##### 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, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 000-28430
 SS&C TECHNOLOGIES, INC.
  Delaware
    
    06-1169696(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 
 
 o þ
 o o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 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, 2010
and December 31, 2009
    
    
    3Condensed Consolidated Statements of Operations for the three
months and nine months ended September 30, 2010 and 2009
    
    
    4Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 2010 and 2009
    
    
    5Notes to unaudited Condensed Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4. Controls and Procedures
    
    
    25PART II. OTHER INFORMATIONItem 1A. Risk Factors
    
    
    26Item 6. Exhibits
    
    
    26SIGNATURE
    
    
    27EXHIBIT INDEX
    
    
    28Exhibit 31.1Exhibit 31.2Exhibit 32
    2




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##### Table of Contents



Part I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 
    September 30,
    
    
    December 31,2010
    
    
    2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    86,975
    
    
    $
    19,055Accounts receivable, net of allowance for
doubtful accounts of $1,981 and $1,425,
respectively
    
    
    44,834
    
    
    
    41,600Prepaid expenses and other current assets
    
    
    5,950
    
    
    
    6,164Prepaid income taxes
    
    
    6,282
    
    
    
    669Deferred income taxes
    
    
    1,467
    
    
    
    1,780Total current assets
    
    
    145,508
    
    
    
    69,268Property and equipment:Leasehold improvements
    
    
    5,363
    
    
    
    5,358Equipment, furniture, and fixtures
    
    
    28,754
    
    
    
    25,91534,117
    
    
    
    31,273Less accumulated depreciation
    
    
    (20,953
    )
    
    
    (17,237
    )Net property and equipment
    
    
    13,164
    
    
    
    14,036Deferred income taxes
    
    
    649
    
    
    
    499Goodwill (Note 9)
    
    
    895,182
    
    
    
    885,517Intangible and other assets, net of
accumulated amortization of $143,291 and
$116,670, respectively
    
    
    191,136
    
    
    
    216,321Total assets
    
    $
    1,245,639
    
    
    $
    1,185,641LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt (Note 5)
    
    $
    1,719
    
    
    $
    4,270Accounts payable
    
    
    2,666
    
    
    
    4,804Income taxes payable
    
    
    
    
    
    
    703Accrued employee compensation and benefits
    
    
    12,654
    
    
    
    14,693Other accrued expenses
    
    
    10,530
    
    
    
    16,938Interest payable
    
    
    5,219
    
    
    
    2,070Deferred maintenance and other revenue
    
    
    41,656
    
    
    
    40,400Total current liabilities
    
    
    74,444
    
    
    
    83,878Long-term debt, net of current portion (Note 5)
    
    
    288,685
    
    
    
    392,989Other long-term liabilities
    
    
    13,570
    
    
    
    12,779Deferred income taxes
    
    
    40,451
    
    
    
    50,008Total liabilities
    
    
    417,150
    
    
    
    539,654Commitments and contingencies (Note 7)Stockholders equity (Notes 3 and 4):Common stock, $0.01 par value, 1 share
authorized; 1 share issued and
outstanding
    
    
    
    
    
    
    Additional paid-in capital
    
    
    735,209
    
    
    
    583,251Accumulated other comprehensive income
    
    
    23,743
    
    
    
    16,436Retained earnings
    
    
    69,537
    
    
    
    46,300Total stockholders equity
    
    
    828,489
    
    
    
    645,987Total liabilities and stockholders equity
    
    $
    1,245,639
    
    
    $
    1,185,641
 See accompanying notes to Condensed Consolidated Financial Statements.
  3




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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Software licenses
    
    $
    5,966
    
    
    $
    5,829
    
    
    $
    17,629
    
    
    $
    15,632Maintenance
    
    
    18,294
    
    
    
    16,959
    
    
    
    54,130
    
    
    
    48,565Professional services
    
    
    4,896
    
    
    
    4,283
    
    
    
    15,384
    
    
    
    14,872Software-enabled services
    
    
    53,847
    
    
    
    41,826
    
    
    
    155,652
    
    
    
    120,801Total revenues
    
    
    83,003
    
    
    
    68,897
    
    
    
    242,795
    
    
    
    199,870Cost of revenues:Software licenses
    
    
    1,918
    
    
    
    2,133
    
    
    
    5,754
    
    
    
    6,304Maintenance
    
    
    8,224
    
    
    
    7,025
    
    
    
    24,305
    
    
    
    20,352Professional services
    
    
    3,625
    
    
    
    3,170
    
    
    
    10,243
    
    
    
    10,659Software-enabled services
    
    
    28,570
    
    
    
    22,473
    
    
    
    82,137
    
    
    
    65,079Total cost of revenues
    
    
    42,337
    
    
    
    34,801
    
    
    
    122,439
    
    
    
    102,394Gross profit
    
    
    40,666
    
    
    
    34,096
    
    
    
    120,356
    
    
    
    97,476Operating expenses:Selling and marketing
    
    
    6,275
    
    
    
    4,962
    
    
    
    18,910
    
    
    
    15,229Research and development
    
    
    7,867
    
    
    
    6,969
    
    
    
    23,486
    
    
    
    19,593General and administrative
    
    
    6,939
    
    
    
    4,502
    
    
    
    19,165
    
    
    
    14,683Total operating expenses
    
    
    21,081
    
    
    
