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8-K - 8-K - ADVENT SOFTWARE INC /DE/a14-4859_18k.htm
EX-99.2 - EX-99.2 - ADVENT SOFTWARE INC /DE/a14-4859_1ex99d2.htm

Exhibit 99.1

 

ADVENT SOFTWARE REPORTS FOURTH QUARTER

AND FULL YEAR 2013 RESULTS

 

Company Achieves Record Quarterly Revenue of $97.6 Million, up 6% and Record Operating Cash Flow of $36.7 Million, up 12%

 

SAN FRANCISCO — February 3, 2014 — 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 fourth quarter and year ended December 31, 2013.

 

“The fourth quarter capped off a year of record revenue and operating cash flow, while we also expanded non-GAAP operating margin to 30% for the year,” said Pete Hess, Chief Executive Officer of Advent. “Advent’s success, including our strong renewal rates, demonstrates our ability to help customers respond to the evolving trends in investment management.  We are excited about our solutions and ability to expand the value we provide to our clients and shareholders.”

 

FOURTH QUARTER AND FULL YEAR 2013 RESULTS

 

GAAP Results for Continuing Operations

 

The Company reported quarterly revenue of $97.6 million for the fourth quarter of 2013, compared to $92.0 million in the fourth quarter of 2012, a 6% increase.  Total annual revenue for the year ended December 31, 2013 was $383.0 million, compared to $358.8 million recorded in 2012, a 7% increase.

 

Operating income for the fourth quarter of 2013 was $18.4 million, or 18.9% of revenue, compared to $12.7 million or 13.8% of revenue for the fourth quarter of 2012.  Operating income for the year ended December 31, 2013 was $46.1 million, or 12.0% of revenue, compared to $49.2 million, or 13.7% of revenue, for 2012. Our operating income for fiscal year 2013 included recapitalization charges of $6.0 million and stock compensation expense of $48.2 million, of which $26.7 million was due to the modification of equity awards.

 

Net income for the fourth quarter of 2013 was $11.0 million compared to $8.0 million in the fourth quarter of 2012. Net income for the year ended December 31, 2013 was $28.8 million compared to $30.2 million for 2012, a 5% decrease. On a fully diluted basis, earnings per share in the fourth quarter of 2013 were $0.20, compared to $0.16 in the fourth quarter of 2012.  On a fully diluted basis, earnings per share for the year ended December 31, 2013 was $0.54, compared to $0.58 for 2012.

 

Operating cash flow in the fourth quarter of 2013 was $36.7 million, compared with $32.8 million in the fourth quarter of 2012. Operating cash flow for the year ended December 31, 2013 totaled $98.6 million, compared with $86.6 million in 2012, a 14% increase.

 

Cash, cash equivalents, and marketable securities totaled $34 million as of December 31, 2013, compared to $231 million as of December 31, 2012. Total outstanding debt as of December 31, 2013 was $305 million compared to $95 million as of December 31, 2012. In 2013, the Company paid a one-time special dividend totaling $470 million that was partially financed by long-term debt proceeds.

 

Deferred revenue as of December 31, 2013 was $194 million, compared to $183 million as of December 31, 2012.

 



 

Non-GAAP Results for Continuing Operations

 

Non-GAAP operating income for the fourth quarter of 2013 was $28.9 million, or 29.6% of revenue. This represents a 17% increase compared to $24.6 million, or 26.7% of revenue, in the fourth quarter of 2012.  Non-GAAP operating income for the year ended December 31, 2013 was $115.3 million, or 30.1% of revenue. This represents a 36% increase compared to $85.0 million of non-GAAP operating income, or 23.7% of revenue, for 2012.

 

On a fully diluted basis, non-GAAP earnings per share were $0.32 in the fourth quarter of 2013 and they represent a 5% increase from non-GAAP diluted net income per share of $0.30 in the fourth quarter of 2012. On a fully diluted basis, non-GAAP net income per share was $1.32 for the year ended December 31, 2013, a 28% increase compared to $1.03 per share for 2012.

 

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

 

FOURTH QUARTER AND FULL YEAR 2013 HIGHLIGHTS

 

·                  Strong Renewal Rate: Advent delivered a strong initially reported renewal rate for Q3 2013 of 97%, compared to 94% the same period last year. This is the highest initial renewal rate reported in five years.

 

·                  International Success: Advent saw enhanced success in the international market, signing SMT Fund Services, part of Sumitomo Mitsui Bank Group, as well as Nordea Bank AB in the fourth quarter.

