SSNC
$37.81
SS&C Technologies
$.04
.11%
Earnings Details
2nd Quarter June 2017
Thursday, July 27, 2017 4:05:00 PM
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Summary

SS&C Technologies Raises Revenue Guidance but Remains In-line with Estimates

SS&C Technologies (SSNC) reported 2nd Quarter June 2017 earnings of $0.43 per share on revenue of $411.0 million. The consensus earnings estimate was $0.42 per share on revenue of $412.8 million. Revenue grew 10.2% on a year-over-year basis.

The company said it expects third quarter revenue of $420.0 million to $428.0 million. The current consensus revenue estimate is $421.2 million for the quarter ending September 30, 2017. The company said it expects 2017 revenue of $1.669 billion to $1.689 billion. The company's previous guidance was of $1.664 million to $1.686 million and the current consensus estimate is revenue of $1.67 billion for the year ending December 31, 2017.

SS&C Technologies Holdings Inc provides software and software-enabled services including SaaS to the financial services industry.

Results
Reported Earnings
$0.43
Earnings Whisper
-
Consensus Estimate
$0.42
Reported Revenue
$411.0 Mil
Revenue Estimate
$412.8 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

SS&C Technologies Reports Record Revenue for Q2 2017

Q2 GAAP revenue $411.0 million, up 10.2 percent, Fully Diluted GAAP Earnings Per Share $0.24, up 71.4 percent

Adjusted revenue $414.1 million, up 7.7 percent, Adjusted Diluted Earnings Per Share $0.46, up 17.9 percent

SS&C Technologies Holdings, Inc. (SSNC), a global provider of investment and financial software-enabled services and software, today announced its financial results for the second quarter ended June 30, 2017.

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GAAP Results

SS&C reported GAAP revenue of $411.0 million for the second quarter of 2017, up 10.2 percent compared to $373.1 million in the second quarter of 2016. GAAP operating income for the second quarter of 2017 was $90.0 million, or 21.9 percent of GAAP revenue compared to $66.0 million, or 17.7 percent of GAAP revenue in 2016’s second quarter, representing a 36.3 percent increase.

GAAP net income for the second quarter of 2017 was $51.2 million, up 81.3 percent compared to $28.2 million in 2016’s second quarter. On a fully diluted GAAP basis, earnings per share in the second quarter of 2017 were $0.24 per share, up 71.4 percent compared to $0.14 per share on a fully diluted GAAP basis in the second quarter of 2016.

Adjusted Non-GAAP Results (defined in Notes 1-4 below)

Adjusted revenue was $414.1 million for the second quarter of 2017, up 7.7 percent compared to $384.4 million in the second quarter of 2016. Adjusted operating income for the second quarter of 2017 was $157.3 million, or 38.0 percent of adjusted revenue compared to $140.5 million, or 36.6 percent of adjusted revenue in 2016’s second quarter, representing a 12.0 percent increase.

Adjusted net income for the second quarter of 2017 was $96.2 million, up 21.1 percent compared to $79.4 million in 2016’s second quarter. Adjusted diluted earnings per share in the second quarter of 2017 were $0.46 per share, up 17.9 percent compared to $0.39 per share in the second quarter of 2016.

Highlights:

SS&C adjusted revenue for Q2 2017 was $414.1 million, up 7.7 percent from Q2 2016 adjusted revenue of $384.4 million.

Adjusted diluted earnings per share were $0.46 for Q2 2017, increasing 17.9 percent from Q2 2016’s $0.39 adjusted diluted earnings per share.

For the first six months of 2017, net cash provided by operating activities was $193.8 million, an increase of 39.1 percent.

SS&C paid off $208.4 million of debt for the first six months of 2017, bringing our net debt to consolidated EBITDA leverage ratio to 3.45x.

"Q2 2017 marks our 21st straight quarter of revenue growth, growing adjusted revenue 7.7 percent, and, in the first six months we generated $193.8 million in cash flow up 39.1 percent," says Bill Stone, Chairman and Chief Executive Officer of SS&C Technologies. "SS&C’s continuous investment in our 8,200 strong workforce and a relentless focus on customer service, delivers a superior customer experience. We have become one of the world’s largest financial technology companies and our investments have strengthened our competitive advantage. We have been honored to receive numerous industry awards for technology and service over the past several years, and this quarter SS&C was named to Forbes’ America’s Best Midsized Employers.

