Press Release

Advent Software Reports Fourth Quarter and Full Year 2013 Results

Company Achieves Record Quarterly Revenue of $97.6 Million, up 6% and Record Operating Cash Flow of $36.7 Million, up 12%

SAN FRANCISCO – February 3, 2014 – 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
  • Strong Renewal Rate: Advent delivered a strong initially reported renewal rate for Q3 2013 of 97%, compared to 94% the same period last year. This is the highest initial renewal rate reported in five years.
  • International Success: Advent saw enhanced success in the international market, signing SMT Fund Services, part of Sumitomo Mitsui Bank Group, as well as Nordea Bank AB in the fourth quarter.
  • Solid Growth in Black Diamond: Total assets on the platform increased 64% for the year to over $220 billion and the number of clients increased 29%, including many large advisory firms, such as McGladrey Wealth Management and Essex Financial. Black Diamond also achieved its highest renewal rate and client satisfaction scores in its history.
  • New Releases Across the Product Portfolio: Advent announced global availability of new releases to several key products that includes compelling new functionality for asset and wealth management firms, alternative managers, family offices, and administrators. The updated products include Geneva®, Advent Portfolio Exchange® (APX), Moxy®, Advent Rules Manager®, and Advent Revenue Center®.

FINANCIAL GUIDANCE    

Advent updates the following financial guidance for the fourth 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 (% of revenue)

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%

View the comprehensive Q4.13 financial statements.

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 onhttp://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.

CONTACTS
Media Contact:
Amanda Diamondstein-Cieplinska
Advent Software, Inc.
(415) 645-1668
adiamond@advent.com

Investor Relations Contact:
Justin Ritchie
Advent Software, Inc.
(415) 645-1683
jritchie@advent.com