<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): March 11, 1999
----------------
SS&C Technologies, Inc.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware
----------------------------------------------
(State or Other Jurisdiction of Incorporation)
000-28430 06-1169696
------------------------ ------------------------------------
(Commission File Number) (I.R.S. Employer Identification No.)
80 Lamberton Road
Windsor, Connecticut 06095
- --------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(860) 298-4500
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
Not Applicable
-----------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
This Amendment No. 1 to Current Report on Form 8-K/A is filed for the purpose of
filing the financial statements of HedgeWare, Inc. ("HedgeWare") required by
Item 7(a) and the pro forma financial information required by Item 7(b).
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements of Businesses Acquired.
-------------------------------------------
The financial statements of HedgeWare required by this item are
included as Exhibit 99.2 to this Current Report on Form 8-K/A and
incorporated herein by reference.
(b) Pro Forma Financial Information.
-------------------------------
The proforma financial information required by this item is
included as Exhibit 99.3 to this Current Report on Form 8-K/A and
incorporated herein by reference.
(c) Exhibits.
--------
The Exhibit Index attached hereto is incorporated herein by reference.
-2-
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 2, 1999 SS&C TECHNOLOGIES, INC.
---------------------------------------
(Registrant)
By: /s/ Anthony R. Guarascio
-------------------------------------
Anthony R. Guarascio
Senior Vice President and Chief
Financial Officer (Principal Financial
and Accounting Officer)
-3-
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
2 Agreement and Plan of Merger, dated as of March 11, 1999, by and among
SS&C Technologies, Inc., HedgeWare, Inc., Asset Management Acquisition
Corp. and Michael J. Lazarcheck, Robert H. Pontbriand, Matthew J.
Cosciello, Andrew Appell, Eugene Barra, Ellis Horowitz, Ronald
Kashden, Brook F. Seitz, Mark E. Tarantina and Alan Zenreich
(previously filed as Exhibit 2 to the Registrant's Current Report on
Form 8-K, dated March 11, 1999 (File No. 000-28430)).
23.1 Consent of PricewaterhouseCoopers LLP.
99.1 Press Release dated March 11, 1999 (previously filed as Exhibit 99 to
the Registrant's Current Report on Form 8-K, dated March 11, 1999
(File No. 000-28430)).
99.2 Financial Statements of HedgeWare, Inc.
99.3 Pro Forma Financial Statements of SS&C Technologies, Inc.
<PAGE>
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 333-82131, 333-52295, 33-07213, 333-07211, 333-
07207 and 333-07205) of SS&C Technologies, Inc. of our report dated May 24, 1999
relating to the financial statements of HedgeWare, Inc., which appears in this
Amendment No. 1 to the Form 8-K/A of SS&C Technologies, Inc.
PricewaterhouseCoopers LLP
Stamford, Connecticut
November 1, 1999
<PAGE>
Exhibit 99.2
HEDGEWARE, INC.
Financial Statements
December 31, 1998 and 1997
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
HedgeWare, Inc.
In our opinion, the accompanying balance sheet and the related statements of
operations, of changes in stockholders' deficit and of cash flows present
fairly, in all material respects, the financial position of HedgeWare, Inc. at
December 31, 1998 and 1997, and the results of its operations and its cash flows
for each of the years then ended, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in Note 10 to the financial statements, on March 11, 1999, the
Company became a wholly owned subsidiary of SS&C Technologies, Inc.
PricewaterhouseCoopers LLP
Stamford, Connecticut
May 24, 1999
-1-
<PAGE>
HedgeWare, Inc.
