* ASV grew $4 million to $619 million * Revenues rose 1% to $155 million * EPS advanced 10% to $0.74 * Free cash flow doubled to $60 million
NORWALK, Conn., Sept. 22, 2009 (GLOBE NEWSWIRE) -- FactSet Research Systems Inc. (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 2009.
For the quarter ended August 31, 2009, revenues increased to $155.5 million, up 1% compared to the prior year. Operating income for the fourth quarter rose to $54 million, an 8% increase from the same period in fiscal 2008. The operating margin advanced to 35%. Net income rose 8% to $36.3 million. Diluted earnings per share increased to $0.74, up 10% from last year.
Consolidated Statements of Income
---------------------------------------------------------------------
(Condensed and
Unaudited)
Three Months Ended Twelve Months Ended
(In thousands, August 31, August 31,
except per ------------------------------------------------------
share data) 2009 2008 Change 2009 2008 Change
-------------- -------- -------- ------ -------- -------- ------
Revenues $155,462 $153,707 1.1% $622,023 $575,519 8.1%
Operating
income 54,360 50,231 8.2% 211,030 183,887 14.8%
Other income 95 835 (88.6)% 1,092 5,160 (78.8)%
Provision for
income taxes 18,180 17,482 4.0% 67,172 64,030 4.9%
Net income $36,275 $33,584 8.0% $144,950 $125,017 15.9%
Diluted
earnings per
share $0.74 $0.67 10.4% $2.97 $2.50 18.8%
Weighted
average
common shares 48,880 50,341 48,789 50,080
---------------------------------------------------------------------
Philip A. Hadley, Chairman and CEO, said, "ASV, clients and users all grew during the fourth quarter. I was very pleased that each of our key metrics showed meaningful improvement sequentially from last quarter. It is premature to call a long-term recovery for our industry, but we believe we may be seeing an encouraging step in the right direction. Looking back on the just completed fiscal year, our EPS grew 19% in one the most challenging operating environments on record."
Annual Subscription Value ("ASV")
ASV increased $4 million during the fourth quarter and included a $0.4 million benefit from foreign exchange. ASV was $619 million at August 31, 2009. Of this total, 82% of ASV is 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 annual subscription services currently being supplied to clients.
Financial Highlights - Fourth Quarter of Fiscal 2009
* ASV from FactSet's U.S. operations was $419 million and $200
million related to international operations.
* U.S. revenues were $106 million, the same as the year ago quarter.
* Non-U.S. revenues increased 3% to $49.6 million.
* Operating margin rose 2.3% to 35%.
* Free cash flow doubled to $60 million.
* The effective tax rate for the quarter was 33.4%.
* Revenues from FactSet Fundamentals were $1.5 million. The quarterly
operating loss decreased 58% to $0.7 million from $1.6 million last
quarter. The investment in FactSet Fundamentals diluted EPS by
$0.01.
* Capital expenditures were $5.1 million.
* Non-subscription revenues were $1.5 million. A supplementary
schedule is presented further on in this press release to summarize
revenues related to services that are not included in the
calculation of FactSet's ASV.
Operational Highlights - Fourth Quarter of Fiscal 2009
* Client count was 2,045 at August 31, 2009, a net increase of 12
clients during the quarter.
* Professionals using FactSet increased to 37,300, up 200 users.
* Portfolio Analytics ("PA") 2.0 was deployed by 647 clients
representing 5,640 users. PA users increased by 40 during the
quarter, while the number of PA clients remained the same as the
previous quarter.
* Annual client retention rate was greater than 95% of ASV and 87% of
clients.
* Employee count at August 31, 2009 was 2,962, up 412 employees
during the quarter.
* Common shares outstanding at August 31, 2009 were 46.7 million. The
Company repurchased 594,600 shares during the quarter and $102
million remains authorized for future repurchases.
Fiscal 2009 Highlights
* Revenues increased 8% to $622 million.
* Diluted earnings per share rose 19% to $2.97.
* Free cash flow generated was $184 million, a rise of 71% over the
prior year.
* Accounts receivable decreased 16% over the last 12 months.
* Employee count rose 25% after adjusting for discontinuing a BPO
relationship in May 2009.
* Capital expenditures were $21 million, net of landlord
contributions for construction of $3 million. Approximately 50% of
capital expenditures were for computer equipment and the remainder
covered office space expansion.
* FactSet increased its quarterly dividend 11% from $0.18 to $0.20
per share in May 2009.
* FactSet Europe was named one of UK's 50 best places to work.
* Wall Street Journal partnered with FactSet to calculate its annual
ranking of the best equity analysts.