    16,433
    
    
    
    61,561
    
    
    
    49,505Operating income
    
    
    19,585
    
    
    
    17,663
    
    
    
    58,795
    
    
    
    47,971Interest expense, net
    
    
    (6,743
    )
    
    
    (9,147
    )
    
    
    (23,818
    )
    
    
    (27,791
    )Other income (expense), net
    
    
    653
    
    
    
    (334
    )
    
    
    653
    
    
    
    (1,256
    )Loss on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    (5,480
    )
    
    
    Income before income taxes
    
    
    13,495
    
    
    
    8,182
    
    
    
    30,150
    
    
    
    18,924Provision for income taxes
    
    
    3,641
    
    
    
    2,575
    
    
    
    6,913
    
    
    
    5,928Net income
    
    $
    9,854
    
    
    $
    5,607
    
    
    $
    23,237
    
    
    $
    12,996
 See accompanying notes to Condensed Consolidated Financial Statements.
  4




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Nine months ended September 30,2010
    
    
    2009Cash flow from operating activities:Net income
    
    $
    23,237
    
    
    $
    12,996Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    30,356
    
    
    
    26,707Amortization of loan origination costs
    
    
    2,896
    
    
    
    1,724(Gain) loss on sale or disposition of property and equipment
    
    
    (1
    )
    
    
    13Deferred income taxes
    
    
    (12,467
    )
    
    
    (8,727
    )Stock-based compensation expense
    
    
    9,181
    
    
    
    4,363Provision for doubtful accounts
    
    
    580
    
    
    
    300Changes in operating assets and liabilities, excluding
effects from acquisitions:Accounts receivable
    
    
    (2,009
    )
    
    
    2,594Prepaid expenses and other assets
    
    
    80
    
    
    
    132Accounts payable
    
    
    (2,151
    )
    
    
    (184
    )Accrued expenses and other liabilities
    
    
    90
    
    
    
    3,491Income taxes prepaid and payable
    
    
    (2,392
    )
    
    
    (2,224
    )Deferred maintenance and other revenues
    
    
    229
    
    
    
    3,815Net cash provided by operating activities
    
    
    47,629
    
    
    
    45,000Cash flow from investing activities:Additions to property and equipment
    
    
    (3,265
    )
    
    
    (1,192
    )Proceeds from sale of property and equipment
    
    
    51
    
    
    
    3Cash paid for business acquisitions, net of cash acquired
    
    
    (11,372
    )
    
    
    (10,327
    )Additions to capitalized software and other intangibles
    
    
    (171
    )
    
    
    (46
    )Net cash used in investing activities
    
    
    (14,757
    )
    
    
    (11,562
    )Cash flow from financing activities:Repayment of debt
    
    
    (107,670
    )
    
    
    (11,735
    )Transactions involving SS&C Holdings common stock
    
    
    
    
    
    
    (225
    )Proceeds from common stock issuance, net of issuance costs
    
    
    134,613
    
    
    
    Proceeds from the exercise of stock options
    
    
    5,880
    
    
    
    Purchase of common stock for treasury
    
    
    (1,169
    )
    
    
    Income tax benefit related to exercise of stock options
    
    
    3,453
    
    
    
    Net cash provided by (used in) financing activities
    
    
    35,107
    
    
    
    (11,960
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (59
    )
    
    
    1,684Net increase in cash and cash equivalents
    
    
    67,920
    
    
    
    23,162Cash and cash equivalents, beginning of period
    
    
    19,055
    
    
    
    29,299Cash and cash equivalents, end of period
    
    $
    86,975
    
    
    $
    52,461
 See accompanying notes to Condensed Consolidated Financial Statements.
  5




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SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
 
   SS&C Technologies, Inc., together with its subsidiaries, is referred to herein as SS&C, the
Company, we, our, and us. SS&C Technologies Holdings, Inc., our ultimate parent company,
is referred to herein as Holdings.
 1.
Basis of Presentation
  Reclassifications
  2.
The Transaction
  3.
Equity and Stock-based Compensation
     6




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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Statements of operations
classificationCost of maintenance
    
    $
    106
    
    
    $
    33
    
    
    $
    231
    
    
    $
    89Cost of professional services
    
    
    146
    
    
    
    59
    
    
    
    332
    
    
    
    163Cost of software-enabled services
    
    
    834
    
    
    
    315
    
    
    
    1,924
    
    
    
    875Total cost of revenues
    
    
    1,086
    
    
    
    407
    
    
    
    2,487
    
    
    
    1,127Selling and marketing
    
    
    594
    
    
    
    259
    
    
    
    1,359
    
    
    
    754Research and development
    
    
    409
    
    
    
    169
    
    
    
    924
    
    
    
    467General and administrative
    
    
    1,860
    
    
    
    734
    
    
    
    4,411
    
    
    
    2,015Total operating expenses
    
    
    2,863
    
    
    
    1,162
    
    
    
    6,694
    
    
    
    3,236Total stock-based compensation
expense
    
    $
    3,949
    
    
    $
    1,569
    
    
    $
    9,181
    
    
    $
    4,363
  7




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Shares ofUnderlyingOptionsOutstanding at January 1, 2010
    
