FactSet Research Systems (NYSE:FDS) (Nasdaq:FDS), a leading provider of integrated global financial information and analytical applications for the investment community, today announced its results for the first quarter of fiscal 2012.
For the quarter ended November 30, 2011 revenues increased to $196.4 million, up 13% compared to the prior year. Operating income for the first quarter rose to $66.8 million from $59.4 million in the same period of fiscal 2011. Net income advanced to $45.5 million as compared to $41.6 million a year ago. Diluted earnings per share increased to $0.99, up from $0.88 in the same period of fiscal 2011.
Non-GAAP net income advanced 15% to $50.8 million and non-GAAP diluted earnings per share increased 18% to $1.10. Quarterly free cash flow was $48.7 million during the first quarter of fiscal 2012, up from $14.2 million in the year ago quarter.
GAAP financial measures including net income and diluted earnings per share have been adjusted to exclude stock-based compensation expense, amortization of intangible assets and income tax benefits. A reconciliation between GAAP and non-GAAP financial measures is presented on page 7 of this press release.
Consolidated Statements of Income
(Condensed and Unaudited) Three Months Ended November 30
(In thousands, except per share data) 2011 2010 Change
Revenues $196,448 $173,289 13.4 %
Operating income 66,753 59,429 12.3 %
Provision for income taxes 21,486 17,953 19.7 %
Net income $45,544 $41,601 9.5 %
Diluted earnings per share $0.99 $0.88 12.5 %
Diluted weighted average shares 46,103 47,487
Non-GAAP net income $50,807 $44,124 15.1 %
Non-GAAP diluted earnings per share $1.10 $0.93 18.3 %
Philip Hadley, Chairman and CEO said, "Our earnings results in the first quarter demonstrate the strength of FactSet's business model. We again delivered double digit growth for both revenues and EPS and our free cash flow reached a first quarter record high. Volatility in the financial markets interrupted short-term buying patterns from our clients, dampening our ASV growth this quarter."
Annual Subscription Value ("ASV")
ASV was $782 million at November 30, 2011, up 12.5% over the prior year. Of this total, 82% is derived from buy-side clients and the remainder is from the sell-side firms who perform M&A advisory work and equity research. ASV advanced $3.5 million during the first quarter. ASV increased from buy-side clients, but decreased from sell-side clients. Over the past three months, users declined by 1,200 to 46,900, all from reductions at sell-side firms. ASV at any given point in time represents the forward-looking revenues for the next 12 months from all services currently being supplied to clients.
Financial Highlights — First Quarter of Fiscal 2012
• ASV from U.S. operations was $533 million and $249 million was related to international operations.
• U.S. revenues were $134 million, up 14% from the year ago quarter.
• Non-U.S. revenues rose 13% to $62 million as compared to the same period in fiscal 2011.
• Cash and investments were $208 million at November 30, 2011.
• The effective tax rate was 32.1% as compared to 30.1% a year ago.
• The U.S. Federal R&D tax credit expires on December 31, 2011. The expiration increased the annual and first quarter effective tax rate by 1.3% and reduced quarterly diluted EPS by $0.02.
• Accounts receivable decreased $10 million over the past three months.
• Free cash flow generated during the quarter was $48.7 million, up $34.5 million over the prior year period.
Operational Highlights — First Quarter of Fiscal 2012
• Client count was 2,271 at November 30, a net increase of 34 clients during the quarter.
• Annual client retention was greater than 95% of ASV, consistent with last year. On a client basis, the annual retention rate improved to 92% of clients at November 30 as compared to 90% a year ago, reflecting a reduction in client turnover.
• Employee count was 5,450 at November 30, an increase of 199 employees during the quarter.
• Capital expenditures were $6.1 million.
• A regular quarterly dividend of $12.2 million or $0.27 per share will be paid on December 20, 2011, to common stockholders of record as of November 30, 2011.
• The Company repurchased 150,000 shares for $14.6 million during the first quarter. At November 30, 2011, $128 million remains authorized for future repurchases.
• Common shares outstanding were 45.1 million at November 30, 2011.
• On October 24, 2011, the Company announced the election of Robin A. Abrams to its Board of Directors.
The following forward-looking statements reflect FactSet's expectations as of December 13, 2011. Given the number of risk factors, uncertainties and assumptions discussed below, actual results may differ materially. The Company does not intend to update its forward-looking statements until its next quarterly results announcement, other than in publicly available statements.
Second Quarter Fiscal 2012 Expectations
• Revenues are expected to range between $197 million and $200 million, which represents year over year growth of 11% and 13% at each end of the range.
• Operating margin is expected to range between 33.7% and 34.2%.
• GAAP diluted EPS should range between $0.99 and $1.01.
• Non-GAAP diluted EPS should range between $1.10 and $1.12, which represents year over year growth of 12% and 14% at each end of the range.
• Both GAAP diluted EPS and non-GAAP diluted EPS include a $0.02 reduction to reflect the expiration of the U.S. Federal R&D tax credit on December 31, 2011.