- ASV advanced $31.9 million. Excluding the StreetAccount acquisition, ASV increased $20.4 million.
- Diluted EPS was $1.08, up 13% when excluding a stock-based compensation charge recorded in the year ago quarter
- Excluding StreetAccount, client count rose by 57, the largest quarterly growth since 2006
- Free cash flow was $51 million during the fourth quarter and $209 million for the full fiscal 2012 year, up 18% over last year
|(Condensed and Unaudited)||Three Months Ended August 31,||Twelve Months Ended August 31,|
|(In thousands, except per share data)||2012||2011||Change||2012||2011||Change|
|Provision for income taxes||22,547||18,304||23.2||%||85,896||67,912||26.5||%|
|Diluted earnings per share||$1.08||$0.88||22.7||%||$4.12||$3.61||14.1||%|
|Diluted weighted average shares||45,152||46,595||45,810||47,355|
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.
- 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.
- 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%.
Business OutlookThe 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.
- 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%.
About Non-GAAP Financial MeasuresFinancial measures in accordance with generally accepted accounting principles ("GAAP") including diluted earnings per share have been adjusted to report non-GAAP financial measures. These measures exclude stock-based compensation expense and amortization of intangible assets. FactSet uses these non-GAAP financial measures, both in presenting its results to stockholders and the investment community, and in its internal evaluation and management of the businesses. The Company believes that these financial measures and the information they provide are useful to investors because it permits investors to view the Company's performance using the same tools that management uses to gauge progress in achieving its goals. Investors may benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning, forecasting and analyzing future periods and may also facilitate comparisons to its historical performance. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see page 7 of this release. About Non-GAAP Free Cash Flow 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 $57 million of net cash provided by operations and $5.7 million of capital expenditures. 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 GAAP. FactSet uses this financial measure, both in presenting its results to stockholders and the investment community, and in the Company's internal evaluation and management of the businesses. Management believes that this financial measure is useful to investors because it permits investors to view the Company's performance using the same metric that management uses to gauge progress in achieving its goals and is an indication of cash flow that may be available to fund further investments in future growth initiatives.
About FactSetFactSet, a leading provider of financial information and analytics, helps the world's best investment professionals outperform. More than 49,000 users stay ahead of global market trends, access extensive company and industry intelligence, and monitor performance with FactSet's desktop analytics, mobile applications, and comprehensive data feeds. The Company was named the 2012 Best Research Provider at the Inside Market Data and Inside Reference Data Awards and has been included in FORTUNE's Top 100 Best Companies to Work For, the United Kingdom's Great Places to Work and France's Best Workplaces. FactSet is listed on the New York Stock Exchange and NASDAQ (NYSE:FDS) (Nasdaq:FDS). Learn more at www.factset.com, and follow us on Twitter: www.twitter.com/factset.
|FactSet Research Systems Inc.|
|Consolidated Statements of Income - Unaudited|
|Three Months Ended||Twelve Months Ended|
|August 31,||August 31,|
|(In thousands, except per share data)||2012||2011||2012||2011|
|Cost of services||72,295||65,477||275,537||244,623|
|Selling, general and administrative||64,741||67,472||257,266||243,552|
|Total operating expenses||137,036||132,949||532,803||488,175|
|Income before income taxes||71,086||59,184||274,705||238,958|
|Provision for income taxes||22,547||18,304||85,896||67,912|
|Net income||$ 48,539||$ 40,880||$188,809||$171,046|
|Diluted earnings per common share||$ 1.08||$ 0.88||$ 4.12||$ 3.61|
|Diluted weighted average common shares||45,152||46,595||45,810||47,355|
|FactSet Research Systems Inc.|
|Consolidated Statements of Financial Condition - Unaudited|
|August 31,||August 31,|
|Cash and cash equivalents||$189,044||$181,685|
