##### 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 March 31, 2011
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 001-34675
 SS&C TECHNOLOGIES HOLDINGS, INC.
  Delaware
    
    71-0987913(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 
 
 þ o
 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 HOLDINGS, INC. AND SUBSIDIARIES
INDEX
 PageNumberPART I. FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Consolidated Balance Sheets at March 31, 2011 and December 31, 2010
    
    
    2Condensed Consolidated Statements of Operations for the three months ended
March 31, 2011 and 2010
    
    
    3Condensed Consolidated Statements of Cash Flows for the three months ended
March 31, 2011 and 2010
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    18Item 4. Controls and Procedures
    
    
    18PART II. OTHER INFORMATIONItem 1A. Risk Factors
    
    
    19Item 6. Exhibits
    
    
    19SIGNATURE
    
    
    20EXHIBIT INDEXExhibit 31.1Exhibit 31.2Exhibit 32
   1




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##### Table of Contents



Part I. FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands except per share data)
(unaudited)
 March 31,
    
    
    December 31,2011
    
    
    2010ASSETSCurrent assets:Cash and cash equivalents
    
    $
    70,835
    
    
    $
    84,843Accounts receivable, net of allowance for doubtful
accounts of $2,328 and $1,986, respectively
    
    
    55,676
    
    
    
    45,531Prepaid expenses and other current assets
    
    
    6,230
    
    
    
    5,932Prepaid income taxes
    
    
    2,789
    
    
    
    2,242Deferred income taxes
    
    
    1,226
    
    
    
    1,142Total current assets
    
    
    136,756
    
    
    
    139,690Property and equipment:Leasehold improvements
    
    
    5,650
    
    
    
    5,605Equipment, furniture, and fixtures
    
    
    32,187
    
    
    
    30,40737,837
    
    
    
    36,012Less accumulated depreciation
    
    
    (23,992
    )
    
    
    (22,442
    )Net property and equipment
    
    
    13,845
    
    
    
    13,570Deferred income taxes
    
    
    636
    
    
    
    686Goodwill (Note 11)
    
    
    944,968
    
    
    
    926,668Intangible and other assets, net of accumulated amortization of
$163,191 and $153,123, respectively
    
    
    191,688
    
    
    
    195,112Total assets
    
    $
    1,287,893
    
    
    $
    1,275,726LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt (Note 6)
    
    $
    1,697
    
    
    $
    1,702Accounts payable
    
    
    3,392
    
    
    
    3,790Accrued employee compensation and benefits
    
    
    5,395
    
    
    
    16,854Other accrued expenses
    
    
    13,077
    
    
    
    11,052Interest payable
    
    
    2,609
    
    
    
    1,305Deferred maintenance and other revenue
    
    
    53,072
    
    
    
    41,671Total current liabilities
    
    
    79,242
    
    
    
    76,374Long-term debt, net of current portion (Note 6)
    
    
    222,838
    
    
    
    289,092Other long-term liabilities
    
    
    13,458
    
    
    
    12,343Deferred income taxes
    
    
    38,218
    
    
    
    40,734Total liabilities
    
    
    353,756
    
    
    
    418,543Commitments and contingencies (Note 9)Stockholders equity (Notes 3 and 4):Common stock:Class A non-voting common stock, $0.01 par value, 5,000
shares authorized; 791 shares issued and outstanding, of
which 103 shares and 154 shares are unvested, respectively
    
    
    8
    
    
    
    8Common stock, $0.01 par value, 100,000 shares authorized;
76,214 shares and 72,489 shares issued, respectively, and
75,726 shares and 72,001 shares outstanding,
respectively
    
    
    762
    
    
    
    725Additional paid-in capital
    
    
    809,959
    
    
    
    750,857Accumulated other comprehensive income
    
    
    40,680
    
    
    
    32,699Retained earnings
    
    
    88,547
    
    
    
    78,713939,956
    
    
    
    863,002Less: cost of common stock in treasury, 488 shares
    
    
    (5,819
    )
    
    
    (5,819
    )Total stockholders equity
    
    
    934,137
    
    
    
    857,183Total liabilities and stockholders equity
    
    $
    1,287,893
    
    
    $
    1,275,726
 See accompanying notes to Condensed Consolidated Financial Statements
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SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 Three Months Ended March 31,2011
    
    
    2010Revenues:Software licenses
    
    $
    6,573
    
    
    $
    5,589Maintenance
    
    
    19,447
    
    
    
    18,019Professional services
    
    
    5,267
    
    
    
    5,389Software-enabled services
    
    
    57,720
    
    
    
    49,177Total revenues
    
    
    89,007
    
    
    
    78,174Cost of revenues:Software licenses
    
    
    1,675
    
    
    
    1,928Maintenance
    
    
    8,666
    
    
    