Balance Sheet
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 31,
1998 1997
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 137,841 $ 24,649
Accounts receivable, net of allowance for doubtful
accounts of $142,143 and $16,360 at
December 31, 1998 and 1997, respectively (Note 2) 838,645 382,804
Prepaid expenses and other current assets 32,447 27,694
----------- ----------
Total current assets 1,008,933 435,147
Fixed assets, net (Note 3) 294,084 238,594
Other assets 14,180 15,313
----------- ----------
Total assets $ 1,317,197 $ 689,054
=========== ==========
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable and accrued expenses (Note 4) $ 1,569,780 $ 611,416
Deferred revenue (Note 2) 847,740 227,800
Current portion of notes payable (Note 6) 188,545 42,733
Current portion of capital lease obligation (Note 9) 7,280 7,520
Performance unit plan accrual (Note 8) 2,058,052 1,700,000
Stockholder loans (Note 5) 535,689 154,776
----------- -----------
Total current liabilities 5,207,086 2,744,245
Notes payable, less current portion (Note 6) 8,870 48,271
Capital lease obligation, less current portion (Note 9) 17,257 1,988
----------- -----------
Total liabilities 5,233,213 2,794,504
----------- -----------
Commitments and contingencies (Note 9)
Stockholders' deficit
Common stock, no par value, 1,000 shares authorized;
100 shares issued and outstanding at December 31,
1998 and 1997 65,500 65,500
Additional paid-in capital 1,079 2,284
Accumulated deficit (3,982,595) (2,173,234)
----------- -----------
Total stockholders' deficit (3,916,016) (2,105,450)
----------- -----------
Total liabilities and stockholders' deficit $ 1,317,197 $ 689,054
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-2-
<PAGE>
HedgeWare, Inc.
Statement of Operations
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
December 31,
1998 1997
<S> <C> <C>
Revenues (Note 2):
Software licenses $ 399,473 $ 41,990
Service and maintenance 3,781,057 3,335,457
------------ ------------
4,180,530 3,377,447
------------ ------------
Cost of revenues and operating expenses:
Cost of software licenses 14,740 9,257
Cost of service and maintenance 2,997,667 1,996,045
Sales and marketing 106,365 407,224
Product development 1,954,128 1,751,750
General and administrative 854,774 462,032
------------ ------------
5,927,674 4,626,308
------------ ------------
Loss from operations (1,747,144) (1,248,861)
Interest expense (21,163) (11,848)
Interest expense - stockholders (54,794) (29,863)
Other income 13,740 28,526
------------ ------------
Net loss $ (1,809,361) $ (1,262,046)
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-3-
<PAGE>
HedgeWare, Inc.
Statement of Changes in Stockholders' Deficit
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Additional
Common Stock Paid-In Retained
Shares Amount Capital Deficit Total
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1997 100 $ 65,500 $ 24,286 $ (911,188) $ (821,402)
Dividend distributions - - (22,002) - (22,002)
Net loss - - - (1,262,046) (1,262,046)
----- -------- -------- ----------- -----------
Balance at December 31, 1997 100 65,500 2,284 (2,173,234) (2,105,450)
Dividend distributions - - (1,205) - (1,205)
Net loss - - - (1,809,361) (1,809,361)
----- -------- -------- ----------- -----------
Balance at December 31, 1998 100 $ 65,500 $ 1,079 $(3,982,595) $(3,916,016)
===== ======== ======== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
<PAGE>
HedgeWare, Inc.
Statement of Cash Flows
Increase (Decrease) in Cash and Cash Equivalents
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
December 31,
1998 1997
<S> <C> <C>
Cash flows from operating activities
Net loss $ (1,809,361) $ (1,262,046)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 96,143 85,351
Provision for doubtful accounts 125,783 14,217
Changes in operating assets and liabilities:
Accounts receivable (581,624) (102,030)
Prepaid expenses and other current assets (4,753) 6,954
Accounts payable and accrued expenses 957,159 115,879
Deferred revenue 619,940 107,800
Performance unit plan accrual 358,052 1,033,333
------------- -------------
Net cash used in operating activities (238,661) (542)
------------- -------------
Cash flows from investing activities
Purchase of fixed assets (126,700) (92,015)
------------- -------------
Cash flows from financing activities
Proceeds from stockholder loans 387,913 100,000
Repayment of stockholder loans (7,000) (1,100)
Proceeds from notes payable 285,000 265,000
Repayment of notes payable (178,589) (350,483)
Payments on capital lease obligations (8,771) (6,875)
------------- -------------
Net cash provided by financing activities 478,553 6,542
------------- -------------
Net increase (decrease) in cash and cash equivalents 113,192 (86,015)
Cash and cash equivalents, beginning of year 24,649 110,664
------------- -------------
Cash and cash equivalents, end of year $ 137,841 $ 24,649
============= =============
Supplemental disclosures of cash flows
Interest paid $ 24,551 $ 11,848
============= =============
Noncash investing and financing activities
</TABLE>
During 1998, the Company entered into capital lease obligations to purchase
fixed assets in the amount of $23,800. No capital lease obligations were
entered into during the year ended 1997.
