Tyler Technologies Reports Earnings for Fourth Quarter 2018 |
Company achieves double-digit revenue growth for the 29th consecutive
quarter Tyler
Technologies, Inc. (NYSE: TYL) today announced financial results for
the fourth quarter and year ended December 31, 2018.
Fourth Quarter 2018 Financial Highlights: -
Total revenues were $242.0 million, up 11.2 percent from $217.7
million for the fourth quarter of 2017. Non-GAAP total revenues were
$243.0 million, up 11.5 percent from $217.9 million for the fourth
quarter of 2017. GAAP organic revenue growth was 7.4 percent and
non-GAAP organic revenue growth was 7.3 percent.
-
Recurring revenue from maintenance and subscriptions was $158.1
million, up 13.1 percent compared to the fourth quarter of 2017, and
comprised 65.4 percent of fourth quarter 2018 revenue.
-
Operating income was $38.9 million, down 12.2 percent from $44.3
million for the fourth quarter of 2017. Non-GAAP operating income was
$65.2 million, up 2.2 percent from $63.8 million for the fourth
quarter of 2017.
-
Net income was $31.6 million, or $0.79 per diluted share, down 52.3
percent compared to $66.2 million, or $1.68 per diluted share, for the
fourth quarter of 2017. The decline was primarily due to the one-time
tax benefit associated with the Tax Cuts and Jobs Act that was
recognized in the fourth quarter of 2017. Non-GAAP net income was
$50.5 million, or $1.26 per diluted share, up 20.0 percent compared to
$42.1 million, or $1.06 per diluted share, for the fourth quarter of
2017.
-
Cash flows from operations were $70.9 million, up 32.7 percent
compared to $53.4 million for the fourth quarter of 2017.
-
Adjusted EBITDA was $72.1 million, up 4.1 percent compared to $69.3
million for the fourth quarter of 2017.
-
Tyler repurchased 780,842 shares of its common stock during the
quarter at an average price of $192.16. Tyler also announced that its
board of directors has increased the company's common stock repurchase
authorization by 1.5 million shares. Tyler may repurchase up to an
additional 2.7 million shares under the current authorization.
-
Software license arrangements comprised approximately 60 percent and
subscription arrangements comprised approximately 40 percent of the
total new software contract value in the fourth quarter.
-
Software subscription bookings in the fourth quarter added $7.9
million in new annual recurring revenue.
-
On December 7, 2018, Tyler acquired SceneDoc, Inc. Its results, which
are immaterial, are included in Tyler's consolidated results from the
date of acquisition.
-
Subsequent to the end of the year, Tyler announced the signing of a
definitive agreement to acquire MicroPact, Inc., for $185 million in
cash. The transaction is expected to close in the first quarter of
2019.
-
Effective January 1, 2018, Tyler adopted the requirements of ASU No.
2014-09, Revenue from Contracts with Customers (Topic 606), utilizing
the full retrospective method of transition. Prior year amounts have
been restated from previously reported amounts to reflect the impact
of the full retrospective adoption of Topic 606.
Full Year 2018 Financial Highlights: -
Total revenues were $935.3 million, up 11.2 percent from $840.9
million in 2017. Non-GAAP total revenues were $939.7 million, up 11.6
percent from $842.0 million in 2017. Both GAAP and non-GAAP organic
revenue growth were 8.9 percent.
-
Recurring revenue from maintenance and subscriptions was $605.1
million, up 13.8 percent compared to 2017, and comprised 64.7 percent
of 2018 revenue.
-
Operating income was $152.5 million, down 6.3 percent from $162.8
million in 2017. Non-GAAP operating income was $250.3 million, up 5.4
percent from $237.4 million in 2017.
-
Net income was $147.5 million, or $3.68 per diluted share, down 13.0
percent compared to $169.6 million, or $4.32 per diluted share, in
2017. Non-GAAP net income was $192.8 million, or $4.80 per diluted
share, up 24.6 percent compared to $154.8 million, or $3.94 per
diluted share, in 2017.
-
Cash flows from operations were $250.2 million, up 27.8 percent
compared to $195.8 million in 2017.
-
Adjusted EBITDA was $274.6 million, up 7.4 percent compared to $255.6
million in 2017.
-
Software license arrangements comprised approximately 59 percent and
subscription arrangements comprised approximately 41 percent of the
total new software contract value for the year.
-
Software subscription bookings in 2018 added $26.5 million in new
annual recurring revenue.
