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SAN FRANCISCO, CA -- (Marketwired) -- 02/03/14 -- Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the global investment management industry, announced today its financial results for the fourth quarter and year ended December 31, 2013.
"The fourth quarter capped off a year of record revenue and operating cash flow, while we also expanded non-GAAP operating margin to 30% for the year," said Pete Hess, Chief Executive Officer of Advent. "Advent's success, including our strong renewal rates, demonstrates our ability to help customers respond to the evolving trends in investment management. We are excited about our solutions and ability to expand the value we provide to clients and shareholders."
FOURTH QUARTER AND FULL YEAR 2013 RESULTS
GAAP Results for Continuing Operations
The Company reported quarterly revenue of $97.6 million for the fourth quarter of 2013, compared to $92.0 million in the fourth quarter of 2012, a 6% increase. Total annual revenue for the year ended December 31, 2013 was $383.0 million, compared to $358.8 million recorded in 2012, a 7% increase.
Operating income for the fourth quarter of 2013 was $18.4 million, or 18.9% of revenue, compared to $12.7 million or 13.8% of revenue for the fourth quarter of 2012. Operating income for the year ended December 31, 2013 was $46.1 million, or 12.0% of revenue, compared to $49.2 million, or 13.7% of revenue, for 2012. Our operating income for fiscal year 2013 included recapitalization charges of $6.0 million, and stock compensation expense of $48.2 million, of which $26.7 million was due to the modification of equity awards.
Net income for the fourth quarter of 2013 was $11.0 million compared to $8.0 million in the fourth quarter of 2012. Net income for the year ended December 31, 2013 was $28.8 million compared to $30.2 million for 2012, a 5% decrease. On a fully diluted basis, earnings per share in the fourth quarter of 2013 were $0.20, compared to $0.16 in the fourth quarter of 2012. On a fully diluted basis, earnings per share for the year ended December 31, 2013 was $0.54, compared to $0.58 for 2012.
Operating cash flow in the fourth quarter of 2013 was $36.7 million, compared with $32.8 million in the fourth quarter of 2012. Operating cash flow for the year ended December 31, 2013 totaled $98.6 million, compared with $86.6 million in 2012, a 14% increase.
Cash, cash equivalents, and marketable securities totaled $34 million as of December 31, 2013, compared to $231 million as of December 31, 2012. Total outstanding debt as of December 31, 2013 was $305 million compared to $95 million as of December 31, 2012. In 2013, the Company paid a one-time special dividend totaling $470 million that was partially financed by long-term debt proceeds.
Deferred revenue as of December 31, 2013 was $194 million, compared to $183 million as of December 31, 2012.
Non-GAAP Results for Continuing Operations
Non-GAAP operating income for the fourth quarter of 2013 was $28.9 million, or 29.6% of revenue. This represents a 17% increase compared to $24.6 million, or 26.7% of revenue, in the fourth quarter of 2012. Non-GAAP operating income for the year ended December 31, 2013 was $115.3 million, or 30.1% of revenue. This represents a 36% increase compared to $85.0 million of non-GAAP operating income, or 23.7% of revenue, for 2012.
On a fully diluted basis, non-GAAP earnings per share were $0.32 in the fourth quarter of 2013 and they represent a 5% increase from non-GAAP diluted net income per share of $0.30 in the fourth quarter of 2012. On a fully diluted basis, non-GAAP net income per share was $1.32 for the year ended December 31, 2013, a 28% increase compared to $1.03 per share for 2012.
The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.
FOURTH QUARTER AND FULL YEAR 2013 HIGHLIGHTS
FINANCIAL GUIDANCE
Advent updates the following financial guidance for the first quarter and fiscal year 2014:
----------------------------------------------------------------------------
Guidance Q1 2014 FY 2014
----------------------------------------------------------------------------
Total Revenue ($M) $95 -$97 $395-$403
----------------------------------------------------------------------------
GAAP Operating Margin n/a 21.0% - 21.5%
----------------------------------------------------------------------------
Stock Compensation Expense (% of revenue) n/a 8%
----------------------------------------------------------------------------
Amortization of Intangibles (% of revenue) n/a 2%
----------------------------------------------------------------------------
Non-GAAP Operating Margin n/a 31.0% - 31.5%
----------------------------------------------------------------------------
Operating Cash Flow ($M) n/a $105 - $115
----------------------------------------------------------------------------
Capital Expenditures ($M) n/a $8 - $11
----------------------------------------------------------------------------
Effective Tax Rate (GAAP) n/a 35% - 40%
----------------------------------------------------------------------------
Effective Tax Rate (non-GAAP) n/a 35%
----------------------------------------------------------------------------
INVESTOR CALL
Advent Software, Inc. will host its Q4 2013 quarterly earnings conference call at 5:00 p.m. Eastern time today. The Q4 2013 earnings presentation and trended disclosures file, which include highlights and detailed financial information, are currently available at http://investor.advent.com. To participate via phone, please dial 866-578-5771 and request conference ID #16791928. Telephone replay will be available through midnight February 10, 2014. The replay number for domestic callers is 888-286-8010, and for international callers is 617-801-6888, with the conference ID of #88334133. The conference call will also be webcast live and then archived on http://investor.advent.com.
