FactSet Research Systems (NYSE:FDS) (Nasdaq:FDS), a leading provider of integrated financial information and analytical applications to the global investment community, today announced its results for the fourth quarter of fiscal 2012.
For the quarter ended August 31, 2012 revenues increased to $207.7 million, up 8% compared to the prior year. Included in this total was $1.8 million from the acquisition of StreetAccount on June 29, 2012. Operating income for the fourth quarter rose to $70.6 million from $59.0 million in the same period of fiscal 2011. Net income advanced to $48.5 million compared to $40.9 million a year ago. Diluted earnings per share increased to $1.08, up from $0.88 in the same period of fiscal 2011. The year ago fourth quarter results include a pre-tax stock-based compensation charge of $5.4 million or $0.08 per diluted share. The acquisition of StreetAccount did not have an impact on FactSet's fiscal 2012 fourth quarter diluted earnings per share.
"FactSet continues to generate shareholder value as illustrated by our double-digit EPS growth in the quarter," says Philip Hadley, Chairman and CEO. "Investments in our products have helped us expand market share. We added 57 net new clients and 1,100 new users in the past three months. We were also pleased to acquire StreetAccount in June 2012, a leader in timely and informative news summaries for the investment community."
Annual Subscription Value ("ASV")
ASV advanced $20.4 million organically during the quarter. Including $11.4 million from the acquisition of StreetAccount, ASV increased $31.9 million over the last three months. ASV totaled $843 million at August 31, 2012, up 7% organically over the prior year. Of this total, 81% 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 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 — Fourth Quarter of Fiscal 2012
• ASV from U.S. operations was $572 million and $271 million was related to international operations.
• U.S. revenues were $141.4 million, up 7% from the year ago quarter.
• Non-U.S. revenues rose 10% to $66.3 million as compared to the same period in fiscal 2011.
• Operating margin was 34.0% for the quarter.
• Quarterly free cash flow was $51 million.
• Cash and investments were $203 million at August 31, 2012.
• The effective tax rate was 31.7% as compared to 30.9% a year ago.
Operational Highlights — Fourth Quarter of Fiscal 2012
• Client count was 2,392 at August 31, a net increase of 57 clients during the quarter, excluding StreetAccount. This net client increase represents the largest quarterly organic growth since the fourth quarter of fiscal 2006.
• Annual client retention was greater than 95% of ASV and 92% when expressed as a percentage of clients.
• Over the past three months, users increased by 1,100 to 49,500, excluding StreetAccount.
• Employee count was 5,735 at August 31, an increase of 280 employees during the quarter.
• Capital expenditures were $5.7 million.
• A regular quarterly dividend of $13.7 million or $0.31 per share was paid on September 18, 2012 to common stockholders of recorded as of August 31, 2012.
• The Company repurchased 710,000 shares for $65.8 million during the fourth quarter. At August 31, 2012, $190 million remains authorized for future repurchases.
• Common shares outstanding were 44.3 million at August 31, 2012.
Fiscal 2012 Highlights
• Revenues increased 11% to $806 million.
• Diluted earnings per share rose 14% to $4.12.
• Free cash flow generated over the last twelve months was $209 million, up 18%.
• Accounts receivable decreased $1 million over the last twelve months while organic ASV is up $53 million over the same period, reflecting an improvement in DSO from 35 to 32 days.
• Users of FactSet advanced by 1,400 professionals since August 31, 2011.
• A net increase of 155 clients over the last twelve months compared to 127 last year.
• Employee count rose 9% to 5,735, up 484 employees from a year ago.
• FactSet increased its quarterly dividend 15% from $0.27 to $0.31 per share in May 2012. This is the 7th consecutive year that FactSet's annual dividend has been increased by more than 10%, resulting in a five year dividend growth rate of 21%.
On June 29, 2012, FactSet acquired StreetAccount LLC ("SA") to complement the Company's news offering with distilled and crucial market moving information for buy-side and sell-side institutions. Founded in 2003, SA is known for its timely and informative news summaries and provides investment professionals with an efficient method for managing news flow. The StreetAccount service includes real-time company updates, portfolio and sector filtering, email alerts, and market summaries. Content is written by financial professionals and can be customized for portfolio, index, sector, market, time of day (i.e., Overnight Summaries), and category (i.e., Top Stories, Market Summaries, Economic, M&A). At the time of acquisition, SA had annual subscriptions of $11.4 million. The acquisition of SA did not have an impact on FactSet's fourth quarter diluted earnings per share and is not expected to have a material impact on the Company's fiscal 2013 diluted earnings per share.
The following forward-looking statements reflect FactSet's expectations as of September 25, 2012. 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.
First Quarter Fiscal 2013 Expectations
• Revenues are expected to range between $210 million and $213 million.
• Operating margin is expected to range between 33.5% and 34.0%.
• The effective tax rate is expected to range between 31.5% and 32.5%.
• GAAP diluted EPS should range between $1.10 and $1.12, which represents year over year growth of 11% and 13% at each end of the range.
Full Year Fiscal 2013
• The full year fiscal 2013 guidance for capital expenditures, net of landlord contributions, is $20 million to $28 million.
• The annual effective tax rate is expected to range between 31.5% and 32.5%.