Q2 GAAP Diluted Earnings Per Share of $0.31, and Adjusted Diluted Earnings Per Share of $0.57, Q2 YTD Operating Cash Flow Increased to $92.8 million, up 32.6%
SS&C Technologies Holdings, Inc. (NASDAQ: SSNC), a global provider of investment and financial software-enabled services and software, today announced its financial results for the quarter that ended June 30, 2014.
“SS&C has had nine straight quarters of record revenues. Our earnings and cash flows are strong and give us the financial flexibility to reinvest in our products and services, pursue acquisitions, buyback stock and/or pay down debt.” said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies. “Our strong and consistent performance on both the top and bottom line is a testament to SS&C’s best-in-class software and services, as well as management’s ability to expand margins by increasing productivity and utilizing the latest technology.”
SS&C reported GAAP revenue of $188.7 million for the second quarter of 2014, compared to $177.5 million in the second quarter of 2013, a 6.3 percent increase. GAAP operating income for the second quarter of 2014 was $45.4 million, or 24.1 percent of revenue. This represents an increase of 0.2 percent compared to $45.3 million, or 25.5 percent of revenue, in the second quarter of 2013. GAAP net income for the second quarter of 2014 was $27.2 million compared to $26.1 million in the second quarter of 2013, a 4.3 percent increase. On a fully diluted GAAP basis, earnings per share in the second quarter of 2014 were $0.31.
Adjusted operating income (a non-GAAP measure defined in note 2 to the attached Condensed Consolidated Financial Information) in the second quarter of 2014 was $74.0 million, or 39.2 percent of adjusted revenue. This represents a 7.6 percent increase compared to $68.8 million, or 38.7 percent of adjusted revenue, in the second quarter of 2013. Adjusted net income (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) for the second quarter of 2014 was $49.6 million compared to $41.0 million in 2013’s second quarter, a 20.9 percent increase. Adjusted diluted earnings per share (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) in the second quarter of 2014 were $0.57 compared to $0.48 in the second quarter of 2013, an 18.8 percent increase.
Operating Cash Flow
SS&C generated net cash from operating activities of $92.8 million for the six months ended June 30, 2014, compared to $70.0 million for the same period in 2013, representing a 32.6 percent increase. SS&C ended the quarter with $73.5 million in cash, and $675.0 million in gross debt, for a net debt balance of $601.5 million. SS&C's leverage ratio as defined in our credit agreement stood at 1.97 times consolidated EBITDA as of June 30, 2014.
Annual Run Rate Basis
Annual Run Rate Basis (ARRB) recurring revenue, defined as the sum of maintenance and software-enabled services revenue for the quarter on an annualized basis, was $685.0 million based on maintenance and software-enabled services revenue of $171.2 million for the second quarter of 2014. This represents an increase of 4.8 percent from $163.5 million and $653.8 million annual run-rate in the same period in 2013 and an increase of 0.2 percent from $170.9 million for the first quarter of 2014, an annual run rate of $683.6 million. We believe ARRB of our recurring revenue is a good indicator of visibility into future revenue.
|Q3 2014||FY 2014|
|Adjusted Revenue ($M)||$190.0 – $194.0||$757.0 – $770.0|
|Adjusted Net Income ($M)||$50.5 – $52.2||$198.5 – $206.0|
|Cash from Operating Activities ($M)||N/A||$225.0 – $235.0|
|Capital Expenditures (% of revenue)||N/A||2.3% – 2.8%|
|Diluted Shares (M)||87.4 – 87.7||87.5 – 87.8|
|Effective Income Tax Rate (%)||28%||28%|