Looking forward we will continue to explore opportunities to reinvent the way we capture, process and deliver investment information. The various consumers of our output rely on us to stay abreast of new financial instruments, tax and financial reporting requirements, and changing investment strategies. SS&C’s clients understand our commitment and, during Q2 we spent over $39 million in research and development."

Annual Run Rate Basis

Annual Run Rate Basis (ARRB) recurring revenue, defined as adjusted recurring revenue on an annualized basis, was $1,549.7 million based on adjusted recurring revenue $387.4 million for the second quarter of 2017. This represents an increase of 8.8 percent from $356.1 million and $1,424.3 million run-rate in the same period in 2016 and an increase of 0.1 percent from $387.2 million for the first quarter of 2017, an annual run rate of $1,548.9 million. We believe ARRB of our recurring revenue is a good indicator of visibility into future revenue.

Operating Cash Flow

SS&C generated net cash from operating activities of $193.8 million for the six months ended June 30, 2017, compared to $139.3 million for the same period in 2016, representing a 39.1 percent increase. SS&C ended the quarter with $90.4 million in cash and cash equivalents and $2,351.2 million in gross debt, for a net debt balance of $2,260.8 million. SS&C’s leverage ratio as defined in our credit agreement stood at 3.45 times consolidated EBITDA as of June 30, 2017.

Guidance

Q3 2017
FY 2017
Adjusted Revenue ($M)
$420.0 - $428.0
$1,669.0 - $1,689.0
Adjusted Net Income ($M)
$103.5 - $108.0
$403.0 - $413.0
Cash from Operating Activities ($M)
-
$485.0
- $500.0
Capital Expenditures (% of revenue)
-
2.8% - 3.2%
Diluted Shares (M)
212.4 - 213.0
211.3 - 212.1
Effective Income Tax Rate (%)
28%
28%

SS&C does not provide reconciliations of guidance for Adjusted Revenues and Adjusted Net Income to comparable GAAP measures, in reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K. SS&C is unable, without unreasonable efforts, to forecast certain items required to develop meaningful comparable GAAP financial measures. These items include acquisition transactions and integration, foreign exchange rate changes, as well as other non-cash and other adjustments as defined under the Company’s Credit agreement, that are difficult to predict in advance in order to include in a GAAP estimate.

Non-GAAP Financial Measures

Adjusted revenue, adjusted operating income, adjusted consolidated EBITDA, adjusted net income and adjusted diluted earnings per share are non-GAAP measures. See the accompanying notes to the attached Condensed Consolidated Financial Information for the reconciliations and definitions for each of these non-GAAP measures and the reasons our management believes these measures provide useful information to investors regarding our financial condition and results of operations.

Earnings Call and Press Release

SS&C’s Q2 2017 earnings call will take place at 5:00 p.m. eastern time today, July 27, 2017. The call will discuss Q2 2017 results and our guidance and business outlook. Interested parties may dial 877-312-8798 (US and Canada) or 253-237-1193 (International), and request the "SS&C Technologies Second Quarter 2017 Conference Call"; conference ID #3714534. A replay will be available after 8:00 p.m. eastern time on July 27, 2017, until midnight on August 3, 2017. The dial-in number is 855-859-2056 (US and Canada) or 404-537-3406 (International); access code #3714534. The call will also be available for replay on SS&C’s website after July 27, 2017; access: http://investor.ssctech.com/results.cfm.

Certain information contained in this press release relating to, among other things, our financial guidance for the third quarter and full year of 2017 constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words "believes", "anticipates", "plans", "expects", "estimates", "projects", "forecasts", "may", "assume", "anticipates", "intend", "will", "continue", "opportunity", "predict", "potential", "future", "guarantee", "likely", "target", "indicate", "would", "could" and "should" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. Such statements reflect management’s best judgment based on factors currently known but are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, but are not limited to, the state of the economy and the financial services industry, the Company’s ability to finalize large client contracts, fluctuations in customer demand for the Company’s products and services, intensity of competition from application vendors, delays in product development, the Company’s ability to control expenses, terrorist activities, exposure to litigation, the Company’s ability to integrate acquired businesses, the effect of the acquisitions on customer demand for the Company’s products and services, the market price of the Company’s stock prevailing from time to time, the Company’s cash flow from operations, general economic conditions, and those risks discussed in the "Risk Factors" section of the Company’s most recent Annual Report on Form 10-K, which is on file with the Securities and Exchange Commission and can also be accessed on our website. The Company cautions investors that it may not update any or all of the foregoing forward-looking statements.

