Exhibit 99.1
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[LETTERHEAD OF SUNGARD APPEARS HERE]
October 18, 2001
Madeline Hopkins Michael J. Ruane Internet
(610) 341-4357 (610) 341-8709 www.sungard.com
SunGard Announces Third Quarter 2001 Results
Trend Continues Toward High-Availability and ASP Solutions
Wayne, PA -- SunGard (NYSE:SDS), a global leader in integrated IT solutions and
eProcessing for financial services, reported today that net income for the three
months ended September 30, 2001 was $62.2 million, an increase of 6% over net
income of $58.5 million for the same period in 2000, excluding one-time charges
for merger costs. Revenue for the third quarter was $463.3 million, an increase
of 12% over revenue of $413.2 million reported in the year-ago quarter.
The related diluted net income per share was $0.22, unchanged from 2000 second
quarter results, adjusted for the June 2001 two-for-one stock split. Cash
earnings per share, which excludes after-tax amortization of acquisition-related
intangibles, were $0.26 for the quarter, compared to $0.25 for the same period
in 2000.
"SunGard delivered a solid operating performance despite the impact of the
September 11th attacks and the slowdown in our clients' decision-making
process," commented James L. Mann, chairman and chief executive officer.
"Those events provide further impetus for SunGard's fundamental business drivers
of integration, connectivity and continuity. Going forward, we believe that
financial institutions will view more favorably the type of high-availability,
ASP, and integrated solutions with built-in business continuity that SunGard
offers," added Mr. Mann.
For the first nine months of 2001, revenue was $1.37 billion, an increase of 14%
over the $1.2 billion reported for the first nine months of 2000. The related
net income and diluted net income per share for the first nine months of 2001,
excluding one-time items, were $183.2 million and $0.64, respectively, increases
of 17% and 10% over related net income and diluted net income per share for the
first nine months of 2000 of $155.9 million and $0.58, respectively.
"We have revised our outlook for 2001 diluted earnings per share to be in the
range of $0.88 to $0.91, reflecting our estimation of the impact of recent
events on our 2001 full-year results. As always, we will provide guidance on
2002 earnings in February when we report full-year results," Mr. Mann added.
Investment Support Systems (ISS) revenue grew 13% to $339.3 million for the
quarter. Recent events highlight just how vital information technology is to
business and the financial markets. Now more than ever, it is clear that
integrated, single vendor straight-through-processing solutions are ultimately
more resilient than stand-alone solutions. Going forward, the Company believes
that financial institutions will look for solutions with built-in redundancy and
business continuity. SunGard offers these today.
Business Continuity and Internet Services (BCIS) revenue increased 12% to $116.2
million. While BCIS handled 30 declared emergencies triggered by the events of
September 11th, these activities did not have a material impact on the results
of this segment. However, that event did underscore how crucial the business
continuity industry is to the financial services industry.
On October 11, 2001, SunGard agreed to buy the Availability Solutions business
of Comdisco, Inc. for $825 million in cash, without assumption of any bank or
public debt. SunGard's bid is fully supported by Comdisco and both the Official
Committee of Unsecured Creditors and the Official Equity Committee. This
transaction is subject to approval by the U.S. Bankruptcy Court for the Northern
District of Illinois at a hearing set for October 23, 2001 and is expected to
close as soon as possible after Bankruptcy Court approval.
"The combination of these two world-class organizations will ensure that this
critical industry will be served by an experienced, independent vendor providing
hardware-neutral services," said Mr. Mann. He added, "The transaction has
widespread support from customers, who will benefit from more facilities,
platforms, network capacity and technical personnel, with greater geographic
coverage and increased operating efficiencies."
SunGard previously had submitted its Hart-Scott-Rodino (HSR) filing related to
the Comdisco transaction. The HSR waiting period has expired, but the U.S.
Justice Department has not concluded its investigation. The Company is
optimistic that the Justice Department will conclude its review by October 23,
2001 and not seek to block the transaction.