    
    12,737,559Granted
    
    
    2,154,135Cancelled/forfeited
    
    
    (182,330
    )Exercised
    
    
    (1,770,035
    )Outstanding at September 30, 2010
    
    
    12,939,329
 4.
Comprehensive Income
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Net income
    
    $
    9,854
    
    
    $
    5,607
    
    
    $
    23,237
    
    
    $
    12,996Foreign currency translation gains
    
    
    8,726
    
    
    
    17,869
    
    
    
    5,536
    
    
    
    29,410Unrealized gains on interest rate
swaps, net of tax
    
    
    585
    
    
    
    238
    
    
    
    1,771
    
    
    
    1,021Total comprehensive income
    
    $
    19,165
    
    
    $
    23,714
    
    
    $
    30,544
    
    
    $
    43,427
 5.
Debt
  September 30,
    
    
    December 31,2010
    
    
    2009Senior credit facility, revolving portion
    
    $
    
    
    
    $
    2,000Senior credit facility, term loan
portion, weighted-average interest rate
of 2.52% and 2.39%, respectively
    
    
    157,072
    
    
    
    190,032113/4% senior subordinated notes due 2013
    
    
    133,250
    
    
    
    205,000Capital leases
    
    
    82
    
    
    
    227290,404
    
    
    
    397,259Short-term borrowings and current
portion of long-term debt
    
    
    (1,719
    )
    
    
    (4,270
    )Long-term debt
    
    $
    288,685
    
    
    $
    392,989
   3 4
  8




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6.
Derivatives and Hedging Activities
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Interest rate swap
    
    $
    1,085
    
    
    $
    1,070
    
    
    $
    3,352
    
    
    $
    2,815
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Amount of gain
recognized in AOCI,
net of tax
    
    $
    585
    
    
    $
    238
    
    
    $
    1,771
    
    
    $
    1,021
      7.
Commitments and Contingencies
   9




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8.
Acquisitions
    Accounts receivable
    
    $
    1,680Tangible assets acquired, net of cash received
    
    
    32Acquired customer relationships and contracts
    
    
    2,500Goodwill
    
    
    8,404Deferred revenue
    
    
    (1,126
    )Other liabilities assumed
    
    
    (118
    )Consideration paid, net of cash received
    
    $
    11,372
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues
    
    $
    83,003
    
    
    $
    77,022
    
    
    $
    243,451
    
    
    $
    229,581Net income
    
    $
    9,854
    
    
    $
    6,042
    
    
    $
    23,313
    
    
    $
    15,067
 9.
Goodwill
  Balance at December 31, 2009
    
    $
    885,5172010 acquisition
    
    
    8,404Adjustments to previous acquisitions
    
    
    (352
    )Income tax benefit on rollover options exercised
    
    
    (3,873
    )Effect of foreign currency translation
    
    
    5,486Balance at September 30, 2010
    
    $
    895,182
  10




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10. Product and Geographic Sales Information
   Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009United States
    
    $
    58,079
    
    
    $
    43,078
    
    
    $
    164,791
    
    
    $
    127,213Canada
    
    
    12,338
    
    
    
    10,774
    
    
    
    36,697
    
    
    
    30,437Americas excluding United States and Canada
    
    
    1,684
    
    
    
    2,674
    
    
    
    4,962
    
    
    
    5,924Europe
    
    
    9,028
    
    
    
    10,898
    
    
    
    30,597
    
    
    
    30,723Asia Pacific and Japan
    
    
    1,874
    
    
    
    1,473
    
    
    
    5,748
    
    
    
    5,573$
    83,003
    
    
    $
    68,897
    
    
    $
    242,795
    
    
    $
    199,870
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Portfolio management/accounting
    
    $
    66,837
    
    
    $
    57,224
    
    
    $
    194,388
    
    
    $
    163,716Trading/treasury operations
    
    
    9,650
    
    
    
    5,379
    
    
    
    29,810
    
    
    
    17,455Financial modeling
    
    
    2,309
    
    
    
    2,296
    
    
    
    6,905
    
    
    
    6,592Loan management/accounting
    
    
    1,232
    
    
    
    981
    
    
    
    3,263
    
    
    
    3,271Property management
    
    
    1,233
    
    
    
    1,328
    
    
    
    3,451
    
    
    
    3,818Money market processing
    
    
    1,117
    
    
    
    993
    
    
    
    3,100
    
    
    
    2,894Training
    
    
    625
    
    
    
    696
    
    
    
    1,878
    
    
    
    2,124$
    83,003
    
    
    $
    68,897
    
    
    $
    242,795
    
    
    $
    199,870
 11. Supplemental Guarantor Condensed Consolidating Financial Statements
 3 4
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At September 30, 2010Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    76,149
    
    
    $
    1,491
    
    
    $
    9,335
    
    
    $
    
    
    
    $
    86,975Accounts receivable, net
    
    
    24,281
    
    
    
    7,841
    
    
    
    12,712
    
    
    
    
    
    
    
    44,834Prepaid income taxes
    
    
    6,282
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,282Prepaid expenses and other current assets
    
    
    2,412
    
    
    
    658
    
    
    
    2,880
    
    
    
    
    
    
    
    5,950Deferred income taxes
    
    
    1,022
    
    
    
    140
    
    
    
    305
    
    
    
    
    
    
    
    1,467Property and equipment, net
    
    
    7,684
    
    
    
    1,147
    
    
    