About SS&C Technologies

SS&C is a global provider of investment and financial software-enabled services and software focused exclusively on the global financial services industry. Founded in 1986, SS&C has its headquarters in Windsor, Connecticut and offices around the world. Some 11,000 financial services organizations, from the world’s largest institutions to local firms, manage and account for their investments using SS&C’s products and services. These clients in the aggregate manage over $44 trillion in assets.

Follow SS&C on Twitter, LinkedIn and Facebook.

SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2017
2016
2017
2016
Revenues:
Software-enabled services
$
272,518
$
244,672
$
548,970
$
450,319
Maintenance and term licenses
113,614
103,392
224,171
198,512
Total recurring revenues
386,132
348,064
773,141
648,831
Perpetual licenses
3,822
5,039
6,650
10,254
Professional services
21,026
19,974
38,888
38,123
Total non-recurring revenues
24,848
25,013
45,538
48,377
Total revenues
410,980
373,077
818,679
697,208
Cost of revenues:
Software-enabled services
158,888
146,243
312,894
259,971
Maintenance and term licenses
47,280
46,460
94,265
93,406
Total recurring cost of revenues
206,168
192,703
407,159
353,377
Perpetual licenses
650
643
1,215
1,141
Professional services
16,874
17,133
32,777
32,645
Total non-recurring cost of revenues
17,524
17,776
33,992
33,786
Total cost of revenues
223,692
210,479
441,151
387,163
Gross profit
187,288
162,598
377,528
310,045
Operating expenses:
Selling and marketing
30,121
28,535
60,363
58,396
Research and development
39,079
40,827
77,528
77,274
General and administrative
28,103
27,199
59,935
57,894
Total operating expenses
97,303
96,561
197,826
193,564
Operating income
89,985
66,037
179,702
116,481
Interest expense, net
(26,295)
(32,846)
(55,315)
(65,935)
Other (expense) income, net
(1,197)
12
(1,268)
(1,835)
Loss on extinguishment of debt
--
--
(2,326)
--
Income before income taxes
62,493
33,203
120,793
48,711
Provision for income taxes
11,342
4,982
21,495
13,485
Net income
$
51,151
$
28,221
$
99,298
$
35,226
Basic earnings per share
$
0.25
$
0.14
$
0.49
$
0.18
Diluted earnings per share
$
0.24
$
0.14
$
0.47
$
0.17
Basic weighted average number of common shares outstanding
204,550
198,765
203,966
198,143
Diluted weighted average number of common and common equivalent shares outstanding
211,299
204,916
210,478
204,596
Cash dividends declared and paid per common share
$
0.0625
$
0.0625
$
0.1250
$
0.1250
Net income
$
51,151
$
28,221
$
99,298
$
35,226
Other comprehensive income (loss), net of tax:
Foreign currency exchange translation adjustment
20,966
(26,793)
31,745
(17,472)
Total comprehensive income (loss), net of tax
20,966
(26,793)
31,745
(17,472)
Comprehensive income
$
72,117
$
1,428
$
131,043
$
17,754
See Notes to Condensed Consolidated Financial Information.
SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
June 30,
December 31,
2017
2016
ASSETS
Current assets:
Cash and cash equivalents
$
90,370
$
117,558
Accounts receivable, net
235,811
241,307
Prepaid expenses and other current assets
32,875
31,119
Prepaid income taxes
18,032
23,012
Restricted cash
1,880
