WINDSOR, Conn., July 28, 2021 /PRNewswire/ -- SS&C
Technologies Holdings, Inc. (NASDAQ: SSNC), a global provider of
investment, financial and healthcare software-enabled services and
software, today announced its financial results for the second
quarter and full year ended June 30, 2021.
(in millions, except
per share data):
|
Three Months
Ended June 30,
2021
|
Three Months
Ended June 30,
2020
|
Change
|
Six Months
Ended June 30,
2021
|
Six Months
Ended June 30,
2020
|
Change
|
GAAP
Results
|
Revenue
|
$1,259.0
|
$1,138.1
|
10.6%
|
$2,492.4
|
$2,311.7
|
7.8%
|
Operating
income
|
312.9
|
241.3
|
29.7%
|
582.0
|
460.1
|
26.5%
|
Operating income
margin
|
24.9%
|
21.2%
|
370 bp
|
23.4%
|
19.9%
|
350 bp
|
Diluted earnings per
share
|
$0.71
|
$0.64
|
10.9%
|
$1.36
|
$1.01
|
34.7%
|
Adjusted Non-GAAP
Results (defined in Notes 1 - 4 below)
|
Adjusted
revenue
|
$1,261.0
|
$1,140.8
|
10.5%
|
$2,496.4
|
$2,318.8
|
7.7%
|
Adjusted operating
income
|
495.8
|
430.1
|
15.3%
|
971.6
|
874.3
|
11.1%
|
Adjusted operating
income margin
|
39.3%
|
37.7%
|
160 bp
|
38.9%
|
37.7%
|
120 bp
|
Adjusted diluted
earnings per share
|
$1.24
|
$1.04
|
19.2%
|
$2.42
|
$2.07
|
16.9%
|
Second Quarter 2021 Highlights:
- Adjusted organic revenue growth for Q2 2021 was 7.2%.
- SS&C reported record adjusted consolidated EBTIDA of
$511.1 million for the quarter,
$1,003.0 million for the first six
months 2021.
- Repurchased 2.0 million shares of common stock in Q2 2021 at an
average price of $73.44 per share for
$143.6 million.
- Paid down $183.1 million in debt
for the first six months in 2021, bringing consolidated net
leverage ratio to 3.12x and our secured net leverage ratio to 2.09x
consolidated EBTIDA.
- As of June 28, 2021, SS&C
restructured the management of former DST financial services
products and services offering to further align and integrate
teams.
- In July, SS&C announced it has entered into a joint venture
with healthcare industry leaders to create a new cloud-native,
API-driven claims adjudication platform, called DomaniRx. We
believe this will shape the future of Pharmacy Benefit Management
(PBM) and harmonize the payer and provider management user
experience.
"SS&C continues to post strong results. Q2 2021 finished
with 10.5% adjusted revenue growth, and 7.2% adjusted organic
growth. We saw outperformance from all of our business units this
quarter, and expect the momentum to carry into the second half of
the year," says Bill Stone, Chairman
and Chief Executive Officer. "We simplified our organizational
structure to focus on growth opportunities, and our teams
delivered. Since Q1 2020 we have added $400
billion to our alternatives platform. We are also excited
about opportunities we will generate from DomaniRx, the healthcare
joint venture announced last week. Partnering with world class
players will give us access to talent and ideas as we develop the
next generation PBM platform."
Operating Cash Flow
SS&C generated net cash from operating activities of
$562.3 million for the six
months ended June 30, 2021, compared to $555.7 million for the same period in 2020.
SS&C ended the second quarter with $247.1 million in cash and cash equivalents
and $6,325.6 million in gross
debt, for a net debt balance of $6,078.5 million. SS&C's
consolidated net leverage ratio as defined in our credit agreement
stood at 3.12 times consolidated EBITDA as of June 30,
2021. SS&C's net secured leverage ratio stood at
2.09 times consolidated EBITDA as of June 30, 2021.
SS&C Authorizes $1 Billion
Common Stock Repurchase Program
SS&C announced that its Board of Directors ("Board") has
authorized a stock repurchase program, which will enable the
Company to repurchase up to $1
billion in the aggregate of the Company's outstanding shares
of common stock. This represents a $250 million increase from the Company's previous
stock repurchase program. Under the renewed program,
SS&C's proposed repurchases may be made from time to time in
one or more transactions on the open market or in privately
negotiated purchase and/or through other legally permissible means,
depending on market conditions and in accordance with applicable
rules and regulations promulgated under the Securities Exchange Act
of 1934, as amended. The timing and amount of any shares
repurchased will be determined by the Company's management based on
its evaluation of market conditions and other factors. Repurchases
may also be made under a Rule 10b5-1 plan, which would permit
shares to be repurchased when the Company might otherwise be
precluded from doing so under insider trading laws. The repurchase
program may be suspended or discontinued at any time. Any
repurchased shares will be available for use in connection with the
SS&C's stock plans and for other corporate purposes. The
Company's authority to repurchase shares under the renewed program
shall continue until the one year anniversary of the Board's
authorization, unless earlier terminated by the Board.
