##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 333-135139
 SS&C TECHNOLOGIES, INC.
 (Exact name of Registrant as specified in its charter)
 Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    06-1169696
(I.R.S. Employer Identification No.)
 80 Lamberton Road
Windsor, CT 06095
(Address of principal executive offices, including zip code)
 860-298-4500
(Registrants telephone number, including area code)
 þ o
  Large accelerated filer oAccelerated filer oNon-accelerated filer þ(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



SS&C TECHNOLOGIES, INC.
 INDEX
 PageNumberPART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (unaudited)Condensed Consolidated Balance Sheets at
September 30, 2008 and December 31, 2007
    
    
    2Condensed Consolidated Statements of Operations for the
three months and nine months ended September 30, 2008 and
2007
    
    
    3Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 2008 and 2007
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    16Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4T.
    
    Controls and Procedures
    
    
    24PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    25Item 1A.
    
    Risk Factors
    
    
    26Item 6.
    
    Exhibits
    
    
    26SIGNATURE
    
    
    27EXHIBIT INDEX
    
    
    28EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32 SECTION 906 CERTFICATION OF THE CEO & CFO
   1




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Part I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 
 
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCurrent assetsCash and cash equivalents
    
    $
    30,330
    
    
    $
    19,175Accounts receivable, net of allowance for
doubtful accounts of $1,501 and $1,248,
respectively
    
    
    46,195
    
    
    
    39,546Prepaid expenses and other current assets
    
    
    7,616
    
    
    
    9,585Deferred income taxes
    
    
    1,108
    
    
    
    1,169Total current assets
    
    
    85,249
    
    
    
    69,475Property and equipmentLeasehold improvements
    
    
    5,093
    
    
    
    4,522Equipment, furniture, and fixtures
    
    
    21,476
    
    
    
    17,53226,569
    
    
    
    22,054Less accumulated depreciation
    
    
    (11,301
    )
    
    
    (9,014
    )Net property and equipment
    
    
    15,268
    
    
    
    13,040Goodwill
    
    
    844,745
    
    
    
    860,690Intangible and other assets, net of
accumulated amortization of $77,129 and
$55,572, respectively
    
    
    220,364
    
    
    
    247,290Total assets
    
    $
    1,165,626
    
    
    $
    1,190,495LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesCurrent portion of long-term debt
    
    $
    2,156
    
    
    $
    2,429Accounts payable
    
    
    3,462
    
    
    
    2,558Income taxes payable
    
    
    5,905
    
    
    
    3,181Accrued employee compensation and benefits
    
    
    11,069
    
    
    
    11,668Other accrued expenses
    
    
    8,537
    
    
    
    10,053Interest payable
    
    
    8,029
    
    
    
    2,090Deferred maintenance and other revenue
    
    
    32,839
    
    
    
    29,480Total current liabilities
    
    
    71,997
    
    
    
    61,459Long-term debt, net of current portion
    
    
    412,454
    
    
    
    440,580Other long-term liabilities
    
    
    10,260
    
    
    
    10,216Deferred income taxes
    
    
    57,261
    
    
    
    65,647Total liabilities
    
    
    551,972
    
    
    
    577,902Commitments and contingencies (Note 7)Stockholders equityCommon stock
    
    
    
    
    
    
    Additional paid-in capital
    
    
    575,915
    
    
    
    570,497Accumulated other comprehensive income
    
    
    16,926
    
    
    
    33,615Retained earnings
    
    
    20,813
    
    
    
    8,481Total stockholders equity
    
    
    613,654
    
    
    
    612,593Total liabilities and stockholders equity
    
    $
    1,165,626
    
    
    $
    1,190,495
  2




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Three Months
    
    
    Three Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues:Software licenses
    
    $
    5,669
    
    
    $
    7,159
    
    
    $
    18,353
    
    
    $
    18,653Maintenance
    
    
    16,348
    
    
    
    15,666
    
    
    
    48,986
    
    
    
    45,899Professional services
    
    
    5,316
    
    
    
    3,338
    
    
    
    18,695
    
    
    
    12,381Software-enabled services
    
    
    43,668
    
    
    
    37,320
    
    
    
    125,685
    
    
    
    102,792Total revenues
    
    
    71,001
    
    
    
    63,483
    
    
    
    211,719
    
    
    
    179,725Cost of revenues:Software licenses
    
    
    2,262
    
    
    
    2,374
    
    
    
    6,868
    
    
    
    7,155Maintenance
    
    
    6,844
    
    
    
    6,412
    
    
    
    20,104
    
    
    
    19,520Professional services
    
    
    3,774
    
    
    
    3,290
    
    
    
    11,906
    
    
    
    10,312Software-enabled services
    
    
    23,092
    
    
    
    20,293
    
    
    
    68,433
    
    
    
    57,132Total cost of revenues
    
    
    35,972
    
    
    
    32,369
    
    
    
    107,311
    
    
    
    94,119Gross profit
    
    
    35,029
    
    
    
    31,114
    
    
    
    104,408
    
    
    
    85,606Operating expenses:Selling and marketing
    
    
    4,761
    
    
    
    4,989
    
    
    
    14,701
    
    
    
    14,272Research and development
    
    
    6,597
    
    
    
    6,580
    
    
    