|Accounts receivable, net of reserves||74,251||75,004|
|Prepaid expenses and other current assets||14,341||12,473|
|Total current assets||299,125||273,170|
|Property, equipment, and leasehold improvements, net||76,530||81,620|
|Intangible assets, net||43,371||46,310|
|Accounts payable and accrued expenses||$ 27,680||$ 24,603|
|Total current liabilities||113,176||109,423|
|Deferred rent and other non-current liabilities||20,646||21,913|
|Common stock||$ 456||$ 614|
|Additional paid-in capital||137,569||432,538|
|Treasury stock, at cost||(122,749)||(824,382)|
|Accumulated other comprehensive loss||(22,726)||(5,660)|
|TOTAL STOCKHOLDERS' EQUITY||552,264||515,188|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$694,143||$657,440|
|FactSet Research Systems Inc.|
|Consolidated Statements of Cash Flows - Unaudited|
|(In thousands)||Twelve Months Ended|
|CASH FLOWS FROM OPERATING ACTIVITIES|
|Adjustments to reconcile net income to net cash provided by operating activities|
|Depreciation and amortization||33,779||36,847|
|Stock-based compensation expense||21,982||25,773|
|Deferred income taxes||(3,760)||(1,806)|
|Gain on sale of assets||--||(22)|
|Tax benefits from share-based payment arrangements||(11,159)||(18,331)|
|Changes in assets and liabilities, net of effects of acquisition|
|Accounts receivable, net of reserves||2,083||(15,311)|
|Accounts payable and accrued expenses||9||715|
|Taxes payable, net of prepaid taxes||4,209||20,387|
|Prepaid expenses and other assets||(445)||(6,579)|
|Deferred rent and other non-current liabilities||(905)||(483)|
|Other working capital accounts, net||(583)||(437)|
|Net cash provided by operating activities||231,965||207,136|
|CASH FLOWS FROM INVESTING ACTIVITIES|
|Acquisition of business, net of cash acquired||(21,329)||--|
|Purchases of investments||(15,000)||--|
|Purchases of property, equipment and leasehold improvements, net of proceeds from dispositions||(22,520)||(29,343)|
|Net cash used in investing activities||(58,849)||(29,343)|
|CASH FLOWS FROM FINANCING ACTIVITIES|
|Repurchase of common stock||(153,641)||(216,584)|
|Proceeds from employee stock plans||33,747||43,079|
|Tax benefits from share-based payment arrangements||11,159||18,331|
|Net cash used in financing activities||(158,718)||(199,123)|
|Effect of exchange rate changes on cash and cash equivalents||(7,039)||7,274|
|Net increase (decrease) in cash and cash equivalents||7,359||(14,056)|
|Cash and cash equivalents at beginning of period||181,685||195,741|
|Cash and cash equivalents at end of period||$189,044||$181,685|
|Non-GAAP Financial Measures|
|Financial measures in accordance with GAAP including diluted earnings per share have been adjusted to report non-GAAP financial measures. FactSet uses these non-GAAP financial measures, both in presenting its results to stockholders and the investment community, and in its internal evaluation and Company believes that these financial measures and the information they provide are useful to investors because it permits investors to view the Company's performance using the same tools that management uses to gauge progress in achieving its goals. Non-GAAP measures may also facilitate comparisons to FactSet's historical performance.|
|(Unaudited)||Three Months Ended|
|(In thousands, except per share data)||2012||2011||Change|
|GAAP Diluted earnings per common share||$ 1.08||$ 0.88|
|Incremental stock-based compensation, net of tax (a)||--||0.08|
|Sub-total||$ 1.08||$ 0.96||13%|
|Stock-based compensation, net of tax (b)||0.07||0.07|
|Amortization of intangible assets from acquisitions, net of tax||0.03||0.03|
|Non-GAAP diluted earnings per share||$ 1.18||$ 1.06||11%|
|For the purposes of calculating the non-GAAP measures above, stock-based compensation expense and amortization of intangible assets are taxed at the effective tax rates. For the three months ended August 31, 2012, the effective tax rate was 31.7%. For the three months ended August 31, 2011, the effective tax rate was 30.9%.|
|(a) To add-back a stock-based compensation charge of $0.08 per diluted share related to an increase in the estimated number of performance-based options that will vest. The revised estimate reflected a higher performance level than previously estimated and accordingly, increased the number of performance-based options that will vest and be expensed.|
|(b) Stock-based compensation, net of tax, during each quarterly period when excluding non-recurring charges.|
CONTACT: Rachel Stern FactSet Research Systems Inc. 203.810.1000