Guidance
|
|
Q3
2021
|
|
FY
2021
|
Adjusted Revenue
($M)
|
|
$1,205.0 –
$1,245.0
|
|
$4,921.0 –
$5,001.0
|
Adjusted Net Income
($M)
|
|
$309.0 –
$325.0
|
|
$1,258.0 –
$1,295.0
|
Adjusted Diluted
Earnings per Share
|
|
$1.15 –
$1.21
|
|
$4.70 –
$4.82
|
Cash from Operating
Activities ($M)
|
|
–
|
|
$1,305.0 –
$1,345.0
|
Capital Expenditures
(% of revenue)
|
|
–
|
|
2.6% –
3.0%
|
Diluted Shares
(M)
|
|
268.6 –
268.1
|
|
268.4 –
267.9
|
Effective Income Tax
Rate (%)
|
|
26%
|
|
26%
|
SS&C does not provide reconciliations of guidance for
Adjusted Revenues and Adjusted Net Income to comparable GAAP
measures, in reliance on the unreasonable efforts exception
provided under Item 10(e)(1)(i)(B) of Regulation S-K.
SS&C is unable, without unreasonable efforts, to forecast
certain items required to develop meaningful comparable GAAP
financial measures. These items include acquisition
transactions and integration, foreign exchange rate changes, as
well as other non-cash and other adjustments as defined under the
Company's Credit agreement, that are difficult to predict in
advance in order to include in a GAAP estimate. The
unavailable information could have a significant impact on Q3 2021
and FY 2021 GAAP financial results.
Non-GAAP Financial Measures
Adjusted revenue, adjusted operating income, adjusted
consolidated EBITDA, adjusted net income and adjusted diluted
earnings per share are non-GAAP measures. See the
accompanying notes for the reconciliations and definitions for each
of these non-GAAP measures and the reasons our management believes
these measures provide useful information to investors regarding
our financial condition and results of operations.
Earnings Call and Press Release
SS&C's Q2 2021 earnings call will take place at
5:00 p.m. eastern time today,
July 28, 2021. The call will
discuss Q2 2021 results and business outlook. Interested
parties may dial 844-343-4183 (US and Canada) or 647-689-5128 (International), and
request the "SS&C Technologies Second Quarter 2021 Earnings
Conference Call"; conference ID #8196187. In connection with
the earnings call, a presentation will be available on SS&C's
website at http://investor.ssctech.com/results.cfm. A replay will
be available after 8:00 p.m. eastern
time on July 28, 2021, until
midnight on August 4, 2021. The
replay dial-in number is 800-585-8367 or 416-621-4642; access code
#8196187. The call will also be available for replay on
SS&C's website after July 28,
2021; access: http://investor.ssctech.com/results.cfm.
Certain information contained in this press release relating
to, among other things, the Company's financial guidance for the
second quarter and full year of 2021 constitute forward-looking
statements for purposes of the safe harbor provisions under the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, expectations, intentions,
projections, developments, future events, performance, underlying
assumptions, and other statements that are other than statements of
historical facts. Without limiting the
foregoing, the words "believes", "anticipates", "plans", "expects",
"estimates", "projects", "forecasts", "may", "assume", "intend",
"will", "continue", "opportunity", "predict", "potential",
"future", "guarantee", "likely", "target", "indicate", "would",
"could" and "should" and similar expressions are intended to
identify forward-looking statements, although not all
forward-looking statements are accompanied by such
words. Such statements reflect management's best
judgment based on factors currently known but are subject to risks
and uncertainties, which could cause actual results to differ
materially from those anticipated. Such risks and
uncertainties include, but are not limited to, the state of the
economy and the financial services industry and other industries in
which the Company's clients operate, the Company's ability to
realize anticipated benefits from its acquisitions, including DST
Systems, Inc., the effect of customer consolidation on demand
for the Company's products and services, the increasing focus of
the Company's business on the hedge fund industry, the variability
of revenue as a result of activity in the securities markets, the
ability to retain and attract clients, fluctuations in customer
demand for the Company's products and services, the intensity of
competition with respect to the Company's products and services,
the exposure to litigation and other claims, terrorist activities
and other catastrophic events, disruptions, attacks or failures
affecting the Company's software-enabled services, risks associated
with the Company's foreign operations, privacy concerns relating to
the collection and storage of personal information, evolving
regulations and increased scrutiny from regulators, the
Company's ability to protect intellectual property assets and
litigation regarding intellectual property rights, delays in
product development, investment decisions concerning cash balances,
regulatory and tax risks, risks associated with the Company's joint
ventures, changes in accounting standards, risks related to the
Company's substantial indebtedness, the market price of the
Company's stock prevailing from time to time, and the risks
discussed in the "Risk Factors" section of the Company's most
recent Annual Report on Form 10-K and Quarterly Report on Form
10-Q, which are on file with the Securities and Exchange Commission
and can also be accessed on our website. Forward-looking
statements speak only as of the date on which they are made and,
except to the extent required by applicable securities laws, we
undertake no obligation to update or revise any forward-looking
statements.
