SS&C Q2 net income soars

"I am pleased to report that our second quarter revenue of $91.8 million rose 12.5 percent year-over-year," said Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies Holdings, Inc. "For the six months ended June 30, 2011, we had strong cash flow from operations of $41.1 million, up 75 percent from $23.4 million for the same period in 2010."

Results

The Company reported quarterly revenue of $91.8 million for the second quarter of 2011, compared to $81.6 million in the second quarter of 2010, an increase of 12.5 percent.

GAAP operating income for the second quarter of 2011 was $22.9 million, or 24.9 percent of revenue. This represents a 15.7 percent increase compared to GAAP operating income of 19.8 million and 24.2 percent of revenue in the second quarter of 2010. GAAP net income for the second quarter of 2011 was $13.0 million compared to $4.4 million in the second quarter of 2010, an increase of 199 percent.

On a fully diluted GAAP basis, earnings per diluted share in the second quarter of 2011 were up 167 percent to $0.16 compared with $0.06 in the second quarter of 2010.

Adjusted operating income (a non-GAAP measure defined in note 2 to the attached Condensed Consolidated Financial Information) in the second quarter of 2011 was $35.8 million, or 39.0 percent of adjusted revenue. This represents a 10.7 percent increase compared to adjusted operating income of $32.4 million and 39.6 percent of adjusted revenue in the second quarter of 2010.

Adjusted net income (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) for the second quarter of 2011 was $21.3 million compared to $16.2 million in 2010's second quarter, a 31.8 percent increase.

Adjusted diluted earnings per share (a non-GAAP measure defined in note 4 to the attached Condensed Consolidated Financial Information) in the second quarter of 2011 were $0.26 compared to $0.22 in the second quarter of 2010, an increase of 18 percent.

Annual Run Rate Basis

Annual Run Rate Basis (ARRB) recurring revenue, defined as the addition of maintenance and software-enabled services revenue, was $81.0 million for the second quarter of 2011, an annual run-rate of $323.8 million. This represents an increase of 14.9 percent from $70.4 million and $281.8 million run-rate in the same period in 2010 and an increase of 4.9 percent from Q1 2011's $77.2 million and $308.7 million run-rate. We believe ARRB of our recurring revenue is a good indicator of visibility into future revenue.
Operating Cash Flow

SS&C ended the quarter with $82.6 million in cash and cash equivalents, and $203.7 million in debt for a net debt balance of $121.1 million. We generated net cash from operating activities of $41.1 million for the six months ended June 30, 2011, compared to $23.4 million for the same period in 2010.

Guidance

SS&C announces the following financial guidance for the third quarter and fiscal year 2011:

Guidance                                          Q3 2011            FY 2011
Total Revenue ($M)                           $93.5 - $95.0    $369.0 - $373.0
Adjusted Net Income ($M)                   $21.6 - $22.1     $84.0 - $85.2
Cash from Operating Activities ($M)       N/A                $84.0 - $87.0
Capital Expenditures (% of revenue)     N/A                  2.1% - 2.3%