-
Total backlog at year-end was $1.25 billion, up 1.7 percent from $1.23
billion at December 31, 2017. Software-related backlog (excluding
appraisal services) was $1.21 billion, up 1.9 percent from $1.19
billion at December 31, 2017.
"Our fourth quarter performance provided a solid finish to 2018," said
Lynn Moore Jr., Tyler's president and chief executive officer. "We
achieved double-digit total revenue growth for the 29th consecutive
quarter and both total and organic growth improved over the third
quarter levels. Subscription revenues led the way with growth of 26
percent. In addition, software license and royalties revenues grew 15
percent and reached a new quarterly high, surpassing $25 million for the
first time. Together, our core software licenses and subscription
revenues grew 23 percent, with 15 percent organic growth.
"Our new business pipeline remains strong and backlog at the end of the
quarter reached a new high of $1.25 billion. Bookings declined 13
percent on a difficult comparison with fourth quarter 2017, which
included the $21 million Odyssey courts software contract with the State
of Kansas Judicial Branch. In addition, the intentional reduction in our
standard initial term for new software subscription contracts continues
to negatively impact bookings. The average new subscription contract
term was 4.1 years in the fourth quarter, compared to 5.4 years in
fourth quarter of 2017.
"Cash flow was once again very strong, as cash flows from operations in
the fourth quarter grew 33 percent over last year, and free cash flow
grew 39 percent. For the full year, cash flows from operations increased
28 percent, and free cash flow rose 46 percent.
"2018 was certainly a year of investment for Tyler, and we used our
strong cash flow and balance sheet to make a number of investments that
further our growth objectives and create long-term shareholder value. In
December, we completed our fifth acquisition of the year with the
purchase of SceneDoc, which provides mobile-first, software-as-a-service
field reporting for law enforcement agencies. In total, we used
approximately $178 million in cash for acquisitions in 2018. While these
acquisitions represent important additions to our product offerings,
we're also making significant investments in the acquired businesses to
strengthen their organizations and integrate their solutions with
existing Tyler products. As a result, the 2018 acquisitions were in the
aggregate dilutive to earnings.
"We are excited about the pending acquisition of MicroPact, a leading
provider of specialized, vertically-oriented case management and
business process management applications for government. This
acquisition is expected to close in the first quarter and will be the
second largest in our history. MicroPact complements our current product
offerings and will significantly expand our total addressable market
through its strong presence in the federal space.
"As we noted at the beginning of 2018, we significantly increased our
research and development spend for the year. R&D expense increased 34
percent from 2017, with a wide range of product development projects
across our product suites, including accelerated R&D at Socrata, which
we acquired in April. While R&D growth will slow somewhat in 2019,
investment in product development will remain at an elevated level in
the coming year.
"We were also very active with our stock repurchase program in the
fourth quarter of 2018, reflecting our confidence in the company's
long-term outlook. We repurchased more than 780,000 shares of our common
stock during the quarter, and the $150 million used on stock repurchases
this quarter exceeded the total used on stock repurchases in the
previous six years combined. With our board's recent 1.5 million share
increase to our stock repurchase authorization, we expect to continue to
opportunistically return cash to shareholders through future buybacks.
"Looking to 2019, our guidance reflects the ongoing investment in our
2018 acquisitions, which will collectively remain dilutive in 2019,
along with a continued elevated level of investment in research and
development. Our guidance also includes the estimated impact of the
pending acquisition of MicroPact, which is expected to be completed in
the first quarter," said Moore.
Guidance for 2019
As of February 20, 2019, Tyler Technologies is providing the guidance
below for the full year 2019, including the estimated impact of the
pending acquisition of MicroPact.
-
GAAP total revenues are expected to be in the range of $1.08 billion
to $1.10 billion.
-
Non-GAAP total revenues are expected to be in the range of $1.09
billion to $1.11 billion.
-
GAAP diluted earnings per share are expected to be in the range of
$3.54 to $3.69 and may vary significantly due to the impact of stock
option exercises on the GAAP effective tax rate, as well as the final
valuations of acquired intangibles.
-
Non-GAAP diluted earnings per share are expected to be in the range of
$5.20 to $5.35.
-
Pretax non-cash, share-based compensation expense is expected to be
approximately $62 million.
-
Research and development expense is expected to be in the range of $82
million to $84 million.
-
Fully diluted shares for the year are expected to be in the range of
40 million to 41 million shares.
