EXHIBIT 99.1
July 20, 2000
Michael J. Ruane Madeline Hopkins Internet
(610) 341-8709 (610) 341-4357 www.sungard.com
SunGard Announces Second Quarter 2000 Results
and Adoption of Stockholder Rights Plan
Wayne, PA -- SunGard (NYSE:SDS) reported today that net income for the three
months ended June 30, 2000, excluding one-time charges, was $54.4 million, an
increase of 28% over originally reported net income of $42.6 million for the
same period in 1999. The related diluted net income per share was $0.40 for the
quarter, a 14% increase over originally reported second quarter 1999 diluted
earnings per share of $0.35, before merger costs.
Cash earnings, which are earnings per share excluding after-tax amortization of
acquisition-related intangibles and merger costs, were $0.48 for the second
quarter, a 20% increase over the corresponding quarter last year.
James L. Mann, chairman and chief executive officer, stated, "This was another
solid quarter for SunGard, and we confirm our 2000 outlook for diluted net
income per share in the range of $1.58 to $1.64. We are realizing the results
of our integrated eProcessing strategy. By leveraging synergies within SunGard
and adding value to acquired products, we offer end-to-end, straight-through
processing solutions which differentiate SunGard from competing niche products.
The result of this strategy has been a growing number of large contracts for
integrated solutions that include multiple SunGard products. With SunGard
solutions processing over 2 million trades daily, routing nearly 70% of Nasdaq
trade orders and managing over $7 trillion in assets, we are confident that 2000
will be a good year."
For the second quarter, revenues were $401.1 million, an increase of 20%
compared to originally reported revenues of $333.4 million for the same period
in 1999. On a restated basis, revenues increased 14% for the quarter. For the
first six months of 2000, revenues were $785.8 million, an increase of 20% over
originally reported revenues of $653.0 million for the first six months of 1999.
On a restated basis, revenues increased 12% for the first half of the year.
Investment Support Systems revenues increased 24% to $291.6 million. The
Company continued its development of end-to-end, straight-through processing
(STP) solutions and is in the process of rolling out MINT EAI (enterprise
application integration) technology across SunGard businesses and identifying
new integration opportunities. Sales of integrated solutions have been one of
the reasons why the volume of both assets processed using INVEST ONE and
securities processed using Phase3, increased more than 80% over last year.
Acceptance of and demand for the SunGard Transaction Network (STN) is
exemplified by a growing number of clients and SunGard products and solutions
now linked to the network. STN clients now include 50 pension plan
administrators and third party processors servicing many thousands of 401k
plans, 200 trust banks and over 250 broker/dealers. Bridge Information Systems
joined as yet another partner, linking its Triad customers to SunGard's BRASS
through STN. STN is a fully automated solution linking investors and asset
managers with brokers, brokers with exchanges, exchanges with banks, and banks
with settlement agents and custodians, to achieve straight-through processing
for securities transactions.
Business Continuity and Internet Services (BCIS) revenues increased 11% to
$100.6 million in the second quarter. This reflects strong performance in the
core recovery services business and SunGard's expansion into the broader
enterprise outsourcing market for high-availability infrastructure for Web
hosting, co-location and application service provision (ASP). BCIS recently
announced a $1 billion backlog in contractually recurring revenues for
continuity services.
During the quarter, SunGard completed three acquisitions to further its
integrated STP solutions. In the brokerage and execution area, SunGard acquired
Frontier Analytics, Inc. which provides sophisticated investment analysis and
asset allocation software to professional investors and financial services
companies. The Company also acquired McSherry & Co., an agency execution
broker, to provide greater NYSE floor coverage and trade execution through
SunGard's wireless STP trading solutions for listed securities. In the risk and
derivatives area, the Company acquired RioFin Limited, a company that provides
value-added applications for trading, operations and risk management for use
with SunGard's Panorama offering.
Net income after merger costs and diluted net income per share for the second
quarter were $53.7 million and $0.40, respectively, as compared to pro forma net
income after extraordinary items and pro forma diluted net income per share of
$37.2 million and $0.29, respectively, for the second quarter of 1999.
For the first six months of 2000, net income and diluted net income per share,
excluding one-time items and restatements, were $97.5 million and $0.72,
respectively, increases of 22% and 9% over originally reported net income and
diluted net income per share for the first six months of 1999 of $79.8 million
and $0.66, respectively.
SunGard also announced that its board of directors approved the adoption of a
Stockholder Rights Plan under which all stockholders of record as of July 20,
2000 will receive rights to purchase shares of a new series of preferred stock.
The rights plan is designed to enable all SunGard stockholders to realize the
full value of their investment and to provide for fair and equal treatment of
all SunGard stockholders if there is a hostile attempt to acquire SunGard. The
adoption of the rights plan is intended as a means to guard against abusive
takeover tactics and is not in response to any particular proposal.