    20,341
    
    
    
    19,617General and administrative
    
    
    8,092
    
    
    
    5,643
    
    
    
    20,689
    
    
    
    17,170Total operating expenses
    
    
    19,450
    
    
    
    17,212
    
    
    
    55,731
    
    
    
    51,059Operating income
    
    
    15,579
    
    
    
    13,902
    
    
    
    48,677
    
    
    
    34,547Interest expense, net
    
    
    (10,295
    )
    
    
    (11,067
    )
    
    
    (31,132
    )
    
    
    (33,622
    )Other income (expense), net
    
    
    1,057
    
    
    
    (58
    )
    
    
    278
    
    
    
    522Income before income taxes
    
    
    6,341
    
    
    
    2,777
    
    
    
    17,823
    
    
    
    1,447Provision for income taxes
    
    
    1,531
    
    
    
    556
    
    
    
    5,491
    
    
    
    458Net income
    
    $
    4,810
    
    
    $
    2,221
    
    
    $
    12,332
    
    
    $
    989
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Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007Cash flow from operating activities:Net income
    
    $
    12,332
    
    
    $
    989Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    26,292
    
    
    
    25,957Stock-based compensation
    
    
    5,405
    
    
    
    6,513Foreign exchange gains on debt
    
    
    
    
    
    
    (768
    )Amortization of loan origination costs
    
    
    1,756
    
    
    
    1,728Equity losses (earnings) on long-term investment
    
    
    1,039
    
    
    
    (63
    )Loss on sale or disposal of property and equipment
    
    
    1
    
    
    
    90Deferred income taxes
    
    
    (7,433
    )
    
    
    (4,037
    )Provision for doubtful accounts
    
    
    703
    
    
    
    589Changes in operating assets and liabilities, excluding effects from acquisitions:Accounts receivable
    
    
    (8,437
    )
    
    
    (8,679
    )Prepaid expenses and other assets
    
    
    (1,004
    )
    
    
    (946
    )Accounts payable
    
    
    1,014
    
    
    
    (309
    )Accrued expenses
    
    
    4,528
    
    
    
    10,915Income taxes payable
    
    
    2,892
    
    
    
    1,994Deferred maintenance and other revenues
    
    
    4,034
    
    
    
    6,165Net cash provided by operating activities
    
    
    43,122
    
    
    
    40,138Cash flow from investing activities:Additions to property and equipment
    
    
    (6,203
    )
    
    
    (5,375
    )Proceeds from sale of property and equipment
    
    
    2
    
    
    
    6Cash paid for business acquisitions, net of cash acquired
    
    
    
    
    
    
    (5,130
    )Net cash used in investing activities
    
    
    (6,201
    )
    
    
    (10,499
    )Cash flow from financing activities:Cash received from borrowings
    
    
    
    
    
    
    5,200Repayment of debt
    
    
    (25,050
    )
    
    
    (31,067
    )Transactions involving SS&C Technologies Holdings, Inc. common stock
    
    
    12
    
    
    
    (8
    )Income tax benefit related to exercise of stock options
    
    
    
    
    
    
    82Net cash used in financing activities
    
    
    (25,038
    )
    
    
    (25,793
    )Effect of exchange rate changes on cash
    
    
    (728
    )
    
    
    626Net increase in cash and cash equivalents
    
    
    11,155
    
    
    
    4,472Cash and cash equivalents, beginning of period
    
    
    19,175
    
    
    
    11,718Cash and cash equivalents, end of period
    
    $
    30,330
    
    
    $
    16,190
  4




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SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
 
           
    
    the vesting of the remaining 2006 and 2007 performance-based options that
did not otherwise vest during 2007;
    
    the conversion of all Superior Options granted under the 2006 Equity
Incentive Plan into performance-based options, with one-third of the options
vesting in each of 2008, 2009 and 2010 based upon the Companys EBITDA for
these years falling within the designated EBITDA target ranges;
    
    the elimination of the annual EBITDA targets originally established for
2009 through 2011, with new target ranges to be established by the Board of
Directors of Holdings annually; and
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
    
    a modification to the performance-based options such that any
performance-based options that do not vest in any given year as a result of
not attaining that years EBITDA target range, shall vest based upon the
Companys EBITDA for the following year falling within the targeted range
for the following year.
     Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Statements of operations classification:Cost of maintenance
    
    $
    42
    
    
    $
    37
    
    
    $
    104
    
    
    $
    138Cost of professional services
    
    
    71
    
    
    
    62
    
    
    
    178
    
    
    
    208Cost of software-enabled services
    
    
    448
    
    
    
    457
    
    
    
    1,201
    
    
    
    1,436Total cost of revenues
    
    
    561
    
    
    
    556
    
    
    
    1,483
    
    
    
    1,782Selling and marketing
    
    
    342
    
    
    
    323
    
    
    
    872
    
    
    
    1,063Research and development
    
    
    228
    
    
    
    199
    
    
    
    572
    
    
    
    670General and administrative
    
    
    966
    
    
    
    895
    
    
    
    2,478
    
    
    
    2,998Total operating expenses
    
    
    1,536
    
    
    
    1,417
    
    
    
    3,922
    
    
    