    4,333
    
    
    
    
    
    
    
    13,164Investment in subsidiaries
    
    
    213,991
    
    
    
    
    
    
    
    
    
    
    
    (213,991
    )
    
    
    Intercompany balances
    
    
    101,525
    
    
    
    1,197
    
    
    
    (102,722
    )
    
    
    
    
    
    
    Deferred taxes, long-term
    
    
    (109
    )
    
    
    208
    
    
    
    550
    
    
    
    
    
    
    
    649Goodwill, intangible and other assets, net
    
    
    741,300
    
    
    
    57,733
    
    
    
    287,285
    
    
    
    
    
    
    
    1,086,318Total assets
    
    $
    1,174,537
    
    
    $
    70,415
    
    
    $
    214,678
    
    
    $
    (213,991
    )
    
    $
    1,245,639Current portion of long-term debt
    
    $
    1,436
    
    
    $
    
    
    
    $
    283
    
    
    $
    
    
    
    $
    1,719Accounts payable
    
    
    1,275
    
    
    
    149
    
    
    
    1,242
    
    
    
    
    
    
    
    2,666Accrued expenses and other liabilities
    
    
    19,911
    
    
    
    2,831
    
    
    
    5,661
    
    
    
    
    
    
    
    28,403Income taxes payable
    
    
    (4,506
    )
    
    
    3,640
    
    
    
    866
    
    
    
    
    
    
    
    Deferred maintenance and other revenue
    
    
    30,034
    
    
    
    3,466
    
    
    
    8,156
    
    
    
    
    
    
    
    41,656Long-term debt, net of current portion
    
    
    261,876
    
    
    
    
    
    
    
    26,809
    
    
    
    
    
    
    
    288,685Other long-term liabilities
    
    
    6,426
    
    
    
    228
    
    
    
    6,916
    
    
    
    
    
    
    
    13,570Deferred income taxes, long-term
    
    
    29,596
    
    
    
    2,529
    
    
    
    8,326
    
    
    
    
    
    
    
    40,451Total liabilities
    
    
    346,048
    
    
    
    12,843
    
    
    
    58,259
    
    
    
    
    
    
    
    417,150Stockholders equity
    
    
    828,489
    
    
    
    57,572
    
    
    
    156,419
    
    
    
    (213,991
    )
    
    
    828,489Total liabilities and stockholders equity
    
    $
    1,174,537
    
    
    $
    70,415
    
    
    $
    214,678
    
    
    $
    (213,991
    )
    
    $
    1,245,639
 At December 31, 2009Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalCash and cash equivalents
    
    $
    6,226
    
    
    $
    1,087
    
    
    $
    11,742
    
    
    $
    
    
    
    $
    19,055Accounts receivable, net
    
    
    24,958
    
    
    
    5,898
    
    
    
    10,744
    
    
    
    
    
    
    
    41,600Prepaid expenses and other current assets
    
    
    3,440
    
    
    
    575
    
    
    
    2,149
    
    
    
    
    
    
    
    6,164Prepaid income taxes
    
    
    669
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    669Deferred income taxes
    
    
    1,321
    
    
    
    220
    
    
    
    239
    
    
    
    
    
    
    
    1,780Property and equipment, net
    
    
    7,998
    
    
    
    1,620
    
    
    
    4,418
    
    
    
    
    
    
    
    14,036Investment in subsidiaries
    
    
    193,769
    
    
    
    
    
    
    
    
    
    
    
    (193,769
    )
    
    
    Intercompany balances
    
    
    104,903
    
    
    
    (6,353
    )
    
    
    (98,550
    )
    
    
    
    
    
    
    Deferred income taxes, long-term
    
    
    
    
    
    
    
    
    
    
    499
    
    
    
    
    
    
    
    499Goodwill, intangible and other assets, net
    
    
    754,745
    
    
    
    60,997
    
    
    
    286,096
    
    
    
    
    
    
    
    1,101,838Total assets
    
    $
    1,098,029
    
    
    $
    64,044
    
    
    $
    217,337
    
    
    $
    (193,769
    )
    
    $
    1,185,641Current portion of long-term debt
    
    $
    3,725
    
    
    $
    
    
    
    $
    545
    
    
    $
    
    
    
    $
    4,270Accounts payable
    
    
    1,935
    
    
    
    1,043
    
    
    
    1,826
    
    
    
    
    
    
    
    4,804Accrued expenses
    
    
    23,733
    
    
    
    3,813
    
    
    
    6,155
    
    
    
    
    
    
    
    33,701Income taxes payable
    
    
    739
    
    
    
    (63
    )
    
    
    27
    
    
    
    
    
    
    
    703Deferred maintenance and other revenue
    
    
    29,308
    
    
    
    2,888
    
    
    
    8,204
    
    
    
    
    
    
    
    40,400Long-term debt, net of current portion
    
    
    351,624
    
    
    
    
    
    
    
    41,365
    
    
    
    
    
    
    
    392,989Other long-term liabilities
    
    
    3,482
    
    
    
    384
    
    
    
    6,898
    
    
    
    
    
    
    
    10,764Deferred income taxes, long-term
    
    
    37,496
    
    
    
    3,265
    
    
    
    11,262
    
    
    
    
    
    
    
    52,023Total liabilities
    
    
    452,042
    
    
    
    11,330
    
    
    
