|SunGard Announces Record Revenue and Earnings in 2001|
Integration of Comdisco Availability Solutions Proceeding Well
WAYNE, Pa.--(BUSINESS WIRE)--Feb. 14, 2002--SunGard (NYSE:SDS), a global leader in integrated IT solutions for financial services and leading provider of information availability services, reported today that net income for the quarter ended December 31, 2001, excluding merger costs and other one-time items, was $75.6 million, a 15% increase over net income of $65.6 million for the same period in 2000.
The related diluted net income per share was $0.26, up 8% over the $0.24 for same period in 2000, adjusted for the June 2001 two-for-one stock split.
For the three months ended December 31, 2001, revenue was $562.4 million, an increase of 22% over revenue of $461.7 million for the same period in 2000. For the full-year 2001, revenue was $1.93 billion, an increase of 16% over revenue of $1.66 billion for full-year 2000.
Fourth quarter and full-year 2001 revenue includes $60 million from the newly acquired Availability Solutions business of Comdisco, Inc. Approximately $5 million of that revenue are non-recurring fees for servicing clients affected by September 11, generating approximately $0.01 of net income per share.
Net income for the twelve months ended December 31, 2001, excluding merger costs and other one-time items, was $258.8 million, up 17% over net income of $221.5 million for the same period in 2000.
The related diluted net income per share was $0.91 for the year, up 11% over 2000 full-year results of $0.82. Cash earnings per share, which excludes after-tax amortization of acquisition-related intangibles, were $1.07 for the year, compared to $0.96 for the same period in 2000.
Net income including merger costs and other one-time items for the three months ended December 31, 2001 was $65.6 million, up 5% over net income for the same period in 2000. The related diluted net income per share was $0.23, unchanged from fourth quarter 2000 results.
Net income including merger costs and other one-time items and related diluted earnings per share for the twelve months ended December 31, 2001 were $246.1 million and $0.86, respectively. Further details concerning merger costs and other one-time items are described in the supplemental information and related notes attached to this release.
``SunGard grew solidly in 2001, despite a depressed economy and the events of September 11, and I am pleased that we reported earnings at the high end of our recent guidance for the full year,'' commented James L. Mann, chairman and chief executive officer. ``SunGard holds a unique position in integrated solutions and availability services, both of which have become top priorities for the financial services industry. Our focus on operational excellence and recurring revenue has enabled SunGard to achieve continued growth and positions us well for the future.''
The Company's outlook for 2002 diluted net income per share is in the range of $1.05 to $1.09, representing growth of between 15% and 20%. This is before an estimated positive impact of $0.05 per share arising from the adoption of Financial Accounting Standard (FAS) 142, ``Goodwill and Other Intangible Assets,'' effective January 1, 2002.
Financial results for 2001 include $21.5 million, or $0.06 per share, of goodwill amortization expense.
``The integration of Comdisco's Availability Solutions business into SunGard is proceeding well and according to plan. Our combined resources offer clients the broadest range of information availability services to protect and manage their business processes. We have reduced headcount by 15% and plan to reduce total data center space by 10%, with no reduction in equipment. This business is being managed with SunGard's usual precision, and we expect this transaction to be accretive to earnings in 2002,'' said Cristobal Conde, president and chief operating officer.
Investment Support Systems (ISS) revenue grew 13% over 2000 to reach $1.37 billion for 2001. Quarter-over-quarter revenue grew by 8%, to $371.5 million. SunGard systems are mission-critical for customers, regardless of whether the economy is growing or contracting. SunGard's strategic focus on integration has further enhanced its position.
As financial services institutions continue to seek cost efficiencies in a fiercely competitive industry, SunGard's integrated solutions address the challenge of straight-through processing. By delivering powerful multi-product systems that are already integrated, SunGard offers customers the opportunity to realize substantial savings in time and resources.
SunGard signed several multi-year deals in the fourth quarter, exemplifying our integration and cross-selling efforts. These deals include the following:
In a multi-year agreement, the wealth management division of Wells Fargo, Lowry Hill, selected Global Plus to meet its clients' asset management needs. Global Plus will be used by Lowry Hill in an ASP environment together with AddVantage for online delivery to its high net worth clients. Additionally, Philadelphia-based Glenmede Trust extended its 15-year relationship with SunGard, using Global Plus for trust accounting in an ASP environment.
Procter & Gamble signed with SunGard Investor Accounting Systems, switching to the ASP model for SunGard's Comprehensive Securities System II.
Additionally, the SunGard Transaction Network (STN), linking the SunGard community of customers on the buy-side and sell-side of the industry, enrolled its 500th member organization in the STN equities routing service.
Business Continuity and Internet Services (BCIS) performed well in a year of exceptional challenges and opportunities. Including the November 15, 2001 purchase of Comdisco's Availability Solutions business for $850 million, revenue increased 27% to $521.3 million. Quarter-over-quarter revenue increased 66% to $182.4 million.
Excluding revenue related to the Availability Solutions acquisition, BCIS grew 12% and 11% for the year and fourth quarter, respectively. The Comdisco assets complement SunGard's well. With this transaction, SunGard has had an infusion of outstanding people, significant additions to its infrastructure, and a greater presence in major financial hubs.
Upon completion of the integration, SunGard will support more than thirty operating platforms, sixty facilities with 2.5 million square feet of space and 14,000 end user recovery positions.
As the pioneer of the availability services business, SunGard has long been an industry leader, evidenced by an unprecedented record of success with over ninety thousand simulated recoveries and more than one thousand recoveries to date.
SunGard is now stronger than ever with the scale to be extremely cost-efficient and the capacity to offer support in the face of the largest catastrophes. As the industry's largest hardware-independent vendor, SunGard provides its customers a compelling alternative to the hardware giants with which SunGard competes.
As of December 31, 2001, cash balances were $396.3 million. SunGard completed seven acquisitions during 2001, for a total investment of $880 million in cash and 8.3 million SunGard shares.
In connection with its acquisition of Comdisco's Availability Solutions business, the Company borrowed $450 million, including $100 million in short-term borrowings and $350 million in long-term debt payable in three years or earlier at the Company's option. SunGard expects to repay the $100 million in short-term borrowings by March 31, 2002.
In connection with the Company's borrowings, SunGard was assigned a Baa2 senior unsecured debt rating by Moody's Investors Service and a triple-'B'-plus corporate credit rating by Standard & Poor's.
SunGard will hold its regular quarterly earnings conference call on February 15, 2002, beginning at 9:00 a.m. EST. It can be accessed at www.vcall.com. An audio replay of the call will be available beginning at noon that day through midnight on February 22, 2002. To listen to the replay, dial 719/457-0820, passcode #643917.