Tuesday, September 25, 2012
For the quarter ended August 31, 2012 revenues increased to $207.7 million, up 8% compared to the prior year. Included in this total was $1.8 million from the acquisition of StreetAccount on June 29, 2012. Operating income for the fourth quarter rose to $70.6 million from $59.0 million in the same period of fiscal 2011. Net income advanced to $48.5 million compared to $40.9 million a year ago. Diluted earnings per share increased to $1.08, up from $0.88 in the same period of fiscal 2011. The year ago fourth quarter results include a pre-tax stock-based compensation charge of $5.4 million or $0.08 per diluted share. The acquisition of StreetAccount did not have an impact on FactSet’s fiscal 2012 fourth quarter diluted earnings per share.
“FactSet continues to generate shareholder value as illustrated by our double-digit EPS growth in the quarter,” says Philip Hadley, Chairman and CEO. “Investments in our products have helped us expand market share. We added 57 net new clients and 1,100 new users in the past three months. We were also pleased to acquire StreetAccount in June 2012, a leader in timely and informative news summaries for the investment community.”
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
Operational Highlights – Fourth Quarter of Fiscal 2012
Fiscal 2012 Highlights
On June 29, 2012, FactSet acquired StreetAccount LLC (“SA”) to complement the Company's news offering with distilled and crucial market moving information for buy-side and sell-side institutions. Founded in 2003, SA is known for its timely and informative news summaries and provides investment professionals with an efficient method for managing news flow. The StreetAccount service includes real-time company updates, portfolio and sector filtering, email alerts, and market summaries. Content is written by financial professionals and can be customized for portfolio, index, sector, market, time of day (i.e., Overnight Summaries), and category (i.e., Top Stories, Market Summaries, Economic, M&A). At the time of acquisition, SA had annual subscriptions of $11.4 million. The acquisition of SA did not have an impact on FactSet’s fourth quarter diluted earnings per share and is not expected to have a material impact on the Company’s fiscal 2013 diluted earnings per share.
The 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
Full Year Fiscal 2013
The Company will host a conference call today, September 25, 2012, at 11:00 a.m. (EDT) to review the fourth quarter fiscal 2012 earnings release. To listen, please visit investor.factset.com.
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 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 Financial Measures
Financial 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, click here.
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.
FactSet, 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.