    76,282
    
    
    
    
    
    
    
    539,654Stockholders equity
    
    
    645,987
    
    
    
    52,714
    
    
    
    141,055
    
    
    
    (193,769
    )
    
    
    645,987Total liabilities and stockholders equity
    
    $
    1,098,029
    
    
    $
    64,044
    
    
    $
    217,337
    
    
    $
    (193,769
    )
    
    $
    1,185,641
  12




---



##### Table of Contents



For the three months ended September 30, 2010Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    37,997
    
    
    $
    24,582
    
    
    $
    20,895
    
    
    $
    (471
    )
    
    $
    83,003Cost of revenue
    
    
    21,181
    
    
    
    14,128
    
    
    
    7,499
    
    
    
    (471
    )
    
    
    42,337Gross profit
    
    
    16,816
    
    
    
    10,454
    
    
    
    13,396
    
    
    
    
    
    
    
    40,666Operating expenses:Selling & marketing
    
    
    3,723
    
    
    
    1,022
    
    
    
    1,530
    
    
    
    
    
    
    
    6,275Research & development
    
    
    4,167
    
    
    
    1,716
    
    
    
    1,984
    
    
    
    
    
    
    
    7,867General & administrative
    
    
    5,313
    
    
    
    507
    
    
    
    1,119
    
    
    
    
    
    
    
    6,939Total operating expenses
    
    
    13,203
    
    
    
    3,245
    
    
    
    4,633
    
    
    
    
    
    
    
    21,081Operating income
    
    
    3,613
    
    
    
    7,209
    
    
    
    8,763
    
    
    
    
    
    
    
    19,585Interest expense, net
    
    
    (4,076
    )
    
    
    
    
    
    
    (2,667
    )
    
    
    
    
    
    
    (6,743
    )Other income (expense), net
    
    
    914
    
    
    
    (148
    )
    
    
    (113
    )
    
    
    
    
    
    
    653Loss on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) income before income taxes
    
    
    451
    
    
    
    7,061
    
    
    
    5,983
    
    
    
    
    
    
    
    13,495(Benefit) provision for income taxes
    
    
    297
    
    
    
    1,307
    
    
    
    2,037
    
    
    
    
    
    
    
    3,641Equity in net income of subsidiaries
    
    
    9,700
    
    
    
    
    
    
    
    
    
    
    
    (9,700
    )
    
    
    Net income
    
    $
    9,854
    
    
    $
    5,754
    
    
    $
    3,946
    
    
    $
    (9,700
    )
    
    $
    9,854
 For the three months ended September 30, 2009Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    32,074
    
    
    $
    17,062
    
    
    $
    20,119
    
    
    $
    (358
    )
    
    $
    68,897Cost of revenue
    
    
    16,691
    
    
    
    10,572
    
    
    
    7,896
    
    
    
    (358
    )
    
    
    34,801Gross profit
    
    
    15,383
    
    
    
    6,490
    
    
    
    12,223
    
    
    
    
    
    
    
    34,096Operating expenses:Selling & marketing
    
    
    3,039
    
    
    
    599
    
    
    
    1,324
    
    
    
    
    
    
    
    4,962Research & development
    
    
    4,079
    
    
    
    897
    
    
    
    1,993
    
    
    
    
    
    
    
    6,969General & administrative
    
    
    3,322
    
    
    
    311
    
    
    
    869
    
    
    
    
    
    
    
    4,502Total operating expenses
    
    
    10,440
    
    
    
    1,807
    
    
    
    4,186
    
    
    
    
    
    
    
    16,433Operating income
    
    
    4,943
    
    
    
    4,683
    
    
    
    8,037
    
    
    
    
    
    
    
    17,663Interest expense, net
    
    
    (6,153
    )
    
    
    
    
    
    
    (2,994
    )
    
    
    
    
    
    
    (9,147
    )Other income (expense), net
    
    
    384
    
    
    
    (147
    )
    
    
    (571
    )
    
    
    
    
    
    
    (334
    )(Loss) income before income taxes
    
    
    (826
    )
    
    
    4,536
    
    
    
    4,472
    
    
    
    
    
    
    
    8,182(Benefit) provision for income taxes
    
    
    560
    
    
    
    973
    
    
    
    1,042
    
    
    
    
    
    
    
    2,575Equity in net income of subsidiaries
    
    
    6,993
    
    
    
    
    
    
    
    
    
    
    
    (6,993
    )
    
    
    Net income
    
    $
    5,607
    
    
    $
    3,563
    
    
    $
    3,430
    
    
    $
    (6,993
    )
    
    $
    5,607
 For the nine months ended September 30, 2010Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    109,343
    
    
    $
    70,542
    
    
    $
    64,097
    
    
    $
    (1,187
    )
    
    $
    242,795Cost of revenue
    
    
    59,826
    
    
    
    40,275
    
    
    
    23,525
    
    
    
    (1,187
    )
    
    
    122,439Gross profit
    
    
    49,517
    
    
    
    30,267
    
    
    
    40,572
    
    
    
    
    
    
    
    120,356Operating expenses:Selling & marketing
    
    
    11,067
    
    
    
    3,143
    
    
    
    4,700
    
    
    
    
    
    
    
    18,910Research & development
    
    
    12,373
    
    
    
    5,116
    
    
    
    5,997
    
    
    