-
GAAP earnings per share assumes an estimated annual effective tax rate
of approximately 10 percent after discrete tax items and includes
approximately $27 million of estimated discrete tax benefits related
to share-based compensation.
-
The non-GAAP annual effective tax rate is expected to be 24 percent.
-
Capital expenditures are expected to be in the range of $54 million to
$56 million, including approximately $16 million related to real
estate and approximately $6 million of capitalized software
development. Total depreciation and amortization expense is expected
to be approximately $75 million, including approximately $47 million
of amortization of acquisition intangibles.
GAAP to non-GAAP guidance reconciliation
Non-GAAP total revenues is derived from adding back the estimated full
year impact of write-downs of acquisition-related deferred revenue and
amortization of acquired leases of approximately $10 million. Non-GAAP
diluted earnings per share is derived by adding back the estimated full
year impact of non-cash share-based compensation expense and employer
portion of payroll tax related to employee stock transactions of
approximately $62 million, and amortization of acquired software and
intangible assets of approximately $47 million. Additionally, the
non-GAAP tax rate of 24 percent is estimated periodically as described
below under "Non-GAAP Financial Measures" and excludes approximately $27
million of estimated discrete tax benefits related to share-based
compensation that are included in the GAAP estimated annual effective
tax rate.
Conference Call
Tyler Technologies will hold a conference call on Thursday, February 21,
at 10:00 a.m. EST to discuss the company's results. The company is
offering participants the opportunity to register in advance for the
conference through the following link: http://dpregister.com/10128442.
Registered participants will receive an email with a calendar reminder
and a dial-in number and PIN that will allow them immediate access to
the call on February 21.
Participants who do not wish to pre-register for the call may dial in
using 844-861-5506 (U.S. callers) or 412-317-6587 (international
callers) or 866-450-4696 (Canada callers) and ask for the "Tyler
Technologies" call. A replay will be available two hours after
completion of the call through February 28, 2019. To access the replay,
please dial 877-344-7529 (U.S. callers), 412-317-0088 (international
callers) and 855-669-9658 (Canada callers) and reference passcode
10128442.
The live webcast and archived replay can also be accessed at http://investors.tylertech.com/Presentations.
About Tyler Technologies, Inc.
Tyler Technologies (NYSE: TYL) is a leading provider of end-to-end
information management solutions and services for local governments.
Tyler partners with clients to empower the public sector - cities,
counties, schools and other government entities - to become more
efficient, more accessible and more responsive to the needs of their
constituents. Tyler's client base includes more than 15,000 local
government offices in all 50 states, Canada, the Caribbean, Australia,
and other international locations. Forbes has included Tyler on its
"Best Small Companies" list eight times and ranked Tyler on its "Best
Midsize Employers" list in 2018. More information about Tyler
Technologies, headquartered in Plano, Texas, can be found at www.tylertech.com.
Non-GAAP Financial Measures
Tyler Technologies has provided in this press release financial measures
that have not been prepared in accordance with generally accepted
accounting principles (GAAP) and are therefore considered non-GAAP
financial measures. This information includes non-GAAP revenues,
non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income,
non-GAAP operating margin, non-GAAP net income, non-GAAP earnings per
diluted share, EBITDA, and adjusted EBITDA. We use these non-GAAP
financial measures internally in analyzing our financial results and
believe they are useful to investors, as a supplement to GAAP measures,
in evaluating Tyler's ongoing operational performance because they
provide additional insight in comparing results from period to period.
Tyler believes the use of these non-GAAP financial measures provides an
additional tool for investors to use in evaluating ongoing operating
results and trends and in comparing our financial results with other
companies in our industry, many of which present similar non-GAAP
financial measures. Non-GAAP financial measures discussed above exclude
write-downs of acquisition-related deferred revenue and acquired leases,
share-based compensation expense, employer portion of payroll taxes on
employee stock transactions, acquisition-related costs, and expenses
associated with amortization of intangibles arising from business
combinations.
Tyler currently uses a non-GAAP tax rate of 24 percent. This rate is
based on Tyler's estimated annual GAAP income tax rate forecast,
adjusted to account for items excluded from GAAP income in calculating
Tyler's non-GAAP income, as well as significant non-recurring tax
adjustments. The non-GAAP tax rate used in future periods will be
reviewed periodically to determine whether it remains appropriate in
consideration of factors including Tyler's periodic effective tax rate
calculated in accordance with GAAP, changes resulting from tax
legislation, changes in the geographic mix of revenues and expenses, and
other factors deemed significant. Due to differences in tax treatment of
items excluded from non-GAAP earnings, as wells as the methodology
applied to Tyler's estimated annual tax rate as described above, the
estimated tax rate on non-GAAP income may differ from the GAAP tax rate
and from Tyler's actual tax liabilities.