About SS&C Technologies
SS&C is a global provider of services and software for the
financial services and healthcare industries. Founded in 1986,
SS&C is headquartered in Windsor,
Connecticut, and has offices around the world. Some 18,000
financial services and healthcare organizations, from the world's
largest companies to small and mid-market firms, rely on SS&C
for expertise, scale, and technology.
Follow SS&C on Twitter, LinkedIn and Facebook.
SS&C
Technologies Holdings, Inc. and Subsidiaries
Condensed
Consolidated Statements of Comprehensive Income
(in millions,
except per share data)
(unaudited)
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software-enabled
services
|
|
$
|
1,057.1
|
|
|
$
|
945.0
|
|
|
$
|
2,100.5
|
|
|
$
|
1,934.5
|
|
License, maintenance
and related
|
|
|
201.9
|
|
|
|
193.1
|
|
|
|
391.9
|
|
|
|
377.2
|
|
Total
revenues
|
|
|
1,259.0
|
|
|
|
1,138.1
|
|
|
|
2,492.4
|
|
|
|
2,311.7
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software-enabled
services
|
|
|
582.8
|
|
|
|
549.9
|
|
|
|
1,178.3
|
|
|
|
1,133.4
|
|
License, maintenance
and related
|
|
|
81.2
|
|
|
|
76.9
|
|
|
|
160.0
|
|
|
|
159.0
|
|
Total cost of
revenues
|
|
|
664.0
|
|
|
|
626.8
|
|
|
|
1,338.3
|
|
|
|
1,292.4
|
|
Gross
profit
|
|
|
595.0
|
|
|
|
511.3
|
|
|
|
1,154.1
|
|
|
|
1,019.3
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
|
97.7
|
|
|
|
84.3
|
|
|
|
189.7
|
|
|
|
175.7
|
|
Research and
development
|
|
|
100.8
|
|
|
|
96.8
|
|
|
|
208.7
|
|
|
|
201.7
|
|
General and
administrative
|
|
|
83.6
|
|
|
|
88.9
|
|
|
|
173.7
|
|
|
|
181.8
|
|
Total operating
expenses
|
|
|
282.1
|
|
|
|
270.0
|
|
|
|
572.1
|
|
|
|
559.2
|
|
Operating
income
|
|
|
312.9
|
|
|
|
241.3
|
|
|
|
582.0
|
|
|
|
460.1
|
|
Interest expense,
net
|
|
|
(51.0)
|
|
|
|
(60.5)
|
|
|
|
(102.4)
|
|
|
|
(137.9)
|
|
Other income,
net
|
|
|
6.5
|
|
|
|
19.0
|
|
|
|
24.5
|
|
|
|
3.7
|
|
Equity in earnings of
unconsolidated affiliates, net
|
|
|
(0.4)
|
|
|
|
(1.0)
|
|
|
|
(0.1)
|
|
|
|
(0.3)
|
|
(Loss) gain on
extinguishment of debt
|
|
|
(1.5)
|
|
|
|
0.2
|
|
|
|
(1.8)
|
|
|
|
(2.6)
|
|
Income before income
taxes
|
|
|
266.5
|
|
|
|
199.0
|
|
|
|
502.2
|
|
|
|
323.0
|
|
Provision for income
taxes
|
|
|
76.7
|
|
|
|
29.5
|
|
|
|
137.5
|
|
|
|
54.3
|
|
Net income
|
|
$
|
189.8
|
|
|
$
|
169.5
|
|
|
$
|
364.7
|
|
|
$
|
268.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share
|
|
$
|
0.74
|
|
|
$
|
0.66
|
|
|
$
|
1.42
|
|
|
$
|
1.05
|
|
Diluted earnings per
share
|
|
$
|
0.71
|
|
|
$
|
0.64
|
|
|
$
|
1.36
|
|
|
$
|
1.01
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
weighted-average number of common shares outstanding
|
|
|
255.7
|
|
|
|
257.0
|
|
|
|
256.4
|
|
|
|
256.1
|
|
Diluted
weighted-average number of common and common
equivalent shares outstanding
|
|
|
267.6
|
|
|
|
265.8
|
|
|
|
267.8
|
|
|
|
265.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
189.8
|
|
|
$
|
169.5
|
|
|
$
|
364.7
|
|
|
$
|
268.7
|
|
Other
comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized
(loss) gain on interest rate swaps
|
|
|
(0.2)
|
|
|
|
(0.3)
|
|
|
|
0.3
|
|
|
|
(2.7)
|
|
Foreign currency
exchange translation adjustment
|
|
|
1.9
|
|
|
|
34.1
|
|
|
|
10.3
|
|
|
|
(116.6)
|
|
Change in defined
benefit pension obligation
|
|
|
0.1
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
—
|
|
Total other
comprehensive income (loss), net of tax
|
|
|
1.8
|
|
|
|
33.8
|
|
|
|
10.7
|
|
|
|
(119.3)
|
|
Comprehensive
income
|
|
$
|