The rights will be exercisable only if a person or group acquires or announces a
tender offer for 15% or more of SunGard's common stock. In this case, all
rights holders except the 15% buyer will be entitled to purchase SunGard common
stock at a discount. The effect is to encourage potential acquirers of more
than 15% of SunGard's common stock to negotiate with SunGard's board of
directors.
The rights will be distributed as a non-taxable dividend and will expire ten
years after the record date. The rights will trade with SunGard's common stock
unless and until they are separated upon the occurrence of certain future
events. SunGard's board of directors may terminate the rights plan at any time
or redeem the rights before a person acquires 15% of SunGard's common stock.
Additional details regarding the rights plan will be outlined in a summary to be
mailed to all stockholders as soon as practicable.
The Company will make available a replay of the investor conference call
beginning July 21, 2000 at 12 noon EDT through midnight on Thursday, July 27,
2000. To listen to the replay, dial 719-457-0820; passcode #920680. A Webcast
replay and formal comments made on the call will be posted on the Company's Web
site at www.sungard.com.
SunGard (NYSE:SDS) is a global leader in integrated IT solutions and eProcessing
for financial services. SunGard is also the pioneer and a leading provider of
high-availability infrastructure for business continuity. With annual revenues
in excess of $1 billion, SunGard serves more than 10,000 clients in over 50
countries, including 47 of the world's 50 largest financial services
institutions. Visit SunGard at www.sungard.com.
- --------------------------------------------------------------------------------
"Safe Harbor" Statement under Private Securities Litigation Reform Act of 1995
Statements about the Company's outlook for 2000 and all other statements in this
release other than historical facts are forward-looking statements that are
subject to risks and uncertainties that may change at any time and differ from
actual results. Forward-looking statements include information about possible
or assumed future financial results of the Company and usually contain words
such as "believes," "intends," "expects," "anticipates," or similar expressions.
The Company derives most of its forward-looking statements from its operating
budgets and forecasts, which are based upon many detailed assumptions. While
the Company believes that its assumptions are reasonable, it cautions that there
are inherent difficulties in predicting certain important factors, such as the
timing and magnitude of software sales, the effect of Y2K issues on software and
services buying decisions, the timing and scope of technological advances, the
integration and performance of acquired businesses, the prospects for future
acquisitions, the ability to attract and retain key personnel, and the overall
condition of the financial services industry. These factors, as and when
applicable, are discussed in the Company's filings with the Securities and
Exchange Commission, including its most recent Form 10-K, a copy of which may be
obtained from the Company without charge.
- --------------------------------------------------------------------------------
SunGard Data Systems Inc.
Consolidated Condensed Balance Sheets
(In thousands)
June 30,
2000 Dec. 31,
(Unaudited) 1999
------------- ----------
Assets:
Current:
Cash, equivalents and short-term investments $ 354,320 $ 391,225
Accounts receivable, net 342,084 334,402
Prepaid expenses and other current assets 67,981 61,180
------------- ----------
Total current assets 764,385 786,807
Property and equipment, net 191,653 182,682
Software products, net 140,172 110,355
Goodwill, deferred income taxes and other intangible assets, net 567,556 484,918
------------- ----------
$1,663,766 $1,564,762
============ ==========
Liabilities and Stockholders' Equity:
Current:
Short-term and current portion of long-term debt $ 10,744 $ 7,755
Accounts payable and accrued expenses 160,565 174,857
Deferred revenue 174,541 165,866
------------- ----------
Total current liabilities 345,850 348,478
Long-term debt 7,449 5,517
Stockholders' equity 1,310,467 1,210,767
------------- ----------
$1,663,766 $1,564,762
============= ==========
See Notes to Consolidated Condensed Financial Information.
SunGard Data Systems Inc.
Notes to Consolidated Condensed Financial Information
(In thousands, except per share amounts)
Note 1. Basis of Income Statement Presentation:
Excluding Restatements, Merger Costs and Extraordinary Items:
- ------------------------------------------------------------
a) Excludes all one-time merger costs and extraordinary items, as
described in Note 2.
b) Includes all 1999 poolings of interests only from the
beginning of the quarter during which the merger was completed.
Including Restatements, Merger Costs and Extraordinary Items:
- ------------------------------------------------------------
a) Includes all poolings of interests that resulted in the
restatement of previously reported results (Automated Securities
Clearance, Ltd., FDP Corp., Oshap Technologies Ltd., Pentamation
Enterprises, Inc. and Sterling Wentworth Corporation) for all
periods presented.
b) Includes all one-time merger costs and extraordinary items, as
described in Note 2.
