SS&C Technologies, Inc. DEFA14A
 

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
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SS&C TECHNOLOGIES, INC.
 
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This filing consists of the Company’s press release dated October 20, 2005.
 
 


 

(PRESS RELEASE LOGO)  
For Immediate Release
Contact:
Patrick Pedonti, Chief Financial Officer (860) 298-4738
Lese Amato, Investor Relations (860) 298-4653
E-mail: InvestorRelations@sscinc.com
SS&C Technologies Announces Q3 Numbers
WINDSOR, CT – October 20, 2005 — SS&C Technologies, Inc. (NASDAQ: SSNC) today announced results for the quarter ended September 30, 2005. Q3 revenues were $46.1 million, up from $25.2 million for Q3 2004. Net income and operating income for Q3 2005 were $7.0 million and $11.9 million, respectively, increases of 44% and 59% from the $4.8 million and $7.5 million for the third quarter of last year. Diluted earnings per share for Q3 were $0.28, 40% higher than the $0.20 diluted earnings per share for the same period in 2004. Merger costs related to the pending sale of SS&C were $0.04 per diluted earnings per share in the quarter.
Bill Stone, SS&C’s Chairman and CEO, said, “We are pleased with our third quarter numbers. We had solid revenues in all segments. In Q3, license revenues were $7.6 million, up 84% over Q3 last year. Recurring revenues, which includes both maintenance and outsourcing revenues, grew to $34.9 million, an increase of 93% over the $18.1 million in Q3 2004.”
Stone continued, “In all business lines, we are seeing positive results from both organic growth and acquisitions. In Q3 2005, several of our products recorded an increase in license revenue over Q3 2004, including CAMRA, LMS, SKYLINE, Antares, Altair, Sylvan, and FundRunner.”
“This quarter, we reached a new benchmark in outsourcing revenues at $21.6 million, a 153% increase over Q3 2004,” said Stone. “Outsourcing revenues are growing organically and through acquisitions, as asset managers and hedge funds continue to recognize the benefits of outsourcing their back-offices. Growth can be attributed primarily to FMC’s outsourcing business, and fund administration services we provide to hedge funds.”
“In Q3 we continued to execute on integrating our acquisitions and implementing economy-of-scale initiatives,” said Stone. “Our focus is on managing our expenses closely and implementing operational efficiencies. As a result, our Q3 net income increased to $7.0 million, a 44% increase over the $4.8 million in Q3 last year; and Q3 operating income rose by 59% over Q3 2004 to $11.9 million.”

 


 

Earnings Call
SS&C’s Q3 2005 earnings call will take place at 5:00 p.m. Eastern Time today, October 20, 2005. The call will discuss Q3 results and the current status of the Carlyle transaction. Interested parties may dial 706-643-7858 (US, Canada and International) and request the “SS&C Third Quarter Earnings Call”, conference ID #1420935. A replay will be available after 8:00 pm on October 20, until midnight on November 20, 2005. To hear the replay, dial 706-645-9291 and enter the access code 1420935. A replay of the call will also be available after October 21, 2005 on our website at www.ssctech.com/about/investor.asp#c.
Important Additional Information Filed with the SEC
On October 19, 2005, SS&C Technologies, Inc. filed a definitive proxy statement with the SEC in connection with the proposed merger transaction. SS&C is mailing the proxy statement to its stockholders on or about October 21, 2005. The proxy statement contains important information about SS&C, the merger, and related matters. Investors and security holders are urged to read the proxy statement.
Investors and security holders may obtain free copies of the proxy statement and other documents filed with the SEC by SS&C through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders may obtain free copies of the proxy statement from SS&C by contacting Investor Relations, SS&C Technologies, Inc., 80 Lamberton Road, Windsor, CT 06095, telephone (860) 298-4500.
The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the merger agreement. Information regarding the Company’s directors and executive officers is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 and its proxy statement dated April 26, 2005, which are filed with the SEC. Additional information regarding the interests of the potential participants is included in the merger proxy statement and other relevant documents on file with the SEC.

 


 

SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
(unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,     September 30,     September 30,  
    2005     2004     2005     2004  
Revenues:
                               
Software licenses
  $ 7,567     $ 4,116     $ 17,884     $ 12,444  
Maintenance
    13,263       9,521       35,067       26,742  
Professional services
    3,633       2,973       9,565       7,550  
Outsourcing
    21,647       8,553       51,723       22,100  
 
                       
Total revenues
    46,110       25,163       114,239       68,836  
 
                       
 
                               
Cost of revenues:
                               
Software licenses
    913       600       2,267       1,630  
Maintenance
    3,199       2,173       8,224       6,162  
Professional services
    2,171       1,769       6,377       4,842  
Outsourcing
    12,958       4,613       28,808       11,701  
 
                       
Total cost of revenues
    19,241       9,155       45,676       24,335  
 
                       
 
                               
Gross profit
    26,869       16,008       68,563       44,501  
 
                       
 
                               
Operating expenses:
                               
Selling and marketing
    4,167       2,844       10,540       7,791  
Research and development
    5,772       3,703       15,195       10,211  
General and administrative
    3,820       1,947       9,814       5,785  
Merger costs related to the pending sale of SS&C
    1,171             1,171        
 
                       
Total operating expenses
    14,930       8,494       36,720       23,787  
 
                       
 
                               
Operating income
    11,939       7,514       31,843       20,714  
 
                               
Interest income (expense)
    (677 )     472       (556 )     837  
Other income (expense), net
    211       (5 )     326       (21 )
 
