WINDSOR, CT - January 30, 2002 - SS&C Technologies, Inc. (Nasdaq: SSNC) today announced results for the quarter and full year ended December 31, 2002. Revenues were $16.2 million for the fourth quarter and $62.4 million for the full year, compared with $14.6 million and $56.4 million, respectively, in 2001. Net income for 2002 was $2.6 million in the fourth quarter or $0.20 diluted earnings per share, and $7.3 million for the full year, or $0.53 diluted earnings per share. In 2001, net income was $1.2 million, or $0.08 diluted earnings per share for the fourth quarter, and $4.0 million, or $0.27 diluted earnings per share for the year.
"We are pleased to report these positive results, highlighted by 150% and 96% increases in EPS for the quarter and year, respectively," remarked CEO Bill Stone.
"Operating income in Q4 was $4.0 million up from $3.3 million in Q3 and $1.8 million in Q4 2001, increases of 21% and 128%, respectively," said Stone. "2002 operating income was $11.1 million, up 329% from $2.6 million in 2001. Included in this year's operating income was a $1.7 million write-off of IPR&D related to the acquisition of Real-Time USA, Inc. Last year's operating income included a $0.8 million restructuring charge."
"Translating operating earnings into cash is a key measure of the quality of earnings," said Stone. We increased cash by $14.1 million, or $1.05 per share, excluding stock repurchases of $27.7 million, the acquisitions of Real-Time and DBC for $8.4 million and proceeds from option exercises of $4.3 million."
"We currently expect Q1 2003 revenues to be in the range of $15.5 to $16.5 million and net income to be between $0.15 and $0.17 per diluted share," stated Stone. "For 2003, our expectation is for revenue to be $65 to $70 million and diluted earnings per share between $0.75 and $0.80."
New Market Expansion
"In the fourth quarter, we continued to selectively expand into new markets consistent with our recurring revenue business model. We acquired DBC, the leading provider of municipal finance software," said Stone. "DBC's applications are used by underwriters, investment banks, municipal issuers and financial advisors for structuring new issues, securitizations, strategic planning and asset/liability management."
Research & Development
"The emphasis of our development efforts in 2002 was increasing our clients competitive position by deploying technology globally which is integrated via web services," said Norm Boulanger, Chief Operating Officer of SS&C. "The prime example of this commitment is the release of the multi-language version of Antares, our trade order management system, that gives clients the ability to simultaneously operate in different languages."
"We also introduced a web-based Solution Center," continued Boulanger. "The Solution Center Web Site is an exclusive on-line client community. In addition to finding self-help answers to product questions, clients can exchange information, share best practices and software tips, and comment on business issues."
"Looking forward to 2003, we expect to bring three new products to market: 1) a front-end origination module to our loan management system, LMS, 2) a reporting and data visualization tool for actuarial software called AnalyticsExpress, and 3) a multi-family module for our property management system, SKYLINE II," said Boulanger.
Key Wins by Market
"In the Insurance market, we rolled out CAMRAâ¢ D Class, a product geared to smaller insurance entities, and signed on a number of new clients in the fourth quarter. In addition, several large companies, including New York Life Investment Management, LLC and John Hancock Life Insurance Company, Inc., licensed additional modules to use in conjunction with CAMRA, and we have just completed a major system conversion to CAMRA at a large insurance asset manager based in Chicago. We also licensed Finesse to Highway Insurance, our first UK client for that product," commented Stone.
"The most significant development in this market came with the announcement this week of a long-term co-marketing and technology sharing agreement with Milliman USA, the largest life actuarial consulting firm in the U.S.," said Stone. "SS&C and Milliman have agreed to cooperate in the distribution, development and servicing of PTS and MG-ALFA financial modeling software products."
"The Commercial Lending business line had a strong fourth quarter, inking substantial LMS deals with AEGON USA Realty Advisors, and New York Life Investment Management, LLC," said Stone. "In both cases, we demonstrated that our integrated solutions could handle the requirements of their complex commercial loan portfolios. A new origination module is earmarked to be released in the first quarter of 2003, which will make LMS a total solution for commercial loan processing, and be a major factor for generating additional revenue for 2003," said Stone.
"The Real Estate business posted a solid fourth quarter for license sales," said Stone. "More importantly, SKYLINE had its best year since its acquisition, and continues to position itself as a leader in the property management industry. A focused sales strategy, extensive development enhancements and strategic partnerships with third-party vendors all contributed to SKYLINE's success in 2002. With the strong foundation that has been built, we anticipate continuing with the momentum that is underway," said Stone.
With the introduction of Lightning early in 2002, the Financial Institutions business based in Minneapolis was able to expand its alliance program. "In the fourth quarter, we signed a contract with BB&T Capital Markets to use Lightning and TradePath, the Bloomberg interface," said Stone. "Throughout 2002 we grew our client base by signing several important contracts with a number of dealer banks and corporate credit unions and believe these new alliance partners will create solid growth opportunities for us in 2003."
"We also signed a resellers agreement with Merchants Credit Bureau to add the Tri-Bureau Merged Credit Report to our existing BANCMall offerings," remarked Stone. "This report complements the suite of BancMall services we currently offer and was immediately well-received by our clients. We expect this service to continue to generate revenues in 2003."
Hedge & Family Office
"In the Hedge and Family Office space, the latest release of our AdvisorWare product included a number of important new tax features and other enhancements," said Stone. "As a result, fourth quarter license sales included several well-known hedge funds, including MH Davidson & Co., Deerfield Management Company and Cumberland Associates, as well as Austin Capital Management, a notable and successful fund of funds firm. Our family office product, Total Return, posted positive results in the fourth quarter, most notably with Mellon Financial Corporation acquiring a license to expand its use of the system."
"Overseas, the international market continues to be a challenge with the difficult economy," said Stone. "In the fourth quarter, our London office signed a contract with one of Europe's largest and most successful hedge fund companies to use our new pricing server in conjunction with Antares. The pricing server is a dynamic, rules-based engine that provides fast, accurate pricing data from multiple data vendors. There is increased interest in this product, and it is expected that interest will turn into sales in 2003."
In the Netherlands, sales for the fourth quarter were favorable. "Several existing Mabel clients up-graded their system to take advantage of the straight-through processing capabilities of the new module," said Stone. "Insurance clients who up-graded include AXA, Royal Nederland and Goudsche Verzekeringen, and new clients include Vida Nova and a private asset management firm. In addition to Mabel sales, Kas Bank is in the process of implementing Altair, and expects to go live early in 2003."
"In the Middle East and Africa sector, we signed a licensing and distribution agreement with TSL Inc., a financial services technology integrator that operates in 14 countries in the region," said Stone. "This relationship will continue to develop in 2003."
"The multi-language version of Antares, rolled out in Japan in the fourth quarter, is a milestone for our global marketing efforts," remarked Stone. "The initial version, in Japanese, provides clients the ability to perform global trade order processing, and will give us a powerful advantage for 2003."
SS&C's Q4 2002 earnings call will take place at 5:00 p.m. EST today, January 30, 2003. Interested parties may dial 706-643-7858 (US, Canada and International) and request the "SS&C Fourth Quarter Earnings Call". A replay will be available by dialing 706-645-9291 (US, Canada and international) and entering the access code 7490532 after 8:00 p.m. today until February 9, 2003.