    4,731Total stock-based compensation expense
    
    $
    2,097
    
    
    $
    1,973
    
    
    $
    5,405
    
    
    $
    6,513
  Shares ofHoldingsUnder OptionOutstanding at January 1, 2008
    
    
    12,155,024Granted
    
    
    Cancelled/forfeited
    
    
    (438,931
    )Exercised
    
    
    (210,111
    )Outstanding at September 30, 2008
    
    
    11,505,982
  6




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    4,810
    
    
    $
    2,221
    
    
    $
    12,332
    
    
    $
    989Foreign currency translation (losses) gains
    
    
    (11,498
    )
    
    
    16,814
    
    
    
    (16,642
    )
    
    
    36,056Unrealized gains (losses) on interest rate
swaps, net of tax
    
    
    195
    
    
    
    (1,875
    )
    
    
    (47
    )
    
    
    (827
    )Total comprehensive (loss) income
    
    $
    (6,493
    )
    
    $
    17,160
    
    
    $
    (4,357
    )
    
    $
    36,218
   September 30,
    
    
    December 31,2008
    
    
    2007Senior credit facility, term loan
portion, weighted-average interest rate
of 5.84% and 7.04%, respectively
    
    $
    209,610
    
    
    $
    238,00911 3/4% senior subordinated notes due 2013
    
    
    205,000
    
    
    
    205,000414,610
    
    
    
    443,009Current portion of long-term debt
    
    
    (2,156
    )
    
    
    (2,429
    )Long-term debt
    
    $
    412,454
    
    
    $
    440,580
      7




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Three Months Ended
    
    
    Nine months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007United States
    
    $
    43,468
    
    
    $
    36,619
    
    
    $
    125,665
    
    
    $
    107,589Canada
    
    
    11,071
    
    
    
    10,596
    
    
    
    34,103
    
    
    
    29,171Americas, excluding
United States and
Canada
    
    
    812
    
    
    
    1,310
    
    
    
    3,791
    
    
    
    3,028Europe
    
    
    13,411
    
    
    
    13,171
    
    
    
    41,775
    
    
    
    35,755Asia Pacific and Japan
    
    
    2,239
    
    
    
    1,787
    
    
    
    6,385
    
    
    
    4,182$
    71,001
    
    
    $
    63,483
    
    
    $
    211,719
    
    
    $
    179,725
  Three Months Ended
    
    
    Nine months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Portfolio management/accounting
    
    $
    57,120
    
    
    $
    48,892
    
    
    $
    170,580
    
    
    $
    139,866Trading/treasury operations
    
    
    7,007
    
    
    
    7,936
    
    
    
    21,431
    
    
    
    21,005Financial modeling
    
    
    2,205
    
    
    
    2,332
    
    
    
    6,691
    
    
    
    6,695Loan management/accounting
    
    
    1,314
    
    
    
    1,873
    
    
    
    3,715
    
    
    
    3,929Property management
    
    
    1,392
    
    
    
    1,202
    
    
    
    4,167
    
    
    
    3,819Money market processing
    
    
    1,168
    
    
    
    670
    
    
    
    2,929
    
    
    
    2,829Training
    
    
    795
    
    
    
    578
    
    
    
    2,206
    
    
    
    1,582$
    71,001
    
    
    $
    63,483
    
    
    $
    211,719
    
    
    $
    179,725
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Condensed Consolidating Balance Sheet at September 30, 2008Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    21,248
    
    
    $
    1,168
    
    
    $
    7,914
    
    
    $
    
    
    
    $
    30,330Accounts receivable, net
    
    
    24,860
    
    
    
    7,482
    
    
    
    13,853
    
    
    
    
    
    
    
    46,195Income taxes receivable
    
    
    2,197
    
    
    
    
    
    
    
    
    
    
    
    (2,197
    )
    
    
    Prepaid expenses and other current assets
    
    
    3,488
    
    
    
    758
    
    
    
    3,370
    
    
    
    
    
    
    
    7,616Deferred income taxes
    
    
    501
    
    
    
    98
    
    
    
    509
    
    
    
    
    
    
    
    1,108Property and equipment, net
    
    
    9,075
    
    
    
    1,034
    
    
    
    5,159
    
    
    
    
    
    
    
    15,268Investment in subsidiaries
    
    
    135,816
    
    
    
    
    
    
    
    
    
    
    
    (135,816
    )
    
    
    Intercompany balances
    
    
    128,742
    
    
    
    695
    
    
    
    (129,437
    )
    
    
    
    
    
    
    Goodwill, intangible and other assets, net
    
    
    752,475
    
    
    
    20,057
    
    
    
    292,577
    
    
    
    
    
    
    
    1,065,109Deferred income taxes, long-term
    
    
    
    
    
    
    208
    
    
    
    903
    
    
    
    (1,111
    )
    
    
    Total assets
    
    $
    1,078,402
    
    
    $
    31,500
    
    
    $
    194,848
    
    
    $
    (139,124
    )
    
    $
    1,165,626Current portion of long-term debt
    
    $
    1,724
    
    
    $
    
    
    
    $
    432
    
    
    $
    
    
    
    $
    2,156Accounts payable
    
    
    2,150
    
    
    
    204
    
    
    
    1,108
    
    
    
    
    
    
    
    3,462Accrued expenses
    
    
    20,796
    
    
    