 

·                  Solid Growth in Black Diamond: Total assets on the platform increased 64% for the year to over $220 billion and the number of clients increased 29%, including many large advisory firms such as McGladrey Wealth Management and Essex Financial.  Black Diamond also achieved its highest renewal rate and client satisfaction scores in its history.

 

·                  New Releases Across the Product Portfolio: Advent announced global availability of new releases to several key products that includes compelling new functionality for asset and wealth management firms, alternative managers, family offices, and administrators. The updated products include Geneva®, Advent Portfolio Exchange® (APX), Moxy®, Advent Rules Manager®, and Advent Revenue Center®.

 

FINANCIAL GUIDANCE

 

Advent updates the following financial guidance for the first quarter and fiscal year 2014:

 

Guidance

 

Q1 2014

 

FY 2014

 

Total Revenue ($M)

 

$95 -$97

 

$395-$403

 

GAAP Operating Margin

 

n/a

 

21.0% - 21.5%

 

Stock Compensation Expense (% of revenue)

 

n/a

 

8%

 

Amortization of Intangibles (% of revenue)

 

n/a

 

2%

 

Non-GAAP Operating Margin

 

n/a

 

31.0% - 31.5%

 

Operating Cash Flow ($M)

 

n/a

 

$105 - $115

 

Capital Expenditures ($M)

 

n/a

 

$8 - $11

 

Effective Tax Rate (GAAP)

 

n/a

 

35% - 40%

 

Effective Tax Rate (non-GAAP)

 

n/a

 

35%

 

 



 

INVESTOR CALL

 

Advent Software, Inc. will host its Q4 2013 quarterly earnings conference call at 5:00 p.m. Eastern time today.  The Q4 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 866-578-5771 and request conference ID #16791928.  Telephone replay will be available through midnight February 10, 2014.  The replay number for domestic callers is 888-286-8010, and for international callers is 617-801-6888, with the conference ID of #88334133. The conference call will also be webcast live and then archived on http://investor.advent.com.

 

ABOUT ADVENT

 

Over the last 30 years of industry change, our core mission to help our clients focus on their unique strategies and deliver exceptional investor service has never wavered. With unparalleled precision and ahead of the curve solutions, we’ve helped over 4,300 firms in nearly 60 countries – from established global institutions to small start-up practices – to grow their business and thrive.  Advent technology helps firms minimize risk, work together seamlessly, and discover new opportunities in a constantly evolving world. Together with our clients, we are shaping the future of investment management. For more information on Advent products visit http://www.advent.com.

 

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 (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 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 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, and Advent Software, are registered trademarks of Advent Software, Inc.  Any other company names or marks mentioned herein are those of their respective owners.

 

CONTACTS

Media Contact:

Amanda Diamondstein-Cieplinska

Advent Software, Inc.

(415) 645-1668

 



 

adiamond@advent.com

 

Investor Relations Contact:

Justin Ritchie

Advent Software, Inc.

(415) 645-1683

jritchie@advent.com

 



 

ADVENT SOFTWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(GAAP, Unaudited)

 

 

 

December 31

 

December 31

 

 

 

2013

 

2012

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

33,828

 

$

58,217

 

Short-term marketable securities

 

 

111,192

 

Accounts receivable, net

 

58,717

 

61,069

 

Deferred taxes, current

 

24,898

 

18,934

 

Prepaid expenses and other

 

30,114

 

25,868

 

Current assets of discontinued operation

 

100

 

88

 

Total current assets

 

147,657

 

275,368

 

Property and equipment, net

 

31,698

 

37,269

 

Goodwill

 

207,818

 

206,932

 

Other intangibles, net

 

27,392

 

38,205

 

Long-term marketable securities

 

 

61,552

 

Deferred taxes, long-term

 

23,020

 

24,524

 

Other assets

 

17,372

 

12,994

 

Noncurrent assets of discontinued operation

 

1,337

 

1,609

 

 

 

 

 

 

 

Total assets

 

$

456,294

 

$

658,453

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

5,348

 

$

5,190

 

Accrued liabilities

 

41,625

 

37,096

 

Deferred revenues

 

186,107

 

174,388

 

Income taxes payable

 

 

5,593

 

Current portion of long-term debt

 

20,000

 

10,000

 

Current liabilities of discontinued operation

 

600

 

262

 

Total current liabilities

 

253,680

 

232,529

 

Deferred revenues, long-term

 

7,809

 

8,787

 

Long-term income taxes payable

 

7,667

 

5,335

 

Long-term debt

 