    7,997Professional services
    
    
    3,570
    
    
    
    3,358Software-enabled services
    
    
    30,584
    
    
    
    25,879Total cost of revenues
    
    
    44,495
    
    
    
    39,162Gross profit
    
    
    44,512
    
    
    
    39,012Operating expenses:Selling and marketing
    
    
    6,890
    
    
    
    6,152Research and development
    
    
    7,972
    
    
    
    7,759General and administrative
    
    
    6,543
    
    
    
    5,680Total operating expenses
    
    
    21,405
    
    
    
    19,591Operating income
    
    
    23,107
    
    
    
    19,421Interest expense, net
    
    
    (5,127
    )
    
    
    (9,017
    )Other expense, net
    
    
    (287
    )
    
    
    (115
    )Loss on extinguishment of debt
    
    
    (2,881
    )
    
    
    Income before income taxes
    
    
    14,812
    
    
    
    10,289Provision for income taxes
    
    
    4,978
    
    
    
    1,268Net income
    
    $
    9,834
    
    
    $
    9,021Basic earnings per share
    
    $
    0.13
    
    
    $
    0.15Basic weighted average number of common shares outstanding
    
    
    74,375
    
    
    
    60,785Diluted earnings per share
    
    $
    0.12
    
    
    $
    0.14Diluted weighted average number of common and common equivalent shares outstanding
    
    
    78,692
    
    
    
    64,542
 See accompanying notes to Condensed Consolidated Financial Statements.
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SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Three Months Ended March 31,2011
    
    
    2010Cash flow from operating activities:Net income
    
    $
    9,834
    
    
    $
    9,021Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    10,378
    
    
    
    10,113Amortization of loan origination costs
    
    
    1,393
    
    
    
    584Gain on sale or disposition of property and equipment
    
    
    
    
    
    
    (2
    )Deferred income taxes
    
    
    (2,776
    )
    
    
    (2,359
    )Stock-based compensation expense
    
    
    1,797
    
    
    
    1,350Provision for doubtful accounts
    
    
    430
    
    
    
    146Changes in operating assets and liabilities, excluding effects from acquisitions:Accounts receivable
    
    
    (9,572
    )
    
    
    (1,178
    )Prepaid expenses and other assets
    
    
    (43
    )
    
    
    193Accounts payable
    
    
    (566
    )
    
    
    (966
    )Accrued expenses and other liabilities
    
    
    (9,917
    )
    
    
    (7,156
    )Income taxes receivable and payable
    
    
    243
    
    
    
    (2,989
    )Deferred maintenance and other revenues
    
    
    10,893
    
    
    
    8,785Net cash provided by operating activities
    
    
    12,094
    
    
    
    15,542Cash flow from investing activities:Additions to property and equipment
    
    
    (1,566
    )
    
    
    (998
    )Proceeds from sale of property and equipment
    
    
    
    
    
    
    52Cash paid for business acquisitions, net of cash acquired
    
    
    (14,771
    )
    
    
    (11,372
    )Additions to capitalized software and other intangibles
    
    
    (539
    )
    
    
    (51
    )Net cash used in investing activities
    
    
    (16,876
    )
    
    
    (12,369
    )Cash flow from financing activities:Repayment of debt
    
    
    (67,054
    )
    
    
    (2,659
    )Proceeds from common stock issuance, net
    
    
    52,010
    
    
    
    Proceeds from exercise of stock options
    
    
    3,632
    
    
    
    953Income tax benefit related to exercise of stock options
    
    
    1,701
    
    
    
    2,009Purchase of common stock for treasury
    
    
    
    
    
    
    (1,169
    )Net cash used in financing activities
    
    
    (9,711
    )
    
    
    (866
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    485
    
    
    
    (173
    )Net (decrease) increase in cash and cash equivalents
    
    
    (14,008
    )
    
    
    2,134Cash and cash equivalents, beginning of period
    
    
    84,843
    
    
    
    19,055Cash and cash equivalents, end of period
    
    $
    70,835
    
    
    $
    21,189Supplemental disclosure of cash paid for:Interest
    
    $
    3,414
    
    
    $
    2,750Income taxes, net
    
    $
    5,508
    
    
    $
    5,901Supplemental disclosure of non-cash investing activities:See Note 10 for a discussion of acquisitions
 See accompanying notes to Condensed Consolidated Financial Statements.
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SS&C TECHNOLOGIES HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 SS&C Technologies Holdings, Inc. is our top-level holding company. SS&C Technologies, Inc., or
SS&C, is our primary operating company and a wholly-owned subsidiary of SS&C Technologies
Holdings, Inc. We, us, our and the Company mean SS&C Technologies Holdings, Inc. and its
consolidated subsidiaries, including SS&C.
 1. Basis of Presentation
  Recent Accounting Pronouncements
   2. The Transaction
  3. Equity and Stock-based Compensation
  5