    1,191
    
    
    
    5,648
    
    
    
    
    
    
    
    27,635Income taxes payable
    
    
    
    
    
    
    3,567
    
    
    
    4,535
    
    
    
    (2,197
    )
    
    
    5,905Deferred maintenance and other revenue
    
    
    21,097
    
    
    
    4,154
    
    
    
    7,588
    
    
    
    
    
    
    
    32,839Long-term debt, net of current portion
    
    
    370,982
    
    
    
    
    
    
    
    41,472
    
    
    
    
    
    
    
    412,454Other long-term liabilities
    
    
    3,813
    
    
    
    
    
    
    
    6,447
    
    
    
    
    
    
    
    10,260Deferred income taxes, long-term
    
    
    44,186
    
    
    
    
    
    
    
    14,186
    
    
    
    (1,111
    )
    
    
    57,261Total liabilities
    
    
    464,748
    
    
    
    9,116
    
    
    
    81,416
    
    
    
    (3,308
    )
    
    
    551,972Stockholders equity
    
    
    613,654
    
    
    
    22,384
    
    
    
    113,432
    
    
    
    (135,816
    )
    
    
    613,654Total liabilities and stockholders equity
    
    $
    1,078,402
    
    
    $
    31,500
    
    
    $
    194,848
    
    
    $
    (139,124
    )
    
    $
    1,165,626
 Condensed Consolidating Balance Sheet at December 31, 2007Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    9,031
    
    
    $
    1,984
    
    
    $
    8,160
    
    
    $
    
    
    
    $
    19,175Accounts receivable, net
    
    
    19,281
    
    
    
    4,792
    
    
    
    15,473
    
    
    
    
    
    
    
    39,546Prepaid expenses and other current assets
    
    
    5,444
    
    
    
    421
    
    
    
    3,720
    
    
    
    
    
    
    
    9,585Deferred income taxes
    
    
    497
    
    
    
    77
    
    
    
    595
    
    
    
    
    
    
    
    1,169Property and equipment, net
    
    
    8,475
    
    
    
    661
    
    
    
    3,904
    
    
    
    
    
    
    
    13,040Investment in subsidiaries
    
    
    121,363
    
    
    
    
    
    
    
    
    
    
    
    (121,363
    )
    
    
    Intercompany balances
    
    
    151,489
    
    
    
    (8,769
    )
    
    
    (142,720
    )
    
    
    
    
    
    
    Deferred income taxes, long-term
    
    
    
    
    
    
    1,026
    
    
    
    
    
    
    
    (1,026
    )
    
    
    Goodwill, intangible and other assets, net
    
    
    770,442
    
    
    
    20,766
    
    
    
    316,772
    
    
    
    
    
    
    
    1,107,980Total assets
    
    $
    1,086,022
    
    
    $
    20,958
    
    
    $
    205,904
    
    
    $
    (122,389
    )
    
    $
    1,190,495Current portion of long-term debt
    
    $
    1,817
    
    
    $
    
    
    
    $
    612
    
    
    $
    
    
    
    $
    2,429Accounts payable
    
    
    1,407
    
    
    
    56
    
    
    
    1,095
    
    
    
    
    
    
    
    2,558Accrued expenses and other liabilities
    
    
    15,248
    
    
    
    1,725
    
    
    
    6,838
    
    
    
    
    
    
    
    23,811Income taxes payable
    
    
    623
    
    
    
    
    
    
    
    2,558
    
    
    
    
    
    
    
    3,181Deferred maintenance and other revenue
    
    
    18,768
    
    
    
    2,894
    
    
    
    7,818
    
    
    
    
    
    
    
    29,480Long-term debt, net of current portion
    
    
    381,214
    
    
    
    
    
    
    
    59,366
    
    
    
    
    
    
    
    440,580Other long-term liabilities
    
    
    3,680
    
    
    
    
    
    
    
    6,536
    
    
    
    
    
    
    
    10,216Deferred income taxes, long-term
    
    
    50,672
    
    
    
    
    
    
    
    16,001
    
    
    
    (1,026
    )
    
    
    65,647Total liabilities
    
    
    473,429
    
    
    
    4,675
    
    
    
    100,824
    
    
    
    (1,026
    )
    
    
    577,902Stockholders equity
    
    
    612,593
    
    
    
    16,283
    
    
    
    105,080
    
    
    
    (121,363
    )
    
    
    612,593Total liabilities and stockholders equity
    
    $
    1,086,022
    
    
    $
    20,958
    
    
    $
    205,904
    
    
    $
    (122,389
    )
    
    $
    1,190,495
 11




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##### Table of Contents



Condensed Consolidating Statement of Operationsfor the three months ended September 30, 2008Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    29,434
    
    
    $
    19,859
    
    
    $
    22,067
    
    
    $
    (359
    )
    
    $
    71,001Cost of revenues
    
    
    16,399
    
    
    
    11,034
    
    
    
    8,898
    
    
    
    (359
    )
    
    
    35,972Gross profit
    
    
    13,035
    
    
    
    8,825
    
    
    
    13,169
    
    
    
    
    
    
    
    35,029Operating expenses:Selling & marketing
    
    
    2,917
    
    
    
    411
    
    
    