ABOUT ADVENT
Over the last 30 years of industry change, our core mission to help our clients focus on their unique strategies and deliver exceptional investor service has never wavered. With unparalleled precision and ahead of the curve solutions, we've helped over 4,300 firms in nearly 60 countries -- from established global institutions to small start-up practices -- to grow their business and thrive. Advent technology helps firms minimize risk, work together seamlessly, and discover new opportunities in a constantly evolving world. Together with our clients, we are shaping the future of investment management. For more information on Advent products visit http://www.advent.com.
ABOUT NON-GAAP FINANCIAL INFORMATION
This press release includes non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), please see the accompanying tables entitled "Reconciliation of Selected Continuing Operations' GAAP Measures to Non-GAAP Measures."
FORWARD-LOOKING STATEMENTS
The financial projections under Financial Guidance and any other forward-looking statements included in this presentation reflect management's best judgment based on factors currently known and involve risks and uncertainties; our actual results may differ materially from those discussed here. These risks and uncertainties include: potential fluctuations in new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our products; the successful development, release and market acceptance of new products and product enhancements; uncertainties and fluctuations in the financial markets; the Company's ability to satisfy contractual performance requirements and other risks detailed from time to time in our SEC reports including, but not limited to, our quarterly reports on Form 10-Q and our 2012 Annual Report on Form 10-K. The Company disclaims any intention or obligation to publicly update or revise any forward-looking statements including any guidance, whether as a result of events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Advent, the Advent logo, and Advent Software, are registered trademarks of Advent Software, Inc. Any other company names or marks mentioned herein are those of their respective owners.
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(GAAP, Unaudited)
December 31 December 31
2013 2012
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 33,828 $ 58,217
Short-term marketable securities - 111,192
Accounts receivable, net 58,717 61,069
Deferred taxes, current 24,898 18,934
Prepaid expenses and other 30,114 25,868
Current assets of discontinued operation 100 88
------------ ------------
Total current assets 147,657 275,368
Property and equipment, net 31,698 37,269
Goodwill 207,818 206,932
Other intangibles, net 27,392 38,205
Long-term marketable securities - 61,552
Deferred taxes, long-term 23,020 24,524
Other assets 17,372 12,994
Noncurrent assets of discontinued operation 1,337 1,609
------------ ------------
Total assets $ 456,294 $ 658,453
============ ============
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 5,348 $ 5,190
Accrued liabilities 41,625 37,096
Deferred revenues 186,107 174,388
Income taxes payable - 5,593
Current portion of long-term debt 20,000 10,000
Current liabilities of discontinued operation 600 262
------------ ------------
Total current liabilities 253,680 232,529
Deferred revenues, long-term 7,809 8,787
Long-term income taxes payable 7,667 5,335
Long-term debt 285,000 85,000
Other long-term liabilities 11,171 13,139
Noncurrent liabilities of discontinued operation 2,782 3,804
------------ ------------
Total liabilities 568,109 348,594
------------ ------------
Stockholders' (deficit) equity:
Common stock 513 505
Additional paid-in capital 42,533 453,585
Accumulated deficit (165,870) (154,261)
Accumulated other comprehensive income 11,009 10,030
------------ ------------
Total stockholders' (deficit) equity (111,815) 309,859
------------ ------------
Total liabilities and stockholders'
(deficit) equity $ 456,294 $ 658,453
============ ============
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(GAAP, Unaudited)
Three Months Ended Twelve Months Ended
December 31 December 31
-------------------- --------------------
2013 2012 2013 2012
--------- --------- --------- ---------
Net revenues:
Recurring revenues $ 89,019 $ 83,875 $ 349,881 $ 324,627
Non-recurring revenues 8,560 8,142 33,078 34,192
--------- --------- --------- ---------
Total net revenues 97,579 92,017 382,959 358,819
Cost of revenues (1):
Recurring revenues 18,417 16,991 70,590 68,953
Non-recurring revenues 8,956 9,890 40,044 43,505
