SS&C Technologies Reports Record Fourth Quarter and 2012 Results

Windsor, CT - 14 February 2013

GAAP Diluted Earnings Per Share of $0.19, Up 18.8%, Adjusted Diluted Earnings Per Share of $0.42, Up 44.8%

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 fourth quarter and full year ended December 31, 2012.

Financial Highlights:

  • Revenue increased 79.5% to $171.8 million in fourth quarter 2012 and 48.8% to $551.8 million for the full year 2012.
  • GAAP net income increased 21.3% to $16.1 million in fourth quarter 2012 and diluted EPS for fourth quarter 2012 rose 18.8% to $0.19.
  • Adjusted net income grew 49.8% to $35.0 million for fourth quarter 2012 and adjusted diluted EPS (defined below) rose 44.8% to $0.42 in the same period.
  • Adjusted consolidated EBITDA (defined below) increased 77.2% to $70.1 million in fourth quarter 2012. For full year 2012, adjusted consolidated EBITDA increased 45.8% to $220.5 million.
  • SS&C's Annual Run Rate Basis (ARRB) recurring revenue, defined as the addition of maintenance and software-enabled services revenue, was $157.2 million for the fourth quarter of 2012, an annual run-rate of $628.7 million. This represents an increase of 88.7% from $83.3 million and $333.2 million run-rate for the same period in 2011.

"We are pleased with the progress we have made integrating our GlobeOp and PORTIA acquisitions. Our technological capabilities combined with our global operations and accounting expertise is proving to be a winner," said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies. "Our innovative cloud-based services continue to be a strategic focus. We are well into our fourth release of our portals and mobility apps and we have begun to roll out a new analytics solution. The power of this solution is its ability to gather accounting and operational information our clients need to make the best possible decision on their data — every time, in real-time. We are branding these integrated capabilities SS&C Investment Intelligence. We believe SS&C Investment Intelligence complements the investment process and leverages our client's investment intelligence. SS&C's independence, transparency and focus are driving larger opportunities and leading to increased revenues and profit margins. Further we have reduced our leverage from 4.2x at the close of our GlobeOp acquisition to 3.7x at the end of December."

Results

SS&C reported GAAP revenue of $171.8 million for the fourth quarter of 2012, up 79.5 percent compared to $95.7 million in the fourth quarter of 2011. Revenue for the year ended December 31, 2012 was $551.8 million, up 48.8 percent over $370.8 million in 2011. GAAP operating income for the fourth quarter of 2012 was $42.8 million, up 80.6 percent from $23.7 million in 2011's fourth quarter. GAAP operating income for the year ended December 31, 2012 was $123.2 million, up 31.4 percent from $93.8 million for 2011.

GAAP net income for the fourth quarter of 2012 was $16.1 million compared to net income of $13.3 million in the fourth quarter of 2011, an increase of 21.3 percent. GAAP net income for the year ended December 31, 2012 was $45.8 million, or 8.3 percent of revenue, compared to $51.0 million, or 13.8 percent of revenue, in 2011. On a fully diluted GAAP basis, earnings per share in the fourth quarter of 2012 was $0.19 compared to fully diluted GAAP earnings per share of $0.16 in the fourth quarter of 2011, an increase of 18.8 percent. On a fully diluted basis, GAAP earnings per share for the year ended December 31, 2012, was $0.55, a 12.7 percent decrease over 2011's $0.63 per share.

Adjusted revenue (a non-GAAP measure defined in note 1 to the attached Condensed Consolidated Financial Information) in the fourth quarter of 2012 was $172.0 million, up 79.8 percent compared to $95.7 million in the fourth quarter of 2011. Adjusted revenue for the year ended December 31, 2012 was $552.9 million, up 49.1 percent over $370.9 million for 2011. Adjusted operating income (a non-GAAP measure defined in note 2 to the attached Condensed Consolidated Financial Information) in the fourth quarter of 2012 was $66.1 million, or 38.4 percent of adjusted revenue. This represents a 72.3 percent increase compared to adjusted operating income of $38.4 million and 40.1 percent of adjusted revenue in the fourth quarter of 2011. Adjusted operating income for the year ended December 31, 2012 was $209.8 million, up 43.7 percent from adjusted operating income of $146.0 million in 2011.

Adjusted net income (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) for the fourth quarter of 2012 was $35.0 million, up 49.8 percent compared to $23.3 million in 2011's fourth quarter. Adjusted net income for the year ended December 31, 2012 was $117.4 million, up 35.8 percent compared to $86.5 million for 2011. Adjusted diluted earnings per share (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) in the fourth quarter of 2012 was $0.42 per share, up 44.8 percent compared to $0.29 per share in the fourth quarter of 2011. Adjusted diluted earnings per share for the year ended December 31, 2012 was $1.42, up 32.7 percent compared to $1.07 for 2011.

Annual Run Rate Basis

Annual Run Rate Basis (ARRB) recurring revenue, defined as the sum of maintenance and software-enabled services revenue on an annualized basis, was $628.7 million based on maintenance and software-enabled services revenue of $157.2 million for the fourth quarter of 2012. This represents an increase of 88.7 percent from $83.3 million and $333.2 million run-rate in the same period in 2011 and an increase of 4.0 percent from $151.1 million for the third quarter of 2012, an annual run rate of $604.5 million. We believe ARRB of our recurring revenue is a good indicator of visibility into future revenue.

Operating Cash Flow

SS&C ended the quarter with $86.2 million in cash, and $1,021.0 million in gross debt for a net debt balance of $934.8 million. SS&C generated net cash from operating activities of $134.4 million for the year ended December 31, 2012, compared to $110.4 million for the same period in 2011, an increase of 21.8 percent.

Guidance

Q1 2013

FY 2013

Adjusted Revenue ($M)

$171.0 — $175.0

$710.0 — $720.0

Adjusted Net Income ($M)

$35.5 — $36.8

$152.0 — $156.0

Cash from Operating Activities ($M)

N/A

$168.0 — $175.0

Capital Expenditures (% of revenue)

N/A

2.4% — 2.8%

Diluted Shares (M)

83.8 — 84.2

84.8 — 85.3

Effective Income Tax Rate (%)

30%

30%

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