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SAN FRANCISCO, CA -- (Marketwired) -- 10/28/13 -- 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 third quarter ended September 30, 2013.
"Advent delivered record revenues and solid profitability, demonstrating the value customers continue to place on our solutions," said Pete Hess, Chief Executive Officer at Advent. "Third quarter highlights also included our successful annual client conference, AdventConnect, where we shared a well-received preview of our new cloud-based solution platform, which launches next year. It's exciting to see the enthusiasm as we continue to sharpen our focus on our clients' success."
THIRD QUARTER 2013 RESULTS
GAAP Results for Continuing Operations
The Company reported quarterly revenue of $96.8 million for the third quarter of 2013, compared to $90.2 million in the third quarter of 2012, a 7% increase.
Operating income for the third quarter of 2013 was $17.4 million, or 18.0% of revenue, compared to $12.6 million or 14.0% of revenue for the third quarter of 2012.
Net income for the third quarter of 2013 was $9.8 million compared to $7.7 million in the third quarter of 2012.
On a fully diluted basis, earnings per share in the third quarter of 2013 were $0.18, compared to $0.15 in the third quarter of 2012.
Operating cash flow in the third quarter of 2013 was $22.8 million, compared with $25.3 million in the third quarter of 2012.
Cash, cash equivalents and marketable securities totaled $41 million as of September 30, 2013, compared to $404 million as of June 30, 2013. On July 9, 2013, the Company paid a one-time special cash dividend of $9 per share totaling approximately $470 million. The special dividend was financed with cash on hand and proceeds from Advent's recently closed $425 million senior credit facility. Total outstanding debt as of September 30, 2013 was $350 million compared to $225 million as of June 30, 2013.
Deferred revenue as of September 30, 2013 was $173 million, compared to $174 million as of June 30, 2013.
Non-GAAP Results for Continuing Operations
Non-GAAP operating income for the third quarter of 2013 was $29.0 million, or 30.0% of revenue. This represents a 39% increase compared to $20.8 million, or 23.1% of revenue, in the third quarter of 2012. On a fully diluted basis, non-GAAP earnings per share were $0.31 in the third quarter of 2013 and represent a 22% increase from non-GAAP diluted earnings per share of $0.26 in the third quarter of 2012.
The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.
THIRD QUARTER HIGHLIGHTS
FINANCIAL GUIDANCE
Advent updates the following financial guidance for the fourth quarter and fiscal year 2013:
----------------------------------------------------------------------------
Guidance Q4 2013 FY 2013
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Total Revenue ($M) $95 -$97 $380-$382
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YoY Revenue Growth 3% - 5% 6%
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GAAP Operating Margin n/a 11.0% - 11.5%
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Stock Compensation Expense (% of revenue) n/a 13.0%
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Amortization of Intangibles (% of revenue) n/a 3.0%
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Recapitalization Costs (% of revenue) n/a 1.5%
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Restructuring Charges (% of revenue) n/a 1.0%
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Non-GAAP Operating Margin n/a 29.5% - 30.0%
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Operating Cash Flow ($M) n/a $93 - $97
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Capital Expenditures ($M) n/a $8 - $10
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Effective Tax Rate (GAAP) n/a 25% - 30%
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Effective Tax Rate (non-GAAP) n/a 35%
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INVESTOR CALL
Advent Software, Inc. will host its Q3 2013 quarterly earnings conference call at 5:00 p.m. Eastern time today. The Q3 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 (877) 280-4962 and request conference ID #26629001. Telephone replay will be available through midnight November 4, 2013. The replay number for domestic callers is (888) 286-8010, and for international callers is (617) 801-6888, with the conference ID of #34661098.