    
    
    
    
    23,486General & administrative
    
    
    13,811
    
    
    
    1,932
    
    
    
    3,422
    
    
    
    
    
    
    
    19,165Total operating expenses
    
    
    37,251
    
    
    
    10,191
    
    
    
    14,119
    
    
    
    
    
    
    
    61,561Operating income
    
    
    12,266
    
    
    
    20,076
    
    
    
    26,453
    
    
    
    
    
    
    
    58,795Interest expense, net
    
    
    (15,806
    )
    
    
    
    
    
    
    (8,012
    )
    
    
    
    
    
    
    (23,818
    )Other income (expense), net
    
    
    1,624
    
    
    
    (298
    )
    
    
    (673
    )
    
    
    
    
    
    
    653Loss from extinguishment of debt
    
    
    (5,480
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,480
    )(Loss) income before income taxes
    
    
    (7,396
    )
    
    
    19,778
    
    
    
    17,768
    
    
    
    
    
    
    
    30,150(Benefit) provision for income taxes
    
    
    (1,741
    )
    
    
    3,809
    
    
    
    4,845
    
    
    
    
    
    
    
    6,913Equity in net income of subsidiaries
    
    
    28,892
    
    
    
    
    
    
    
    
    
    
    
    (28,892
    )
    
    
    Net income
    
    $
    23,237
    
    
    $
    15,969
    
    
    $
    12,923
    
    
    $
    (28,892
    )
    
    $
    23,237
  13




---



##### Table of Contents



For the nine months ended September 30, 2009Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalRevenue
    
    $
    87,097
    
    
    $
    54,046
    
    
    $
    59,958
    
    
    $
    (1,231
    )
    
    $
    199,870Cost of revenue
    
    
    47,326
    
    
    
    33,430
    
    
    
    22,869
    
    
    
    (1,231
    )
    
    
    102,394Gross profit
    
    
    39,771
    
    
    
    20,616
    
    
    
    37,089
    
    
    
    
    
    
    
    97,476Operating expenses:Selling & marketing
    
    
    9,056
    
    
    
    2,179
    
    
    
    3,994
    
    
    
    
    
    
    
    15,229Research & development
    
    
    11,376
    
    
    
    2,584
    
    
    
    5,633
    
    
    
    
    
    
    
    19,593General & administrative
    
    
    11,034
    
    
    
    792
    
    
    
    2,857
    
    
    
    
    
    
    
    14,683Total operating expenses
    
    
    31,466
    
    
    
    5,555
    
    
    
    12,484
    
    
    
    
    
    
    
    49,505Operating income
    
    
    8,305
    
    
    
    15,061
    
    
    
    24,605
    
    
    
    
    
    
    
    47,971Interest expense, net
    
    
    (18,967
    )
    
    
    
    
    
    
    (8,824
    )
    
    
    
    
    
    
    (27,791
    )Other income (expense), net
    
    
    1,013
    
    
    
    (480
    )
    
    
    (1,789
    )
    
    
    
    
    
    
    (1,256
    )(Loss) income before income taxes
    
    
    (9,649
    )
    
    
    14,581
    
    
    
    13,992
    
    
    
    
    
    
    
    18,924(Benefit) provision for income taxes
    
    
    (1,595
    )
    
    
    2,863
    
    
    
    4,660
    
    
    
    
    
    
    
    5,928Equity in net income of subsidiaries
    
    
    21,050
    
    
    
    
    
    
    
    
    
    
    
    (21,050
    )
    
    
    Net income
    
    $
    12,996
    
    
    $
    11,718
    
    
    $
    9,332
    
    
    $
    (21,050
    )
    
    $
    12,996
 For the nine months ended September 30, 2010Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalCash Flow from Operating Activities:Net income
    
    $
    23,237
    
    
    $
    15,969
    
    
    $
    12,923
    
    
    $
    (28,892
    )
    
    $
    23,237Non-cash adjustments
    
    
    (6,798
    )
    
    
    3,858
    
    
    
    4,593
    
    
    
    28,892
    
    
    
    30,545Changes in operating assets and liabilities
    
    
    (3,181
    )
    
    
    27
    
    
    
    (2,999
    )
    
    
    
    
    
    
    (6,153
    )Net cash provided by operating activities
    
    
    13,258
    
    
    
    19,854
    
    
    
    14,517
    
    
    
    
    
    
    
    47,629Cash Flow from Investment Activities:Intercompany transactions
    
    
    19,410
    
    
    
    (19,202
    )
    
    
    (208
    )
    
    
    
    
    
    
    Cash paid for business acquisitions, net
    
    
    (11,372
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,372
    )Proceeds from sale of property and equipment
    
    
    52
    
    
    
    79
    
    
    
    (80
    )
    
    
    
    
    
    
    51Additions to capitalized software and other
intangibles
    
    
    (171
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (171
    )Additions to property and equipment
    
    
    (1,994
    )
    
    
    (327
    )
    
    
    (944
    )
    
    
    
    
    
    
    (3,265
    )Net cash provided by (used in) investing
activities
    
    
    5,925
    
    
    
    (19,450
    )
    
    
    (1,232
    )
    
    
    
    
    
    
    (14,757
    )Cash Flow from Financing Activities:Net repayments of debt
    
    
    (92,037
    )
    
    
    
    
    