During 1998 and 1997, the Company declared S-corporation distributions in the
amount of $1,205 and $22,002 to stockholders, respectively. These
distributions are included in accounts payable and accrued expenses on the
balance sheet and have not been paid as of December 31, 1998.
The accompanying notes are an integral part of these financial statements.
-5-
<PAGE>
HedgeWare, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Nature of the Business
HedgeWare, Inc. ("HedgeWare" or the "Company") was incorporated in Delaware
in 1988 as an "S" corporation. HedgeWare provides portfolio, financial
partnership, and tax accounting software to hedge fund managers and traders
throughout the United States. HedgeWare develops and markets software used
by active hedge fund managers to track and calculate their positions in
numerous instrument types. HedgeWare products provide registered investment
advisors with a complete set of tools for enterprise-wide portfolio
management, accounting, research, and operational support.
2. Summary of Significant Accounting Policies
Cash Equivalents
The Company considers all highly liquid investments with original maturities
of three months or less from the date of acquisition to be cash equivalents.
The Company invests its excess cash in an overnight money market account.
Accordingly, the investments are subject to minimal credit and market risk.
At December 31, 1998 and 1997, the Company had $3,156 and $5,766,
respectively, in a money market account.
Revenue Recognition and Deferred Revenue
The revenue recognition policies for the period are presented in conformity
with AICPA Statement of Position 97-2, "Software Revenue Recognition" ("SoP
97-2"). Under SoP 97-2, the Company recognizes software license revenue
when a noncancelable license agreement has been executed, fees are fixed and
determinable, the software has been delivered, accepted by the customer if
acceptance is required by the contract and other than perfunctory, and
collection is considered probable. Revenue is derived from the sale of
software licenses and from the performance of maintenance, installation,
training and programming services. License revenue is recognized when the
software is delivered unless there is uncertainty about customer acceptance,
in which case, the Company delays recognition of revenue until acceptance
occurs. Revenue from services is recognized as the services are performed.
Maintenance revenues are recognized ratably over the maintenance period,
generally one year. Revenue is deferred to the extent of cash received in
advance of delivery or performance of services. The Company had a provision
for doubtful accounts of $142,143 and $16,360 at December 31, 1998 and 1997,
respectively.
Fixed Assets
Fixed assets are stated at cost and depreciated using the straight-line
method over the estimated useful lives of the assets. Assets held under
capital leases are amortized over the shorter of the lease life or the
estimated useful life of the assets. Maintenance and repair costs are
expensed as incurred.
Research and Development and Capitalized Software Development Costs
In accordance with Statement of Financial Accounting Standards No. 86,
"Accounting for the Costs of Computer Software to be Sold, Leased or
Otherwise Marketed," the Company has evaluated the establishment of
technological feasibility of its products under development. The time period
during which costs could be capitalized from the point of reaching
technological feasibility until the time of general product release is short
and, consequently, the amounts that could be capitalized are not material to
the Company's financial position or results of operations. Therefore, the
Company charges all product development expenses to operations in the period
incurred.