Non-GAAP financial measures should be considered in addition to, and not
as a substitute for, or superior to, financial information prepared in
accordance with GAAP. The non-GAAP measures used by Tyler Technologies
may be different from non-GAAP measures used by other companies.
Investors are encouraged to review the reconciliation of these non-GAAP
measures to their most directly comparable GAAP financial measures,
which has been provided in the financial statement tables included below
in this press release.
Forward-looking Statements
This document contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 that are not historical in nature and
typically address future or anticipated events, trends, expectations or
beliefs with respect to our financial condition, results of operations
or business. Forward-looking statements often contain words such as
"believes," "expects," "anticipates," "foresees," "forecasts,"
"estimates," "plans," "intends," "continues," "may," "will," "should,"
"projects," "might," "could" or other similar words or phrases.
Similarly, statements that describe our business strategy, outlook,
objectives, plans, intentions or goals also are forward-looking
statements. We believe there is a reasonable basis for our
forward-looking statements, but they are inherently subject to risks and
uncertainties and actual results could differ materially from the
expectations and beliefs reflected in the forward-looking statements. We
presently consider the following to be among the important factors that
could cause actual results to differ materially from our expectations
and beliefs: (1) changes in the budgets or regulatory environments of
our clients, primarily local and state governments, that could
negatively impact information technology spending; (2) our ability to
protect client information from security breaches and provide
uninterrupted operations of data centers; (3) our ability to achieve
growth or operational synergies through the integration of acquired
businesses, while avoiding unanticipated costs and disruptions to
existing operations; (4) material portions of our business require the
Internet infrastructure to be adequately maintained; (5) our ability to
achieve our financial forecasts due to various factors, including
project delays by our clients, reductions in transaction size, fewer
transactions, delays in delivery of new products or releases or a
decline in our renewal rates for service agreements; (6) general
economic, political and market conditions; (7) technological and market
risks associated with the development of new products or services or of
new versions of existing or acquired products or services; (8)
competition in the industry in which we conduct business and the impact
of competition on pricing, client retention and pressure for new
products or services; (9) the ability to attract and retain qualified
personnel and dealing with the loss or retirement of key members of
management or other key personnel; and (10) costs of compliance and any
failure to comply with government and stock exchange regulations. A
detailed discussion of these factors and other risks that affect our
business are described in our filings with the Securities and Exchange
Commission, including the detailed "Risk Factors" contained in our most
recent annual report on Form 10-K. We expressly disclaim any obligation
to publicly update or revise our forward-looking statements.
|
|
|
| |
|
| | TYLER TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Amounts in thousands, except per share data) (Unaudited) | | | | | | | |