A few weeks ago, SunGard announced a $100 million share repurchase plan. That
plan expired on October 12, 2001, when the SEC's relaxed rules on repurchases
expired. The Company did not repurchase any shares under that plan.
SunGard will hold its quarterly earnings conference call at 9:00 a.m. EDT on
October 19, 2001. You may listen to the call live at www.vcall.com. Replays
will be available shortly after the end of the call through midnight on Friday,
October 26, 2001 at www.vcall.com or 719-457-0820, code #691586.
About SunGard
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 20,000 clients in over 50
countries, including 47 of the world's 50 largest financial services
institutions. Visit SunGard at www.sungard.com.
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"Safe Harbor" Statement under Private Securities Litigation Reform Act of 1995
Statements about the Company's outlook for 2001, statements about the expected
effects on SunGard of the acquisition of Comdisco's business continuity assets
(if such acquisition closes), statements about the expected timing and scope of
the acquisition 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 SunGard and usually contain words such as "believes," "intends,"
"expects," "anticipates," or similar expressions. SunGard derives most of its
forward-looking statements from its operating budgets and forecasts, which are
based upon many detailed assumptions. While SunGard 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 ramifications of the events of September 11, 2001, the
effect of general economic and market 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. SunGard may not be able to complete the Comdisco
acquisition on the terms summarized above or other acceptable terms, or at all,
due to a number of factors, including the failure to get Bankruptcy Court
approval or the failure to satisfy other conditions to closing. The factors set
forth in this paragraph and other factors which may affect SunGard or its
ability to complete acquisitions and realize the expected benefits of the
acquisitions, as and when applicable, are discussed in SunGard's filings with
the Securities and Exchange Commission, including its most recent Form 10-K, a
copy of which may be obtained from SunGard without charge.
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# # #
SunGard Data Systems Inc.
Consolidated Condensed Income Statements
Excluding Merger Costs (See Note 1)
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended Three Months Ended
------------------------ ---------------------
September 30, September 30,
------------------------ ---------------------
2001 2000 2001 2000
----------- ----------- --------- ---------
Revenues $ 1,366,256 $ 1,198,970 $ 463,270 $ 413,209
----------- ----------- --------- ---------
Costs and expenses:
Cost of sales and direct operating 537,879 483,359 180,498 164,665
Sales, marketing and administration 293,753 259,565 98,469 85,021
Product development 128,937 104,089 44,956 34,879
Depreciation and amortization 72,412 65,939 25,751 23,091
Amortization of acquisition-related intangible assets 48,010 41,858 16,585 14,009
----------- ----------- --------- ---------
1,080,991 954,810 366,259 321,665
----------- ----------- --------- ---------
Income from operations, excluding merger costs 285,265 244,160 97,011 91,544
Interest income 20,557 17,132 5,934 6,498
Interest expense (1,702) (1,383) (397) (615)
----------- ----------- --------- ---------
Income before income taxes, excluding merger costs 304,120 259,909 102,548 97,427
Income taxes 120,930 103,964 40,301 38,971
----------- ----------- --------- ---------
Net income, excluding merger costs $ 183,190 $ 155,945 $ 62,247 $ 58,456
----------- ----------- --------- ---------
Basic net income per common share, excluding
merger costs $ 0.67 $ 0.59 $ 0.22 $ 0.22
----------- ----------- --------- ---------
Shares used to compute basic net income per
common share (see Note 2) 274,720 263,549 279,069 264,752
----------- ----------- --------- ---------
Diluted net income per common share, excluding
merger costs $ 0.64 $ 0.58 $ 0.22 $ 0.22
----------- ----------- --------- ---------
Shares used to compute diluted net income per
common share (see Note 2) 284,117 269,918 287,549 271,474
----------- ----------- --------- ---------
See Notes to Consolidated Condensed Financial Information.
==============================================================================
SunGard Data Systems Inc.