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Three Months Ended March 31,2011
    
    
    2010Statements of operations classificationCost of maintenance
    
    $
    51
    
    
    $
    27Cost of professional services
    
    
    58
    
    
    
    46Cost of software-enabled services
    
    
    338
    
    
    
    267Total cost of revenues
    
    
    447
    
    
    
    340Selling and marketing
    
    
    265
    
    
    
    208Research and development
    
    
    150
    
    
    
    132General and administrative
    
    
    935
    
    
    
    670Total operating expenses
    
    
    1,350
    
    
    
    1,010Total stock-based compensation expense
    
    $
    1,797
    
    
    $
    1,350
  Shares of CommonStock UnderlyingOptionsOutstanding at January 1, 2011
    
    
    12,182,192Granted
    
    
    186,250Cancelled/forfeited
    
    
    (25,361
    )Exercised
    
    
    (625,047
    )Outstanding at March 31, 2011
    
    
    11,718,034
 4. Comprehensive Income
  6




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Three Months Ended March 31,2011
    
    
    2010Net income
    
    $
    9,834
    
    
    $
    9,021Foreign currency translation gains (losses)
    
    
    7,981
    
    
    
    8,442Unrealized gains on interest rate swaps, net of tax
    
    
    
    
    
    
    494Total comprehensive income
    
    $
    17,815
    
    
    $
    17,957
 5. Basic and Diluted Earnings Per Share
   Three Months Ended March 31,2011
    
    
    2010Weighted average common shares outstanding
    
    
    74,375
    
    
    
    60,785Weighted average common stock equivalents  options and restricted
shares
    
    
    4,317
    
    
    
    3,757Weighted average common and common equivalent shares outstanding
    
    
    78,692
    
    
    
    64,542
  6. Debt
  March 31, 
2011
    
    
    December 31, 
2010Senior credit facility, term loan portion, weighted-average
interest rate of 2.55%
    
    $
    157,878
    
    
    $
    157,49911 3/4% senior subordinated notes due 2013
    
    
    66,625
    
    
    
    133,250Capital leases
    
    
    32
    
    
    
    45224,535
    
    
    
    290,794Short-term borrowings and current portion of long-term debt
    
    
    (1,697
    )
    
    
    (1,702
    )Long-term debt
    
    $
    222,838
    
    
    $
    289,092
   3 4
 7




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7. Derivatives and Hedging Activities
   Three Months Ended March 31,2011
    
    
    2010Interest rate swaps
    
    $
    
    
    
    $
    1,132
  Three Months Ended March 31,2011
    
    
    2010Change in fair value recognized in AOCI, net of tax
    
    $
    
    
    
    $
    494
  8. Fair Value Measurements
    9. Commitments and Contingencies
  10. Acquisitions
  8




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March 10, 2011Accounts receivable
    
    $
    462Tangible assets acquired, net of cash received
    
    
    72Acquired customer relationships and contracts
    
    
    3,700Completed technology
    
    
    1,600Trade name
    
    
    100Goodwill
    
    
    10,982Deferred revenue
    
    
    (190
    )Other liabilities assumed
    
    
    (1,966
    )Consideration paid, net of cash received
    
    $
    14,760
    Three Months Ended March 31,2011
    
    
    2010Revenues
    
    $
    90,015
    
    
    $
    83,449Net income
    
    $
    9,994
    
    
    $
    9,828Basic earnings per share
    
    $
    0.13
    
    
    $
    0.16Basic weighted average number of common shares outstanding
    
    
    74,375
    
    
    
    60,785Diluted earnings per share
    
    $
    0.13
    
    
    $
    0.15Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    78,692
    
    
    
    64,542
 9




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11. Goodwill
  Balance at December 31, 2010
    
    $
    926,668Adjustments to prior acquisition
    
    
    6102011 acquisition
    
    
    10,982Income tax benefit on rollover options exercised
    
    
    (759
    )Effect of foreign currency translation
    
    
    7,467Balance at March 31, 2011
    
    $
    944,968
 12. Product and Geographic Sales Information
   Three Months Ended March 31,2011
    
    
    2010United States
    
    $
    61,518
    
    
    $
    52,116Canada
    
    
    13,239
    
    
    
    11,685Americas excluding United States and Canada
    
    
    1,849
    
    
    
    1,001Europe
    
    
    9,810
    
    
    
    11,397Asia Pacific and Japan
    
    
    2,591
    
    
    
    1,975$
    89,007
    
    
    $
    78,174
  Three Months Ended March 31,2011
    
    
    2010Portfolio management/accounting
    
    $
    68,467
    
    
    $
    62,225Trading/treasury operations
    
    
    10,530
    
    
    