| | | | |
Three Months Ended December 31,
| | |
Twelve Months Ended December 31,
| | | | | 2018 |
|
|
2017
| | | 2018 |
|
|
2017
| | | | |
| | |
As Adjusted
| | |
| | |
As Adjusted
|
Revenues:
| | | | | | | | | | | | | |
Software licenses and royalties
| | | | $ | 25,821 | | |
$
|
22,416
| | | | $ | 93,441 | | |
$
|
86,242
| |
Subscriptions
| | | | | 59,811 | | | |
47,445
| | | | | 220,547 | | | |
172,176
| |
Software services
| | | | | 46,457 | | | |
46,059
| | | | | 191,269 | | | |
180,460
| |
Maintenance
| | | | | 98,333 | | | |
92,354
| | | | | 384,521 | | | |
359,319
| |
Appraisal services
| | | | | 5,376 | | | |
5,755
| | | | | 21,846 | | | |
25,023
| |
Hardware and other
| | | |
| 6,183 | | |
|
3,672
|
| | |
| 23,658 | | |
|
17,679
|
|
Total revenues
| | | | | 241,981 | | | |
217,701
| | | | | 935,282 | | | |
840,899
| | | | | | | | | | | | | | |
|
Cost of revenues:
| | | | | | | | | | | | | |
Software licenses and royalties
| | | | | 863 | | | |
1,117
| | | | | 3,802 | | | |
3,321
| |
Acquired software
| | | | | 5,969 | | | |
5,443
| | | | | 22,972 | | | |
21,686
| |
Software services, maintenance and subscriptions
| | | | | 111,843 | | | |
99,886
| | | | | 438,923 | | | |
387,634
| |
Appraisal services
| | | | | 3,445 | | | |
3,718
| | | | | 14,299 | | | |
16,286
| |
Hardware and other
| | | |
| 3,990 | | |
|
2,187
|
| | |
| 15,708 | | |
|
12,595
|
|
Total cost of revenues
| | | | | 126,110 | | | |
112,351
| | | | | 495,704 | | | |
441,522
| | | | | | | | | | | | | | |
|
Gross profit
| | | | | 115,871 | | | |
105,350
| | | | | 439,578 | | | |
399,377
| | | | | | | | | | | | | | |
|
Selling, general and administrative expenses
| | | | | 55,134 | | | |
45,621
| | | | | 207,605 | | | |
175,914
| |
Research and development expense
| | | | | 17,335 | | | |
12,017
| | | | | 63,264 | | | |
47,324
| |
Amortization of customer and trade name intangibles
| | | |
| 4,475 | | |
|
3,365
|
| | |
| 16,217 | | |
|
13,381
|
|
Operating income
| | | | | 38,927 | | | |
44,347
| | | | | 152,492 | | | |
162,758
| |
Other income, net
| | | |
| 1,180 | | |
|
914
|
| | |
| 3,378 | | |
|
698
|
|
Income before income taxes
| | | | | 40,107 | | | |
45,261
| | | | | 155,870 | | | |
163,456
| |
Income tax provision (benefit)
| | | |
| 8,555 | | |
|
(20,935
|
)
| | |
| 8,408 | | |
|
(6,115
|
)
|
Net income
| | | | $ | 31,552 | | |
$
|
66,196
|
| | | $ | 147,462 | | |
$
|
169,571
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
|
Earnings per common share:
| | | | | | | | | | | | | |
Basic
| | | | $ | 0.82 | | |
$
|
1.76
|
| | | $ | 3.84 | | |
$
|
4.55
|
|
Diluted
| | | | $ | 0.79 | | |
$
|
1.68
|
| | | $ | 3.68 | | |
$
|
4.32
|
| | | | | | | | | | | | | |
|
Weighted average common shares outstanding:
| | | | | | | | | | | | | |
Basic
| | | | | 38,614 | | | |
37,694
| | | | | 38,445 | | | |
37,273
| |
Diluted
| | | | | 39,891 | | | |
39,499
| | | | | 40,123 | | | |
39,246
| | | | | | | | | | | | | | |
|
|
|
| |
|
| | TYLER TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Amounts in thousands, except per share data) (Unaudited) | | | | | | |
| | | |
Three Months Ended December 31,
| | |
Twelve Months Ended December 31,
| | | | 2018 |
|
|
2017
| | | 2018 |
|
|
2017
| | | |
| | |
As Adjusted
| | |
| | |
As Adjusted
| Reconciliation of non-GAAP total revenues | | | | | | | | | | | | |
GAAP total revenues
| | | $ | 241,981 | | | |
$
|
217,701
| | | | $ | 935,282 | | | |
$
|
840,899
| |
Non-GAAP adjustments:
| | | | | | | | | | | | |