    1,433
    
    
    
    
    
    
    
    4,761Research & development
    
    
    3,552
    
    
    
    1,004
    
    
    
    2,041
    
    
    
    
    
    
    
    6,597General & administrative
    
    
    6,686
    
    
    
    375
    
    
    
    1,031
    
    
    
    
    
    
    
    8,092Total operating expenses
    
    
    13,155
    
    
    
    1,790
    
    
    
    4,505
    
    
    
    
    
    
    
    19,450Operating
(loss) income
    
    
    (120
    )
    
    
    7,035
    
    
    
    8,664
    
    
    
    
    
    
    
    15,579Interest expense, net
    
    
    (6,462
    )
    
    
    
    
    
    
    (3,833
    )
    
    
    
    
    
    
    (10,295
    )Other expense, net
    
    
    371
    
    
    
    151
    
    
    
    535
    
    
    
    
    
    
    
    1,057(Loss) income before income taxes
    
    
    (6,211
    )
    
    
    7,186
    
    
    
    5,366
    
    
    
    
    
    
    
    6,341(Benefit) provision for income taxes
    
    
    (1,928
    )
    
    
    1,582
    
    
    
    1,877
    
    
    
    
    
    
    
    1,531Equity in net income of subsidiaries
    
    
    9,093
    
    
    
    
    
    
    
    
    
    
    
    (9,093
    )
    
    
    Net income
    
    $
    4,810
    
    
    $
    5,604
    
    
    $
    3,489
    
    
    $
    (9,093
    )
    
    $
    4,810Condensed Consolidating Statement of Operationsfor the three months ended September 30, 2007Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    26,069
    
    
    $
    15,880
    
    
    $
    21,928
    
    
    $
    (394
    )
    
    $
    63,483Cost of revenues
    
    
    14,468
    
    
    
    10,164
    
    
    
    8,131
    
    
    
    (394
    )
    
    
    32,369Gross profit
    
    
    11,601
    
    
    
    5,716
    
    
    
    13,797
    
    
    
    
    
    
    
    31,114Operating expenses:Selling & marketing
    
    
    3,092
    
    
    
    424
    
    
    
    1,473
    
    
    
    
    
    
    
    4,989Research & development
    
    
    3,747
    
    
    
    817
    
    
    
    2,016
    
    
    
    
    
    
    
    6,580General & administrative
    
    
    4,055
    
    
    
    165
    
    
    
    1,423
    
    
    
    
    
    
    
    5,643Total operating expenses
    
    
    10,894
    
    
    
    1,406
    
    
    
    4,912
    
    
    
    
    
    
    
    17,212Operating income
    
    
    707
    
    
    
    4,310
    
    
    
    8,885
    
    
    
    
    
    
    
    13,902Interest expense, net
    
    
    (6,724
    )
    
    
    
    
    
    
    (4,343
    )
    
    
    
    
    
    
    (11,067
    )Other expense, net
    
    
    (14
    )
    
    
    (34
    )
    
    
    (10
    )
    
    
    
    
    
    
    (58
    )(Loss) income before income taxes
    
    
    (6,031
    )
    
    
    4,276
    
    
    
    4,532
    
    
    
    
    
    
    
    2,777(Benefit) provision for income taxes
    
    
    (1,377
    )
    
    
    1,005
    
    
    
    928
    
    
    
    
    
    
    
    556Equity in net income of subsidiaries
    
    
    6,875
    
    
    
    
    
    
    
    
    
    
    
    (6,875
    )
    
    
    Net income
    
    $
    2,221
    
    
    $
    3,271
    
    
    $
    3,604
    
    
    $
    (6,875
    )
    
    $
    2,221
 12




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##### Table of Contents



Condensed Consolidating Statement of Operationsfor the nine months ended September 30, 2008Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    87,814
    
    
    $
    56,684
    
    
    $
    68,338
    
    
    $
    (1,117
    )
    
    $
    211,719Cost of revenues
    
    
    48,665
    
    
    
    32,584
    
    
    
    27,179
    
    
    
    (1,117
    )
    
    
    107,311Gross profit
    
    
    39,149
    
    
    
    24,100
    
    
    
    41,159
    
    
    
    
    
    
    
    104,408Operating expenses:Selling & marketing
    
    
    9,087
    
    
    
    1,152
    
    
    
    4,462
    
    
    
    
    
    
    
    14,701Research & development
    
    
    10,707
    
    
    
    3,196
    
    
    
    6,438
    
    
    
    
    
    
    
    20,341General & administrative
    
    
    15,235
    
    
    
    804
    
    
    
    4,650
    
    
    
    
    
    
    
    20,689Total operating expenses
    
    
    35,029
    
    
    
    5,152
    
    
    
    15,550
    
    
    
    
    
    
    
    55,731Operating income
    
    
    4,120
    
    
    
    18,948
    
    
    
    25,609
    
    
    
    
    
    
    
    48,677Interest
expense, net
    
    
    (19,403
    )
    
    
    
    
    
    
    (11,729
    )
    
    
    
    
    
    
    (31,132
    )Other
(expense) income,  net
    
    
    (821
    )
    
    
    162
    
    
    
    937
    
    
    
    
    
    
    
    278(Loss) income before income taxes
    
    
    (16,104
    )
    