    
    (15,633
    )
    
    
    
    
    
    
    (107,670
    )Proceeds from common stock issuance, net of
issuance costs
    
    
    134,613
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    134,613Proceeds from the exercise of stock options
    
    
    5,880
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,880Purchase of common stock for treasury
    
    
    (1,169
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,169
    )Income tax benefit related to exercise of
stock options
    
    
    3,453
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,453Net cash provided by (used in) financing
activities
    
    
    50,740
    
    
    
    
    
    
    
    (15,633
    )
    
    
    
    
    
    
    35,107Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    (59
    )
    
    
    
    
    
    
    (59
    )Net increase (decrease) in cash and cash
equivalents
    
    
    69,923
    
    
    
    404
    
    
    
    (2,407
    )
    
    
    
    
    
    
    67,920Cash and cash equivalents, beginning of period
    
    
    6,226
    
    
    
    1,087
    
    
    
    11,742
    
    
    
    
    
    
    
    19,055Cash and cash equivalents, end of period
    
    $
    76,149
    
    
    $
    1,491
    
    
    $
    9,335
    
    
    $
    
    
    
    $
    86,975
  14




---



##### Table of Contents



For the nine months ended September 30, 2009Total
    
    
    Total Non-
    
    
    ConsolidatingSS&C
    
    
    Guarantors
    
    
    Guarantors
    
    
    Adjustments
    
    
    TotalCash Flow from Operating Activities:Net income
    
    $
    12,996
    
    
    $
    11,718
    
    
    $
    9,332
    
    
    $
    (21,050
    )
    
    $
    12,996Non-cash adjustments
    
    
    (4,275
    )
    
    
    2,600
    
    
    
    5,005
    
    
    
    21,050
    
    
    
    24,380Changes in operating assets and liabilities
    
    
    8,883
    
    
    
    3,344
    
    
    
    (4,603
    )
    
    
    
    
    
    
    7,624Net cash provided by operating activities
    
    
    17,604
    
    
    
    17,662
    
    
    
    9,734
    
    
    
    
    
    
    
    45,000Cash Flow from Investment Activities:Intercompany transactions
    
    
    28,685
    
    
    
    (19,963
    )
    
    
    (8,722
    )
    
    
    
    
    
    
    Additions to property and equipment
    
    
    (936
    )
    
    
    (52
    )
    
    
    (250
    )
    
    
    
    
    
    
    (1,238
    )Cash paid for business acquisitions, net of
cash acquired
    
    
    (10,456
    )
    
    
    129
    
    
    
    
    
    
    
    
    
    
    
    (10,327
    )Proceeds from sale of property and equipment
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    3Net cash provided by (used in) investing
activities
    
    
    17,293
    
    
    
    (19,886
    )
    
    
    (8,969
    )
    
    
    
    
    
    
    (11,562
    )Cash Flow from Financing Activities:Net repayments of debt
    
    
    (11,437
    )
    
    
    
    
    
    
    (298
    )
    
    
    
    
    
    
    (11,735
    )Transactions involving SS&C Technologies
Holdings, Inc. common stock
    
    
    (225
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (225
    )Net cash used in financing activities
    
    
    (11,662
    )
    
    
    
    
    
    
    (298
    )
    
    
    
    
    
    
    (11,960
    )Effect of exchange rate changes on cash
    
    
    
    
    
    
    
    
    
    
    1,684
    
    
    
    
    
    
    
    1,684Net increase (decrease) in cash and cash
equivalents
    
    
    23,235
    
    
    
    (2,224
    )
    
    
    2,151
    
    
    
    
    
    
    
    23,162Cash and cash equivalents, beginning of period
    
    
    10,329
    
    
    
    5,180
    
    
    
    13,790
    
    
    
    
    
    
    
    29,299Cash and cash equivalents, end of period
    
    $
    33,564
    
    
    $
    2,956
    
    
    $
    15,941
    
    
    $
    
    
    
    $
    52,461
 12. Recent Accounting Pronouncements
  13.
Subsequent Events
   15




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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, 2010 and 2009
  Three months ended
    
    
    
    
    
    
    Nine months endedSeptember 30,
    
    
    %
    
    
    September 30,
    
    
    %2010
    
    
    2009
    
    
    Change
    
    
    2010
    
    
    2009
    
    
    ChangeRevenues:Software licenses
    
    $
    5,966
    
    
    $
    5,829
    
    
    
    2
    %
    
    $
    17,629
    
    
    $
    15,632
    
    
    
    13
    %Maintenance
    
    
    18,294
    
    
    
    16,959
    
    
    
    8
    %
    
    
    54,130
    
    
    
    48,565
    
    
    
    11
    %Professional services
    
    
    4,896
    
    
    
    4,283
    
    
    
    14
    %
    
    
    15,384
    
    
    
    14,872
    
    
    
    3
    %Software-enabled
services
    
    
    53,847
    
    
    
    41,826
    
    
    
    29
    %
    
    
    155,652
    
    
    
    120,801
    
    
    
    29
    %Total revenues
    
    
    83,003
    
    
    
    68,897
    
    
    
    20
    %
    
    
    242,795
    
    
    
    199,870
    
    
    
    21
    %
  Three months ended
    
    
    Nine months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009Revenues:Software licenses
    