191.6
|
|
|
$
|
203.3
|
|
|
$
|
375.4
|
|
|
$
|
149.4
|
|
SS&C
Technologies Holdings, Inc. and Subsidiaries
Condensed
Consolidated Balance Sheets
(in
millions)
(unaudited)
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2021
|
|
|
2020
|
|
Assets
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
247.1
|
|
|
$
|
209.3
|
|
Funds receivable and
funds held on behalf of clients
|
|
|
2,921.3
|
|
|
|
1,227.4
|
|
Accounts receivable,
net
|
|
|
711.8
|
|
|
|
648.0
|
|
Contract
asset
|
|
|
26.9
|
|
|
|
20.4
|
|
Prepaid expenses and
other current assets
|
|
|
216.8
|
|
|
|
187.5
|
|
Restricted
cash
|
|
|
3.9
|
|
|
|
5.9
|
|
Total current
assets
|
|
|
4,127.8
|
|
|
|
2,298.5
|
|
Property, plant and
equipment, net
|
|
|
394.2
|
|
|
|
412.8
|
|
Operating lease
right-of-use assets
|
|
|
323.5
|
|
|
|
350.8
|
|
Investments
|
|
|
172.8
|
|
|
|
183.5
|
|
Unconsolidated
affiliates
|
|
|
219.8
|
|
|
|
225.6
|
|
Contract
asset
|
|
|
76.0
|
|
|
|
82.0
|
|
Goodwill
|
|
|
8,080.8
|
|
|
|
8,078.7
|
|
Intangible and other
assets, net
|
|
|
4,040.2
|
|
|
|
4,291.7
|
|
Total
assets
|
|
$
|
17,435.1
|
|
|
$
|
15,923.6
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt
|
|
$
|
55.2
|
|
|
$
|
53.9
|
|
Client funds
obligations
|
|
|
2,921.3
|
|
|
|
1,227.4
|
|
Accounts
payable
|
|
|
29.8
|
|
|
|
28.1
|
|
Income taxes
payable
|
|
|
33.2
|
|
|
|
9.3
|
|
Accrued employee
compensation and benefits
|
|
|
205.5
|
|
|
|
311.5
|
|
Interest
payable
|
|
|
27.5
|
|
|
|
27.5
|
|
Other accrued
expenses
|
|
|
336.6
|
|
|
|
293.1
|
|
Deferred
revenue
|
|
|
335.7
|
|
|
|
332.5
|
|
Total current
liabilities
|
|
|
3,944.8
|
|
|
|
2,283.3
|
|
Long-term debt, net
of current portion
|
|
|
6,214.9
|
|
|
|
6,388.5
|
|
Operating lease
liabilities
|
|
|
297.4
|
|
|
|
323.6
|
|
Other long-term
liabilities
|
|
|
277.1
|
|
|
|
287.9
|
|
Deferred income
taxes
|
|
|
877.2
|
|
|
|
923.8
|
|
Total
liabilities
|
|
|
11,611.4
|
|
|
|
10,207.1
|
|
Total stockholders'
equity
|
|
|
5,823.7
|
|
|
|
5,716.5
|
|
Total liabilities and
stockholders' equity
|
|
$
|
17,435.1
|
|
|
$
|
15,923.6
|
|
SS&C
Technologies Holdings, Inc. and Subsidiaries
Condensed
Consolidated Statements of Cash Flows
(in
millions)
(unaudited)
|
|
|
Six Months Ended
June 30,
|
|
|
|
2021
|
|
|
2020
|
|
Cash flow from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
364.7
|
|
|
$
|
268.7
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
335.3
|
|
|
|
364.1
|
|
Equity in earnings of
unconsolidated affiliates, net
|
|
|
0.1
|
|
|
|
0.3
|
|
Cash distributions
received from unconsolidated affiliates
|
|
|
10.0
|
|
|
|
8.0
|
|
Gain on bargain
purchase
|
|
|
(3.2)
|
|
|
|
—
|
|
Stock-based
compensation expense
|
|
|
55.5
|
|
|
|
44.6
|
|
Net gains on
investments
|
|
|
(17.2)
|
|
|
|
(5.5)
|
|
Amortization and
write-offs of loan origination costs and original issue
discounts
|
|
|
6.7
|
|
|
|
6.9
|
|
Loss on extinguishment
of debt, net
|
|
|
1.8
|
|
|
|
0.9
|
|
Loss on sale or
disposition of property and equipment
|
|
|
0.1
|
|
|
|
4.0
|
|
Deferred income
taxes
|
|
|
(47.2)
|
|
|
|
(84.1)
|
|
Provision for doubtful
accounts
|
|
|
4.5
|
|
|
|
4.8
|
|
Changes in operating
assets and liabilities, excluding effects from
acquisitions:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(63.7)
|
|
|
|
(11.9)
|
|
Prepaid expenses and
other assets
|
|
|
(17.5)
|
|
|
|
(16.5)
|
|
Contract
assets
|
|
|
(0.8)
|
|
|
|
(3.7)
|
|
Accounts
payable
|
|
|
(0.1)
|
|
|
|
4.0
|
|
Accrued expenses and
other liabilities
|
|