-6-
<PAGE>
HedgeWare, Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------
Concentration of Credit Risk and Significant Customers
Financial instruments which potentially expose the Company to concentration
of credit risk consist primarily of trade accounts receivable. The Company
grants credit terms in the normal course of business to its customers. At
December 31, 1998, two of the Company's customers accounted for approximately
11% and 14% of the Company's accounts receivable. At December 31, 1997, two
of the Company's customers accounted for approximately, 12% and 14% of the
Company's accounts receivable.
Financial Instruments
The carrying amounts of the Company's financial instruments, which include
cash, accounts receivable, accounts payable and accrued expenses, notes
payable and stockholder loans, approximate their fair market values at
December 31, 1998.
Income Taxes
Beginning in 1988, Hedgeware elected and has since been treated for federal
and certain state income tax purposes as an "S" corporation under Subchapter
S of The Internal Revenue Code of 1986, as amended. Therefore, no provision
for federal income taxes is made in the financial statements. The income tax
effect of the Company's activities accrue to the individual stockholders.
Comprehensive Income
The Company has adopted Statement of Financial Accounting Standards No. 130
("SFAS 130"), "Reporting Comprehensive Income." SFAS 130 requires that items
defined as comprehensive income, such as foreign currency translation
adjustments and unrealized gains (losses) on marketable securities, be
separately classified in the financial statements and that the accumulated
balance of other comprehensive income be reported separately from accumulated
deficit and additional paid-in capital in the equity section of the balance
sheet. There were no differences between net income and comprehensive income
for the year ended December 31, 1998 and 1997.
Use of Estimates
The preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
-7-
<PAGE>
HedgeWare, Inc.
Notes to Financial Statements
- -----------------------------------------------------------------------------
3. Fixed Assets
Fixed assets consist of the following:
<TABLE>
<CAPTION>
Estimated
December 31 useful life
1998 1997 (in years)
------------ ---------- --------------
<S> <C> <C> <C>
Leasehold improvements $ 19,663 $ 19,663 5
Office equipment 151,028 121,322 7
Hardware and software 654,310 533,516 5
---------- ---------
825,001 674,501
Accumulated depreciation and amortization (530,917) (435,907)
---------- ---------
$ 294,084 $ 238,594
========== =========
</TABLE>
Depreciation expense for the years ended December 31, 1998 and 1997 was
$95,010 and $84,409, respectively.
Included in the above amounts are office equipment acquired under capital
leases as of December 31, 1998 and 1997 of $56,200 and $32,400,
respectively. Accumulated amortization on assets under capital leases
totaled $32,267 and $24,300 as of December 31, 1998 and 1997, respectively.
4. Account Payable And Accrued Expenses
Accounts payable and accrued expenses consist of the following:
<TABLE>
<CAPTION>
December 31,
1998 1997
------------ ----------
<S> <C> <C>
Accounts payable $ 217,485 $ 47,698
Accrued employee compensation 712,803 260,991
Other accrued expenses 639,492 302,727
----------- ---------
$ 1,569,780 $ 611,416
=========== =========
</TABLE>
5. Stockholder Loans
At December 31, 1998 and 1997, the Company had $535,689 and $154,776 of
stockholders loans outstanding. The loans bear interest at a rate of 9.5%
per annum and are payable on demand. During 1998 and 1997, the Company
incurred $54,794 and $29,863 of interest expense, of which $84,657 and
$29,863 was payable at December 31, 1998 and 1997, respectively, and are
included in accounts payable and accrued expenses on the financial
statements. These loans and accrued interest were settled in March 1999 in
connection with the merger (Note 10).
-8-
<PAGE>
HedgeWare, Inc.
Notes to Financial Statements
- -----------------------------------------------------------------------------
6. Notes Payable
During 1998, the Company entered into an agreement with a bank to provide a
$150,000 revolving credit facility (the "Agreement"). At December 31, 1998,
the Company had outstanding borrowings of $150,000 under the Agreement
which were repaid in March 1999 in connection with the merger (Note 10).
Interest accrues at a rate of 8.75% per annum. This obligation is
collateralized by all assets of the Company.