Amortization of developed
technology 1,682 2,558 9,087 10,258
--------- --------- --------- ---------
Total cost of revenues 29,055 29,439 119,721 122,716
--------- --------- --------- ---------
Gross margin 68,524 62,578 263,238 236,103
Operating expenses (1):
Sales and marketing 20,098 18,566 79,065 74,688
Product development 17,464 16,637 69,718 67,014
General and administrative 10,842 10,144 54,737 37,763
Amortization of other
intangibles 912 958 3,775 3,825
Recapitalization costs - - 6,041 -
Restructuring charges 811 3,581 3,770 3,634
--------- --------- --------- ---------
Total operating expenses 50,127 49,886 217,106 186,924
--------- --------- --------- ---------
Income from continuing
operations 18,397 12,692 46,132 49,179
Interest and other income
(expense), net (2,603) (515) (7,213) (1,620)
--------- --------- --------- ---------
Income from continuing
operations before income taxes 15,794 12,177 38,919 47,559
Provision for income taxes 4,777 4,147 10,167 17,328
--------- --------- --------- ---------
Net income from continuing
operations $ 11,017 $ 8,030 $ 28,752 $ 30,231
Discontinued operation:
Net (loss) income from
discontinued operation (net
of applicable taxes of $(11),
$(8), $34 and $126,
respectively) (18) (49) 50 184
--------- --------- --------- ---------
Net income $ 10,999 $ 7,981 $ 28,802 $ 30,415
========= ========= ========= =========
Basic net income (loss) per
share (2):
Continuing operations $ 0.22 $ 0.16 $ 0.56 $ 0.60
Discontinued operation (0.00) (0.00) 0.00 0.00
--------- --------- --------- ---------
Total operations $ 0.22 $ 0.16 $ 0.56 $ 0.60
========= ========= ========= =========
Diluted net income (loss) per
share (2):
Continuing operations $ 0.20 $ 0.16 $ 0.54 $ 0.58
Discontinued operation (0.00) (0.00) 0.00 0.00
--------- --------- --------- ---------
Total operations $ 0.20 $ 0.15 $ 0.54 $ 0.58
========= ========= ========= =========
Weighted average shares used to
compute net income (loss) per
share:
Basic 51,105 50,276 51,207 50,614
Diluted 53,844 51,802 53,378 52,425
(1) Includes stock-based
employee compensation expense
as follows:
Cost of recurring revenues $ 844 $ 595 $ 3,491 $ 2,405
Cost of non-recurring revenues 563 310 3,253 1,236
--------- --------- --------- ---------
Total cost of revenues 1,407 905 6,744 3,641
Sales and marketing 2,345 1,902 13,265 7,165
Product development 1,922 1,483 8,863 5,821
General and administrative 1,908 1,167 19,307 4,174
--------- --------- --------- ---------
Total operating expenses 6,175 4,552 41,435 17,160
--------- --------- --------- ---------
Total stock-based employee
compensation expense $ 7,582 $ 5,457 $ 48,179 $ 20,801
========= ========= ========= =========
(2) Net income (loss) per share is based on actual calculated values and
totals may not sum due to rounding.
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Twelve Months Ended
December 31
--------------------
2013 2012
--------- ---------
Cash flows from operating activities:
Net income $ 28,802 $ 30,415
Adjustment to net income for discontinued operation
net income (50) (184)
--------- ---------
Net income from continuing operations 28,752 30,231
Adjustments to reconcile net income to net cash
provided by operating activities from continuing
operations:
Stock-based compensation 48,179 20,801
Excess tax benefit from stock-based compensation (7,477) (7,785)
Depreciation and amortization 24,393 25,879
Amortization of debt issuance costs 947 381
Provision for doubtful accounts 278 403
(Reduction of) provision for sales reserves (306) 1,154
Deferred income taxes 4,589 5,230
Other 29 (252)
--------- ---------
Effect of statement of operations adjustments 70,632 45,811
Changes in operating assets and liabilities:
Accounts receivable 2,074 575
Prepaid and other assets (1,762) 822
Accounts payable 27 (5,368)
Accrued liabilities (6,089) (2,055)
Deferred revenues 11,047 7,151
Income taxes payable (6,117) 9,453
--------- ---------
Effect of changes in operating assets and
liabilities (820) 10,578
--------- ---------
Net cash provided by operating activities from
continuing operations 98,564 86,620
Cash flows from investing activities:
Cash used in acquisition - (700)
Purchases of property and equipment (5,616) (6,369)
Capitalized software development costs (1,995) (2,137)
Purchases of marketable securities (57,863) (220,994)
Sales and maturities of marketable securities 228,619 118,588
Change in restricted cash - 95
--------- ---------
Net cash provided by (used in) investing activities
from continuing operations 163,145 (111,517)
Cash flows from financing activities:
