Adjusted operating income (a non-GAAP financial measure defined in note 1 to the attached Consolidated Condensed Financial Information) was $25.1 million for the three months ended June 30, 2009, compared to $26.8 million in the second quarter of the prior year, representing 37.3% and 37.1% of revenues, respectively. GAAP operating income in the second quarter of 2009 was $15.8 million and includes amortization of $7.8 million and stock-based compensation of $1.5 million, compared to $17.3 million of operating income for the same period in 2008. Consolidated EBITDA (a non-GAAP financial measure defined in note 2 of the Consolidated Condensed Financial Information) for the second quarter of 2009 was $28.1 million, compared to $29.2 million in the second quarter of 2008, a decrease of 3.7%.
"While market conditions remain unpredictable we saw a positive turn in revenues from $63.7 million in the first quarter of 2009 to $67.3 million in the second quarter, a 5.5% increase," said Bill Stone, Chairman and CEO, SS&C Technologies. "We have continued to focus on productivity improvements and cost controls and as a result have maintained our high operating margins. For the rest of 2009, we see reasonably healthy sales pipeline activity around the world and as a result; believe our revenues will continue to stabilize in Q3 and Q4."
"During the second quarter, we acquired the assets and related business associated with Unisys Corporationâs MAXIMIS software. Sophisticated large investment management firms use MAXIMIS software for their investment accounting, regulatory and management reporting needs," noted Stone. "We feel this acquisition represents an excellent strategic fit within our institutional software and services offering, and we expect it will create new opportunities to sell to new and existing clients."
"In Q2 and year to date, we started to see improved demand for our fund administration services for hedge funds, funds of funds and private equity funds. We have seen an improvement in our pipeline for fund administration services. We believe this is notable because of our independence, our financial stability and the quality of our in-house expertise and systems," said Stone.
Balance Sheet and Cash Flow
SS&C ended the quarter with $39.1 million in cash and cash equivalents, and $409.8 million in debt for a net debt balance of $370.7 million. We generated net cash from operating activities of $20.9 million for the six months ended June 30, 2009, compared to $25.0 million for the same period in 2008. This decrease is related in part to an increase in income tax payments of $11.7 million compared to $8.0 million in the same period in 2008.
"We will continue to use cash to acquire new businesses, and pay down debt and deleverage our business. Our consolidated total leverage, as defined in our senior credit facilities, is now 3.3 times consolidated EBITDA compared to 6.8 times when we went private," said Stone.