During 1997, the Company entered into a $50,000 note payable with a bank.
At December 31, 1998 and 1997, the outstanding obligation was $26,516 and
$42,572, respectively, and was paid off in March 1999 in connection with
the merger. The note accrued interest at a rate of 9.0% per annum. This
obligation was collateralized by all the personal property of the Company.
During 1996, the Company entered into a $75,000 note payable with a bank.
At December 31, 1998 and 1997, the outstanding obligation was $20,899 and
$48,432, respectively, and was paid off in March 1999. The note accrued
interest at a rate of 9.75% per annum. This obligation was collateralized
by all the personal property of the Company.
Interest expense related to the above bank debt totaled $23,475 and $10,652
for the years ended December 31, 1998 and 1997, respectively.
7. Common Stock
Each share of common stock entitles the holder to one vote on all matters
submitted to a vote of the Company's stockholders. Common stockholders are
entitled to receive dividends, if any, as may be declared by the board of
directors.
8. Performance Unit Plan
The Company has established a Performance Unit Plan (the "Plan") which
consists of granting of performance units to certain key employees of the
Company. The Plan is administered by the board of directors, who determine
which employees will receive the performance units and the number of
performance units to be granted to the employees. The ultimate value of
these performance units is contingent upon the fair value of the Company.
The increase in the value of these units is accrued and expensed over the
vesting period. The Plan has authorized 20,000 units, not to exceed 20% of
the value of the Company. The units generally vest equally over a three-
year period and no payments under the Plan shall be made until the employee
has been employed by the Company for three years. Upon a change in control,
unit holders in the Plan will receive 20% of the consideration that is
received by the stockholders. During 1998 and 1997, the Company awarded
6,000 and 16,370 units, respectively, and recorded $358,052 and $1,033,333,
respectively, in related compensation expense. At December 31, 1998 and
1997, the Company has accrued $2,058,052 and $1,700,000 as the estimated
obligations payable under the Plan. As a result of the merger described in
Note 10, the Performance Unit Plan holders received 20% of the
consideration.
-9-
<PAGE>
Hedgeware, Inc.
Notes to Financial Statements
- -----------------------------------------------------------------------------
9. Commitments and Contingencies
The Company leases office space under a non cancelable operating lease for
which the Company has a remaining commitment in 1999 totaling $116,406. The
Company has entered into capital leases for equipment having remaining
terms in excess of one year. The Company's future minimum lease commitments
under these capital leases are as follows:
<TABLE>
<CAPTION>
Capital
leases
<S> <C>
1999 $ 9,125
2000 7,107
2001 7,107
2002 5,330
-------
Total 28,669
Less-Amount representing interest 4,132
-------
Present value of future minimum lease payments $24,537
=======
</TABLE>
10. Subsequent Event
During the first quarter of 1999, Asset Management Acquisition Corp., a
wholly owned subsidiary of SS&C Technologies, Inc. ("SS&C") merged with and into
the Company, whereupon the Company became a wholly owned subsidiary of SS&C. In
connection with the merger, the Company exchanged all of its outstanding common
stock in exchange for shares of SS&C common stock.
-10-
<PAGE>
Exhibit 99_3
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following unaudited pro forma condensed combined statements of
operations for the years ended December 31, 1996, 1997 and 1998 reflect the
consolidated results of operations, respectively, of SS&C Technologies, Inc.
(SS&C) after giving effect to the March 11, 1999 Merger Agreement ("Merger")
between SS&C and HedgeWare, Inc. ("HedgeWare"), under the assumptions set forth
in the accompanying notes. The unaudited pro forma condensed combined statement
of financial position combines the December 31, 1998 historical consolidated
statement of financial position of SS&C with the December 31, 1998 historical
condensed statement of financial position of HedgeWare giving effect to the
Merger, under the assumptions set forth in the accompanying notes. The pro forma
condensed combined statements of operations are not necessarily indicative of
SS&C's consolidated results of operations as they may be in the future. These
pro forma condensed combined statements of operations should be read in
conjunction with the accompanying explanatory notes, the Agreement and Plan of
Merger dated as of March 11, 1999, and the historical financial statements and
related notes of SS&C previously filed and the financial statements of HedgeWare
appearing elsewhere in this Current Report on Form 8-K/A.