    9,920Financial modeling
    
    
    1,897
    
    
    
    2,346Loan management/accounting
    
    
    2,373
    
    
    
    949Property management
    
    
    3,519
    
    
    
    1,190Money market processing
    
    
    1,565
    
    
    
    906Training
    
    
    656
    
    
    
    638$
    89,007
    
    
    $
    78,174
 10




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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 Ended March 31, 2011 and 2010
  Three Months Ended March 31,
    
    
    Percentage2011
    
    
    2010
    
    
    ChangeRevenues:Software licenses
    
    $
    6,573
    
    
    $
    5,589
    
    
    
    18
    %Maintenance
    
    
    19,447
    
    
    
    18,019
    
    
    
    8
    %Professional services
    
    
    5,267
    
    
    
    5,389
    
    
    
    -2
    %Software-enabled services
    
    
    57,720
    
    
    
    49,177
    
    
    
    17
    %Total revenues
    
    $
    89,007
    
    
    $
    78,174
    
    
    
    14
    %
  Three months ended March 31,2011
    
    
    2010Revenues:Software licenses
    
    
    7
    %
    
    
    7
    %Maintenance
    
    
    22
    %
    
    
    23
    %Professional services
    
    
    6
    %
    
    
    7
    %Software-enabled services
    
    
    65
    %
    
    
    63
    %Total revenues
    
    
    100
    %
    
    
    100
    %
 Revenues
  11




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Software Licenses
 Maintenance
 Professional Services
 Software-Enabled Services
 Cost of Revenues
  Cost of Software Licenses
 12




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Cost of Maintenance
 Cost of Professional Services
 Cost of Software-Enabled Services
 Operating Expenses
  Selling and Marketing
 Research and Development
 General and Administrative
 13




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Interest Expense, Net. 3 4 Liquidity and Capital Resources
 Other Expense, Net 3 4 Liquidity and Capital Resources
 Loss on Extinguishment of Debt Liquidity and Capital Resources
 Provision for Income Taxes.
 Liquidity and Capital Resources
     3 4
 Off-Balance Sheet Arrangements
  14




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Senior Credit Facilities
    11 3/4% Senior Subordinated Notes due 2013
 3 4 pari passu
 3 4
  Covenant Compliance
  15




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
    
    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.
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TwelveMonths EndedThree Months Ended March 31,
    
    
    March 31,2011
    
    
    2010
    
    
    2011Net income
    
    $
    9,834
    
    
    $
    9,021
    
    
    $
    33,226Interest expense (1)
    
    
    8,008
    
    
    
    9,017
    
    
    
    34,883Income taxes
    
    
    4,978
    
    
    
    1,268
    
    
    
    15,744Depreciation and amortization
    
    
    10,378
    
    
    
    10,113
    
    
    
    40,993EBITDA
    
    
    33,198
    
    
    
    29,419
    
    
    
    124,846Purchase accounting adjustments (2)
    
    
    (102
    )
    
    
    23
    
    
    
    (363
    )Unusual or non-recurring charges (3)
    
    
    536
    
    
    
    351
    
    
    
    (140
    )Acquired EBITDA and cost savings (4)
    
    
    443
    
    
    
    192
    
    
    
    6,506Stock-based compensation
    
    
    1,797
    
    
    
    1,350
    
    
    
    13,701Capital-based taxes
    
    
    152
    
    
    
    226
    
    
    
    1,017Other (5)
    
    
    (30
    )
    
    
    206
    
    
    
    (197
    )Consolidated EBITDA
    
    $
    35,994
    
    
    $
    31,767
    
    
    $
    145,370
 
 (1)
    
    Interest expense includes loss from extinguishment of debt shown as a separate line item on
our Statement of Operations for the three months ended March 31, 2011 and 2010.(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, severance
expenses, proceeds from legal and other settlements and other one-time expenses, such as
expenses associated with the bond redemption, acquisitions and facility refund.(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.  Covenant
    
    
    ActualRequirements
    
    
    RatiosMaximum consolidated total leverage to Consolidated EBITDA ratio(1)
    
    
    5.50x
    
    
    
    1.34xMinimum Consolidated EBITDA to consolidated net interest coverage ratio
    
    
    2.25x
    
    
    
    5.93x
 
 (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 the 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
  17




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Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
      
 Item 4.
    
    Controls and Procedures
  18




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PART II  OTHER INFORMATION
 
 Item 1A.
    
    Risk Factors
  
 Item 6.
    
    Exhibits
  19




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SIGNATURE
  SS&C TECHNOLOGIES HOLDINGS, INC.Date: May 13, 2011
    By:
    /s/ Patrick J. PedontiPatrick J. PedontiSenior Vice President and Chief Financial Officer
(Duly Authorized Officer, Principal Financial and
Accounting Officer) 20




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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
 21