    
    19,110
    
    
    
    14,817
    
    
    
    
    
    
    
    17,823(Benefit) provision for income taxes
    
    
    (3,659
    )
    
    
    4,250
    
    
    
    4,900
    
    
    
    
    
    
    
    5,491Equity in net income of subsidiaries
    
    
    24,777
    
    
    
    
    
    
    
    
    
    
    
    (24,777
    )
    
    
    Net income
    
    $
    12,332
    
    
    $
    14,860
    
    
    $
    9,917
    
    
    $
    (24,777
    )
    
    $
    12,332Condensed Consolidating Statement of Operationsfor the nine months ended September 30, 2007Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalRevenues
    
    $
    74,378
    
    
    $
    47,496
    
    
    $
    58,799
    
    
    $
    (948
    )
    
    $
    179,725Cost of revenues
    
    
    42,191
    
    
    
    30,079
    
    
    
    22,797
    
    
    
    (948
    )
    
    
    94,119Gross profit
    
    
    32,187
    
    
    
    17,417
    
    
    
    36,002
    
    
    
    
    
    
    
    85,606Operating expenses:Selling & marketing
    
    
    9,025
    
    
    
    1,250
    
    
    
    3,997
    
    
    
    
    
    
    
    14,272Research & development
    
    
    11,220
    
    
    
    2,659
    
    
    
    5,738
    
    
    
    
    
    
    
    19,617General & administrative
    
    
    12,417
    
    
    
    824
    
    
    
    3,929
    
    
    
    
    
    
    
    17,170Total operating expenses
    
    
    32,662
    
    
    
    4,733
    
    
    
    13,664
    
    
    
    
    
    
    
    51,059Operating (loss) income
    
    
    (475
    )
    
    
    12,684
    
    
    
    22,338
    
    
    
    
    
    
    
    34,547Interest (expense) income, net
    
    
    (21,270
    )
    
    
    10
    
    
    
    (12,362
    )
    
    
    
    
    
    
    (33,622
    )Other income (expense), net
    
    
    85
    
    
    
    (170
    )
    
    
    607
    
    
    
    
    
    
    
    522(Loss) income before income taxes
    
    
    (21,660
    )
    
    
    12,524
    
    
    
    10,583
    
    
    
    
    
    
    
    1,447(Benefit) provision for income taxes
    
    
    (5,113
    )
    
    
    2,573
    
    
    
    2,998
    
    
    
    
    
    
    
    458Equity in net income of subsidiaries
    
    
    17,536
    
    
    
    
    
    
    
    
    
    
    
    (17,536
    )
    
    
    Net income
    
    $
    989
    
    
    $
    9,951
    
    
    $
    7,585
    
    
    $
    (17,536
    )
    
    $
    989
 13




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##### Table of Contents



Condensed Consolidating Statement of Operationsfor the nine months ended September 30, 2008Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalCash Flow from Operating Activities:Net income
    
    $
    12,332
    
    
    $
    14,860
    
    
    $
    9,917
    
    
    $
    (24,777
    )
    
    $
    12,332Non-cash adjustments
    
    
    (4,713
    )
    
    
    1,912
    
    
    
    5,787
    
    
    
    24,777
    
    
    
    27,763Changes in operating assets and liabilities
    
    
    1,022
    
    
    
    1,284
    
    
    
    721
    
    
    
    
    
    
    
    3,027Net cash provided by operating activities
    
    
    8,641
    
    
    
    18,056
    
    
    
    16,425
    
    
    
    
    
    
    
    43,122Cash Flow from Investing Activities:Intercompany transactions
    
    
    16,429
    
    
    
    (18,224
    )
    
    
    1,795
    
    
    
    
    
    
    
    Additions to property and equipment
    
    
    (2,543
    )
    
    
    (648
    )
    
    
    (3,012
    )
    
    
    
    
    
    
    (6,203
    )Proceeds from sale of property and
equipment
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Net cash provided by (used in) investing
activities
    
    
    13,888
    
    
    
    (18,872
    )
    
    
    (1,217
    )
    
    
    
    
    
    
    (6,201
    )Cash Flow from Financing Activities:Net repayments of debt
    
    
    (10,324
    )
    
    
    
    
    
    
    (14,726
    )
    
    
    
    
    
    
    (25,050
    )Transactions involving SS&C Technologies
Holdings, Inc. common stock
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12Net cash used in financing activities
    
    
    (10,312
    )
    
    
    
    
    
    
    (14,726
    )
    
    
    
    
    
    
    (25,038
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (728
    )
    
    
    
    
    
    
    (728
    )Net increase (decrease) in cash and cash
equivalents
    
    
    12,217
    
    
    
    (816
    )
    
    
    (246
    )
    
    
    
    
    
    
    11,155Cash and cash equivalents, beginning of
period
    
    
    9,031
    
    
    
    1,984
    
    
    
    8,160
    
    
    
    
    
    
    
    19,175Cash and cash equivalents, end of period
    
    $
    21,248
    
    
    $
    1,168
    
    
    $
    7,914
    
    
    $
    
    
    
    $
    30,330Condensed Consolidating Statement of Operationsfor the nine months ended September 30, 2007Total Non-
    