Proceeds from common stock issued from exercises of
stock options 19,495 5,173
Proceeds from common stock issued under the employee
stock purchase plan 6,293 6,661
Excess tax benefits from stock-based compensation 7,477 7,785
Withholding taxes related to equity award net share
settlement (11,833) (5,496)
Proceeds from debt 375,000 50,000
Repayment of debt (165,000) (5,000)
Debt issuance costs (5,725) -
Repurchase of common stock (41,256) (41,275)
Payment of cash dividend (470,133) -
--------- ---------
Net cash (used in) provided by financing activities
from continuing operations (285,682) 17,848
Net cash transferred to discontinued operation (375) (561)
Effect of exchange rate changes on cash and cash
equivalents (41) 302
--------- ---------
Net change in cash and cash equivalents from
continuing operations (24,389) (7,308)
Cash and cash equivalents of continuing operations at
beginning of period 58,217 65,525
--------- ---------
Cash and cash equivalents of continuing operations at
end of period $ 33,828 $ 58,217
========= =========
Twelve Months Ended
December 31
--------------------
2013 2012
--------- ---------
Supplemental disclosure of cash flow information:
Cash flows from discontinued operation:
Net cash used in operating activities $ (375) $ (561)
Net cash transferred from continuing operations 375 561
--------- ---------
Net change in cash and cash equivalents from
discontinued operation - -
Cash and cash equivalents of discontinued operation
at beginning of period - -
--------- ---------
Cash and cash equivalents of discontinued operation
at end of period $ - $ -
========= =========
The cash flows from the discontinued operation, as presented in the
condensed consolidated statement of cash flows, relate to the operations
of MicroEdge, Inc.
ADVENT SOFTWARE, INC.
RECONCILIATION OF SELECTED CONTINUING OPERATIONS' GAAP MEASURES TO NON-GAAP
MEASURES
(In thousands, except per share data)
(Unaudited)
To supplement our condensed consolidated financial statements presented in
accordance with generally accepted accounting principles in the United
States of America (or GAAP), Advent uses non-GAAP measures of continuing
operations' gross margin, operating income, net income and net income per
share, which are adjusted to exclude certain costs, expenses and income we
believe appropriate to enhance an overall understanding of our past
financial performance and also our prospects for the future. These
adjustments to our current period GAAP results are made with the intent of
providing both management and investors a more complete understanding of
Advent's underlying operational results and trends and our marketplace
performance. In addition, these non-GAAP results are among the information
management uses as a basis for our planning and forecasting of future
periods. The presentation of this additional information is not meant to
be considered in isolation or as a substitute for results prepared in
accordance with GAAP.
Three Months Ended December 31
----------------------------------------
2013 2012
------------------- -------------------
% of Net % of Net
Amount Revenues Amount Revenues
--------- -------- --------- --------
GAAP gross margin $ 68,524 70.2% $ 62,578 68.0%
Amortization of acquired
intangibles 1,177 1,908
Stock-based compensation 1,407 905
--------- ---------
Non-GAAP gross margin $ 71,108 72.9% $ 65,391 71.1%
========= =========
GAAP operating income $ 18,397 18.9% $ 12,692 13.8%
Amortization of acquired
intangibles 2,089 2,866
Stock-based compensation 7,582 5,457
Restructuring charges 811 3,581
--------- ---------
Non-GAAP operating income $ 28,879 29.6% $ 24,596 26.7%
========= =========
GAAP net income $ 11,017 $ 8,030
Amortization of acquired
intangibles 2,089 2,866
Stock-based compensation 7,582 5,457
Restructuring charges 811 3,581
Income tax adjustment (1) (4,420) (4,281)
--------- ---------
Non-GAAP net income $ 17,079 $ 15,653
========= =========
GAAP net income $ 11,017 $ 8,030
Net interest 2,510 408
Provision for income taxes 4,777 4,147
Depreciation expense 2,895 2,991
Amortization expense 2,594 3,516
Stock-based compensation 7,582 5,457
--------- ---------
Adjusted EBITDA $ 31,375 $ 24,549
========= =========
Diluted net income per share
GAAP $ 0.20 $ 0.16
Non-GAAP $ 0.32 $ 0.30
Shares used to compute diluted net
income per share 53,844 51,802
(1) The estimated non-GAAP effective tax rate was 35% for the three months
ended December 31, 2013 and 2012, respectively, and has been used to
adjust the provision for income taxes for non-GAAP net income and non-GAAP
diluted net income per share purposes.