285,000

 

85,000

 

Other long-term liabilities

 

11,171

 

13,139

 

Noncurrent liabilities of discontinued operation

 

2,782

 

3,804

 

 

 

 

 

 

 

Total liabilities

 

568,109

 

348,594

 

 

 

 

 

 

 

Stockholders’ (deficit) equity:

 

 

 

 

 

Common stock

 

513

 

505

 

Additional paid-in capital

 

42,533

 

453,585

 

Accumulated deficit

 

(165,870

)

(154,261

)

Accumulated other comprehensive income

 

11,009

 

10,030

 

Total stockholders’ (deficit) equity

 

(111,815

)

309,859

 

 

 

 

 

 

 

Total liabilities and stockholders’ (deficit) equity

 

$

456,294

 

$

658,453

 

 



 

ADVENT SOFTWARE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(GAAP, Unaudited)

 

 

 

Three Months Ended December 31

 

Twelve Months Ended December 31

 

 

 

2013

 

2012

 

2013

 

2012

 

Net revenues:

 

 

 

 

 

 

 

 

 

Recurring revenues

 

$

89,019

 

$

83,875

 

$

349,881

 

$

324,627

 

Non-recurring revenues

 

8,560

 

8,142

 

33,078

 

34,192

 

 

 

 

 

 

 

 

 

 

 

Total net revenues

 

97,579

 

92,017

 

382,959

 

358,819

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (1):

 

 

 

 

 

 

 

 

 

Recurring revenues

 

18,417

 

16,991

 

70,590

 

68,953

 

Non-recurring revenues

 

8,956

 

9,890

 

40,044

 

43,505

 

Amortization of developed technology

 

1,682

 

2,558

 

9,087

 

10,258

 

 

 

 

 

 

 

 

 

 

 

Total cost of revenues

 

29,055

 

29,439

 

119,721

 

122,716

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

68,524

 

62,578

 

263,238

 

236,103

 

 

 

 

 

 

 

 

 

 

 

Operating expenses (1):

 

 

 

 

 

 

 

 

 

Sales and marketing

 

20,098

 

18,566

 

79,065

 

74,688

 

Product development

 

17,464

 

16,637

 

69,718

 

67,014

 

General and administrative

 

10,842

 

10,144

 

54,737

 

37,763

 

Amortization of other intangibles

 

912

 

958

 

3,775

 

3,825

 

Recapitalization costs

 

 

 

6,041

 

 

Restructuring charges

 

811

 

3,581

 

3,770

 

3,634

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

50,127

 

49,886

 

217,106

 

186,924

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

18,397

 

12,692

 

46,132

 

49,179

 

Interest and other income (expense), net

 

(2,603

)

(515

)

(7,213

)

(1,620

)

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

15,794

 

12,177

 

38,919

 

47,559

 

Provision for income taxes

 

4,777

 

4,147

 

10,167

 

17,328

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations

 

$

11,017

 

$

8,030

 

$

28,752

 

$

30,231

 

 

 

 

 

 

 

 

 

 

 

Discontinued operation:

 

 

 

 

 

 

 

 

 

Net (loss) income from discontinued operation (net of applicable taxes of $(11), $(8), $34 and $126, respectively)

 

(18

)

(49

)

50

 

184

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

10,999

 

$

7,981

 

$

28,802

 

$

30,415

 

 

 

 

 

 

 

 

 

 

 

Basic net income (loss) per share (2):

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.22

 

$

0.16

 

$

0.56

 

$

0.60

 

Discontinued operation

 

(0.00

)

(0.00

)

0.00

 

0.00

 

Total operations

 

$

0.22

 

$

0.16

 

$

0.56

 

$

0.60

 

 

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per share (2):

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.20

 

$

0.16

 

$

0.54

 

$

0.58

 

Discontinued operation

 

(0.00

)

(0.00

)

0.00

 

0.00

 

Total operations

 

$

0.20

 

$

0.15

 

$

0.54

 

$

0.58

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used to compute net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

51,105

 

50,276

 

51,207

 

50,614

 

Diluted

 

53,844

 

51,802

 

53,378

 

52,425

 

 


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

 

Cost of recurring revenues

 

$

844

 

$

595

 

$

3,491

 

$

2,405

 

Cost of non-recurring revenues

 

563

 

310

 

3,253

 

1,236

 

Total cost of revenues

 

1,407

 

905

 

6,744

 

3,641

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

2,345

 

1,902

 

13,265

 

7,165

 

Product development

 

1,922

 

1,483

 