New FactSet Platform
On September 14, 2009 FactSet announced the release of the Company's newest financial software platform. The new FactSet consolidates data and analytics, previously spread across multiple applications, onto one comprehensive, intuitive interface.
The new FactSet is faster, more intuitive, and easier to customize. New features include the ability to share workspaces with colleagues for improved collaboration and type ahead technology that helps users find securities more quickly. Visually, the platform has been redesigned from top to bottom with a sleek, modern look. An upgrade to the new FactSet will provide users with improved features and functionality within virtually every report and chart on FactSet.
Business Outlook
The following forward-looking statements reflect FactSet's expectations as of September 22, 2009. 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 2010 Expectations * Revenues are expected to range between $152 million and $157 million. * EPS should range between $0.73 and $0.75. Full Year Fiscal 2010 * The 2010 guidance for capital expenditures, net of landlord contributions, is between $20 million and $26 million.
Conference Call
The Company will host a conference call today, September 22, 2009 at 11:00 a.m. (EDT) to review the fourth quarter fiscal 2009 earnings release. To listen, please visit the investor relations section of the Company's website at www.factset.com.
Forward looking statements
This news release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the Company's strategy for growth, product development, market position, subscriptions, expected expenditures and financial results are forward-looking statements. Forward-looking statements may be identified by words like "expected," "anticipates," "plans," "intends," "projects," "should," "indicates," "continues," "subscriptions" and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in FactSet's filings with the Securities and Exchange Commission, particularly its latest annual report on Form 10-K and quarterly reports on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to, the current status of the global economy; the ability to integrate newly acquired companies and businesses; the stability of global securities markets; the ability to hire qualified personnel; the maintenance of the Company's leading technological position; the impact of global market trends on the Company's revenue growth rate and future results of operations; the negotiation of contract terms with corporate vendors, data suppliers and potential landlords; the continued performance of Thomson Reuters under our Transition Services Agreement with them; the retention of key clients; the successful resolution of ongoing audits by tax authorities; the continued employment of key personnel; the absence of U.S. or foreign governmental regulation restricting international business; and the sustainability of historical levels of profitability and growth rates in cash flow generation.
About Non-GAAP Free Cash Flow
The presentation of free cash flow is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles ("GAAP"). The GAAP financial measure, cash flows provided by operating activities, has been adjusted to report non-GAAP free cash flow that includes the cash cost for taxes and changes in working capital, less capital expenditures. Included in the just completed fourth quarter was $65 million of net cash provided by operations and $5 million of capital expenditures. Free cash flow is not intended as an alternative measure of cash flows provided by operating activities, as determined in accordance with GAAP in the U.S. FactSet uses this financial measure, both in presenting its results to shareholders and the investment community, and in the Company's internal evaluation and management of the businesses. Management believes that this financial measure and the information FactSet provides are useful to investors because they permit investors to view the Company's performance using the same tools that management uses to gauge progress in achieving its goals. FactSet believes this measure is also useful to investors because it is an indication of cash flow that may be available to fund further investments in future growth initiatives.
About FactSet
FactSet Research Systems Inc. combines integrated financial information, analytical applications, and client service to enhance the workflow and productivity of the global investment community. The Company, headquartered in Norwalk, Connecticut, was formed in 1978 and now conducts operations along with its affiliates from more than twenty-three locations worldwide, including Boston, New York, Chicago, San Mateo, London, Amsterdam, Frankfurt, Paris, Milan, Tokyo, Hong Kong, Mumbai and Sydney.
FactSet Research Systems Inc.
Consolidated Statements of Income - Unaudited
Three Months Ended Twelve Months Ended
(In thousands, except per August 31, August 31,
share data) 2009 2008 2009 2008
-------- -------- -------- --------
Revenues $155,462 $153,707 $622,023 $575,519
Operating expenses
Cost of services 52,647 50,684 209,364 191,239
Selling, general and
administrative 48,455 52,792 201,629 200,393
-------- -------- -------- --------
Total operating expenses 101,102 103,476 410,993 391,632
-------- -------- -------- --------
Operating income 54,360 50,231 211,030 183,887
Other income 95 835 1,092 5,160
-------- -------- -------- --------
Income before income taxes 54,455 51,066 212,122 189,047
Provision for income taxes 18,180 17,482 67,172 64,030
-------- -------- -------- --------
Net income $36,275 $33,584 $144,950 $125,017
======== ======== ======== ========
Diluted earnings per
common share $0.74 $0.67 $2.97 $2.50
Weighted average common
shares (Diluted) 48,880 50,341 48,789 50,080
FactSet Research Systems Inc.