    
    ConsolidatingSS&C
    
    
    Total Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalCash Flow from Operating Activities:Net income
    
    $
    989
    
    
    $
    9,951
    
    
    $
    7,585
    
    
    $
    (17,536
    )
    
    $
    989Non-cash adjustments
    
    
    4,568
    
    
    
    1,516
    
    
    
    6,389
    
    
    
    17,536
    
    
    
    30,009Changes in operating assets and liabilities
    
    
    11,104
    
    
    
    (1,594
    )
    
    
    (370
    )
    
    
    
    
    
    
    9,140Net cash provided by operating activities
    
    
    16,661
    
    
    
    9,873
    
    
    
    13,604
    
    
    
    
    
    
    
    40,138Cash Flow from Investing Activities:Intercompany transactions
    
    
    4,174
    
    
    
    (5,953
    )
    
    
    1,779
    
    
    
    
    
    
    
    Cash paid for businesses acquired, net of
cash acquired
    
    
    
    
    
    
    (5,127
    )
    
    
    (3
    )
    
    
    
    
    
    
    (5,130
    )Additions to property and equipment
    
    
    (4,119
    )
    
    
    (160
    )
    
    
    (1,096
    )
    
    
    
    
    
    
    (5,375
    )Proceeds from sale of property and
equipment
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Net cash provided by (used in) investing
activities
    
    
    61
    
    
    
    (11,240
    )
    
    
    680
    
    
    
    
    
    
    
    (10,499
    )Cash Flow from Financing Activities:Net repayments of debt
    
    
    (11,500
    )
    
    
    
    
    
    
    (14,367
    )
    
    
    
    
    
    
    (25,867
    )Income tax benefit related to exercise of
stock options
    
    
    82
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82Transactions involving SS&C Technologies
Holdings, Inc. common stock
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8
    )Net cash used in financing activities
    
    
    (11,426
    )
    
    
    
    
    
    
    (14,367
    )
    
    
    
    
    
    
    (25,793
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    626
    
    
    
    
    
    
    
    626Net increase (decrease) in cash and cash
equivalents
    
    
    5,296
    
    
    
    (1,367
    )
    
    
    543
    
    
    
    
    
    
    
    4,472Cash and cash equivalents, beginning of
period
    
    
    3,055
    
    
    
    2,317
    
    
    
    6,346
    
    
    
    
    
    
    
    11,718Cash and cash equivalents, end of period
    
    $
    8,351
    
    
    $
    950
    
    
    $
    6,889
    
    
    $
    
    
    
    $
    16,190
 14




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##### Table of Contents



15




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 CRITICAL ACCOUNTING POLICIES
  
    
    Revenue Recognition
    
    Allowance for Doubtful Accounts
    
    Long-Lived Assets, Intangible Assets and Goodwill
    
    Acquisition Accounting
    
    Income Taxes
    
    Stock-based compensation
 Results of Operations for the Three Months and Nine Months Ended September 30, 2008 and
2007
  Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    
    
    
    
    September 30,Percent
    
    
    
    
    
    
    
    
    
    
    Percent2008
    
    
    2007
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    ChangeRevenues:Software licenses
    
    $
    5,669
    
    
    $
    7,159
    
    
    
    -21
    %
    
    $
    18,353
    
    
    $
    18,653
    
    
    
    -2
    %Maintenance
    
    
    16,348
    
    
    
    15,666
    
    
    
    4
    %
    
    
    48,986
    
    
    
    45,899
    
    
    
    7
    %Professional services
    
    
    5,316
    
    
    
    3,338
    
    
    
    59
    %
    
    
    18,695
    
    
    
    12,381
    
    
    
    51
    %Software-enabled services
    
    
    43,668
    
    
    
    37,320
    
    
    
    17
    %
    
    
    125,685
    
    
    
    102,792
    
    
    
    22
    %Total revenues
    
    $
    71,001
    
    
    $
    63,483
    
    
    
    12
    %
    
    $
    211,719
    
    
    $
    179,725
    
    
    
    18
    %
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Revenues:Software licenses
    
    
    8
    %
    
    
    11
    %
    
    
    9
    %
    
    
    10
    %Maintenance
    
    
    23
    %
    
    
    25
    %
    
    
    23
    %
    
    
    26
    %Professional services
    
    
    7
    %
    
    
    5
    %
    
    
    9
    %
    
    
    7
    %Software-enabled
services
    
    
    62
    %
    
    
    59
    %
    
    
    59
    %
    
    
    57
    %
 Revenues
  16




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##### Table of Contents



Software Licenses
 Maintenance
 Professional Services
 Software-enabled Services
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Cost of Revenues
  Cost of Software Licenses
 Cost of Maintenance
 Cost of Professional Services
 Cost of Software-enabled Services
 Operating Expenses
  18




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##### Table of Contents



Selling and Marketing
 Research and Development
 General and Administrative
 Interest Expense, Net 3 4
 Other Income (Expense), Net
 Provision for Income Taxes
 Liquidity and Capital Resources
  19




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Off-Balance Sheet Arrangements
  Senior Credit Facilities
     20




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##### Table of Contents



11 3/4 % Senior Subordinated Notes due 2013
 3 4
   Covenant Compliance
       
    
    Consolidated EBITDA does not reflect the provision of income tax expense in
our various jurisdictions;
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##### Table of Contents




