Press Releases

SunGard Announces Second Quarter 2009 Results

August 6, 2009 — Wayne, PA

SunGard, one of the world’s leading software and IT services companies, reported today that revenue for the three months ended June 30, 2009 was $1.37 billion, an increase of 1% compared to the same period in 2008. On a constant currency basis, organic revenue decreased by one-half of 1% 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. One of our broker/dealer businesses contributed approximately six percentage points to overall organic revenue growth in the quarter.

For the three months ended June 30, 2009, adjusted EBITDA (defined in Note 1 to the Notes to the Consolidated Condensed Financial Information) was $355 million compared to $363 million in 2008, a 2% decrease.

Adjusted income from operations (defined in Note 2 to the Notes to the Consolidated Condensed Financial Information) for the three months ended June 30, 2009 was $275 million, a 4% decrease from $285 million in 2008.

Reported income from operations for the three months ended June 30, 2009 was $134 million compared to $145 million for the year 2008, a decrease of $11 million. Reported income from operations in 2009 and 2008 includes amortization of acquired intangible assets of $130 million and $118 million, respectively, and stock-based compensation, purchase ccounting adjustments and other costs of $11 million and $22 million, respectively.

Cristóbal Conde, president and chief executive officer, commented, “We are very pleased that we achieved our targets in a very challenging environment and our overall performance is better than we expected at the start of the year. Part of the reason we are doing so well competitively is that all of our businesses are staying close to our customers and are getting in front of decision-makers. Apart from merger situations, the fog is starting to lift and quarter on quarter the mood is slightly on the uptick. However, we expect the second half of the year to remain challenging given that enterprise IT spending continues to be cautious, with long sales cycles and tough pricing pressure being the new normal. We are responding by bundling solutions and adding more value for our customers. Our competitiveness is very strong and we are very well positioned to take advantage of the changing landscape and industry trends.”

Revenue for the first six months of 2009 increased 2% over the same period in 2008 to $2.70 billion. Adjusted EBITDA for the six months ended June 30, 2009 was $675 million compared to $691 million last year. Adjusted income from operations for the six months ended June 30, 2009 was $516 million compared to $542 million last year. Reported income from operations in 2009 and 2008 was $234 million and $269 million and includes amortization of acquired intangible assets of $254 million and $230 million, respectively, and stock-based compensation, purchase accounting adjustments and other costs of $28 million and $43 million, respectively.

Financial Systems organic revenue growth was 2% for the quarter on a constant currency basis. Approximately 12% of organic revenue growth was attributable to one of our broker/dealer businesses. The broker/dealer revenue has remained uncharacteristically high and is a function of market volatility and customer mix; while this broker/dealer revenue increased year over year, sequentially it was unchanged after declining from the fourth quarter of 2008. Total Financial Systems revenue increased 8% to $766 million for the quarter. License fees were $33 million for the quarter, a decrease of $18 million compared to the same quarter in 2008.

Notable deals in the quarter included the following:

  • A global financial firm selected SunGard’s MarketMap as its market data terminal.
  • A privately owned wealth management firm selected SunGard’s Global Plus, Investor’sView and SunGard Transaction Network to provide a wealth management service to its high net worth clients.
  • A leading futures commission merchant selected SunGard’s ClearVision, GMI and StreamCore for its derivatives back-office.

Higher Education revenue decreased 10%, all of which was organic, to $132 million for the quarter. License fees were $5 million for the quarter, a decrease of $4 million from the same quarter of 2008.

Notable deals in the quarter included the following:

  • A private Jesuit university in New York selected SunGard Higher Education for technology management services.
  • South Australia’s largest provider of vocational education training, owned and funded by the Government of South Australia, purchased a range of Banner Unified Digital Campus solutions.
  • A two-year academic institution in Texas purchased a full range of Banner Unified Digital Campus solutions.

Public Sector organic revenue decreased 7% 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 decreased 15% to $95 million for the quarter. License fees were $7 million for the quarter, unchanged from the same quarter of 2008.

Notable deals in the quarter included the following:

  • A city in North Carolina selected SunGard Public Sector to provide computer-aided dispatch, records management and mobile computing software solutions.
  • A London borough extended its contract with SunGard Public Sector to provide managed services for its information and communications technology.
  • A public school district in Illinois selected SunGard’s PLUS Solutions suite to provide student management, special education, finance and human resources, and assessment and curriculum solutions.

Availability Services organic revenue growth was 2% in the quarter on a constant currency basis. Total Availability Services revenue decreased 3% to $376 million for the quarter.

Notable deals in the quarter included the following:

  • An offshore drilling company providing contract drilling services to the oil and natural gas
    exploration and production industry selected SunGard as its managed services provider.
  • A private research and teaching university selected SunGard as its managed services provider.
  • A financial services firm offering comprehensive wealth management selected SunGard as its
    managed services provider.

Financial Position
At June 30, 2009, total debt was $8.49 billion (including $75 million in revolver borrowings) and cash balances were $508 million. During the six months ended June 30, 2009, the Company invested $167 million in capital expenditures and completed two acquisitions. Also during the quarter, the Company amended its credit agreement to extend the maturity of a portion of its term and revolving credit loans and change certain other terms and covenants.

Conference Call & Webcast
A conference call to review the results is scheduled for Friday, August 7, 2009 at 9:00 a.m. (Eastern Time). The dial-in number is 706-902-1370, conference ID 20774353. A replay will be available shortly after the end of the call through midnight on August 14, 2009. To listen to the replay, please dial 706-645-9291, conference ID 20774353. 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 August 14, 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, including the world’s 25 largest financial services companies.

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 five 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, Ambit, Asset Arena, Banner, GMI and Stream 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.