8,863

 

5,821

 

General and administrative

 

1,908

 

1,167

 

19,307

 

4,174

 

Total operating expenses

 

6,175

 

4,552

 

41,435

 

17,160

 

 

 

 

 

 

 

 

 

 

 

Total stock-based employee compensation expense

 

$

7,582

 

$

5,457

 

$

48,179

 

$

20,801

 

 

(2) Net income (loss) 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)

 

 

 

Twelve Months Ended December 31

 

 

 

2013

 

2012

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

28,802

 

$

30,415

 

Adjustment to net income for discontinued operation net income

 

(50

)

(184

)

Net income from continuing operations

 

28,752

 

30,231

 

 

 

 

 

 

 

Adjustments to reconcile net income to net cash provided by operating activities from continuing operations:

 

 

 

 

 

Stock-based compensation

 

48,179

 

20,801

 

Excess tax benefit from stock-based compensation

 

(7,477

)

(7,785

)

Depreciation and amortization

 

24,393

 

25,879

 

Amortization of debt issuance costs

 

947

 

381

 

Provision for doubtful accounts

 

278

 

403

 

(Reduction of) provision for sales reserves

 

(306

)

1,154

 

Deferred income taxes

 

4,589

 

5,230

 

Other

 

29

 

(252

)

Effect of statement of operations adjustments

 

70,632

 

45,811

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

2,074

 

575

 

Prepaid and other assets

 

(1,762

)

822

 

Accounts payable

 

27

 

(5,368

)

Accrued liabilities

 

(6,089

)

(2,055

)

Deferred revenues

 

11,047

 

7,151

 

Income taxes payable

 

(6,117

)

9,453

 

Effect of changes in operating assets and liabilities

 

(820

)

10,578

 

 

 

 

 

 

 

Net cash provided by operating activities from continuing operations

 

98,564

 

86,620

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Cash used in acquisition

 

 

(700

)

Purchases of property and equipment

 

(5,616

)

(6,369

)

Capitalized software development costs

 

(1,995

)

(2,137

)

Purchases of marketable securities

 

(57,863

)

(220,994

)

Sales and maturities of marketable securities

 

228,619

 

118,588

 

Change in restricted cash

 

 

95

 

 

 

 

 

 

 

Net cash provided by (used in) investing activities from continuing operations

 

163,145

 

(111,517

)

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from common stock issued from exercises of stock options

 

19,495

 

5,173

 

Proceeds from common stock issued under the employee stock purchase plan

 

6,293

 

6,661

 

Excess tax benefits from stock-based compensation

 

7,477

 

7,785

 

Withholding taxes related to equity award net share settlement

 

(11,833

)

(5,496

)

Proceeds from debt

 

375,000

 

50,000

 

Repayment of debt

 

(165,000

)

(5,000

)

Debt issuance costs

 

(5,725

)

 

Repurchase of common stock

 

(41,256

)

(41,275

)

Payment of cash dividend

 

(470,133

)

 

 

 

 

 

 

 

Net cash (used in) provided by financing activities from continuing operations

 

(285,682

)

17,848

 

 

 

 

 

 

 

Net cash transferred to discontinued operation

 

(375

)

(561

)

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(41

)

302

 

 

 

 

 

 

 

Net change in cash and cash equivalents from continuing operations

 

(24,389

)

(7,308

)

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

 

$

33,828

 

$

58,217

 

 

 

 

Twelve Months Ended December 31

 

 

 

2013

 

2012

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash flows from discontinued operation:

 

 

 

 

 

Net cash used in operating activities

 

$

(375

)

$

(561

)

Net cash transferred from continuing operations

 

375

 

561

 

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.

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 and income 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 December 31

 

 

 

2013

 

2012

 

 

 

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues

 

 

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

$

68,524

 

70.2%

 

$

62,578

 

68.0%

 

Amortization of acquired intangibles

 

1,177

 

 

 

1,908

 

 

 

Stock-based compensation

 

1,407

 

 

 

905

 

 

 

Non-GAAP gross margin

 

$

71,108

 

72.9%

 

$

65,391

 

71.1%

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

 

$

18,397

 

18.9%

 

$

12,692

 

13.8%

 

Amortization of acquired intangibles

 

2,089

 

 

 

2,866

 

 

 

Stock-based compensation

 

7,582

 

 

 

5,457

 

 

 

Restructuring charges

 

811

 

 

 

3,581

 

 

 

Non-GAAP operating income

 

$

28,879

 

29.6%

 

$

24,596

 