    
    Consolidated EBITDA does not reflect the significant interest expense we
incur as a result of our debt leverage;
    
    Consolidated EBITDA does not reflect any attribution of costs to our
operations related to our investments and capital expenditures through
depreciation and amortization charges;
    
    Consolidated EBITDA does not reflect the cost of compensation we provide to
our employees in the form of stock option awards; and
    
    Consolidated EBITDA excludes expenses that we believe are unusual or
non-recurring, but which others may believe are normal expenses for the
operation of a business.
  TwelveThree Months Ended
    
    
    Nine Months Ended
    
    
    Months EndedSeptember 30,
    
    
    September 30,
    
    
    September(in thousands)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    30, 2008Net income
    
    $
    4,810
    
    
    $
    2,221
    
    
    $
    12,332
    
    
    $
    989
    
    
    $
    17,918Interest expense, net
    
    
    10,295
    
    
    
    11,067
    
    
    
    31,132
    
    
    
    33,622
    
    
    
    42,034Income taxes
    
    
    1,531
    
    
    
    556
    
    
    
    5,491
    
    
    
    458
    
    
    
    4,575Depreciation and amortization
    
    
    8,568
    
    
    
    8,744
    
    
    
    26,292
    
    
    
    25,957
    
    
    
    35,382EBITDA
    
    $
    25,204
    
    
    $
    22,588
    
    
    $
    75,247
    
    
    $
    61,026
    
    
    $
    99,909Purchase accounting adjustments (1)
    
    
    (76
    )
    
    
    (76
    )
    
    
    (224
    )
    
    
    (215
    )
    
    
    (305
    )Unusual or non-recurring charges (2)
    
    
    1,134
    
    
    
    (21
    )
    
    
    2,502
    
    
    
    (262
    )
    
    
    1,046Acquired EBITDA and cost savings (3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135
    
    
    
    Stock-based compensation
    
    
    2,097
    
    
    
    1,973
    
    
    
    5,405
    
    
    
    6,513
    
    
    
    9,871Capital-based taxes
    
    
    165
    
    
    
    645
    
    
    
    880
    
    
    
    1,309
    
    
    
    1,292Other (4)
    
    
    324
    
    
    
    409
    
    
    
    1,044
    
    
    
    1,194
    
    
    
    2,008Consolidated EBITDA
    
    $
    28,848
    
    
    $
    25,518
    
    
    $
    84,854
    
    
    $
    69,700
    
    
    $
    113,821
 
 (1)
    
    Purchase accounting adjustments include an adjustment to increase rent expense by
the amount that would have been recognized if lease obligations were not adjusted to
fair value at the date of the Transaction.(2)
    
    Unusual or non-recurring charges include expenses related to the Companys
terminated public offering, foreign currency gains and losses, equity earnings and
losses on investments, proceeds from legal and other settlements and other one-time
expenses.(3)
    
    Acquired EBITDA and cost savings reflects the EBITDA impact of significant
businesses that were acquired during the period as if the acquisition occurred at the
beginning of the period and cost savings to be realized from such acquisitions.(4)
    
    Other includes management fees and related expenses paid to Carlyle and the
non-cash portion of straight-line rent expense.  Covenant
    
    ActualRequirements
    
    RatiosMaximum consolidated total leverage to Consolidated EBITDA Ratio
    
    
    6.00x
    
    
    
    3.38xMinimum Consolidated EBITDA to consolidated net interest coverage ratio
    
    
    1.70x
    
    
    
    2.87x
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Recent Accounting Pronouncements
    
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
      23




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Item 4T. Controls and Procedures
   24




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
      25




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Item 1A. Risk Factors
  Our business is greatly affected by changes in the state of the general economy and the
financial markets, and a slowdown or prolonged downturn in the general economy or the
financial services industry could disproportionately affect the demand for our products and
services.
  
    
    cancel or reduce planned expenditures for our products and services;
    
    seek to lower their costs by renegotiating their contracts with us;
    
    move their IT solutions in-house;
    
    switch to lower-priced solutions provided by our competitors; or
    
    exit the industry.
  Further or accelerated consolidations in the financial services industry could result in a
decline in demand for our products and services.
  
 Item 6. Exhibits
  26




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SIGNATURE
  SS&C TECHNOLOGIES, INC.Date: November 4, 2008
    By:
    /s/ Patrick J. PedontiPatrick J. PedontiSenior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer) 27




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Exhibit Index
 Exhibit Number
    
    Description2.1*
    
    Asset Purchase Agreement, dated September 30, 2008, by and
among SS&C Technologies New Jersey, Inc., Micro Design
Services, LLC and, for the limited purposes stated therein,
Roman J. Szymansky and Xavier F. Gonzalez, is incorporated
herein by reference to Exhibit 2.1 to the Registrants
Current Report on Form 8-K, filed on October 2, 2008 (File
No. 333-135139)31.1
    
    Certification of the Registrants Chief Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of the Registrants Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    Certification of the Registrants Chief Executive Officer
and Chief Financial Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
 
 *
    
    The Registrant hereby agrees to furnish supplementally a copy of any omitted
schedule to this agreement to the Securities and Exchange Commission upon its
request. 28