SunGard, one of the world's leading software and technology services companies, today reported results for the fourth quarter and full-year ended December 31, 2011.
For the fourth quarter, revenue was $1.17 billion, down 3% year over year. Excluding one of our global trading businesses, a broker/dealer, revenue decreased 2%. At constant currency, the year over year revenue trends were the same. Operating income was $146 million in the quarter and included a non-cash goodwill impairment charge of $48 million and $14 million of restructuring charges, compared to operating income of $172 million in the fourth quarter of 2010 which included $12 million of restructuring charges. Adjusted EBITDA was $431 million and adjusted operating income was $313 million.
Russ Fradin, president and chief executive officer, commented, "I'm encouraged by our performance in the quarter compared to last year's strong finish and by the progress we're making on many fronts, including better expense management. In addition, the Company successfully closed the sale of its Higher Education business in January 2012. While the environment remains challenging, we're optimistic given the opportunities we see to improve our growth and margins for the long term."
For the full-year 2011, revenue was $4.50 billion, flat year over year (down 2% adjusting for currency). Excluding the broker/dealer business mentioned above, revenue increased 3% (1% adjusting for currency). Operating income was $333 million and included a non-cash goodwill impairment charge of $48 million and $77 million of restructuring charges, compared to operating income of $205 million in 2010 which included a non-cash goodwill impairment charge of $205 million and $40 million of restructuring charges. Adjusted EBITDA was $1,373 million and adjusted operating income was $880 million
Financial Systems revenue was $754 million in the fourth quarter, down 4% year over year (down 4% as well adjusting for currency). Excluding the broker/dealer business, revenue decreased 2% year over year (down 2% as well adjusting for currency). License fees were $83 million, a decrease of $15 million compared to the fourth quarter of 2010.
For the full year, revenue was $2.84 billion, up 1% year over year (down 1% adjusting for currency). Excluding the broker/dealer business, revenue increased 5% (3% adjusting for currency). License fees were $240 million, an increase of $3 million compared to last year.
Notable deals in the quarter included the following:
• A global commodities dealer selected SunGard's post trade derivatives solutions suite as well as professional services, managed services and hosting to help accelerate growth in its global futures business.
• An agency of the US Treasury Department expanded its use of SunGard's Asset Arena for investment accounting and selected our professional services to help modernize its accounting infrastructure.
• A leading US bank selected SunGard's Global Plus trust accounting and custody solution to support its growing private client and institutional trust businesses.
• One of the world's largest financial institutions selected SunGard's Valdi and SGN to help its clients trade globally and monitor trade executions.
• A large US financial services company selected SunGard's Wall Street Concepts to provide enhanced client communications and reporting.
Availability Services revenue was $367 million, down 1% year over year (down 1% as well adjusting for currency). For the full year, revenue was $1.46 billion, down 1% year over year (down 2% adjusting for currency).
Notable deals in the quarter included the following:
• One of the world's leading cruise lines selected SunGard to manage the infrastructure for their reservation system.
• A large US specialty department store chain selected SunGard to provide advanced recovery services and testing.
• A global leader in power and control technologies for thin-film manufacturing and solar-power generation chose SunGard's Cloud services.
All Other revenue, comprised of our Public Sector and K-12 businesses, was $49 million in the fourth quarter compared to $54 million in the prior year quarter. For the full year, other revenue was $203 million compared to $214 million in 2010.
For the full-year 2011, the continuing operations of the Company generated $602 million in cash flow from operations, invested $276 million in capital expenditures and spent $35 million on five acquisitions net of acquired cash. The Company also repaid $239 million of debt. At December 31, 2011, the Company's leverage ratio as defined in its senior secured credit agreement was 4.96x and net debt (total debt of $7.83 billion less cash of $868 million) was $6.96 billion, the lowest level since the Company was taken private in August 2005.
In January 2012, the Company closed the previously announced sale of its Higher Education business for a gross purchase price of $1.775 billion and used the net cash proceeds (as defined in the Company's senior secured credit agreement) to repay $1.222 billion of its senior secured credit facility term loans on a pro-rata basis. Taking the sale of the Higher Education business into account, as of December 31, 2011 pro forma leverage was 4.51x (see Note 4 attached to this release) and pro forma net debt was $5.71 billion.
On January 24, 2012, the Company filed a Form 10-Q/A for its third quarter results ended September 30, 2011 to correct the deferred income tax provision related to discontinued operations. For updated information, please refer to the Form 8-K filed by the Company on February 8, 2012.