Page 1
<PAGE>
SS&C TECHNOLOGIES, INC. AND HEDGEWARE, INC.
PRO FORMA COMBINED STATEMENTS OF FINANCIAL POSITION
AT DECEMBER 31, 1998
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
SS&C HedgeWare Adjustment Combined
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 12,909 $ 138 $ 13,047
Restricted cash 1,230 - 1,230
Investments in marketable securities 42,263 - 42,263
Accounts receivable, net 23,603 839 24,442
Note receivable 2,250 - 2,250
Prepaid expenses and other current assets 1,677 32 1,709
Deferred income taxes 434 - 434
-------------- -------------- -------------- --------------
Total current assets 84,366 1,009 85,375
-------------- -------------- -------------- --------------
Property and equipment:
Land 106 - 106
Building and leasehold improvements 2,728 20 2,748
Equipment, furniture and fixtures 9,949 805 10,754
-------------- -------------- -------------- --------------
12,783 825 13,608
-------------- -------------- -------------- --------------
Less accumulated depreciation (5,283) (531) (5,814)
-------------- -------------- -------------- --------------
Net property and equipment 7,500 294 7,794
-------------- -------------- -------------- --------------
Accounts receivable 549 - 549
Deferred income taxes 6,266 - 6,266
Goodwill, net 722 - 722
Intangible and other assets, net 4,594 14 4,608
-------------- -------------- -------------- --------------
Total assets $ 103,997 $ 1,317 $ 105,314
============== ============== ============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $ 125 $ 196 $ 321
Accounts payable 1,907 217 2,124
Taxes payable 848 211 1,059
Accrued employee compensation and benefits 3,430 2,771 6,201
Other accrued expenses 2,270 964 3,234
Deferred maintenance and other revenues 12,454 848 13,302
-------------- -------------- -------------- --------------
Total current liabilities 21,034 5,207 26,241
-------------- -------------- -------------- --------------
Long-term debt 125 26 151
-------------- -------------- -------------- --------------
Total liabilities 21,159 5,233 26,392
-------------- -------------- -------------- --------------
Stockholders' equity:
Common stock 148 66 (61) 153
Additional paid-in capital 81,424 1 61 81,486
Cumulative translation adjustment (121) - (121)
Retained earnings (deficit) 1,387 (3,983) (2,596)
-------------- -------------- -------------- --------------
Total stockholders' equity 82,838 (3,916) 78,922
-------------- -------------- -------------- --------------
Total liabilities and stockholders' equity $ 103,997 $ 1,317 $ 105,314
============== ============== ============== ==============
</TABLE>
See the accompanying notes to the pro forma condensed combined financial
statements.