    
    7
    %
    
    
    8
    %
    
    
    7
    %
    
    
    8
    %Maintenance
    
    
    22
    %
    
    
    25
    %
    
    
    22
    %
    
    
    24
    %Professional services
    
    
    6
    %
    
    
    6
    %
    
    
    7
    %
    
    
    8
    %Software-enabled services
    
    
    65
    %
    
    
    61
    %
    
    
    64
    %
    
    
    60
    %Total revenues
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  16




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Revenues
   Software Licenses
 Maintenance
 Professional Services
  17




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##### Table of Contents



Software-Enabled Services
 Cost of Revenues
  Cost of Software Licenses
 Cost of Maintenance
 Cost of Professional Services
  18




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##### Table of Contents



Cost of Software-Enabled Services
 Operating Expenses
  Selling and Marketing
  19




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##### Table of Contents



Research and Development
 General and Administrative
 Interest Expense, Net. 3 4 3 4 Liquidity and
Capital Resources
 Other Income (Expense), Net
 Loss on Extinguishment of Debt Liquidity and Capital Resources
 Provision for Income Taxes.
  20




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##### Table of Contents



Liquidity and Capital Resources
     3 4
 Off-Balance Sheet Arrangements
  Senior Credit Facilities
    21




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##### Table of Contents



113/4% Senior Subordinated Notes due 2013
 3 4 pari passu
 3 4
  Covenant Compliance
      22




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##### Table of Contents




    
    Consolidated EBITDA does not reflect the provision of income tax expense in our various
jurisdictions;
 
    
    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.
  Three Months Ended
    
    
    Nine Months Ended
    
    
    Twelve Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010Net income
    
    $
    9,854
    
    
    $
    5,607
    
    
    $
    23,237
    
    
    $
    12,996
    
    
    $
    29,259Interest expense (1)
    
    
    6,743
    
    
    
    9,147
    
    
    
    29,298
    
    
    
    27,791
    
    
    
    38,370Income taxes
    
    
    3,641
    
    
    
    2,575
    
    
    
    6,913
    
    
    
    5,928
    
    
    
    10,789Depreciation and amortization
    
    
    10,059
    
    
    
    9,109
    
    
    
    30,356
    
    
    
    26,707
    
    
    
    39,677EBITDA
    
    
    30,297
    
    
    
    26,438
    
    
    
    89,804
    
    
    
    73,422
    
    
    
    118,095Purchase accounting adjustments (2)
    
    
    (87
    )
    
    
    (58
    )
    
    
    (124
    )
    
    
    (163
    )
    
    
    (54
    )Unusual or non-recurring charges (3)
    
    
    (533
    )
    
    
    400
    
    
    
    (449
    )
    
    
    1,683
    
    
    
    (142
    )Acquired EBITDA and cost savings (4)
    
    
    
    
    
    
    
    
    
    
    192
    
    
    
    2,025
    
    
    
    2,121Stock-based compensation
    
    
    3,949
    
    
    
    1,569
    
    
    
    9,181
    
    
    
    4,363
    
    
    
    10,425Capital-based taxes
    
    
    407
    
    
    
    (4
    )
    
    
    861
    
    
    
    672
    
    
    
    984Other (5)
    
    
    (47
    )
    
    
    337
    
    
    
    114
    
    
    
    977
    
    
    
    338Consolidated EBITDA
    
    $
    33,986
    
    
    $
    28,682
    
    
    $
    99,579
    
    
    $
    82,979
    
    
    $
    131,767
 (1)
    
    Interest expense includes loss from extinguishment of debt shown as a separate line
item on our Statement of Operations.(2)
    
    Purchase accounting adjustments include (a) an adjustment to increase revenues by
the amount that would have been recognized if deferred revenue were not adjusted to fair
value at the date of acquisitions and (b) 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.(3)
    
    Unusual or non-recurring charges include foreign currency gains and losses, the
adjustment to the TNR contingent consideration liability, proceeds from legal and other
settlements and other one-time expenses.(4)
    
    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.(5)
    
    Other includes management fees and related expenses paid to The Carlyle Group and
the non-cash portion of straight-line rent expense.  23




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##### Table of Contents



Covenant
    
    
    ActualRequirements
    
    
    RatiosMaximum consolidated total leverage to Consolidated EBITDA ratio (1)
    
    
    5.50
    x
    
    
    1.98
    xMinimum Consolidated EBITDA to consolidated net interest coverage ratio
    
    
    2.25
    x
    
    
    4.30
    x
 (1)
    
    Calculated as the ratio of funded debt, less cash on hand up to a maximum of $30.0
million, to Consolidated EBITDA, as defined by our senior credit facility, for the period
of four consecutive fiscal quarters ended on the measurement date. Funded debt is
comprised of indebtedness for borrowed money, notes, bonds or similar instruments, and
capital lease obligations. This covenant is applied at the end of each quarter. Recent Accounting Pronouncements
   24




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
      
 Item 4. Controls and Procedures
    25




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PART II  OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 6. Exhibits
   26




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##### Table of Contents



SIGNATURE
  SS&C TECHNOLOGIES, INC.Date: November 10, 2010
    By:
    /s/ Patrick J. PedontiPatrick J. PedontiSenior Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)  27




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##### Table of Contents



Exhibit Index
 ExhibitNumber
    
    Description31.1
    
    
    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
  28