Consolidated Statements of Financial Condition - Unaudited
Aug. 31, Aug. 31,
(In thousands) 2009 2008
-------- --------
ASSETS
Cash and cash equivalents $216,320 $117,986
Investments -- 25,032
Accounts receivable, net of reserves 62,854 74,859
Prepaid FactSet Fundamentals database updates
- current 1,787 6,377
Prepaid taxes 7,415 1,090
Deferred taxes 4,319 3,271
Other current assets 6,715 5,908
-------- --------
Total current assets 299,410 234,523
Property, equipment, and leasehold
improvements, net 88,379 91,113
Goodwill 181,355 187,780
Intangible assets, net 46,350 58,333
Prepaid FactSet Fundamentals database updates
- non-current -- 2,000
Deferred taxes 12,295 10,279
Other assets 5,348 3,246
-------- --------
Total assets $633,137 $587,274
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $25,121 $22,366
Accrued compensation 41,889 38,095
Deferred fees 23,005 23,531
Dividends payable 9,348 8,634
-------- --------
Total current liabilities 99,363 92,626
Deferred taxes 3,794 5,122
Taxes payable 6,437 3,905
Deferred rent and other non-current liabilities 22,714 20,150
-------- --------
Total liabilities $132,308 $121,803
Stockholders' Equity
Common stock $581 $571
Additional paid-in capital 248,840 206,585
Treasury stock, at cost (414,995) (311,248)
Retained earnings 676,626 567,381
Accumulated other comprehensive (loss) income (10,223) 2,182
-------- --------
Total stockholders' equity 500,829 465,471
-------- --------
Total liabilities and stockholders' equity $633,137 $587,274
======== ========
FactSet Research Systems Inc.
Consolidated Statements of Cash Flows - Unaudited
Twelve Months Ended
(In thousands) August 31,
2009 2008
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $144,950 $125,017
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 34,337 30,654
Stock-based compensation expense 13,623 13,651
Deferred income taxes (4,318) (4,828)
Gain on sale of assets (101) (75)
Tax benefits from share-based payment arrangements (4,374) (9,572)
Changes in assets and liabilities, net of effects
of business acquired
Accounts receivable, net of reserves 12,005 (14,804)
Accounts payable and accrued expenses 3,081 (1,260)
Accrued compensation 4,212 8,399
Deferred fees (526) (2,651)
Taxes payable, net of prepaid taxes 1,547 7,436
Prepaid expenses and other assets (3,163) (3,935)
Landlord contributions 2,636 1,009
Prepaid fundamentals database updates 5,500 (8,250)
Other working capital accounts, net (1,639) 2,333
-------- --------
Net cash provided by operating activities 207,770 143,124
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of business, net of cash acquired -- (75,869)
Proceeds from sales of investments 25,260 44,392
Purchases of investments -- (52,011)
Purchases of property, equipment and leasehold
improvements (24,040) (35,780)
-------- --------
Net cash provided by (used in) investing activities 1,220 (119,268)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payments (34,770) (25,848)
Repurchase of common stock (103,827) (77,869)
Proceeds from employee stock plans 23,804 20,562
Tax benefits from share-based payment arrangements 4,374 9,572
-------- --------
Net cash used in financing activities (110,419) (73,583)
Effect of exchange rate changes on cash and
cash equivalents (237) (1,121)
-------- --------
Net increase (decrease) in cash and cash
equivalents 98,334 (50,848)
Cash and cash equivalents at beginning of period 117,986 168,834
-------- --------
Cash and cash equivalents at end of period $216,320 $117,986
======== ========
Supplementary Schedule to the Fourth Quarter Earnings Release
To aid an investor's ability to make more precise interpretations of FactSet's financial results, the supplementary schedule below summarizes revenues related to services that are not included in the calculation of FactSet's ASV. Non-subscription services include revenues derived from workstations sold to summer interns, introducing brokerage services, M&A related publications and the Partner software product which is used to author equity research reports. Although the impact from non-subscription revenues individually and in the aggregate has been immaterial to FactSet's annual results, this table might enhance an investor's overall understanding of quarterly revenues.
Non-Subscription Revenues (1)
---------------------------------------------------------------------
(In thousands and unaudited) Aug. 31, Aug. 31,
2009 2008 $ Change % Change
-------- -------- -------- --------
For the three months ended $1,550 $2,720 $ (1,170) (43)%
For the twelve months ended $4,442 $6,445 $ (2,003) (31)%
---------------------------------------------------------------------
(1) Revenues from FactSet services that are not sold on a
subscription basis are excluded from FactSet's reported ASV. The
aforementioned amounts were included in FactSet's reported
revenues each quarter.