2,116
Total current assets
378,968
415,112
Property, plant and equipment, net
100,908
80,395
Deferred income taxes
2,136
2,410
Goodwill
3,676,586
3,652,733
Intangible and other assets, net
1,459,803
1,556,321
Total assets
$
5,618,401
$
5,706,971
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt
$
37,183
$
126,144
Accounts payable
32,668
16,490
Income taxes payable
--
3,473
Accrued employee compensation and benefits
60,846
104,118
Interest payable
16,156
21,470
Other accrued expenses
43,044
53,708
Deferred revenue
234,077
235,222
Total current liabilities
423,974
560,625
Long-term debt, net of current portion
2,261,791
2,374,986
Other long-term liabilities
81,770
59,227
Deferred income taxes
432,688
453,555
Total liabilities
3,200,223
3,448,393
Total stockholders’ equity
2,418,178
2,258,578
Total liabilities and stockholders’ equity
$
5,618,401
$
5,706,971
See Notes to Condensed Consolidated Financial Information.
SS&C Technologies Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Six Months Ended June 30,
2017
2016
Cash flow from operating activities:
Net income
$
99,298
$
35,226
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
117,213
113,440
Stock-based compensation expense
21,278
27,913
Income tax benefit related to exercise of stock options
--
(23,760)
Amortization and write-offs of loan origination costs
5,281
5,312
Loss on extinguishment of debt
963
--
Loss on sale or disposition of property and equipment
12
150
Deferred income taxes
(14,970)
(24,056)
Provision for doubtful accounts
3,218
1,257
Changes in operating assets and liabilities, excluding effects from acquisitions:
Accounts receivable
3,411
(13,458)
Prepaid expenses and other assets
(1,326)
(1,516)
Accounts payable
14,895
7,870
Accrued expenses
(54,543)
(25,851)
Income taxes prepaid and payable
2,562
23,757
Deferred revenue
(3,471)
13,052
Net cash provided by operating activities
193,821
139,336
Cash flow from investing activities:
Additions to property and equipment
(19,368)
(13,593)
Proceeds from sale of property and equipment
1
43
Cash paid for business acquisitions, net of cash acquired
1,805
(317,554)
Additions to capitalized software
(5,636)
(3,306)
Purchase of long-term investment
--
(1,000)
Net cash used in investing activities
(23,198)
(335,410)
Cash flow from financing activities:
Cash received from debt borrowings
45,000
--
Repayments of debt
(253,400)
(155,325)
Proceeds from exercise of stock options
35,855
19,212
Withholding taxes related to equity award net share settlement
(3,057)
(4,615)
Income tax benefit related to exercise of stock options
--
23,760
Purchase of common stock for treasury
--
(11)
Payment of fees related to refinancing activities
--
(222)
Dividends paid on common stock
(25,521)
(24,790)
Net cash used in financing activities
(201,123)
(141,991)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
3,076
(872)
Net decrease in cash, cash equivalents and restricted cash
(27,424)
(338,937)
Cash, cash equivalents and restricted cash, beginning of period
119,674
436,977
Cash, cash equivalents and restricted cash, end of period
$
92,250
$
98,040
See Notes to Condensed Consolidated Financial Information.