Page 2
<PAGE>
SS&C TECHNOLOGIES, INC. AND HEDGEWARE, INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
SS&C HedgeWare Adjustment Pro Forma
Combined
------------ ------------- -------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Software licenses $ 34,479 $ 400 $ 34,879
Maintenance and other recurring revenue 19,531 2,627 22,158
Professional services 15,403 1,154 16,557
------------ ------------- -------------- ------------
Total revenues 69,413 4,181 73,594
------------ ------------- -------------- ------------
Cost of revenues:
Software licenses 3,825 15 3,840
Maintenance and other recurring revenue 7,444 1,308 8,752
Professional services 9,703 1,690 11,393
------------ ------------- -------------- ------------
Total cost of revenues 20,972 3,013 23,985
------------ ------------- -------------- ------------
Gross profit 48,441 1,168 49,609
------------ ------------- -------------- ------------
Operating expenses:
Selling and marketing 15,058 106 15,164
Research and development 17,440 1,954 19,394
General and administrative 8,361 855 9,216
Write-off of purchased in-process
research and development 5,878 - 5,878
------------ ------------- -------------- ------------
Total operating expenses 46,737 2,915 49,652
------------ ------------- -------------- ------------
Operating income (loss) 1,704 (1,747) (43)
Interest income (expense), net 2,020 (76) 1,944
Other income 363 14 377
------------ ------------- -------------- ------------
Income (loss) before income taxes 4,087 (1,809) 2,278
Provision (benefit) for income taxes 1,225 - 1,225
------------ ------------- -------------- ------------
Net income (loss) $ 2,862 $ (1,809) $ 1,053
============ ============= ============== ============
Basic earnings (loss) per share $ 0.20 $ (3.62) $ 0.07
============ ============= ============== ============
Basic weighted average number of common
shares outstanding 14,456 500 14,956
============ ============= ============== ============
Diluted earnings (loss) per share $ 0.19 $ (3.62) $ 0.07
============ ============= ============== ============
Diluted weighted average number of
common and common equivalent shares
outstanding 15,406 500 15,906
============ ============= ============== ============
</TABLE>
See the accompanying notes to the pro forma condensed combined financial
statements.
Page 3
<PAGE>
SS&C TECHNOLOGIES, INC. AND HEDGEWARE, INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
SS&C HedgeWare Adjustment Pro Forma
Combined
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Software licenses $ 22,948 $ 42 $ 22,990
Maintenance and other recurring revenue 10,707 2,736 13,443
Professional services 8,495 599 9,094
-------------- -------------- -------------- --------------
Total revenues 42,150 3,377 45,527
-------------- -------------- -------------- --------------
Cost of revenues:
Software licenses 1,434 9 1,443
Maintenance and other recurring revenue 4,620 1,100 5,720
Professional services 4,585 896 5,481
-------------- -------------- -------------- --------------
Total cost of revenues 10,639 2,005 12,644
-------------- -------------- -------------- --------------
Gross profit 31,511 1,372 32,883
-------------- -------------- -------------- --------------
Operating expenses:
Selling and marketing 11,636 407 12,043
Research and development 10,245 1,752 11,997
General and administrative 8,162 462 8,624
Write-off of purchased in-process
Research and development 861 - 861
-------------- -------------- -------------- --------------
Total operating expenses 30,904 2,621 33,525
-------------- -------------- -------------- --------------
Operating income (loss) 607 (1,249) (642)
Interest income (expense), net 2,218 (42) 2,176
Other income - 29 29
-------------- -------------- -------------- --------------
Income (loss) before income taxes 2,825 (1,262) 1,563
Provision (benefit) for income taxes 1,029 - 1,029
-------------- -------------- -------------- --------------
Net income (loss) $ 1,796 $ (1,262) $ 534
============== ============== ============== ==============
Basic earnings (loss) per share $ 0.13 $ (2.52) $ 0.04
============== ============== ============== ==============
Basic weighted average number of common 13,540 500 14,040
Shares outstanding ============== ============== ============== ==============
Diluted earnings (loss) per share $ 0.13 $ (2.52) $ 0.04
============== ============== ============== ==============
Diluted weighted average number of
common and common equivalent shares
outstanding 13,937 500 14,437
============== ============== ============== ==============
</TABLE>
See the accompanying notes to the pro forma condensed combined financial
statements.
Page 4
<PAGE>
SS&C TECHNOLOGIES, INC. AND HEDGEWARE, INC.