26.7%

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

 

$

11,017

 

 

 

$

8,030

 

 

 

Amortization of acquired intangibles

 

2,089

 

 

 

2,866

 

 

 

Stock-based compensation

 

7,582

 

 

 

5,457

 

 

 

Restructuring charges

 

811

 

 

 

3,581

 

 

 

Income tax adjustment (1)

 

(4,420

)

 

 

(4,281

)

 

 

Non-GAAP net income

 

$

17,079

 

 

 

$

15,653

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

 

$

11,017

 

 

 

$

8,030

 

 

 

Net interest

 

2,510

 

 

 

408

 

 

 

Provision for income taxes

 

4,777

 

 

 

4,147

 

 

 

Depreciation expense

 

2,895

 

 

 

2,991

 

 

 

Amortization expense

 

2,594

 

 

 

3,516

 

 

 

Stock-based compensation

 

7,582

 

 

 

5,457

 

 

 

Adjusted EBITDA

 

$

31,375

 

 

 

$

24,549

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

 

 

 

 

 

 

 

 

GAAP

 

$

0.20

 

 

 

$

0.16

 

 

 

Non-GAAP

 

$

0.32

 

 

 

$

0.30

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute diluted net income per share

 

53,844

 

 

 

51,802

 

 

 

 


(1) The estimated non-GAAP effective tax rate was 35% for the three months ended December 31, 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 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 and income 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.

 

 

 

Twelve Months Ended December 31

 

 

 

2013

 

2012

 

 

 

Amount

 

% of Net
Revenues

 

Amount

 

% of Net
Revenues

 

 

 

 

 

 

 

 

 

 

 

GAAP gross margin

 

$

263,238

 

68.7%

 

$

236,103

 

65.8%

 

Amortization of acquired intangibles

 

6,841

 

 

 

7,599

 

 

 

Stock-based compensation

 

6,744

 

 

 

3,641

 

 

 

Non-GAAP gross margin

 

$

276,823

 

72.3%

 

$

247,343

 

68.9%

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

 

$

46,132

 

12.0%

 

$

49,179

 

13.7%

 

Amortization of acquired intangibles

 

10,616

 

 

 

11,424

 

 

 

Stock-based compensation

 

48,179

 

 

 

20,801

 

 

 

Restructuring charges

 

3,770

 

 

 

3,634

 

 

 

Recapitalization costs

 

6,041

 

 

 

 

 

 

Transaction related fees

 

565

 

 

 

 

 

 

Non-GAAP operating income

 

$

115,303

 

30.1%

 

$

85,038

 

23.7%

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

 

$

28,752

 

 

 

$

30,231

 

 

 

Amortization of acquired intangibles

 

10,616

 

 

 

11,424

 

 

 

Stock-based compensation

 

48,179

 

 

 

20,801

 

 

 

Restructuring charges

 

3,770

 

 

 

3,634

 

 

 

Recapitalization costs

 

6,692

 

 

 

 

 

 

Transaction related fees

 

565

 

 

 

 

 

 

Income tax adjustment (1)

 

(27,892

)

 

 

(11,868

)

 

 

Non-GAAP net income

 

$

70,682

 

 

 

$

54,222

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP net income

 

$

28,752

 

 

 

$

30,231

 

 

 

Net interest

 

6,949

 

 

 

1,732

 

 

 

Provision for income taxes

 

10,167

 

 

 

17,328

 

 

 

Depreciation expense

 

11,531

 

 

 

11,796

 

 

 

Amortization expense

 

12,862

 

 

 

14,083

 

 

 

Stock-based compensation

 

48,179

 

 

 

20,801

 

 

 

Adjusted EBITDA

 

$

118,440

 

 

 

$

95,971

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

 

 

 

 

 

 

 

 

GAAP

 

$

0.54

 

 

 

$

0.58

 

 

 

Non-GAAP

 

$

1.32

 

 

 

$

1.03

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used to compute diluted net income per share

 

53,378

 

 

 

52,425

 

 

 

 


(1) The estimated non-GAAP effective tax rate was 35% for the twelve months ended December 31, 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 and expenses 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, 2014

 

 

 

Continuing Operations

 

 

 

Operating Income %

 

 

 

 

 

Projected GAAP

 

21.0% to 21.5%

 

 

 

 

 

Projected stock-based compensation adjustment

 

8.0%

 

Projected amortization of acquired developed technology and other acquired intangible asset adjustment

 

2.0%

 

 

 

 

 

Projected non-GAAP

 

31.0% to 31.5%