Add: Write-downs of acquisition-related deferred revenue
| | | | 952 | | | | |
124
| | | | | 4,000 | | | | |
663
| |
Add: Amortization of acquired leases
| | |
| 100 |
| | |
|
111
|
| | |
| 426 |
| | |
|
444
|
|
Non-GAAP total revenues
| | | $ | 243,033 |
| | |
$
|
217,936
|
| | | $ | 939,708 |
| | |
$
|
842,006
|
| | | | | | | | | | | | |
| Reconciliation of non-GAAP gross profit and
margin | | | | | | | | | | | | |
GAAP gross profit
| | | $ | 115,871 | | | |
$
|
105,350
| | | | $ | 439,578 | | | |
$
|
399,377
| |
Non-GAAP adjustments:
| | | | | | | | | | | | |
Add: Write-downs of acquisition-related deferred revenue
| | | | 952 | | | | |
124
| | | | | 4,000 | | | | |
663
| |
Add: Amortization of acquired leases
| | | | 100 | | | | |
111
| | | | | 426 | | | | |
444
| |
Add: Share-based compensation expense included in cost of revenues
| | | | 3,948 | | | | |
2,541
| | | | | 13,588 | | | | |
9,415
| |
Add: Amortization of acquired software
| | |
| 5,969 |
| | |
|
5,443
|
| | |
| 22,972 |
| | |
|
21,686
|
|
Non-GAAP gross profit
| | | $ | 126,840 |
| | |
$
|
113,569
|
| | | $ | 480,564 |
| | |
$
|
431,585
|
|
GAAP gross margin
| | |
| 47.9 | % | | |
|
48.4
|
%
| | |
| 47.0 | % | | |
|
47.5
|
%
|
Non-GAAP gross margin
| | |
| 52.2 | % | | |
|
52.1
|
%
| | |
| 51.1 | % | | |
|
51.3
|
%
| | | | | | | | | | | | |
| Reconciliation of non-GAAP operating income
and margin | | | | | | | | | | | | |
GAAP operating income
| | | $ | 38,927 | | | |
$
|
44,347
| | | | $ | 152,492 | | | |
$
|
162,758
| |
Non-GAAP adjustments:
| | | | | | | | | | | | |
Add: Write-downs of acquisition-related deferred revenue
| | | | 952 | | | | |
124
| | | | | 4,000 | | | | |
663
| |
Add: Amortization of acquired leases
| | | | 100 | | | | |
111
| | | | | 426 | | | | |
444
| |
Add: Share-based compensation expense
| | | | 14,774 | | | | |
9,980
| | | | | 52,740 | | | | |
37,348
| |
Add: Employer portion of payroll tax related to employee stock
transactions
| | | | 4 | | | | |
418
| | | | | 1,412 | | | | |
1,102
| |
Add: Amortization of acquired software
| | | | 5,969 | | | | |
5,443
| | | | | 22,972 | | | | |
21,686
| |
Add: Amortization of customer and trade name intangibles
| | |
| 4,475 |
| | |
|
3,365
|
| | |
| 16,217 |
| | |
|
13,381
|
|
Non-GAAP adjustments subtotal
| | |
| 26,274 |
| | |
|
19,441
|
| | |
| 97,767 |
| | |
|
74,624
|
|
Non-GAAP operating income
| | | $ | 65,201 |
| | |
$
|
63,788
|
| | | $ | 250,259 |
| | |
$
|
237,382
|
|
GAAP operating margin
| | |
| 16.1 | % | | |
|
20.4
|
%
| | |
| 16.3 | % | | |
|
19.4
|
%
|
Non-GAAP operating margin
| | |
| 26.8 | % | | |
|
29.3
|
%
| | |
| 26.6 | % | | |
|
28.2
|
%
| | | | | | | | | | | | | | | | | | | | |
|
|
|
|
| |
|
| | TYLER TECHNOLOGIES, INC. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Amounts in thousands, except per share data) (Unaudited) | | | | | | | |
| | | | |
Three Months Ended December 31,
| | |
Twelve Months Ended December 31,
| | | | | 2018 |
|
|
2017
| | | 2018 |
|
|
2017
| | | | |
| | |
As Adjusted
| | |
| | |
As Adjusted
| Reconciliation of non-GAAP net income and
earnings per share | | | | | | | | | | | | | |
GAAP net income
| | | | $ | 31,552 | | | |
$
|
66,196
| | | | $ | 147,462 | | | |
$
|
169,571
| |
Non-GAAP adjustments:
| | | | | | | | | | | | | |
Add: Total non-GAAP adjustments to operating income
| | | | | 26,274 | | | | |
19,441
| | | | | 97,767 | | | | |
74,624
| |
Less: Tax impact related to non-GAAP adjustments
| | | |
| (7,376 | ) | | |
|
(43,581
|
)
| | |
| (52,464 | ) | | |
|
(89,440
|
)
|
Non-GAAP net income
| | | | $ | 50,450 |
| | |
$