SS&C Technologies Holdings, Inc. and Subsidiaries Notes to Condensed Consolidated Financial Information

Note 1. Reconciliation of Revenues to Adjusted Revenues

Adjusted revenues represents revenues adjusted for one-time purchase accounting adjustments to fair value deferred revenue acquired in business combinations. Adjusted revenues are presented because we use this measure to evaluate performance of our business against prior periods and believe it is a useful indicator of the underlying performance of the Company. Adjusted revenues are not a recognized term under generally accepted accounting principles (GAAP). Adjusted revenues does not represent revenues, as that term is defined under GAAP, and should not be considered as an alternative to revenues as an indicator of our operating performance. Adjusted revenues as presented herein is not necessarily comparable to similarly titled measures. Below is a reconciliation between adjusted revenues and revenues, the GAAP measure we believe to be most directly comparable to adjusted revenues.

Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2017
2016
2017
2016
Revenues
$
410,980
$
373,077
$
818,679
$
697,208
Purchase accounting adjustments to deferred revenue
3,107
11,335
4,927
30,318
Adjusted revenues
$
414,087
$
384,412
$
823,606
$
727,526

The following is a breakdown of recurring and non-recurring revenues and adjusted recurring and non-recurring revenues.

Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2017
2016
2017
2016
Software-enabled services
$
272,518
$
244,672
$
548,970
$
450,319
Maintenance and term licenses
113,614
103,392
224,171
198,512
Total recurring revenues
386,132
348,064
773,141
648,831
Perpetual licenses
3,822
5,039
6,650
10,254
Professional services
21,026
19,974
38,888
38,123
Total non-recurring revenues
24,848
25,013
45,538
48,377
Total revenues
$
410,980
$
373,077
$
818,679
$
697,208
Software-enabled services
$
272,518
$
244,763
$
548,970
$
450,549
Maintenance and term licenses
114,916
111,324
225,679
221,274
Total adjusted recurring revenues
387,434
356,087
774,649
671,823
Perpetual licenses
3,822
5,039
6,650
10,254
Professional services
22,831
23,286
42,307
45,449
Total adjusted non-recurring revenues
26,653
28,325
48,957
55,703
Total adjusted revenues
$
414,087
$
384,412
$
823,606
$
727,526

Note 2. Reconciliation of Operating Income to Adjusted Operating Income

Adjusted operating income represents operating income adjusted for amortization of intangible assets, stock-based compensation, purchase accounting adjustments for deferred revenue and related costs and other expenses. Adjusted operating income is presented because we use this measure to evaluate performance of our business and believe it is a useful indicator of the underlying performance of the Company. Adjusted operating income is not a recognized term under GAAP. Adjusted operating income does not represent operating income, as that term is defined under GAAP, and should not be considered as an alternative to operating income as an indicator of our operating performance. Adjusted operating income as presented herein is not necessarily comparable to similarly titled measures. The following is a reconciliation between adjusted operating income and operating income, the GAAP measure we believe to be most directly comparable to adjusted operating income.

Three Months Ended June 30,
Six Months Ended June 30,
(in thousands)
2017
2016
2017
2016
Operating income
$
89,985
$
66,037
$
179,702
$
116,481
Amortization of intangible assets
52,742
51,995
105,150
101,675
Stock-based compensation
10,378
12,566
21,278
27,913
Capital-based taxes
375
--
750
472
Purchase accounting adjustments (1)
2,653
8,630
3,005
24,258
Other (2)
1,212
1,301
2,896
4,919
Adjusted operating income
$
157,345
$
140,529
$
312,781
$
275,718
(1) Purchase accounting adjustments include (a) an adjustment to increase revenues by the amount that would have been recognized if deferred revenue were not adjusted to fair value at the date of acquisitions and (b) an adjustment to increase personnel and commissions expense by the amount that would have been recognized if prepaid commissions and deferred personnel costs were not adjusted to fair value at the date of the acquisitions.
(2) Other includes expenses and income that are permitted to be excluded per the terms of our Credit Agreement from Consolidated EBITDA, a financial measure used in calculating our covenant compliance. These include expenses and income related to currency transactions, facilities and workforce restructuring, legal settlements and business combinations, among other infrequently occurring transactions.

Note 3. Reconciliation of Net Income to EBITDA, Consolidated EBITDA and Adjusted Consolidated EBITDA

EBITDA represents net income before interest expense, income taxes, depreciation and amortization. Consolidated EBITDA, defined under our Credit Agreement entered into in July 2015, as amended, is used in calculating covenant compliance, and is EBITDA adjusted for certain items. Consolidated EBITDA is calculated by subtracting from or adding to EBITDA items of income or expense described below. Adjusted consolidated EBITDA is calculated by subtracting acquired EBITDA from consolidated EBITDA. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are presented because we use these measures to evaluate performance of our business and believe them to be useful indicators of an entity’s debt capacity and its ability to service debt. EBITDA, consolidated EBITDA and adjusted consolidated EBITDA are not recognized terms under GAAP and should not be considered in isolation or as alternatives to operating income, net income or cash flows from operating activities as indicators of our operating performance. The following is a reconciliation of EBITDA, consolidated EBITDA and adjusted consolidated EBITDA to net income.

