Advent Software Announces 2009 Third Quarter Results

Advent Software Announces 2009 Third Quarter Results

Company Reports Strong Annual Contract Value of $6 Million; Operating Cash Flow of $19.8 Million and GAAP EPS of $0.15 from Continuing Operations

SAN FRANCISCO – October 27, 2009 – Advent Software, Inc. (NASDAQ: ADVS), a leading provider of software and services to the global investment management industry, announced today financial results for the third quarter ended September 30, 2009.

“We are very pleased with Advent’s third quarter performance.  We achieved strong results in our key financial metrics and saw increased demand across all areas of our business,” said Stephanie DiMarco, Founder and Chief Executive Officer of Advent.  “Our broad portfolio of products, diverse customer base, financial and competitive strength, and long-term strategy position us well for the future.”

THIRD QUARTER RESULTS
In July 2009, the Company entered into a definitive agreement for the sale of its New York-based subsidiary MicroEdge, Inc. to Vista Equity Partners, which was completed on October 1, 2009.  All past and future reported results of the MicroEdge business are now reported as discontinued operations of the Company.

GAAP Results for Continuing Operations
The Company reported revenue from continuing operations of $63.8 million for the third quarter of 2009, compared to $58.2 million from continuing operations in the third quarter of 2008, a 10% increase. 
 
Operating income from continuing operations for the third quarter of 2009 was $5.8 million, or 9% of revenue, and represents an increase of 83% compared to $3.2 million from continuing operations, or 5% of revenue, in the third quarter of 2008.

Net income from continuing operations for the third quarter of 2009 was $3.9 million compared to $1.8 million from continuing operations in the third quarter of 2008, a 114% increase.
 
On a fully diluted basis, earnings per share from continuing operations in the third quarter of 2009 were $0.15 and represent a 127% increase from $0.06 from continuing operations in the third quarter of 2008. 

Operating cash flow from continuing operations in the third quarter of 2009 was $19.8 million, compared with $17.5 million from continuing operations in the third quarter of 2008, a 13% increase. Cash and cash equivalents of continuing operations totaled $69.2 million as of September 30, 2009.

Total deferred revenues from continuing operations were $132.7 million as of September 30, 2009, compared to $127.1 million from continuing operations as of September 30, 2008, a 4% increase.

Non-GAAP Results for Continuing Operations
Non-GAAP operating income from continuing operations for the third quarter of 2009 was $12.3 million, or 19% of revenue.  This represents a 49% increase compared to $8.3 million from continuing operations, or 14% of revenue, in the third quarter of 2008. 

Non-GAAP diluted earnings per share from continuing operations were $0.30 in the third quarter of 2009 and represent a 58% increase from $0.19 from continuing operations in the third quarter of 2008.

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

GAAP Results for Discontinued Operations
Net income from discontinued operations for the third quarter of 2009 was $0.8 million, compared to $0.9 million from discontinued operations in the third quarter of 2008.

On a fully diluted basis, earnings per share from discontinued operations in the third quarter of 2009 were $0.03, consistent with the third quarter of 2008. 

THIRD QUARTER HIGHLIGHTS

  • Customer Momentum: Advent saw continued momentum in customer wins for Advent Portfolio Exchange® (APX), Geneva® and Tamale RMS®.  The Company signed 19 APX contracts in the third quarter, which, combined with the third quarter APX outsourcing contracts, brings the total number of global APX contracts signed to more than 500.  Advent signed 10 Geneva® contracts in the third quarter.  The Company also added one of the largest university endowments to Tamale’s list of clients in the third quarter.
  • New and Incremental Bookings: The term license contracts signed in the third quarter of 2009 will contribute approximately $6 million in annual revenue (“annual term license contract value” or “ACV”) once they are fully implemented.
  • Launch of Advent Revenue Center® 3.0: Advent unveiled significant new features to Advent Revenue Center®, its comprehensive billing and revenue management solution.  Advent Revenue Center® 3.0 includes revenue forecasting and revenue sharing to help firms maximize revenues, increase efficiency and mitigate operational risk. 
  • Appointment of Chief Financial Officer: Advent promoted James Cox, previously Vice President and Principal Accounting Officer of Advent, to the position of Senior Vice President and Chief Financial Officer.

FINANCIAL GUIDANCE   
Advent announces the following financial guidance for Q4 and FY 2009:

 Guidance

 Q409 Continuing Operations

 FY09 Continuing Operations

 Total Revenue ($M)

 $64-$66

 $257-$259

 GAAP Operating Margin

 n/a

 10%-11%

 Amortization of Intangibles
(% of revenue)

 n/a

 1%-2%

 Stock Compensation Expense (% of revenue)

 n/a

 7%-8%

 Non-GAAP Operating Margin

 n/a

 19%-20%

 Operating Cash Flow ($M)

 n/a

 $70-$75

 Capital Expenditures ($M)

 n/a

 $7-$9


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 2009 quarterly earnings conference call at 5:00 p.m. ET today.  The Q3 2009 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 888-823-1020 and request conference ID #34021948.  A replay will be available through midnight, November 4, 2009, by calling 800-642-1687 and referencing conference ID #34021948.  The conference call will also be webcast live and then archived on http://investor.advent.com.
 
ABOUT ADVENT
Advent Software, Inc., a global firm, has provided trusted solutions to the world’s financial professionals since 1983.  Firms in 60 countries rely on Advent technology to run their mission-critical operations.  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 and services organization.  For more information on Advent products visit product demo page.
 
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 revenue growth, market acceptance, increased demand for our products and new product releases, the anticipated benefits of our sale of MicroEdge, anticipated benefits of our acquisition of Tamale Software, our competitive position, 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 new contract bookings, renewal rates, operating results and future growth rates; continued market acceptance of our Advent Portfolio Exchange®, Geneva® and Moxy® products; the successful development, release 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; the anticipated proceeds and financial impact of divesting our MicroEdge subsidiary 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 2008 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, Advent Software, Advent Portfolio Exchange, Advent Revenue Center, Geneva, Moxy and Tamale RMS are registered trademarks of Advent Software, Inc.  All other company names or marks mentioned herein are those of their respective owners.

Investor Relations Contact:
Heidi Flaherty
Advent Software, Inc.
(415) 645-1145
flaherty@advent.com

Media Contact:     
Jessica Miller      
Advent Software, Inc.    
(415) 645-1668    
jmiller@advent.com