|
42,056
|
| | | $ | 192,765 |
| | |
$
|
154,755
|
|
GAAP earnings per diluted share
| | | | $ | 0.79 |
| | |
$
|
1.68
|
| | | $ | 3.68 |
| | |
$
|
4.32
|
|
Non-GAAP earnings per diluted share
| | | | $ | 1.26 |
| | |
$
|
1.06
|
| | | $ | 4.80 |
| | |
$
|
3.94
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Detail of share-based compensation expense | | | | | | | | | | | | | |
Cost of software services, maintenance and subscriptions
| | | | $ | 3,948 | | | |
$
|
2,541
| | | | $ | 13,588 | | | |
$
|
9,415
| |
Selling, general and administrative expenses
| | | |
| 10,826 |
| | |
|
7,439
|
| | |
| 39,152 |
| | |
|
27,933
|
|
Total share-based compensation expense
| | | | $ | 14,774 |
| | |
$
|
9,980
|
| | | $ | 52,740 |
| | |
$
|
37,348
|
| | | | | | | | | | | | | |
| Reconciliation of EBITDA and adjusted EBITDA | | | | | | | | | | | | | |
GAAP net income
| | | | $ | 31,552 | | | |
$
|
66,196
| | | | $ | 147,462 | | | |
$
|
169,571
| |
Amortization of customer and trade name intangibles
| | | | | 4,475 | | | | |
3,365
| | | | | 16,217 | | | | |
13,381
| |
Depreciation and other amortization included in
| | | | | | | | | | | | | |
cost of revenues, SG&A and other expenses
| | | | | 11,580 | | | | |
10,330
| | | | | 45,052 | | | | |
40,013
| |
Interest expense included in other expense, net
| | | | | 193 | | | | |
191
| | | | | 763 | | | | |
762
| |
Income tax provision (benefit)
| | | |
| 8,555 |
| | |
|
(20,935
|
)
| | |
| 8,408 |
| | |
|
(6,115
|
)
|
EBITDA
| | | | $ | 56,355 | | | |
$
|
59,147
| | | | $ | 217,902 | | | |
$
|
217,612
| |
Write-downs of acquisition-related deferred revenue
| | | | | 952 | | | | |
124
| | | | | 4,000 | | | | |
663
| |
Share-based compensation expense
| | | |
| 14,774 |
| | |
|
9,980
|
| | |
| 52,740 |
| | |
|
37,348
|
|
Adjusted EBITDA
| | | | $ | 72,081 |
| | |
$
|
69,251
|
| | | $ | 274,642 |
| | |
$
|
255,623
|
|
Adjusted EBITDA margin
| | | |
| 29.7 | % | | |
|
31.8
|
%
| | |
| 29.2 | % | | |
|
30.4
|
%
| | | | | | | | | | | | | | | | | | | | | |
|
|
|
| |
|
| | TYLER TECHNOLOGIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands)
(Unaudited) | | | | | | |
| | | | December 31, 2018 | | |
December 31, 2017
| | | |
| | |
As Adjusted
|
ASSETS
| | | | | | | | | | | | |
|
Current assets:
| | | | | | |
Cash and cash equivalents
| | | $ | 134,279 | | |
$
|
185,926
|
Accounts receivable, net
| | | | 298,912 | | | |
246,188
|
Current investments and other assets
| | | | 80,970 | | | |
77,362
|
Income tax receivable
| | |
| 4,697 | | |
|
11,339
|
Total current assets
| | | | 518,858 | | | |
520,815
| | | | | | |
|
Accounts receivable, long-term portion
| | | | 16,020 | | | |
12,107
|
Property and equipment, net
| | | | 155,177 | | | |
152,315
| | | | | | |
|
Other assets:
| | | | | | |
Goodwill
| | | | 753,718 | | | |
657,987
|
Other intangibles, net
| | | | 276,852 | | | |
229,617
|
Non-current investments and other assets
| | |
| 70,338 | | |
|
38,510
| | | | | | |
|
Total assets
| | | $ | 1,790,963 | | |
$
|
1,611,351
| | | | | | |
| | | | | | |
|
LIABILITIES AND SHAREHOLDERS' EQUITY
| | | | | | | | | | | | |
|
Current liabilities:
| | | | | | |
Accounts payable and accrued liabilities
| | | $ | 73,390 | | |
$
|
72,849
|
Deferred revenue
| | |
| 350,512 | | |
|
298,613
|
Total current liabilities
| | | | 423,902 | | | |
371,462
| | | | | | |
|
Revolving line of credit
| | | | - | | | |
-
|
Deferred revenue, long-term
| | | | 424 | | | |
1,274
|
Deferred income taxes
| | | | 41,791 | | | |
46,879
|
Shareholders' equity
| | |
| 1,324,846 | | |
|
1,191,736
