WINDSOR, CT - April 20, 2005 â SS&C Technologies, Inc. (Nasdaq: SSNC) today announced record results for the quarter ended March 31, 2005. Q1 revenues were $27.4 million, an increase of 43% from the $19.2 million for Q1 2004. Net income and operating income for Q1 were $6.0 million and $9.2 million, respectively, increases of 58% and 52% from the $3.8 million and $6.0 million for the first quarter of last year. Diluted earnings per share for Q1 were $0.25, 32% higher than the $0.19 diluted earnings per share for the same period in 2004.
Bill Stone, SS&C's Chairman and CEO, said, "We are very pleased with our first quarter results. Our revenues reached a new record high, with a healthy contribution from outsourcing revenues. In Q1, recurring revenues, which includes both maintenance and outsourcing revenues, hit a new high watermark at $20.3 million, an increase of 54% over the $13.2 million in Q1 2004, and represented 74% of total revenues. We continue to execute on our strategy to grow our outsourcing revenues, both organically and through our acquisitions, and in Q1 we achieved a record high of $10.5 million, a 100% increase over Q1 2004."
Stone continued, "In 2005, we are focusing on closely managing our expenses, and we are seeing economies of scale as we integrate our acquisitions. As a result, in Q1, our operating income rose by 52% over Q1 2004 to $9.2 million. The $9.2 million represents a 33% operating margin. Our Q1 net income increased to $6.0 million, a 58% increase over the $3.8 million in Q1 last year."
Balance Sheet and Cash Flow
"Our balance sheet and cash flow position is strong and the quality of our earnings remains high," said Stone. "We generated $12.8 million in net cash from operations during the first quarter. In Q1, we drew on our liquid resources and bought back $5.6 million of our common stock, as well as paid $25.8 million in cash for two acquisitions. At quarter end, our total cash, cash equivalents and investments in marketable securities were $108.2 million. In April, SS&C borrowed $75 million under its line of credit with Fleet National Bank, a Bank of America company, and used the Fleet borrowings and approximately $84 million from cash on hand to finance the acquisition of Financial Models Company Inc. (FMC)."
"We currently expect Q2 2005 revenues to be in the range of $39.5 to $42.5 million and net income to be between $0.25 and $0.27 per diluted share," stated Stone. "For 2005, our expectation is for revenues to be $157.0 to $165.0 million and diluted earnings per share to be between $1.07 and $1.15."
"SS&C completed two acquisitions in February," said Stone. "We acquired all of the membership interests in Eisnerfast LLC, a fund accounting and administration affiliate of Eisner LLP. Located in New York City, Eisnerfast delivers back-office accounting and administration services to on- and off-shore hedge and private equity funds, funds of funds, and investment advisors. This acquisition is part of our plan to build our fund administration outsourcing business, and we are excited about this strategic fit and future opportunities."
"We also acquired substantially all of the assets of Achievement Technologies, LLC (ATLLC)," continued Stone. "ATLLC's SamTrak software is a comprehensive facilities maintenance and work order processing solution for real estate property managers. SamTrak is fully integrated with our property management solution, SKYLINE, adding an important layer of functionality. SamTrak is also offered as a stand-alone solution for enterprises with multiple properties."
Financial Models Company Inc.
"Yesterday, April 19, 2005, we closed the acquisition of Financial Models Company Inc., a Mississauga, Ontario-based investment systems and application service provider," said Stone. "FMC was a publicly traded company on the Toronto Stock Exchange with 374 employees and CAD 71.9 million in revenue for the fiscal year ended February 28, 2005. SS&C paid CAD 17.70 per share, or an aggregate of approximately USD 159 million in cash for FMC."
"The acquisition of FMC met three key aspects of our acquisition strategy: focus on recurring revenues, expand our market reach and strengthen our existing product offerings," said Stone. "FMC's recurring revenue, which consists of application services and license maintenance revenue, was 81% of its total revenue for the fiscal year ended February 28, 2005. FMC is a significant player in the Canadian investment management market. FMC expands our presence in London and New York, and we gain a presence in Australia. The FMC product and service array: FMCNet, SVC, Pacer, Recon, Pages and FMCSuite, gives us an excellent expansion of our intellectual property."
Stone commented on the integration plans for FMC, stating, "This acquisition propels SS&C to an organization which is over 800 people strong, with a significant presence in a number of foreign markets, powerful products and services to offer virtually every segment of the financial services industry, and a blue-chip client base that uses SS&C's technology and services to manage approximately $7 trillion in assets. Our integration planning teams are already in place and moving forward in a disciplined and deliberate fashion, while our management team remains focused on day-to-day execution, servicing existing clients and implementing growth strategies. We expect the combined strength of SS&C and FMC to create potential for significant growth, benefiting shareholders, clients and employees."