Three Months Ended
Six Months Ended
Twelve
June 30,
June 30,
Months Ended
June 30,
(in thousands)
2017
2016
2017
2016
2017
Net income
$
51,151
$
28,221
$
99,298
$
35,226
$
195,068
Interest expense, net
26,295
32,846
55,315
65,935
117,834
Provision for income tax
11,342
4,982
21,495
13,485
40,630
Depreciation and amortization
58,656
58,167
117,213
113,440
232,456
EBITDA
147,444
124,216
293,321
228,086
585,988
Stock-based compensation
10,378
12,566
21,278
27,913
43,929
Capital-based taxes
375
--
750
472
1,760
Acquired EBITDA and cost savings (1)
81
1,046
889
5,814
6,274
Non-cash portion of straight-line rent expense
478
769
546
1,553
1,191
Loss on extinguishment of debt
--
--
2,326
--
2,326
Purchase accounting adjustments (2)
2,653
8,630
3,005
24,258
10,366
Other (3)
2,409
1,289
4,164
6,754
3,301
Consolidated EBITDA
$
163,818
$
148,516
$
326,279
$
294,850
$
655,135
Less:
acquired EBITDA
(81)
(1,046)
(889)
(5,814)
(6,274)
Adjusted Consolidated EBITDA
$
163,737
$
147,470
$
325,390
$
289,036
$
648,861
(1) Acquired EBITDA reflects the EBITDA impact of significant businesses that were acquired during the period as if the acquisition occurred at the beginning of the period, as well as cost savings enacted in connection with acquisitions.
(2) Purchase accounting adjustments include (a) an adjustment to increase revenues by the amount that would have been recognized if deferred revenue were not adjusted to fair value at the date of acquisitions and (b) an adjustment to increase personnel and commissions expense by the amount that would have been recognized if prepaid commissions and deferred personnel costs were not adjusted to fair value at the date of the acquisitions.
(3) Other includes expenses and income that are permitted to be excluded per the terms of our Credit Agreement from Consolidated EBITDA, a financial measure used in calculating our covenant compliance. These include expenses and income related to currency transactions, facilities and workforce restructuring, legal settlements and business combinations, among other infrequently occurring transactions.

Note 4. Reconciliation of Net Income to Adjusted Net Income and Diluted Earnings Per Share to Adjusted Diluted Earnings Per Share

Adjusted net income and adjusted diluted earnings per share represent net income and earnings per share before amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes and other unusual and non-recurring items. Adjusted net income and adjusted diluted earnings per share are not recognized terms under GAAP, do not represent net income or diluted earnings per share, as those terms are defined under GAAP, and should not be considered as alternatives to net income or diluted earnings per share as indicators of our operating performance. Adjusted net income and adjusted diluted earnings per share are important to management and investors because they represent our operational performance exclusive of the effects of amortization of intangible assets and deferred financing costs, stock-based compensation, capital-based taxes, other unusual and non-recurring items, purchase accounting adjustments, and loss on extinguishment of debt that are not operational in nature or comparable to those of our competitors. The following is a reconciliation between adjusted net income and adjusted diluted earnings per share and net income and diluted earnings per share.

Three Months Ended June 30,
Six Months Ended June 30,
(in thousands, except per share data)
2017
2016
2017
2016
GAAP - Net income
$
51,151
$
28,221
$
99,298
$
35,226
Plus: Amortization of intangible assets
52,742
51,995
105,150
101,675
Plus: Amortization of deferred financing costs and original issue discount
2,625
2,659
5,281
5,312
Plus: Stock-based compensation
10,378
12,566
21,278
27,913
Plus: Capital-based taxes
375
--
750
472
Plus: Loss on extinguishment of debt
--
--
2,326
--
Plus: Purchase accounting adjustments (1)
2,653
8,630
3,005
24,258
Plus: Other (2)
2,409
1,289
4,164
6,754
Income tax effect (3)
(26,087)
(25,914)
(52,074)
(46,742)
Adjusted net income
$
96,246
$
79,446
$
189,178
$
154,868
Adjusted diluted earnings per share
$
0.46
$
0.39
$
0.90
$
0.76
GAAP diluted earnings per share
$
0.24
$
0.14
$
0.47
$
0.17
Diluted weighted-average shares outstanding
211,299
204,916
210,478
204,596
(1) Purchase accounting adjustments include (a) an adjustment to increase revenues by the amount that would have been recognized if deferred revenue were not adjusted to fair value at the date of acquisitions and (b) an adjustment to increase personnel and commissions expense by the amount that would have been recognized if prepaid commissions and deferred personnel costs were not adjusted to fair value at the date of the acquisitions.
(2) Other includes expenses and income that are permitted to be excluded per the terms of our Credit Agreement from Consolidated EBITDA, a financial measure used in calculating our covenant compliance. These include expenses and income related to currency transactions, facilities and workforce restructuring, legal settlements and business combinations, among other infrequently occurring transactions.
(3) An estimated normalized effective tax rate of 28% has been used to adjust the provision for income taxes for the purpose of computing adjusted net income.

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SOURCE SS&C

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