | ) | ||||||||||||
| Recapitalization costs | 6,692 | - | |||||||||||||
| Income tax adjustment (1) | (13,642 | ) | (2,645 | ) | |||||||||||
| Non-GAAP net income | $ | 19,721 | $ | 12,459 | |||||||||||
| GAAP net (loss) income | $ | (4,155 | ) | $ | 7,197 | ||||||||||
| Net interest | 1,351 | 457 | |||||||||||||
| (Benefit) provision for income taxes | (3,024 | ) | 4,063 | ||||||||||||
| Depreciation expense | 2,920 | 2,943 | |||||||||||||
| Amortization expense | 3,352 | 3,529 | |||||||||||||
| Stock-based compensation | 27,189 | 5,084 | |||||||||||||
| Adjusted EBITDA | $ | 27,633 | $ | 23,273 | |||||||||||
| Diluted net income (loss) per share | |||||||||||||||
| GAAP | $ | (0.08 | ) | $ | 0.14 | ||||||||||
| Non-GAAP | $ | 0.37 | $ | 0.24 | |||||||||||
| Shares used to compute GAAP diluted net (loss) income per share | 51,639 | 52,977 | |||||||||||||
| Shares used to compute Non-GAAP diluted net income per share | 53,772 | 52,977 | |||||||||||||
| (1) | The estimated non-GAAP effective tax rate was 35% for the three months ended June 30, 2013 and 2012, respectively, and has been used to adjust the provision for income taxes for non-GAAP net income and non-GAAP diluted net income per share purposes. | |
| ADVENT SOFTWARE, INC. |
| RECONCILIATION OF PROJECTED CONTINUING OPERATIONS' GAAP OPERATING INCOME % |
| TO NON-GAAP OPERATING INCOME % |
| (Preliminary and unaudited) |
Advent provides projections for the non-GAAP measure of its continuing operations' operating income percentage. This non-GAAP measure excludes certain costs, expenses, gains and losses which we believe is appropriate to enhance an overall understanding of our past financial performance and also our prospects for the future. Adjustments to our projected continuing operations' 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. 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 Ending December 31, 2013 | ||||
| Continuing Operations | ||||
| Operating Income % | ||||
| Projected GAAP | 10.0% | to | 10.5% | |
| Projected amortization of acquired developed technology | ||||
| and other acquired intangible asset adjustment | 3.0% | |||
| Projected stock-based compensation adjustment | 13.0% | |||
| Projected restructuring charge adjustment | 1.0% | |||
| Projected recapitalization costs | 1.5% | |||
| Projected non-GAAP | 28.5% | to | 29.0% | |