Note 2. Merger Costs and Extraordinary Items:
Six months ended June 30, 2000 and 1999:
---------------------------------------
During 2000, merger costs of $2,756 ($2,293 after-tax, or $0.02
per diluted share) were recorded. The one-time costs are
associated with pooling-of-interests transactions, and include
severance, investment banking, legal and accounting fees.
During 1999, merger costs of $90,446 ($62,571 pro forma after-
tax, or $0.49 per restated pro forma diluted share) were
recorded. The one-time merger costs are associated with poolings
of interests, including a noncash charge in connection with a
pre-existing employment agreement with an executive of ASC,
which obligated ASC to issue to the executive 25% of the shares
issued in the merger. The fair value of those shares and related
payroll costs totalling $71,459 were recorded as one-time costs
associated with the merger. ASC was an "S" corporation prior to
the merger with SunGard; therefore, substantially all income
passed through directly to and substantially all income taxes
were paid directly by the shareholder of ASC. Pro forma net
income is presented since generally accepted accounting
principles require that pro forma income taxes be reflected on
the Statements of Income for all periods presented, thereby
reflecting income taxes that would have been paid by ASC if ASC
had been a "C" corporation.
Also during 1999, the Company sold two subsidiaries which
resulted in an extraordinary gain of $16,467 ($10,371 after-tax,
or $0.08 per diluted share). In addition, the Company recorded an
extraordinary gain of $299 resulting from the repurchase of
convertible debt by an unconsolidated subsidiary acquired in a
pooling-of-interests transaction.
Three months ended June 30, 2000 and 1999:
-----------------------------------------
During 2000, merger costs of $1,156 ($693 after-tax, or less than
$0.01 per diluted share) were recorded. These one-time costs are
associated with a pooling-of-interests transaction.
During 1999, merger costs of $5,222 ($3,787 pro forma after-tax,
or $0.03 per restated pro forma diluted share) were recorded. The
one-time merger costs are associated with poolings-of-interests
transactions.
SunGard Data Systems Inc.
Consolidated Condensed Income Statements
Excluding Restatements, Merger Costs and Extraordinary Items (See Notes 1 and 2)
(In thousands, except per share amounts)
(Unaudited)
June 30,
---------------------------------------------------
Six Months Ended Three Months Ended
----------------------- ---------------------
2000 1999 2000 1999
-------- -------- -------- --------
-------- -------- -------- --------
Revenues $785,761 $653,017 $401,096 $333,436
-------- -------- -------- --------
Costs and expenses:
Cost of sales and direct operating 318,694 277,775 154,427 141,690
Sales, marketing and administration 174,544 134,861 89,159 66,311
Product development 69,210 58,514 35,031 30,075
Depreciation and amortization 42,848 34,572 22,101 17,536
Amortization of acquisition-related intangible assets 27,849 20,083 14,720 10,279
-------- -------- -------- --------
633,145 525,805 315,438 265,891
-------- -------- -------- --------
Income from operations, excluding merger costs 152,616 127,212 85,658 67,545
Interest income 10,634 7,455 5,267 4,100
Interest expense -768 -841 -311 -461
-------- -------- -------- --------
Income before income taxes, excluding merger
costs and extraordinary items 162,482 133,826 90,614 71,184
Income taxes 64,993 54,066 36,246 28,570
-------- -------- -------- --------
Net income, excluding merger costs and
extraordinary items $ 97,489 $ 79,760 $ 54,368 $ 42,614
======== ======== ======== ========
Basic net income per common share, excluding
merger costs and extraordinary items $ 0.74 $ 0.68 $ 0.41 $ 0.36
======== ======== ======== ========
Shares used to compute basic net income per
common share 131,474 117,104 131,704 119,262
======== ======== ======== ========
Diluted net income per common share, excluding
merger costs and extraordinary items $ 0.72 $ 0.66 $ 0.40 $ 0.35
======== ======== ======== ========
Shares used to compute diluted net income per
common share 134,585 120,980 134,973 122,627
======== ======== ======== ========
See Notes to Consolidated Condensed Financial Information.
SunGard Data Systems Inc.
Supplemental Income Statement Information
Excluding Restatements, Merger Costs and Extraordinary Items (See Notes 1 and 2)
(In thousands)
(Unaudited)
June 30,
----------------------------------------------------
Six Months Ended Three Months Ended
----------------------- ----------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenues:
Investment support systems $572,919 $462,259 $291,564 $235,567
Business continuity and Internet services 196,942 172,700 100,579 90,512
Other businesses 15,900 18,058 8,953 7,357
-------- -------- -------- --------
$785,761 $653,017 $401,096 $333,436
======== ======== ======== ========
Income from operations:
Investment support systems $106,170 $ 93,594 $ 59,444 $ 44,773
Business continuity and Internet services 52,406 40,448 29,358 25,582
Other businesses 4,554 1,323 3,128 1,246
Corporate administration -10,514 -8,153 -6,272 -4,056
-------- -------- -------- --------
$152,616 $127,212 $ 85,658 $ 67,545
======== ======== ======== ========
Operating margin:
Investment support systems 18.5% 20.2% 20.4% 19.0%
======== ======== ======== ========
Business continuity and Internet services 26.6% 23.4% 29.2% 28.3%
======== ======== ======== ========
Other businesses 28.6% 7.3% 34.9% 16.9%
======== ======== ======== ========
Total 19.4% 19.5% 21.4% 20.3%
======== ======== ======== ========
See Notes to Consolidated Condensed Financial Information.