Supplemental Income Statement Information
Excluding Merger Costs (See Note 1)
(In thousands)
(Unaudited)
Nine Months Ended Three Months Ended
------------------------ ---------------------
September 30, September 30,
------------------------ ---------------------
2001 2000 2001 2000
----------- ----------- --------- ---------
Revenues:
Investment support systems $ 1,003,359 $ 873,747 $ 339,252 $ 300,828
Business continuity and Internet services 338,868 300,643 116,186 103,701
Other businesses 24,029 24,580 7,832 8,680
----------- ----------- --------- ---------
$ 1,366,256 $ 1,198,970 $ 463,270 $ 413,209
----------- ----------- --------- ---------
Income from operations:
Investment support systems $ 201,925 $ 170,225 $ 67,412 $ 64,055
Business continuity and Internet services 100,214 82,943 35,502 30,537
Other businesses 7,598 7,420 2,358 2,866
Corporate administration (24,472) (16,428) (8,261) (5,914)
----------- ----------- --------- ---------
$ 285,265 $ 244,160 $ 97,011 $ 91,544
----------- ----------- --------- ---------
Operating margin:
Investment support systems 20.1% 19.5% 19.9% 21.3%
----------- ----------- --------- ---------
Business continuity and Internet services 29.6% 27.6% 30.6% 29.4%
----------- ----------- --------- ---------
Other businesses 31.6% 30.2% 30.1% 33.0%
----------- ----------- --------- ---------
Total 20.9% 20.4% 20.9% 22.2%
----------- ----------- --------- ---------
See Notes to Consolidated Condensed Financial Information.
SunGard Data Systems Inc.
Consolidated Condensed Income Statements
Including Merger Costs (See Note 1)
(In thousands, except per share amounts)
(Unaudited)
Nine Months Ended Three Months Ended
------------------------ ---------------------
September 30, September 30,
------------------------ ---------------------
2001 2000 2001 2000
----------- ----------- --------- ---------
Revenues $ 1,366,256 $ 1,198,970 $ 463,270 $ 413,209
----------- ----------- --------- ---------
Costs and expenses:
Cost of sales and direct operating 537,879 483,359 180,498 164,665
Sales, marketing and administration 293,753 259,565 98,469 85,021
Product development 128,937 104,089 44,956 34,879
Depreciation and amortization 72,412 65,939 25,751 23,091
Amortization of acquisition-related intangible assets 48,010 41,858 16,585 14,009
Merger costs 1,829 7,962 - 5,206
----------- ----------- --------- ---------
1,082,820 962,772 366,259 326,871
----------- ----------- --------- ---------
Income from operations 283,436 236,198 97,011 86,338
Interest income 20,557 17,132 5,934 6,498
Interest expense (1,702) (1,383) (397) (615)
----------- ----------- --------- ---------
Income before income taxes 302,291 251,947 102,548 92,221
Income taxes 121,810 101,419 40,301 36,889
----------- ----------- --------- ---------
Net income $ 180,481 $ 150,528 $ 62,247 $ 55,332
----------- ----------- --------- ---------
Basic net income per common share $ 0.66 $ 0.57 $ 0.22 $ 0.21
----------- ----------- --------- ---------
Shares used to compute basic net income per common share (see Note 2) 274,720 263,549 279,069 264,752
----------- ----------- --------- ---------
Diluted net income per common share $ 0.64 $ 0.56 $ 0.22 $ 0.20
----------- ----------- --------- ---------
Shares used to compute diluted net income per common share (see Note 2) 284,117 269,918 287,549 271,474
----------- ----------- --------- ---------
See Notes to Consolidated Condensed Financial Information.
================================================================================
SunGard Data Systems Inc.
