Advent Software Reports Fourth Quarter and Fiscal Year 2010 Results

Advent Software Reports Fourth Quarter and Fiscal Year 2010 Results

Record Quarterly Revenue of $76 Million and Record Operating Profitability of $12 Million

SAN FRANCISCO – February 7, 2011 – 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, 2010.

“Advent concluded a very strong year with exceptional financial performance in the fourth quarter, in which we again delivered growth in revenue, bookings and profitability,” said Stephanie DiMarco, Founder and Chief Executive Officer of Advent. “We are extremely pleased to enter 2011 with momentum across the business in all geographies and market segments and across all of our products and services.”

FOURTH QUARTER AND FISCAL YEAR 2010 RESULTS

On December 13, 2010, the Company announced a two-for-one stock split of the Company’s common stock, payable in the form of a 100% stock dividend. On January 18, 2011, one additional share of common stock was distributed for each share held as of the close of business on January 3, 2011. All references to number of shares and per share information have been adjusted to reflect the stock split on a retroactive basis.

GAAP Results for Continuing Operations
The Company reported quarterly revenue from continuing operations of $75.6 million for the fourth quarter of 2010, compared to $66.3 million in the fourth quarter of 2009.  Total annual revenues from continuing operations for the year ended December 31, 2010 were $283.5 million, a 9% increase over the $259.5 million recorded in 2009. 
 
Operating income for the fourth quarter of 2010 was $11.7 million, or 16% of revenue, up from $6.4 million or 10% of revenue for the fourth quarter of 2009. Operating income for the year ended December 31, 2010 was $36.3 million, or 13% of revenue, which represented an increase of 30% compared to $27.9 million, or 11% of revenue, for 2009.

Net income for the fourth quarter of 2010 was $9.2 million compared to $4.3 million in the fourth quarter of 2009.  Net income for the year ended December 31, 2010 was $24.3 million compared to $20.8 million for 2009, a 17% increase.

On a fully diluted basis, earnings per share in the fourth quarter of 2010 were $0.17 and represent a 109% increase from $0.08 in the fourth quarter of 2009.  On a fully diluted basis, earnings per share for the year ended December 31, 2010 were $0.45 and represent a 14% increase compared to $0.39 per share for 2009.

Operating cash flow in the fourth quarter of 2010 was $24.4 million, compared with $20.8 million in the fourth quarter of 2009, a 17% increase.  Operating cash flow for the year ended December 31, 2010 was $76.2 million, compared with $72.4 million for 2009, a 5% increase.  Cash, cash equivalents and short and long-term marketable securities totaled $152.0 million as of December 31, 2010, compared to $117.6 million as of December 31, 2009.

Total deferred revenues were $154.2 million as of December 31, 2010, compared to $146.1 million from continuing operations as of December 31, 2009, a 6% increase. 

Non-GAAP Results
Non-GAAP operating income in the fourth quarter of 2010 was $17.9 million, or 24% of revenue.  This represents a 52% increase compared to $11.8 million, or 18% of revenue, in the fourth quarter of 2009.  Non-GAAP operating income for the year ended December 31, 2010 was $60.2 million, or 21% of revenue.  This represents an 18% increase compared to non-GAAP operating income of $51.0 million, or 20% of revenue for 2009.

Non-GAAP diluted earnings per share were $0.21 in the fourth quarter of 2010 compared to $0.14 in the fourth quarter of 2009.  On a non-GAAP basis, diluted earnings per share were $0.71 for the year ended December 31, 2010, a 15% increase compared to $0.62 per share for 2009.

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

FOURTH QUARTER HIGHLIGHTS

  • Strong Fundamental Business Metrics: New term license and Advent OnDemand® contracts signed in the fourth quarter of 2010 are expected to contribute $10.5 million in annual revenue once they are fully implemented, a 5% increase over the fourth quarter of 2009.  The renewal rate was 91% for the third quarter of 2010, a 2 point improvement over the same period last year.
  • Continued International Growth: Signaling continued international momentum in Asia Pacific, Europe and the Middle East, Advent signed new contracts in Hong Kong, New Zealand, Bahrain, Saudi Arabia, the Netherlands, Scandinavia, Switzerland and the United Kingdom in the fourth quarter. Revenues from international operations accounted for 17% of total revenue in the fourth quarter of 2010.
  • Two-for-One Stock Split:  Advent’s Board of Directors approved a two-for-one split of its common stock.  The stock split was accomplished through a stock dividend issued by the Company on January 18, 2011.  The stock split increased the number of shares of common stock outstanding from approximately 26,000,000 shares to approximately 52,000,000 shares.  Weighted average common shares outstanding and earnings per share data for all periods presented have been adjusted to reflect the effect of the stock split. 
  • Buy-Side Technology and HFM Week Awards: Geneva® was named ‘Best Buy-Side Portfolio Accounting Product’ by Buy-Side Technology magazine for the fourth consecutive year and ‘Best Fund Accounting and Reporting System’ by HFM Week.

FINANCIAL GUIDANCE   
Advent announces the following financial guidance for the first quarter and fiscal year 2011:

Guidance

Q1 2011

FY 2011

Total Revenue ($M)   

$74-$76

$307-$314

GAAP Operating Margin

n/a

13%-14%

Amortization of Intangibles

(% of revenue)       

n/a

1%-2%

Stock Compensation Expense (% of revenue)

n/a

6%-7%

Non-GAAP Operating Margin

n/a

21%-22%

Operating Cash Flow ($M)

n/a

$81-$85

Capital Expenditures ($M)

n/a

$12-$15


Click here to view the comprehensive Q4.10 financial statements.

INVESTOR CALL
Advent Software, Inc. will host its Q4 2010 quarterly earnings conference call at 5:00 p.m. Eastern time today.  The Q4 2010 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 800-706-7741 and request conference ID #50145467.  A replay will be available through midnight, February 14, 2011, by calling 888-286-8010 and referencing conference ID #72639493.  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 50 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 http://www.advent.com/about/resources/demos/pr.
 
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, 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 2009 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 OnDemand, Geneva and Moxy are registered trademarks of Advent Software, Inc.  All other company names or marks mentioned herein are those of their respective owners.

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

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