|
(82.1)
|
|
|
|
(91.8)
|
|
Income taxes prepaid
and payable
|
|
|
32.2
|
|
|
|
101.6
|
|
Deferred
revenue
|
|
|
(16.8)
|
|
|
|
(38.7)
|
|
Net cash provided by
operating activities
|
|
|
562.3
|
|
|
|
555.7
|
|
Cash flow from
investing activities:
|
|
|
|
|
|
|
|
|
Cash paid for business
acquisitions, net of cash acquired
|
|
|
7.3
|
|
|
|
(114.1)
|
|
Additions to property
and equipment
|
|
|
(17.6)
|
|
|
|
(16.0)
|
|
Additions to
capitalized software
|
|
|
(42.1)
|
|
|
|
(35.9)
|
|
Investments in
securities
|
|
|
(10.0)
|
|
|
|
(40.8)
|
|
Proceeds from sales /
maturities of investments
|
|
|
38.9
|
|
|
|
33.7
|
|
Collection of other
non-current receivables
|
|
|
5.6
|
|
|
|
5.0
|
|
Net cash used in
investing activities
|
|
|
(17.9)
|
|
|
|
(168.1)
|
|
Cash flow from
financing activities:
|
|
|
|
|
|
|
|
|
Cash received from
debt borrowings
|
|
|
210.0
|
|
|
|
246.0
|
|
Repayments of
debt
|
|
|
(393.1)
|
|
|
|
(503.3)
|
|
Net increase
(decrease) in client funds obligations
|
|
|
1,682.7
|
|
|
|
(947.4)
|
|
Proceeds from exercise
of stock options
|
|
|
88.9
|
|
|
|
82.8
|
|
Withholding taxes paid
related to equity award net share settlement
|
|
|
(5.6)
|
|
|
|
(7.3)
|
|
Purchases of common
stock for treasury
|
|
|
(325.0)
|
|
|
|
(27.9)
|
|
Dividends paid on
common stock
|
|
|
(82.1)
|
|
|
|
(64.0)
|
|
Net cash provided by
(used in) financing activities
|
|
|
1,175.8
|
|
|
|
(1,221.1)
|
|
Effect of exchange
rate changes on cash, cash equivalents and restricted
cash
|
|
|
(1.6)
|
|
|
|
(5.4)
|
|
Net increase
(decrease) in cash, cash equivalents and restricted cash
|
|
|
1,718.6
|
|
|
|
(838.9)
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
|
1,337.9
|
|
|
|
1,789.4
|
|
Cash, cash
equivalents and restricted cash and cash equivalents, end of
period
|
|
$
|
3,056.5
|
|
|
$
|
950.5
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
cash, cash equivalents and restricted cash and cash
equivalents:
|
|
Cash and cash
equivalents
|
|
$
|
247.1
|
|
|
$
|
261.9
|
|
Restricted cash and
cash equivalents
|
|
|
3.9
|
|
|
|
8.4
|
|
Restricted cash and
cash equivalents included in funds receivable and funds held on
behalf
of clients
|
|
|
2,805.5
|
|
|
|
680.2
|
|
|
|
$
|
3,056.5
|
|
|
$
|
950.5
|
|
SS&C Technologies Holdings, Inc. and
Subsidiaries
Disclosures Relating to Non-GAAP Financial
Measures
Note 1. Reconciliation of Revenues to Adjusted
Revenues
Adjusted revenues represents revenues adjusted to include a)
amounts that would have been recognized if deferred revenue were
not adjusted to fair value at the date of acquisition and b)
amounts that would have been recognized if not for adjustments to
deferred revenue and retained earnings related to the adoption of
ASC 606. Adjusted revenues is presented because we use this
measure to evaluate performance of our business against prior
periods and believe it is a useful indicator of the underlying
performance of our business. Adjusted revenues is not a
recognized term under generally accepted accounting principles
("GAAP"). Adjusted revenues does not represent revenues, as
that term is defined under GAAP, and should not be considered as an
alternative to revenues as an indicator of our operating
performance. Adjusted revenues as presented herein is not
necessarily comparable to similarly titled measures presented by
other companies. Below is a reconciliation of adjusted
revenues to revenues, the GAAP measure we believe to be most
directly comparable to adjusted revenues.