Supplemental Income Statement Information
Including Merger Costs (See Note 1)
(In thousands)
(Unaudited)
Nine Months Ended Three Months Ended
------------------------ ---------------------
September 30, September 30,
------------------------ ---------------------
2001 2000 2001 2000
----------- ----------- --------- ---------
Revenues:
Investment support systems $ 1,003,359 $ 873,747 $ 339,252 $ 300,828
Business continuity and Internet services 338,868 300,643 116,186 103,701
Other businesses 24,029 24,580 7,832 8,680
----------- ----------- --------- ---------
$ 1,366,256 $ 1,198,970 $ 463,270 $ 413,209
----------- ----------- --------- ---------
Income from operations:
Investment support systems $ 201,925 $ 170,225 $ 67,412 $ 64,055
Business continuity and Internet services 100,214 82,943 35,502 30,537
Other businesses 7,598 7,420 2,358 2,866
Corporate administration (24,472) (16,428) (8,261) (5,914)
Merger costs (1,829) (7,962) - (5,206)
----------- ----------- --------- ---------
$ 283,436 $ 236,198 $ 97,011 $ 86,338
----------- ----------- --------- ---------
Operating margin (excluding merger costs):
Investment support systems 20.1% 19.5% 19.9% 21.3%
----------- ----------- --------- ---------
Business continuity and Internet services 29.6% 27.6% 30.6% 29.4%
----------- ----------- --------- ---------
Other businesses 31.6% 30.2% 30.1% 33.0%
----------- ----------- --------- ---------
Total 20.9% 20.4% 20.9% 22.2%
----------- ----------- --------- ---------
See Notes to Consolidated Condensed Financial Information.
SunGard Data Systems Inc.
Consolidated Condensed Balance Sheets
(In thousands)
Sept. 30,
2001
(Unaudited) Dec 31, 2000
----------- ------------
Assets:
Current:
Cash, equivalents and short-term investments $ 682,583 $ 436,069
Accounts receivable, net 425,179 415,615
Prepaid expenses and other current assets 62,380 60,058
----------- ------------
Total current assets 1,170,142 911,742
Property and equipment, net 249,668 208,580
Software products, net 144,492 150,290
Goodwill, deferred income taxes and other assets, net 565,744 574,573
----------- ------------
$ 2,130,046 $ 1,845,185
----------- ------------
Liabilities and Stockholders' Equity:
Current:
Short-term and current portion of long-term debt $ 1,488 $ 5,908
Accounts payable and accrued expenses 219,275 204,025
Deferred revenue 204,204 184,837
----------- ------------
Total current liabilities 424,967 394,770
Long-term debt 3,588 7,939
Stockholders' equity 1,701,491 1,442,476
----------- ------------
$ 2,130,046 $ 1,845,185
----------- ------------
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. Merger Costs:
Nine months ended September 30, 2001 and 2000:
---------------------------------------------
During 2001, net merger costs of $1,829 ($2,709 after-tax, or less
than $0.01 per diluted share) were recorded. The one-time costs are
associated with a pooling-of-interests transaction and costs
associated with the attempted acquisition of certain assets of Bridge
Information Systems, Inc. (Bridge), reduced by the $5.0 million
break-up fee paid to the Company in connection with the attempted
acquisition of Bridge. The costs include investment banking, legal
and accounting fees.
During 2000, merger costs of $7,962 ($5,417 after-tax, or $0.02 per
diluted share) were recorded. The one-time costs are associated with
acquired in-process research and development and pooling-of-interests
transactions.
Three months ended September 30, 2001 and 2000:
----------------------------------------------
During 2001, no merger costs were recorded.
During 2000, merger costs of $5,206 ($3,124 after-tax, or $0.01 per
diluted share) were recorded. These one-time costs are associated
with acquired in-process research and development in connection with
the acquisition of Global Information Solutions Ltd.
Note 2. Two-for-one common stock split:
On May 11, 2001, the Company's board of directors authorized a
two-for-one stock split of the Company's common stock. Stockholders
of record as of the close of business on May 25, 2001 received one
additional share of SunGard stock for every share held on that date.
The effective date for the stock split was June 18, 2001. The number
of shares used for purposes of calculating net income per common
share and all per share data has been adjusted for all periods
presented to reflect the stock split.