Press Releases
SunGard Announces Third Quarter 2009 Results
November 5, 2009 — Wayne, PA
Wayne, PA – November 5, 2009 – SunGard, one of the world’s leading software and IT services companies, reported today that revenue for the three months ended September 30, 2009 was $1.34 billion, a decrease of 4% compared to the same period in 2008. On a constant currency basis, organic revenue decreased by 7% in the quarter. Organic revenue is revenue from businesses owned for at least one year and excludes revenue from businesses sold in the previous twelve months. Approximately five percentage points of the decrease in organic revenue in the quarter was attributable to one of our broker/dealer businesses.
For the three months ended September 30, 2009, adjusted EBITDA (defined in Note 1 to the Notes to the Consolidated Condensed Financial Information) was $373 million, a $2 million increase from the prior year period.
Adjusted income from operations (defined in Note 2 to the Notes to the Consolidated Condensed Financial Information) for the three months ended September 30, 2009 was $300 million, a 3% increase from $290 million in 2008.
Reported income from operations for the three months ended September 30, 2009 was $132 million compared to $136 million for the year 2008, a decrease of $4 million. Reported income from operations in 2009 and 2008 includes amortization of acquired intangible assets of $150 million and $131 million, respectively, and stock-based compensation, purchase accounting adjustments and other costs of $18 million and $23 million, respectively.
Cristóbal Conde, president and chief executive officer, commented, “We are pleased that we continue to hit our targets. Overall, SunGard is viewed as a very strong strategic partner. The spending mood is trending to the positive, but sales cycles remain long. Customers are still looking to reduce their spending on core platforms that are not in growth businesses, but at the same time they are reallocating these savings to discretionary budgets to go after growth opportunities. Our ability to bundle and cross-sell solutions makes us very competitive.”
Revenue for the first nine months of 2009 decreased less than one-half of 1% over the same period in 2008 to $4.04 billion. Adjusted EBITDA for the nine months ended September 30, 2009 was $1.05 billion compared to $1.07 billion last year. Adjusted income from operations for the nine months ended September 30, 2009 was $816 million compared to $832 million last year. Reported income from operations in 2009 and 2008 was $366 million and $405 million and includes amortization of acquired intangible assets of $404 million and $361 million, respectively, and stock-based compensation, purchase accounting adjustments and other costs of $46 million and $66 million, respectively.
Financial Systems organic revenue decreased 15% for the quarter on a constant currency basis. Approximately 8% of the decrease in organic revenue was attributable to one of our broker/dealer businesses. This broker/dealer revenue has been uncharacteristically high and is a function of market volatility and customer mix. It decreased year over year and sequentially has declined two of the past three quarters. In addition, the largest customer in this business has given us notice that it plans to decrease its use of our services beginning in the first quarter of 2010 as a result of impending regulatory changes. The estimated annual impact of this customer departure is approximately $384 million in revenue and $35-$40 million in income from operations.
Total Financial Systems revenue decreased 6% to $724 million for the quarter. License fees were $38 million for the quarter, an increase of $3 million compared to the same quarter in 2008.
Notable deals in the quarter included the following:
- A large insurer in China chose SunGard’s Asset Arena to automate its back-office operations.
- One of the world’s largest payments companies, and an existing customer of SunGard AvantGard, selected SunGard’s STN Money Markets to help streamline its trading and reporting.
- A long-term SunGard customer extended its contract for Brass and Protegent to support its U.S. equities trading desk.
Higher Education revenue decreased 2%, all of which was organic, to $125 million for the quarter. License fees were $8 million for the quarter, an increase of $1 million from the same quarter of 2008.
Notable deals in the quarter included the following:
- Four schools in the northeast, part of one of the largest higher education systems in the U.S., purchased a range of Banner Unified Digital Campus solutions.
- A public two-year college in New York extended its relationship with SunGard Higher Education for technology management services.
- One of the most recognized MBA universities in Brazil chose SunGard Higher Education’s Banner Unified Digital Campus.