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
(in
millions)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Revenues
|
|
$
|
1,259.0
|
|
|
$
|
1,138.1
|
|
|
$
|
2,492.4
|
|
|
$
|
2,311.7
|
|
ASC 606 adoption
impact
|
|
|
0.1
|
|
|
|
0.6
|
|
|
|
0.2
|
|
|
|
2.8
|
|
Purchase accounting
adjustments impact on revenue
|
|
|
1.9
|
|
|
|
2.1
|
|
|
|
3.8
|
|
|
|
4.3
|
|
Adjusted
revenues
|
|
$
|
1,261.0
|
|
|
$
|
1,140.8
|
|
|
$
|
2,496.4
|
|
|
$
|
2,318.8
|
|
The following is a breakdown of software-enabled services and
license, maintenance and related revenues and adjusted
software-enabled services and license, maintenance and related
revenues.
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
(in
millions)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Software-enabled
services
|
|
$
|
1,057.1
|
|
|
$
|
945.0
|
|
|
$
|
2,100.5
|
|
|
$
|
1,934.5
|
|
License, maintenance
and related
|
|
|
201.9
|
|
|
|
193.1
|
|
|
|
391.9
|
|
|
|
377.2
|
|
Total
revenues
|
|
$
|
1,259.0
|
|
|
$
|
1,138.1
|
|
|
$
|
2,492.4
|
|
|
$
|
2,311.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software-enabled
services
|
|
$
|
1,059.0
|
|
|
$
|
946.7
|
|
|
$
|
2,104.2
|
|
|
$
|
1,938.0
|
|
License, maintenance
and related
|
|
|
202.0
|
|
|
|
194.1
|
|
|
|
392.2
|
|
|
|
380.8
|
|
Total adjusted
revenues
|
|
$
|
1,261.0
|
|
|
$
|
1,140.8
|
|
|
$
|
2,496.4
|
|
|
$
|
2,318.8
|
|
Note 2. Reconciliation of Operating Income to Adjusted
Operating Income
Adjusted operating income represents operating income adjusted
for amortization of intangible assets, stock-based compensation,
purchase accounting adjustments for deferred revenue and related
costs, ASC 606 adoption impact and other expenses. Adjusted
operating income is presented because we use this measure to
evaluate performance of our business and believe it is a useful
indicator of our underlying performance. Adjusted operating
income is not a recognized term under GAAP. Adjusted
operating income does not represent operating income, as that term
is defined under GAAP, and should not be considered as an
alternative to operating income as an indicator of our operating
performance. Adjusted operating income as presented herein is
not necessarily comparable to similarly titled measures by other
companies. The following is a reconciliation between adjusted
operating income and operating income, the GAAP measure we believe
to be most directly comparable to adjusted operating income.
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
(in
millions)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Operating
income
|
|
$
|
312.9
|
|
|
$
|
241.3
|
|
|
$
|
582.0
|
|
|
$
|
460.1
|
|
Amortization of
intangible assets
|
|
|
146.2
|
|
|
|
152.4
|
|
|
|
290.8
|
|
|
|
310.0
|
|
Stock-based
compensation
|
|
|
27.7
|
|
|
|
22.1
|
|
|
|
55.5
|
|
|
|
44.6
|
|
Purchase accounting
adjustments (1)
|
|
|
5.3
|
|
|
|
10.3
|
|
|
|
15.5
|
|
|
|
19.9
|
|
ASC 606 adoption
impact
|
|
|
0.2
|
|
|
|
0.7
|
|
|
|
0.4
|
|
|
|
2.9
|
|
Other (2)
|
|
|
3.5
|
|
|
|
3.3
|
|
|
|
27.4
|
|
|
|
36.8
|
|
Adjusted operating
income
|
|
$
|
495.8
|
|
|
$
|
430.1
|
|
|
$
|
971.6
|
|
|
$
|
874.3
|
|
(1)
|
Purchase accounting
adjustments include (a) an adjustment to increase revenues by the
amount that would have been recognized if deferred revenue were not
adjusted to fair value at the date of acquisition, (b) an
adjustment to increase personnel and commissions expense by the
amount that would have been recognized if prepaid commissions and
deferred personnel costs were not adjusted to fair value at the
date of the acquisitions and (c) an adjustment to decrease
depreciation expense by the amount that would not have been
recognized if property, plant and equipment were not adjusted to
fair value at the date of acquisition.
|
(2)
|
Other includes
expenses and income that are permitted to be excluded per the terms
of our Credit Agreement from Consolidated EBITDA, a financial
measure used in calculating our covenant compliance. These
include expenses and income related to foreign currency
transactions, facilities and workforce restructuring, legal
settlements and business acquisitions.
|
Note 3. Reconciliation of Net Income to EBITDA, Consolidated
EBITDA and Adjusted Consolidated EBITDA
EBITDA represents net income before interest expense, income
taxes, depreciation and amortization. Consolidated EBITDA,
defined under our Credit Agreement entered into in April 2018, as amended, is used in calculating
covenant compliance, and is EBITDA adjusted for certain items.
Consolidated EBITDA is calculated by subtracting from or
adding to EBITDA items of income or expense described below.
Adjusted Consolidated EBITDA is calculated by subtracting
acquired EBITDA (as defined below) from Consolidated EBITDA.