                       
 
                               
Income before income taxes
    11,473       7,981       31,613       21,530  
Provision for income taxes
    4,478       3,138       12,060       8,504  
 
                       
 
                               
Net income
  $ 6,995     $ 4,843     $ 19,553     $ 13,026  
 
                       
 
                               
Basic earnings per share
  $ 0.30     $ 0.21     $ 0.84     $ 0.63  
 
                       
 
                               
Basic weighted average number of common shares outstanding
    23,533       23,019       23,232       20,525  
 
                       
 
                               
Diluted earnings per share
  $ 0.28     $ 0.20     $ 0.80     $ 0.60  
 
                       
 
                               
Diluted weighted average number of common and common equivalent shares outstanding
    24,729       24,176       24,408       21,873  
 
                       

 


 

SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
                 
    (unaudited)        
    September 30,     December 31,  
    2005     2004  
     
ASSETS
               
Current assets:
               
Cash and cash equivalents
  $ 14,853     $ 28,913  
Investments in marketable securities
    8,700       101,922  
Accounts receivable, net
    31,967       13,545  
Prepaid expenses and other current assets
    3,499       1,607  
     
Total current assets
    59,019       145,987  
 
               
Property and equipment, net
    10,727       5,353  
 
               
Deferred income taxes
          5,894  
Intangible and other assets, net
    238,882       28,429  
     
 
               
Total assets
  $ 308,628     $ 185,663  
     
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current liabilities:
               
Current portion of long term debt
  $ 17,018     $  
Accounts payable
    3,732       1,073  
Income taxes payable
    651       609  
Accrued employee compensation and benefits
    7,167       6,248  
Other accrued expenses
    6,240       3,549  
Deferred income taxes
    735       188  
Dividend payable
          1,850  
Deferred maintenance and other revenue
    24,875       16,052  
     
Total current liabilities
    60,418       29,569  
 
               
Long-term debt
    50,000        
Deferred income taxes
    7,761        
Total liabilities
    118,179       29,569  
     
 
               
Total stockholders’ equity before treasury stock
    249,453       209,514  
Less: cost of common stock in treasury
    59,004       53,420  
     
Total stockholders’ equity
    190,449       156,094  
     
 
               
Total liabilities and stockholders’ equity
  $ 308,628     $ 185,663  
     

 


 

SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                 
    (unaudited)  
    Nine months ended  
    September 30,     September 30,  
    2005     2004  
     
Cash flow from operating activities:
               
Net income
  $ 19,553     $ 13,026  
     
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    7,277       3,322  
Amortization of loan origination costs
    59        
Net realized losses (gains) on equity investments
    (197 )     26  
Loss (gain) on sale or disposal of property and equipment
    15       (7 )
Deferred income taxes
    650       970  
Income tax benefit related to exercise of stock options
    2,375       2,409  
Provision for doubtful accounts
    930       (168 )
Changes in operating assets and liabilities excluding effects from acquisitions:
               
Accounts receivable
    (8,143 )     522  
Prepaid expenses and other assets
    (343 )     232  
Accounts payable
    801       (382 )
Accrued expenses
    (2,506 )     813  
Taxes payable
    578       (58 )
Deferred maintenance and other revenues
    (9 )     (1,271 )
     
Total adjustments
    1,487       6,408  
     
Net cash provided by operating activities
    21,040       19,434  
     
 
Cash flow from investing activities:
               
Additions to property and equipment
    (2,092 )     (588 )
Proceeds from sale of property and equipment
    3       7  
Cash paid for business acquisitions, net of cash acquired
    (183,604 )     (23,540 )
Cash paid for long-term investment
    (2,000 )      
Purchases of marketable securities
    (88,250 )     (112,889 )
Sales of marketable securities
    181,037       50,708  
     
Net cash used in investing activities
    (94,906 )     (86,302 )
     
 
Cash flow from financing activities:
               
Repayment of debt and acquired debt
    (8,013 )      
Net proceeds from note payable
    75,000        
Issuance of common stock
    343       74,627  
Exercise of options
    2,279       1,897  
Purchase of common stock for treasury
    (5,584 )      
Common stock dividends
    (3,718 )     (2,944 )
     
Net cash provided by financing activities
    60,307       73,580  
     
 
Effect of exchange rate changes on cash
    (501 )     (57 )
     
 
Net increase (decrease) in cash and cash equivalents
    (14,060 )     6,655  
Cash and cash equivalents, beginning of period
    28,913       15,261  
     
Cash and cash equivalents, end of period
  $ 14,853     $ 21,916  
     

 


 

Cautionary Note Regarding Forward-Looking Statements
     Statements in this document regarding the proposed Merger, the expected effects, timing and completion of the proposed transaction and any other statements about SS&C’s future expectations, beliefs, goals, plans or prospects constitute forward-looking statements. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the ability to consummate the proposed transaction due to the failure to obtain stockholder approval, the failure of Parent to consummate the necessary debt financing arrangements set forth in a commitment letter received by Parent or the failure to satisfy other conditions to the closing of the proposed transaction, the ability to recognize the benefits of the transaction, intense competition in SS&C’s industry, changes in government regulation, failure to manage the integration of acquired companies and other risks that are contained in documents and the other factors described in SS&C’s Annual Report on Form 10-K for the year ended December 31, 2004 and its most recent quarterly report filed with the SEC. In addition, any forward-looking statements represent SS&C’s estimates only as of today and should not be relied upon as representing SS&C’s estimates as of any subsequent date. SS&C disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this filing.