Advent Software Achieves Record Quarterly Revenue of $65 Million, a 17% Increase Over Prior Year

Advent Software Achieves Record Quarterly Revenue of $65 Million, a 17% Increase Over Prior Year

Company Also Announces Strong Operating Cash Flow of $19 Million

SAN FRANCISCO – October 28, 2008 – Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the investment management industry, announced today its financial results for the third quarter ended September 30, 2008.

"We are pleased to report that Advent had a solid third quarter that included record revenue of $65 million, strong operating cash flow and our acquisition of leading research management solution provider Tamale Software," said Stephanie DiMarco, Founder and Chief Executive Officer of Advent.  “Despite the current uncertain economic environment, we are confident that Advent will continue to perform well given our high recurring revenue model, the cash flow generating characteristics of our business, the breadth and depth of our mission-critical product portfolio and our strong global market position.”

GAAP RESULTS
The Company reported record revenue of $64.9 million for the third quarter of 2008, compared to $55.5 million in the third quarter of 2007, a 17% increase. 
 
Income from operations for the third quarter of 2008 was $4.7 million, or 7% of revenue, which represented a decrease of 18% compared with $5.8 million, or 10% of revenue, in the third quarter of 2007.

Net income for the third quarter of 2008 was $2.7 million compared to net income of $3.3 million in the third quarter of 2007, an 18% decrease.
 
On a fully diluted basis, earnings per share in the third quarter of 2008 were $0.10 and represent a 20% decrease from diluted earnings per share of $0.12 in the third quarter of 2007. 

Cash flow from operations in the third quarter of 2008 was $19.1 million, compared with $12.4 million in the third quarter of 2007, a 54% increase.  Cash and cash equivalents totaled $76.1 million as of September 30, 2008, compared to $42.8 million as of September 30, 2007, a 78% increase.

Total deferred revenues as of September 30, 2008 were $137.7 million, compared to $99.8 million as of September 30, 2007, a 38% increase.

NON-GAAP RESULTS
Non-GAAP income from operations for the third quarter of 2008 was $10.2 million.  This represents a 5% increase compared to non-GAAP income from operations of $9.6 million for the third quarter of 2007.

On a non-GAAP basis, net income for the third quarter of 2008 was $6.5 million, which represents an increase of 5% compared with $6.2 million for the third quarter of 2007. 

Non-GAAP EPS was $0.23 per diluted share in both the third quarter of 2008 and 2007.

The reconciliation between GAAP and non-GAAP financial measures is provided at the end of this press release.

THIRD QUARTER HIGHLIGHTS

  • Acquisition of Tamale Software, Inc.:  Advent announced the signing of a definitive agreement to acquire privately held Tamale Software.  On October 1, 2008, Advent announced the completion of this acquisition.  The acquisition enables Advent to extend its presence into the front office and establish a leadership position in research management.  Under the terms of the agreement, Advent acquired all of the outstanding capital stock of Tamale Software for approximately $28 million in cash and 906,000 shares of Advent’s common stock.
  • Stock Repurchase Program:  Advent repurchased 360,000 shares of Advent’s common stock in September and 640,000 shares of Advent’s common stock in October at an average price of $34.49 per share. The stock repurchase program of 1.0 million shares authorized by the Board in May 2008 is now completed.
  • Client Conference:  Advent had record-setting attendance at its annual Client Conference held in Las Vegas during the week of September 8th.  During the conference, Advent also held its third annual Analyst and Investor Day.
  • Customer Momentum for APX and Geneva®:  Advent saw continued momentum in customer wins for its award-winning portfolio accounting platforms.  The Company sold a third quarter record of 29 Advent Portfolio Exchange® (APX) contracts, bringing the total number of APX contracts sold to 266 worldwide.  Advent also sold 10 new Geneva® contracts, bringing the total number of Geneva® contracts sold to 186 worldwide. 

FINANCIAL GUIDANCE   
Advent announces the following Q4 2008 and FY 2008 guidance that include the effect of the Tamale acquisition.

  Q408   

FY08

 Total Revenue ($M)    $68 -$70

$258-$260 

 Non-GAAP Operating Margin  

n/a

14% - 15% 

 Non-GAAP Diluted EPS ($)    

n/a

$0.88 - $0.92 

 GAAP Diluted EPS ($)   

n/a

$0.58 - $0.62 

Operating Cash Flow ($M) 

n/a

$72 - $75 

Capital Expenditures ($M)     

n/a

$22 - $24 

  • The effective tax rate range for the full year 2008 decreased to 20% to 25% due to Congress’ renewal of the R&D tax credit in October 2008, and the Company will continue to use 35% for the calculation of non-GAAP diluted EPS.
  • Diluted weighted average shares outstanding are expected to grow 0% to 0.5%.  This excludes the impact of any future share repurchase.

Please click here to view the tables for the reconciliation between GAAP and non-GAAP financial measures.

INVESTOR CALL
Advent Software, Inc. will host its Q3 2008 quarterly earnings conference call at 5:00 p.m. Eastern time today.  The Q3 2008 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 888-812-3873 and request conference ID #69128014.  A replay will be available through midnight, November 4, 2008, by calling 800-642-1687 and referencing conference ID #69128014.  The conference call will also be webcast live and then archived on http://investor.advent.com.
 
ABOUT ADVENT

Advent Software, Inc. (www.advent.com), a global firm, has provided trusted solutions to the world’s leading financial professionals since 1983.  Firms in 60 countries use Advent technology.  Advent’s quality software, data, services and tools enable financial professionals to improve service and communication to their clients, allowing them to grow their business while controlling costs.  Advent is the only financial services software company to be awarded the Service Capability and Performance certification for being a world-class support organization.  For more information, click here.
 
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 (GAAP), please see the accompanying tables entitled “Reconciliation of Selected GAAP Measures to Non-GAAP Measures.”

FORWARD-LOOKING STATEMENTS
The financial projections under Financial Guidance, our growth internationally and demand in the US, market acceptance of our products, anticipated benefits of our acquisition of Tamale Software, uncertain market conditions and their impact on our business, and the momentum of the business, and 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 results and future growth rates; continued market acceptance of our Advent Portfolio Exchange®, Geneva® and Moxy® products; the successful development and market acceptance of new products and product enhancements; continued uncertainties and fluctuations in the financial markets; the Company’s ability to satisfy contractual performance requirements; difficulties in integrating merged businesses, such as Tamale Software, and achieving expected synergies and results; 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 2007 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.

The Advent logo, Advent Software, Advent Portfolio Exchange and Geneva are registered trademarks of Advent Software, Inc.  All other company names or marks mentioned herein are those of their respective owners.