| | | | | | |
|
Total liabilities and shareholders' equity
| | | $ | 1,790,963 | | |
$
|
1,611,351
| | | | | | |
|
|
|
|
| |
|
| | TYLER TECHNOLOGIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands) (Unaudited) | | | | | | | |
| | | | |
Three Months Ended December 31,
| | |
Twelve Months Ended December 31,
| | | | | 2018 |
|
|
2017
| | | 2018 |
|
|
2017
| | | | |
| | |
As Adjusted
| | |
| | |
As Adjusted
|
Cash flows from operating activities:
| | | | | | | | | | | | | |
Net income
| | | | $ | 31,552 | | | |
$
|
66,196
| | | | $ | 147,462 | | | |
$
|
169,571
| |
Adjustments to reconcile net income to cash
| | | | | | | | | | | | | |
provided by operations:
| | | | | | | | | | | | | |
Depreciation and amortization
| | | | | 16,132 | | | | |
13,695
| | | | | 61,759 | | | | |
53,395
| |
Share-based compensation expense
| | | | | 14,774 | | | | |
9,980
| | | | | 52,740 | | | | |
37,348
| |
Provision for losses - accounts receivable
| | | | | 2,286 | | | | |
4,110
| | | | | 2,286 | | | | |
4,110
| |
Deferred income tax benefit
| | | | | (35 | ) | | | |
(19,959
|
)
| | | | (5,069 | ) | | | |
(33,664
|
)
|
Changes in operating assets and liabilities,
| | | | | | | | | | | | | |
exclusive of effects of acquired companies
| | | |
| 6,141 |
| | |
|
(20,648
|
)
| | |
| (8,975 | ) | | |
|
(35,005
|
)
|
Net cash provided by operating activities
| | | |
| 70,850 |
| | |
|
53,374
|
| | |
| 250,203 |
| | |
|
195,755
|
| | | | | | | | | | | | | |
|
Cash flows from investing activities:
| | | | | | | | | | | | | |
Cost of acquisitions, net of cash acquired
| | | | | (10,785 | ) | | | |
(1,583
|
)
| | | | (178,093 | ) | | | |
(11,344
|
)
|
Purchase of marketable security investments
| | | | | (22,987 | ) | | | |
(9,874
|
)
| | | | (115,625 | ) | | | |
(59,779
|
)
|
Proceeds from marketable security investments
| | | | | 20,997 | | | | |
7,611
| | | | | 81,205 | | | | |
28,786
| |
Additions to property and equipment
| | | | | (3,964 | ) | | | |
(5,323
|
)
| | | | (27,424 | ) | | | |
(43,057
|
)
|
Decrease (increase) in other
| | | |
| 825 |
| | |
|
(419
|
)
| | |
| 1,682 |
| | |
|
(1
|
)
|
Net cash used by investing activities
| | | |
| (15,914 | ) | | |
|
(9,588
|
)
| | |
| (238,255 | ) | | |
|
(85,395
|
)
| | | | | | | | | | | | | |
|
Cash flows from financing activities:
| | | | | | | | | | | | | |
Decrease in net borrowings on revolving line of credit
| | | | | - | | | | |
-
| | | | | - | | | | |
(10,000
|
)
|
Purchase of treasury shares
| | | | | (146,553 | ) | | | |
(442
|
)
| | | | (146,553 | ) | | | |
(7,474
|
)
|
Contributions from employee stock purchase plan
| | | | | 2,073 | | | | |
1,702
| | | | | 8,051 | | | | |
7,044
| |
Proceeds from exercise of stock options
| | | |
| 4,371 |
| | |
|
16,277
|
| | |
| 74,907 |
| | |
|
49,845
|
|
Net cash (used) provided by financing activities
| | | |
| (140,109 | ) | | |
|
17,537
|
| | |
| (63,595 | ) | | |
|
39,415
|
| | | | | | | | | | | | | |
|
Net (decrease) increase in net cash and cash equivalents
| | | | | (85,173 | ) | | | |
61,323
| | | | | (51,647 | ) | | | |
149,775
| |
Cash and cash equivalents at beginning of period
| | | |
| 219,452 |
| | |
|
124,603
|
| | |
| 185,926 |
| | |
|
36,151
|
| | | | | | | | | | | | | |
|
Cash and cash equivalents at end of period
| | | | $ | 134,279 |
| | |
$
|
185,926
|
| | | $ | 134,279 |
| | |
$
|
185,926
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190220005916/en/
Brian K. Miller Executive Vice President - CFO Tyler
Technologies, Inc. 972-713-3720 brian.miller@tylertech.com |
Feb 20, 2019 |
|