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 4,400 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 (U.S. 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, Advent Software, Geneva, and Tamale RMS are registered trademarks of, and the Advent logo is a mark 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)
September 30 December 31
2013 2012
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 41,380 $ 58,217
Short-term marketable securities - 111,192
Accounts receivable, net 56,597 61,069
Deferred taxes, current 18,934 18,934
Prepaid expenses and other 30,917 25,868
Current assets of discontinued operation - 88
------------- -------------
Total current assets 147,828 275,368
Property and equipment, net 31,602 37,269
Goodwill 206,956 206,932
Other intangibles, net 30,478 38,205
Long-term marketable securities - 61,552
Deferred taxes, long-term 20,399 24,524
Other assets 16,024 12,994
Noncurrent assets of discontinued operation 1,609 1,609
------------- -------------
Total assets $ 454,896 $ 658,453
============= =============
LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 9,771 $ 5,190
Accrued liabilities 35,713 37,096
Deferred revenues 165,152 174,388
Income taxes payable - 5,593
Current portion of long-term debt 20,000 10,000
Current liabilities of discontinued
operation 625 262
------------- -------------
Total current liabilities 231,261 232,529
Deferred revenues, long-term 7,617 8,787
Long-term income taxes payable 5,335 5,335
Long-term debt 330,000 85,000
Other long-term liabilities 11,556 13,139
Noncurrent liabilities of discontinued
operation 2,928 3,804
------------- -------------
Total liabilities 588,697 348,594
------------- -------------
Stockholders' (deficit) equity:
Common stock 509 505
Additional paid-in capital 32,673 453,585
Accumulated deficit (176,869) (154,261)
Accumulated other comprehensive income 9,886 10,030
------------- -------------
Total stockholders' (deficit) equity (133,801) 309,859
------------- -------------
Total liabilities and stockholders'
(deficit) equity $ 454,896 $ 658,453
============= =============
ADVENT SOFTWARE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(GAAP, Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
-------------------- --------------------
2013 2012 2013 2012
--------- --------- --------- ---------
Net revenues:
Recurring revenues $ 88,116 $ 81,090 $ 260,862 $ 240,752
Non-recurring revenues 8,651 9,084 24,518 26,050
--------- --------- --------- ---------
Total net revenues 96,767 90,174 285,380 266,802
Cost of revenues (1):
Recurring revenues 17,782 17,216 52,173 51,962
Non-recurring revenues 11,501 13,011 31,088 33,615
Amortization of developed
technology 2,508 2,586 7,405 7,700
--------- --------- --------- ---------
Total cost of revenues 31,791 32,813 90,666 93,277
--------- --------- --------- ---------
Gross margin 64,976 57,361 194,714 173,525
Operating expenses (1):
Sales and marketing 18,546 17,965 58,967 56,122
Product development 17,369 17,077 52,254 50,377
General and administrative 10,894 8,752 43,895 27,619
Amortization of other
intangibles 953 955 2,863 2,867
Recapitalization costs - - 6,041 -
Restructuring (benefit) charges (157) (17) 2,959 53
--------- --------- --------- ---------
Total operating expenses 47,605 44,732 166,979 137,038
--------- --------- --------- ---------
Income from continuing
operations 17,371 12,629 27,735 36,487
Interest and other income
(expense), net (2,977) (130) (4,610) (1,105)
--------- --------- --------- ---------
Income from continuing
operations before income taxes 14,394 12,499 23,125 35,382
Provision for income taxes 4,561 4,812 5,390 13,181
--------- --------- --------- ---------
Net income from continuing
operations $ 9,833 $ 7,687 $ 17,735 $ 22,201
Discontinued operation:
Net (loss) income from
discontinued operation (net
of applicable taxes of
$(16), $(13), $45 and $134,
respectively) (20) 11 68 233
--------- --------- --------- ---------
Net income $ 9,813 $ 7,698 $ 17,803 $ 22,434
========= ========= ========= =========
Basic net income (loss) per
share (2):
Continuing operations $ 0.19 $ 0.15 $ 0.35 $ 0.44
Discontinued operation (0.00) 0.00 0.00 0.00
--------- --------- --------- ---------
Total operations $ 0.19 $ 0.15 $ 0.35 $ 0.44
========= ========= ========= =========
Diluted net income (loss) per
share (2):
Continuing operations $ 0.18 $ 0.15 $ 0.33 $ 0.42
Discontinued operation (0.00) 0.00 0.00 0.00
--------- --------- --------- ---------
Total operations $ 0.18 $ 0.15 $ 0.33 $ 0.43
========= ========= ========= =========
Weighted average shares used to
compute net income (loss) per
share:
Basic 51,576 50,401 51,241 50,722
Diluted 53,937 52,248 53,329 52,764
(1) Includes stock-based
employee compensation expense
as follows:
Cost of recurring revenues $ 853 $ 615 $ 2,647 $ 1,810
Cost of non-recurring revenues 578 331 2,690 926
--------- --------- --------- ---------
Total cost of revenues 1,431 946 5,337 2,736
Sales and marketing 2,874 1,877 10,920 5,263
Product development 2,083 1,440 6,941 4,338
General and administrative 2,003 1,108 17,399 3,007
--------- --------- --------- ---------
Total operating expenses 6,960 4,425 35,260 12,608
--------- --------- --------- ---------
Total stock-based employee
compensation expense $ 8,391 $ 5,371 $ 40,597 $ 15,344
========= ========= ========= =========
(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)
Nine Months Ended
September 30
----------------------