ADVENT SOFTWARE, INC.
RECONCILIATION OF SELECTED CONTINUING OPERATIONS' GAAP MEASURES TO NON-GAAP
MEASURES
(In thousands, except per share data)
(Unaudited)
To supplement our condensed consolidated financial statements presented in
accordance with generally accepted accounting principles in the United
States of America (or GAAP), Advent uses non-GAAP measures of continuing
operations' gross margin, operating income, net income and net income per
share, which are adjusted to exclude certain costs, expenses and income we
believe appropriate to enhance an overall understanding of our past
financial performance and also our prospects for the future. These
adjustments to our current period GAAP results are made with the intent of
providing both management and investors a more complete understanding of
Advent's underlying operational results and trends and our marketplace
performance. In addition, these non-GAAP results are among the information
management uses as a basis for our planning and forecasting of future
periods. The presentation of this additional information is not meant to
be considered in isolation or as a substitute for results prepared in
accordance with GAAP.
Twelve Months Ended December 31
----------------------------------------
2013 2012
------------------- -------------------
% of Net % of Net
Amount Revenues Amount Revenues
--------- -------- --------- --------
GAAP gross margin $ 263,238 68.7% $ 236,103 65.8%
Amortization of acquired
intangibles 6,841 7,599
Stock-based compensation 6,744 3,641
--------- ---------
Non-GAAP gross margin $ 276,823 72.3% $ 247,343 68.9%
========= =========
GAAP operating income $ 46,132 12.0% $ 49,179 13.7%
Amortization of acquired
intangibles 10,616 11,424
Stock-based compensation 48,179 20,801
Restructuring charges 3,770 3,634
Recapitalization costs 6,041 -
Transaction related fees 565 -
--------- ---------
Non-GAAP operating income $ 115,303 30.1% $ 85,038 23.7%
========= =========
GAAP net income $ 28,752 $ 30,231
Amortization of acquired
intangibles 10,616 11,424
Stock-based compensation 48,179 20,801
Restructuring charges 3,770 3,634
Recapitalization costs 6,692 -
Transaction related fees 565 -
Income tax adjustment (1) (27,892) (11,868)
--------- ---------
Non-GAAP net income $ 70,682 $ 54,222
========= =========
GAAP net income $ 28,752 $ 30,231
Net interest 6,949 1,732
Provision for income taxes 10,167 17,328
Depreciation expense 11,531 11,796
Amortization expense 12,862 14,083
Stock-based compensation 48,179 20,801
--------- ---------
Adjusted EBITDA $ 118,440 $ 95,971
========= =========
Diluted net income per share
GAAP $ 0.54 $ 0.58
Non-GAAP $ 1.32 $ 1.03
Shares used to compute diluted net
income per share 53,378 52,425
(1) The estimated non-GAAP effective tax rate was 35% for the twelve months
ended December 31, 2013 and 2012, respectively, and has been used to
adjust the provision for income taxes for non-GAAP net income and non-GAAP
diluted net income per share purposes.
ADVENT SOFTWARE, INC.
RECONCILIATION OF PROJECTED CONTINUING OPERATIONS' GAAP OPERATING INCOME %
TO NON-GAAP OPERATING INCOME %
(Preliminary and unaudited)
Advent provides projections for the non-GAAP measure of its continuing
operations' operating income percentage. This non-GAAP measure excludes
certain costs and expenses which we believe is appropriate to enhance an
overall understanding of our past financial performance and also our
prospects for the future. Adjustments to our projected continuing
operations' GAAP results are made with the intent of providing management
and investors a more complete understanding of Advent's underlying
operational results and trends and our marketplace performance. In
addition, these adjusted non-GAAP projections are among the information
management uses as a basis for planning and forecasting of future periods.
The presentation of this additional information is not meant to be
considered in isolation or as a substitute for results prepared in
accordance with generally accepted accounting principles in the United
States of America.
Twelve Months Ending December 31, 2014
Continuing Operations
Operating Income %
---------------------------------------
Projected GAAP 21.0% to 21.5%
=======================================
Projected stock-based
compensation adjustment 8.0%
Projected amortization of
acquired developed technology
and other acquired intangible
asset adjustment 2.0%
---------------------------------------
Projected non-GAAP 31.0% to 31.5%
=======================================
CONTACTS
Media Contact:
Amanda Diamondstein-Cieplinska
Advent Software, Inc.
(415) 645-1668
Email Contact
Investor Relations Contact:
Justin Ritchie
Advent Software, Inc.
(415) 645-1683
Email Contact
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