EBITDA, Consolidated EBITDA and Adjusted Consolidated EBITDA are
presented because we use these measures to evaluate performance of
our business and believe them to be useful indicators of an
entity's debt capacity and its ability to service debt.
EBITDA, Consolidated EBITDA and Adjusted Consolidated EBITDA
are not recognized terms under GAAP and should not be considered in
isolation or as alternatives to operating income, net income or
cash flows from operating activities as indicators of our operating
performance. These measures are not necessarily comparable to
similarly titled measures by other companies. The following
is a reconciliation of EBITDA, Consolidated EBITDA and Adjusted
Consolidated EBITDA to net income.
|
|
Three Months
Ended
June 30,
|
|
|
Six Months
Ended
June 30,
|
|
|
Twelve
Months Ended
June 30,
|
|
(in
millions)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
Net income
|
|
$
|
189.8
|
|
|
$
|
169.5
|
|
|
$
|
364.7
|
|
|
$
|
268.7
|
|
|
$
|
721.2
|
|
Interest expense,
net
|
|
|
51.0
|
|
|
|
60.5
|
|
|
|
102.4
|
|
|
|
137.9
|
|
|
|
210.5
|
|
Provision for income
taxes
|
|
|
76.7
|
|
|
|
29.5
|
|
|
|
137.5
|
|
|
|
54.3
|
|
|
|
233.8
|
|
Depreciation and
amortization
|
|
|
165.8
|
|
|
|
179.4
|
|
|
|
335.3
|
|
|
|
364.1
|
|
|
|
696.4
|
|
EBITDA
|
|
|
483.3
|
|
|
|
438.9
|
|
|
|
939.9
|
|
|
|
825.0
|
|
|
|
1,861.9
|
|
Stock-based
compensation
|
|
|
27.7
|
|
|
|
22.1
|
|
|
|
55.5
|
|
|
|
44.6
|
|
|
|
98.7
|
|
Acquired EBITDA and
cost savings (1)
|
|
|
—
|
|
|
|
0.5
|
|
|
|
1.3
|
|
|
|
2.3
|
|
|
|
2.8
|
|
Non-cash portion of
straight-line rent expense
|
|
|
(0.5)
|
|
|
|
(0.2)
|
|
|
|
(0.7)
|
|
|
|
(0.3)
|
|
|
|
(0.6)
|
|
Loss (gain) on
extinguishment of debt, net
|
|
|
1.5
|
|
|
|
(0.2)
|
|
|
|
1.8
|
|
|
|
2.6
|
|
|
|
3.3
|
|
Equity in earnings of
unconsolidated affiliates, net
|
|
|
0.4
|
|
|
|
1.0
|
|
|
|
0.1
|
|
|
|
0.3
|
|
|
|
1.3
|
|
Purchase accounting
adjustments (2)
|
|
|
1.6
|
|
|
|
1.8
|
|
|
|
3.2
|
|
|
|
3.6
|
|
|
|
6.5
|
|
ASC 606 adoption
impact
|
|
|
0.2
|
|
|
|
0.7
|
|
|
|
0.4
|
|
|
|
2.9
|
|
|
|
2.6
|
|
Other (3)
|
|
|
(3.1)
|
|
|
|
(15.7)
|
|
|
|
2.8
|
|
|
|
33.2
|
|
|
|
(28.6)
|
|
Consolidated
EBITDA
|
|
$
|
511.1
|
|
|
$
|
448.9
|
|
|
$
|
1,004.3
|
|
|
$
|
914.2
|
|
|
$
|
1,947.9
|
|
Less: acquired EBITDA
and cost savings (1)
|
|
|
—
|
|
|
|
(0.5)
|
|
|
|
(1.3)
|
|
|
|
(2.3)
|
|
|
|
(2.8)
|
|
Adjusted Consolidated
EBITDA
|
|
$
|
511.1
|
|
|
$
|
448.4
|
|
|
$
|
1,003.0
|
|
|
$
|
911.9
|
|
|
$
|
1,945.1
|
|
(1)
|
Acquired EBITDA
reflects the EBITDA impact of significant businesses that were
acquired during the period as if the acquisition occurred at the
beginning of the period, as well as cost savings enacted in
connection with acquisitions.
|
(2)
|
Purchase accounting
adjustments include (a) an adjustment to increase revenues by the
amount that would have been recognized if deferred revenue were not
adjusted to fair value at the date of acquisitions (b) an
adjustment to increase personnel and commissions expense by the
amount that would have been recognized if prepaid commissions and
deferred personnel costs were not adjusted to fair value at the
date of the acquisitions and (c) an adjustment to increase or
decrease rent expense by the amount that would have been recognized
if lease obligations were not adjusted to fair value at the date of
acquisitions.
|
(3)
|
Other includes
expenses and income that are permitted to be excluded per the terms
of our Credit Agreement from Consolidated EBITDA, a financial
measure used in calculating our covenant compliance. These
include expenses and income related to foreign currency
transactions, investment gains and losses, facilities and workforce
restructuring, legal settlements, business combinations and other
items.
|
Note 4. Reconciliation of Net Income to Adjusted Net Income
and Diluted Earnings Per Share to Adjusted Diluted Earnings Per
Share
Adjusted net income and adjusted diluted earnings per share
represent net income and earnings per share before amortization of
intangible assets and deferred financing costs, stock-based
compensation, purchase accounting adjustments and other items.