2013 2012
---------- ----------
Cash flows from operating activities:
Net income $ 17,803 $ 22,434
Adjustment to net income for discontinued
operation net income (68) (233)
---------- ----------
Net income from continuing operations 17,735 22,201
Adjustments to reconcile net income to net cash
provided by operating activities from continuing
operations:
Stock-based compensation 40,597 15,344
Excess tax benefit from stock-based compensation (4,220) (4,693)
Depreciation and amortization 18,903 19,372
Amortization of debt issuance costs 593 285
Provision for doubtful accounts 290 209
(Reduction of) provision for sales reserves (196) 1,019
Deferred income taxes 6,281 4,043
Other (45) (521)
---------- ----------
Effect of statement of operations
adjustments 62,203 35,058
Changes in operating assets and liabilities:
Accounts receivable 4,181 8,062
Prepaid and other assets (860) 4,137
Accounts payable 3,843 (2,066)
Accrued liabilities (9,801) (7,137)
Deferred revenues (10,210) (13,506)
Income taxes payable (5,190) 7,024
---------- ----------
Effect of changes in operating assets and
liabilities (18,037) (3,486)
---------- ----------
Net cash provided by operating activities from
continuing operations 61,901 53,773
Cash flows from investing activities:
Cash used in acquisition - (700)
Purchases of property and equipment (2,161) (5,383)
Capitalized software development costs (2,556) (1,942)
Purchases of marketable securities (57,863) (91,926)
Sales and maturities of marketable securities 228,619 69,600
---------- ----------
Net cash provided by (used in) investing activities
from continuing operations 166,039 (30,351)
Cash flows from financing activities:
Proceeds from common stock issued from exercises
of stock options 18,382 4,211
Proceeds from common stock issued under the
employee stock purchase plan 3,211 3,448
Excess tax benefits from stock-based compensation 4,220 4,693
Withholding taxes related to equity award net
share settlement (8,043) (5,257)
Proceeds from debt 375,000 -
Repayment of debt (120,000) (3,750)
Debt issuance costs (5,725) -
Repurchase of common stock (41,256) (41,275)
Payment of cash dividend (470,133) -
---------- ----------
Net cash used in financing activities from
continuing operations (244,344) (37,930)
Net cash transferred to discontinued operation (358) (593)
Effect of exchange rate changes on cash and cash
equivalents (75) 258
---------- ----------
Net change in cash and cash equivalents from
continuing operations (16,837) (14,843)
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 $ 41,380 $ 50,682
========== ==========
Nine Months Ended
September 30
----------------------
2013 2012
---------- ----------
Supplemental disclosure of cash flow information:
Noncash investing activities:
Capital expenditures included in accounts payable $ 738 $ -
Cash flows from discontinued operation:
Net cash used in operating activities $ (358) $ (593)
Net cash provided by investing activities - -
Net cash transferred from continuing operations 358 593
---------- ----------
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, income, gains and losses 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 September 30
----------------------------------------
2013 2012
------------------- -------------------
% of Net % of Net
Amount Revenues Amount Revenues
--------- -------- --------- --------
GAAP gross margin $ 64,976 67.1% $ 57,361 63.6%
Amortization of acquired
intangibles 1,883 1,894
Stock-based compensation 1,431 946
--------- ---------
Non-GAAP gross margin $ 68,290 70.6% $ 60,201 66.8%
========= =========
GAAP operating income $ 17,371 18.0% $ 12,629 14.0%
Amortization of acquired
intangibles 2,836 2,849
Stock-based compensation 8,391 5,371
Restructuring benefit (157) (17)
Recapitalization costs - -
Transaction related fees 565 -
--------- ---------
Non-GAAP operating income $ 29,006 30.0% $ 20,832 23.1%
========= =========
GAAP net income $ 9,833 $ 7,687
Amortization of acquired
intangibles 2,836 2,849
Stock-based compensation 8,391 5,371
Restructuring benefit (157) (17)
Recapitalization costs - -
Transaction related fees 565 -
Income tax adjustment (1) (4,549) (2,434)
--------- ---------
Non-GAAP net income $ 16,919 $ 13,456
========= =========
GAAP net income $ 9,833 $ 7,687
Net interest 2,631 422
Provision for income taxes 4,561 4,812
Depreciation expense 2,771 2,980
Amortization expense 3,461 3,541
Stock-based compensation 8,391 5,371
--------- ---------
Adjusted EBITDA $ 31,648 $ 24,813
========= =========
Diluted net income per share
GAAP $ 0.18 $ 0.15
Non-GAAP $ 0.31 $ 0.26
Shares used to compute diluted net
income per share 53,937 52,248
(1) The estimated non-GAAP effective tax rate was 35% for the three months
ended September 30, 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, expenses, gains and losses 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, 2013
Continuing Operations
Operating Income %
------------------------------
Projected GAAP 11.0% to 11.5%
==============================
Projected stock-based compensation
adjustment 13.0%
Projected amortization of acquired developed
technology and other acquired intangible
asset adjustment 3.0%
Projected recapitalization costs 1.5%
Projected restructuring charge adjustment 1.0%
------------------------------
Projected non-GAAP 29.5% to 30.0%
==============================
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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