SunGard Data Systems Inc.
Consolidated Condensed Income Statements
Including Restatements, Merger Costs and Extraordinary Items (See Notes 1 and 2)
(In thousands, except per share amounts)
(Unaudited)
June 30,
------------------------------------------
Six Months Ended Three Months Ended
------------------------------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenues $785,761 $704,520 $401,096 $352,873
-------- -------- -------- --------
Costs and expenses:
Cost of sales and direct operating 318,694 303,098 154,427 150,703
Sales, marketing and administration 174,544 150,691 89,159 73,894
Product development 69,210 63,238 35,031 31,544
Depreciation and amortization 42,848 36,936 22,101 18,594
Amortization of acquisition-related intangible assets 27,849 21,046 14,720 10,656
Merger costs, including noncash charge of $71,459 in 1999 (see Note 2) 2,756 90,446 1,156 5,222
-------- -------- -------- --------
635,901 665,455 316,594 290,613
-------- -------- -------- --------
Income from operations 149,860 39,065 84,502 62,260
Interest income 10,634 7,670 5,267 3,990
Interest expense -768 -1,134 -311 -608
-------- -------- -------- --------
Income before income taxes and extraordinary items 159,726 45,601 89,458 65,642
Income taxes 64,530 55,183 35,783 28,843
-------- -------- -------- --------
Net income (loss) before extraordinary items 95,196 -9,582 53,675 36,799
Extraordinary items, net of income taxes 0 10,670 0 0
-------- -------- -------- --------
Net income 95,196 1,088 53,675 36,799
Pro forma income tax benefit resulting from acquired
Subchapter S corporation 0 -27,381 0 -447
-------- -------- -------- --------
Pro forma net income after extraordinary items $ 95,196 $ 28,469 $ 53,675 $ 37,246
======== ======== ======== ========
Pro forma basic net income per common share:
Before extraordinary items $ 0.72 $ 0.14 $ 0.41 $ 0.30
======== ======== ======== ========
After extraordinary items $ 0.72 $ 0.23 $ 0.41 $ 0.30
======== ======== ======== ========
Shares used to compute pro forma basic net income per common share 131,474 124,322 131,704 125,223
======== ======== ======== ========
Pro forma diluted net income per common share:
Before extraordinary items $ 0.71 $ 0.14 $ 0.40 $ 0.29
======== ======== ======== ========
After extraordinary items $ 0.71 $ 0.22 $ 0.40 $ 0.29
======== ======== ======== ========
Shares used to compute pro forma diluted net income per common share 134,585 128,374 134,973 128,720
======== ======== ======== ========
See Notes to Consolidated Condensed Financial Information.
SunGard Data Systems Inc.
Supplemental Income Statement Information
Including Restatements, Merger Costs and Extraordinary Items (See Notes 1 and 2)
(In thousands)
(Unaudited)
June 30,
-----------------------------------------------------
Six Months Ended Three Months Ended
--------------------- ----------------------
2000 1999 2000 1999
-------- -------- -------- --------
Revenues:
Investment support systems $572,919 $513,762 $291,564 $255,004
Business continuity and Internet services 196,942 172,700 100,579 90,512
Other businesses 15,900 18,058 8,953 7,357
-------- -------- -------- --------
$785,761 $704,520 $401,096 $352,873
-------- -------- -------- --------
Income from operations:
Investment support systems $106,170 $ 95,893 $ 59,444 $ 44,710
Business continuity and Internet services 52,406 40,448 29,358 25,582
Other businesses 4,554 1,323 3,128 1,246
Corporate administration -10,514 -8,153 -6,272 -4,056
Merger costs -2,756 -90,446 -1,156 -5,222
-------- -------- -------- --------
$149,860 $ 39,065 $ 84,502 $ 62,260
======== ======== ======== ========
Operating margin (excluding merger costs):
Investment support systems 18.5% 18.7% 20.4% 17.5%
======== ======== ======== ========
Business continuity and Internet services 26.6% 23.4% 29.2% 28.3%
======== ======== ======== ========
Other businesses 28.6% 7.3% 34.9% 16.9%
======== ======== ======== ========
Total 19.4% 18.4% 21.4% 19.1%
======== ======== ======== ========
See Notes to Consolidated Condensed Financial Information.