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
SS&C HedgeWare Adjustment Pro Forma
Combined
------------ ----------- -------------- ------------
<S> <C> <C> <C> <C>
Revenues:
Software licenses $ 16,352 $ - $ 16,352
Maintenance and other recurring revenue 7,007 2,670 9,677
Professional services 8,175 421 8,596
------------ ----------- -------------- ------------
Total revenues 31,534 3,091 34,625
------------ ----------- -------------- ------------
Cost of revenues
Software licenses 1,245 - 1,245
Maintenance and other recurring revenue 2,257 809 3,066
Professional services 5,402 649 6,051
------------ ----------- -------------- ------------
Total cost of revenues 8,904 1,458 10,362
------------ ----------- -------------- ------------
Gross profit 22,630 1,633 24,263
------------ ----------- -------------- ------------
Operating expenses:
Selling and marketing 9,023 432 9,455
Research and development 8,414 1,237 9,651
General and administrative 5,338 444 5,782
------------ ----------- -------------- ------------
Total operating expenses 22,775 2,113 24,888
------------ ----------- -------------- ------------
Operating Loss (145) (480) (625)
Interest income (expense), net 914 (1) 913
Other income 158 7 165
------------ ----------- -------------- ------------
Income (loss) before income taxes 927 (474) 453
Provision (benefit) for income taxes 414 - 414
------------ ----------- -------------- ------------
Net income (loss) $ 513 $ (474) $ 39
============ =========== ============== ============
Basic earnings (loss) per share $ 0.05 $ (0.95) $ 0.00
============ =========== ============== ============
Basic weighted average number of common
shares outstanding 10,571 500 11,071
============ =========== ============== ============
Diluted earnings (loss) per share $ 0.04 $ (0.95) $ 0.00
============ =========== ============== ============
Diluted weighted average number of
common and common equivalent shares
outstanding 12,617 500 13,117
============ =========== ============== ============
</TABLE>
See accompanying notes to the pro forma condensed combined Financial Statements.
Page 5
<PAGE>
SS&C TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Pro Forma Combined Condensed Financial Statements
(unaudited)
(1) Basis of Presentation
On March 11, 1999 (the "Effective Date"), SS&C Technologies, Inc. ("SS&C")
completed its acquisition of HedgeWare, Inc. ("HedgeWare") pursuant to an
Agreement and Plan of Merger, dated as of March 11, 1999 (the "Merger
Agreement"), among SS&C, HedgeWare, Asset Management Acquisition Corp., a wholly
owned subsidiary of SS&C (the "Merger Subsidiary"), Michael J. Lazarcheck,
Robert H. Pontbriand and Matthew J. Cosciello (collectively the "Stockholders")
and Andrew Appell, Eugene Barra, Ellis Horowitz, Ronald Kashden, Brook F. Seitz,
Mark E. Tarantina and Alan Zenreich (collectively the "Performance Unit
Holders"). The Stockholders and Performance Unit Holders are referred to
collectively herein as the "Holders."
Pursuant to the Merger Agreement, the Merger Subsidiary was merged with and
into HedgeWare (the "Merger") on the Effective Date, whereupon HedgeWare became
a wholly owned subsidiary of SS&C. In connection with the Merger, (i) all of the
outstanding shares of common stock of HedgeWare held by the Stockholders were
converted into an aggregate of 499,718 shares of Common Stock of SS&C (the
"Common Stock"), (ii) all of the outstanding performance units under HedgeWare's
Performance Unit Plan held by the Performance Unit Holders were converted into
an aggregate of 124,930 shares of Common Stock and (iii) outstanding loans,
interest and dividends aggregating approximately $1,000,000 and owed by
HedgeWare to the Stockholders were converted into an aggregate of 61,035 shares
of Common Stock. SS&C used authorized but previously unissued shares of Common
Stock in connection with the Merger, which will be accounted for as a pooling of
interests.
The unaudited pro forma condensed combined financial statements are
presented for illustrative purposes only, giving effect to the Merger as
accounted for by the pooling of interests method.
HedgeWare had elected to be treated as a Subchapter S Corporation for
income tax purposes, as such, income taxes are not provided for in the pro forma
combined financial statements.
(2) Pro Forma Adjustments
There were no material transactions between SS&C and HedgeWare during any
period presented.
(a) The pro forma adjustments reflect the issuance of 499,718 shares of
SS&C stock in exchange for all the outstanding shares of HedgeWare common stock
as of March 11, 1999.
Page 6