Public Sector organic revenue increased 14% in the quarter on a constant currency basis. This business has significant operations in the U.K., with both revenue and expenses denominated in British pounds. Total Public Sector revenue increased 10% to $103 million for the quarter. License fees were $6 million for the quarter, an increase of $1 million from the same quarter of 2008.
Notable deals in the quarter included the following:
- A national agency dedicated to improving public safety throughout the U.K. extended its contract with SunGard Public Sector for case and custody support.
- A county in Florida selected SunGard Public Sector to provide records management and mobile computing software solutions.
- A county in Texas selected SunGard Public Sector to provide computer-aided dispatch, records management, mobile computing and jail management software.
Availability Services organic revenue was unchanged in the quarter on a constant currency basis. Total Availability Services revenue decreased 3% to $385 million for the quarter.
Notable deals in the quarter included the following:
- A prominent, national pharmacy chain chose SunGard to provide disaster recovery services.
- A large Canadian bank selected SunGard as its managed services provider.
- An electronics design, production and product management company selected SunGard for hosting and managed services.
Financial Position
At September 30, 2009, total debt was $8.34 billion and cash balances were $479 million. During the nine months ended September 30, 2009, the Company invested $255 million in capital expenditures and completed two acquisitions.
Conference Call & Webcast
A conference call to review the results is scheduled for Friday, November 6, 2009 at 9:00 a.m. (Eastern Time). The dial-in number is 706-902-1370, conference ID 38270686. A replay will be available shortly after the end of the call through midnight on November 13, 2009. To listen to the replay, please dial 706-645-9291, conference ID 38270686. You may also listen to the call at www.investorcalendar.com by clicking on the "audio" icon for SunGard. A replay will be available shortly after the end of the webcast, through midnight on November 13, 2009 at www.investorcalendar.com.
Download Earnings Release with financial exhibits
About SunGard
SunGard is one of the world’s leading software and IT services companies. SunGard serves more than 25,000 customers in more than 70 countries.
SunGard provides software and processing solutions for financial services, higher education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software.
With annual revenue exceeding $5 billion, SunGard is ranked 435 on the Fortune 500 and is the largest privately held business software and services company on the Forbes list of private businesses. Based on information compiled by Datamonitor*, SunGard is the third largest provider of business applications software after Oracle and SAP. “Continuity, Insurance & Risk” has recognized SunGard as service provider of the year an unprecedented six times. For more information, please visit SunGard at www.sungard.com.
*January 2009 Technology Vendors Financial Database Tracker http://www.datamonitor.com
Trademark Information: SunGard, the SunGard logo, Asset Arena, AvantGard, Banner, Brass, Protegent and STN are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.
SunGard’s "Safe Harbor" Statement under Private Securities Litigation Reform Act of 1995
Statements in this release other than historical facts constitute forward-looking statements. You can identify forward-looking statements because they contain words such as "believes," "expects," "may," "will," "would," "should," "seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or similar expressions which concern our strategy, plans or intentions. All statements we make relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. All of these forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those we expected. We derive most of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. Some of the factors that we believe could affect our results include: our high degree of leverage; general economic and market conditions; the overall condition of the financial services industry, including the effect of any further consolidation among financial services firms; the integration of acquired businesses, the performance of acquired businesses, and the prospects for future acquisitions; the effect of war, terrorism, natural disasters or catastrophic events; the effect of disruptions to our systems and infrastructure; the timing and magnitude of software sales; the timing and scope of technological advances; customers taking their information availability solutions in-house; the trend in information availability toward solutions utilizing more dedicated resources; the market and credit risks associated with clearing broker operations; the ability to retain and attract customers and key personnel; risks relating to the foreign countries where we transact business; the ability to obtain patent protection and avoid patent-related liabilities in the context of a rapidly developing legal framework for software and business-method patents; and a material weakness in our internal controls. The factors described in this paragraph and other factors that may affect our business or future financial results are discussed in our periodic filings with the Securities and Exchange Commission, copies of which may be obtained from us without charge. We assume no obligation to update any written or oral forward-looking statement made by us or on our behalf as a result of new information, future events or other factors.