We consider adjusted net income and adjusted diluted earnings
per share to be important to management and investors because they
represent our operational performance exclusive of the effects of
amortization of intangible assets and deferred financing costs,
stock-based compensation, purchase accounting adjustments, loss on
extinguishment of debt and other items, that are not operational in
nature or comparable to those of our competitors. Adjusted
net income and adjusted diluted earnings per share are not
recognized terms under GAAP. Adjusted net income and adjusted
diluted earnings per share do not represent net income or diluted
earnings per share, as those terms are defined under GAAP, and
should not be considered as alternatives to net income or diluted
earnings per share as indicators of our operating
performance. Adjusted net income and adjusted diluted
earnings per share as presented herein are not necessarily
comparable to similarly titled measures presented by other
companies. Below is a reconciliation of adjusted net income
and adjusted diluted earnings per share to net income and diluted
earnings per share, the GAAP measures we believe to be most
directly comparable to adjusted net income and adjusted diluted
earnings per share.
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
|
(in millions, except
per share data)
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
GAAP – Net
income
|
|
$
|
189.8
|
|
|
$
|
169.5
|
|
|
$
|
364.7
|
|
|
$
|
268.7
|
|
Plus: Amortization of
intangible assets
|
|
|
146.2
|
|
|
|
152.4
|
|
|
|
290.8
|
|
|
|
310.0
|
|
Plus: Amortization of
deferred financing costs and original issue discount
|
|
|
3.4
|
|
|
|
3.5
|
|
|
|
6.7
|
|
|
|
6.9
|
|
Plus: Stock-based
compensation
|
|
|
27.7
|
|
|
|
22.1
|
|
|
|
55.5
|
|
|
|
44.6
|
|
Plus: Loss (gain) on
extinguishment of debt
|
|
|
1.5
|
|
|
|
(0.2)
|
|
|
|
1.8
|
|
|
|
2.6
|
|
Plus: Purchase
accounting adjustments (1)
|
|
|
5.3
|
|
|
|
10.3
|
|
|
|
15.5
|
|
|
|
19.9
|
|
Plus: ASC 606
adoption impact
|
|
|
0.2
|
|
|
|
0.7
|
|
|
|
0.4
|
|
|
|
2.9
|
|
Plus: Equity in
earnings of unconsolidated affiliates, net
|
|
|
0.4
|
|
|
|
1.0
|
|
|
|
0.1
|
|
|
|
0.3
|
|
Plus: Other
(2)
|
|
|
(3.1)
|
|
|
|
(15.7)
|
|
|
|
2.8
|
|
|
|
33.2
|
|
Income tax effect
(3)
|
|
|
(39.8)
|
|
|
|
(67.5)
|
|
|
|
(90.2)
|
|
|
|
(139.1)
|
|
Adjusted net
income
|
|
$
|
331.6
|
|
|
$
|
276.1
|
|
|
$
|
648.1
|
|
|
$
|
550.0
|
|
Adjusted diluted
earnings per share
|
|
$
|
1.24
|
|
|
$
|
1.04
|
|
|
$
|
2.42
|
|
|
$
|
2.07
|
|
GAAP diluted earnings
per share
|
|
$
|
0.71
|
|
|
$
|
0.64
|
|
|
$
|
1.36
|
|
|
$
|
1.01
|
|
Diluted
weighted-average shares outstanding
|
|
|
267.6
|
|
|
|
265.8
|
|
|
|
267.8
|
|
|
|
265.7
|
|
(1)
|
Purchase accounting
adjustments include (a) an adjustment to increase revenues by the
amount that would have been recognized if deferred revenue were not
adjusted to fair value at the date of acquisition, (b) an
adjustment to increase personnel and commissions expense by the
amount that would have been recognized if prepaid commissions and
deferred personnel costs were not adjusted to fair value at the
date of the acquisitions and (c) an adjustment to decrease
depreciation expense by the amount that would not have been
recognized if property, plant and equipment were not adjusted to
fair value at the date of acquisition.
|
(2)
|
Other includes
expenses and income that are permitted to be excluded per the terms
of our Credit Agreement from Consolidated EBITDA, a financial
measure used in calculating our covenant compliance. These
include expenses and income related to foreign currency
transactions, investment gains and losses, facilities and workforce
restructuring, legal settlements, business acquisitions and other
items.
|
(3)
|
An estimated
normalized effective tax rate of approximately 26% for the three
and six months ended June 30, 2021 and 2020, respectively, has been
used to adjust the provision for income taxes for the purpose of
computing adjusted net income.
|
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SOURCE SS&C