Advent Software Reports Fourth Quarter and Fiscal Year 2009 Results

Advent Software Reports Fourth Quarter and Fiscal Year 2009 Results

Quarterly Revenue of $66 Million and Annual Contract Value of $9 Million


SAN FRANCISCO – February 1, 2010 – 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 full year ended December 31, 2009.

“I’m extremely proud of our fourth quarter and 2009 financial results. Despite a very challenging environment in 2009, the strength of our business model enabled us to grow annual revenues, profits and operating cash flow,” said Stephanie DiMarco, Founder and Chief Executive Officer of Advent.  “The breadth of our product portfolio and our customer focus had us well positioned for the renewed demand we experienced in the fourth quarter.”

FOURTH QUARTER AND FISCAL YEAR 2009 RESULTS
On October 1, 2009, the Company completed the sale of its New York-based subsidiary MicroEdge, Inc. to Vista Equity Partners.  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 quarterly revenue from continuing operations of $66.3 million for the fourth quarter of 2009, compared to $66.5 million in the fourth quarter of 2008.  Total annual revenues from continuing operations for the year ended December 31, 2009 were $259.5 million, a 9% increase over the $237.9 million recorded in 2008. 
 
Operating income from continuing operations for the fourth quarter of 2009 was $6.4 million, or 10% of revenue, up from $6.2 million or 9% of revenue for the fourth quarter of 2008. Operating income from continuing operations for the year ended December 31, 2009 was $27.9 million, or 11% of revenue, which represented an increase of 55% compared to $18.0 million, or 8% of revenue, for 2008.

Net income from continuing operations for the fourth quarter of 2009 was $4.3 million compared to $5.6 million from continuing operations in the fourth quarter of 2008.  Net income from continuing operations for the year ended December 31, 2009 was $20.8 million compared to $17.3 million for 2008, a 20% increase.

On a fully diluted basis, earnings per share from continuing operations in the fourth quarter of 2009 were $0.16 and represent a 23% decrease from $0.21 from continuing operations in the fourth quarter of 2008.  On a fully diluted basis, earnings per share from continuing operations for the year ended December 31, 2009 were $0.79 and represent a 26% increase compared to $0.62 per share for 2008.

Operating cash flow from continuing operations in the fourth quarter of 2009 was $20.8 million, compared with $20.2 million in the fourth quarter of 2008, a 3% increase.  Operating cash flow from continuing operations for the year ended December 31, 2009 was $72.4 million, compared with $70.3 million for 2008, a 3% increase.  Cash, cash equivalents and short and long-term marketable securities totaled $117.6 million as of December 31, 2009, compared to $45.1 million as of December 31, 2008.

Total deferred revenues from continuing operations were $146.1 million as of December 31, 2009, compared to $141.3 million from continuing operations as of December 31, 2008, a 3% increase.

Non-GAAP Results for Continuing Operations
Non-GAAP operating income from continuing operations for the fourth quarter of 2009 was $11.8 million, or 18% of revenue.  This represents a 3% decrease compared to $12.2 million from continuing operations, or 18% of revenue, in the fourth quarter of 2008.  Non-GAAP operating income from continuing operations for the year ended December 31, 2009 was $51.0 million, or 20% of revenue.  This represents a 39% increase compared to non-GAAP operating income from continuing operations of $36.7 million, or 15% of revenue for 2008.

Non-GAAP diluted earnings per share from continuing operations were $0.28 in the fourth quarter of 2009 compared to $0.28 in the fourth quarter of 2008.  On a non-GAAP basis, diluted earnings per share from continuing operations were $1.23 for the year ended December 31, 2009, a 45% increase compared to $0.85 per share for 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 fourth quarter of 2009 was $13.6 million compared to $0.6 million from discontinued operations in the fourth quarter of 2008. Net income from discontinued operations for the year ended December 31, 2009 was $16.1 million, compared to $1.6 million from discontinued operations for 2008. Net income from discontinued operations for the fourth quarter and fiscal 2009 included a post-tax gain of $13.6 million from the disposition of MicroEdge. 

On a fully diluted basis, earnings per share from discontinued operations in the fourth quarter of 2009 were $0.50 compared to $0.02 from discontinued operations in the fourth quarter of 2008.  On a fully diluted basis, earnings per share from discontinued operations for the year ended December 31, 2009 were $0.61, compared to $0.06 from discontinued operations for 2008.   

FOURTH QUARTER HIGHLIGHTS

  • Stronger Bookings: The term license contracts signed in the fourth quarter of 2009 will contribute $8.9 million in annual contract value once they are fully implemented. 
  • Customer Momentum: Advent saw continued momentum in customer wins for Advent Portfolio Exchange® (APX) and Geneva®.  The Company signed 35 locally installed APX contracts in the fourth quarter, which, combined with the fourth quarter APX outsourcing contracts, brings the total number of global APX contracts signed to nearly 600.  Additionally, Advent signed 11 Geneva® contracts in the fourth quarter. 
  • Further Expansion into Asia Pacific: In the fourth quarter, Advent opened a new office in Beijing, China.  The office is staffed with more than 50 employees who were previously part of the Company’s contract workforce.  It is Advent’s largest office outside of North America.
  • Received Buy-Side Technology Award: For the third consecutive year, Buy-Side Technology magazine named Geneva® ‘Best Buy-Side Portfolio Accounting Product.’ 

FINANCIAL GUIDANCE   
Advent announces the following financial guidance for the first quarter and fiscal year 2010:

Guidance 

Q1 2010 Continuing Operations

FY 2010 Continuing Operations

Total Revenue ($M)

$65-$67 

 $272-$280

GAAP Operating Margin 

n/a

 11%-12%

Amortization of Intangibles (% of revenue)

n/a

 1%-2%

Stock Compensation Expense (% of revenue)

n/a

 7%-8%

Non-GAAP Operating Margin

n/a

 20%-21%

Operating Cash Flow ($M)

n/a

 $77-$82

Capital Expenditures ($M)

n/a

 $18-$22


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 Q4 2009 quarterly earnings conference call at 5:00 p.m. Eastern time today.  The Q4 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 800-510-0219 and request conference ID #42966359.  A replay will be available through midnight, February 8, 2010, by calling 888-286-8010 and referencing conference ID #35959304.  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 more than 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 on Advent products, visit our 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 and demand for our products and new product releases, our competitive position, market conditions and their impact on our business, international expansion, 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; 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, Geneva and Moxy 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