Ultimate Software Group Inc. (ULTI, Financial) filed Quarterly Report for the period ended 2010-09-30.
Ultimate Software Group Inc. has a market cap of $1.07 billion; its shares were traded at around $42.62 with a P/E ratio of 4262 and P/S ratio of 5.4. ULTI is in the portfolios of Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, RS Investment Management, Ron Baron of Baron Funds, Pioneer Investments.
We had income from discontinued operations, net of income taxes, for the three months ended September 30, 2010 of $77 thousand. Loss from discontinued operations, net of income taxes, for the nine months ended September 30, 2010, was $853 thousand. The income from discontinued operations, net of income taxes, for the three and nine months ended September 30, 2010, was comprised of $103 thousand and $59 thousand, respectively, from subsidiary operations and a $26 thousand loss and a $912 thousand loss, respectively, from the realization of a non-cash foreign currency translation adjustment. The net loss from discontinued operations, net of income taxes, for the three and nine months ended September 30, 2009, was $115 thousand and $260 thousand, respectively. There was no realized foreign currency translation adjustment for the three and nine months ended September 30, 2009.
The $5.3 million net increase was primarily due to cash provided by operations of $16.2 million and excess tax benefits from stock option exercises, net of shares acquired to settle employee tax withholding liabilities of $3.0 million, partially offset by purchases of treasury stock, net of proceeds from the issuance of Common Stock from employee stock option exercises, of $9.0 million and cash purchases of property and equipment (including principal payments on financed equipment) of $5.0 million.
Net cash provided by operating activities for the nine months ended September 30, 2010 of $16.2 million was comparable to that for the nine months ended September 30, 2009. For the nine months ended September 30, 2010 compared with the nine months ended September 30, 2009, accrued expenses and deferred rent increased by $4.0 million, accounts payable increased by $3.1 million and cash provided by operations was higher by $5.8 million. These increases were offset by increased accounts receivable of $7.1 million, excess tax benefits from stock option exercises of $3.7 million and higher prepaid expenses and other current assets of $3.5 million.
Net cash used in investing activities was $78.8 million for the nine months ended September 30, 2010 as compared to $11.1 million for the nine months ended September 30, 2009. The increase of $67.7 million was primarily attributable to an increase of $70.6 million in funds received from and held on behalf of Ultimate s customers using the UltiPro tax filing offering (“UltiPro Tax Filing Customer Funds”), with such funds being invested by us in overnight repurchase agreements backed by U.S. Treasury or U.S. Government Agency securities and an increase of $0.4 million in cash purchases of marketable securities, partially offset by an increase in cash provided from the maturities of marketable securities of $2.6 million and, to a lesser extent, a decrease in capitalized software costs of $0.6 million.
Net cash provided by financing activities was $68.2 million for the nine months ended September 30, 2010 as compared to $0.6 million for the nine months ended September 30, 2009. The $67.6 million increase was primarily related to an increase of $70.6 million in UltiPro Tax Filing Customer Funds received, a $6.2 million increase in proceeds from the issuance of Common Stock from employee and non-employee director stock option exercises and excess tax benefits from stock option exercises of $3.7 million, partially offset by a $12.6 million increase in repurchases of Common Stock pursuant to Ultimate s stock repurchase plan, and, to a lesser extent, an increase in net shares acquired to settle employee tax withholding liabilities of $0.7 million,
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Ultimate Software Group Inc. has a market cap of $1.07 billion; its shares were traded at around $42.62 with a P/E ratio of 4262 and P/S ratio of 5.4. ULTI is in the portfolios of Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, RS Investment Management, Ron Baron of Baron Funds, Pioneer Investments.
Highlight of Business Operations:
Cost of recurring revenues increased 27.0% to $12.6 million for the three months ended September 30, 2010 from $9.9 million for the three months ended September 30, 2009 and 27.3% to $36.0 million for the nine months ended September 30, 2010 from $28.3 million for the nine months ended September 30, 2009. The $2.7 million and $7.7 million increases in cost of recurring revenues for the three and nine months ended September 30, 2010, respectively, were primarily due to increases in both maintenance costs and SaaS costs. Customer support and maintenance costs increased primarily due to higher labor costs commensurate with the growth in Ultimate s recurring revenues customer base. SaaS costs increased principally as a result of increased labor costs to support the growth in sales from our SaaS Offering.We had income from discontinued operations, net of income taxes, for the three months ended September 30, 2010 of $77 thousand. Loss from discontinued operations, net of income taxes, for the nine months ended September 30, 2010, was $853 thousand. The income from discontinued operations, net of income taxes, for the three and nine months ended September 30, 2010, was comprised of $103 thousand and $59 thousand, respectively, from subsidiary operations and a $26 thousand loss and a $912 thousand loss, respectively, from the realization of a non-cash foreign currency translation adjustment. The net loss from discontinued operations, net of income taxes, for the three and nine months ended September 30, 2009, was $115 thousand and $260 thousand, respectively. There was no realized foreign currency translation adjustment for the three and nine months ended September 30, 2009.
The $5.3 million net increase was primarily due to cash provided by operations of $16.2 million and excess tax benefits from stock option exercises, net of shares acquired to settle employee tax withholding liabilities of $3.0 million, partially offset by purchases of treasury stock, net of proceeds from the issuance of Common Stock from employee stock option exercises, of $9.0 million and cash purchases of property and equipment (including principal payments on financed equipment) of $5.0 million.
Net cash provided by operating activities for the nine months ended September 30, 2010 of $16.2 million was comparable to that for the nine months ended September 30, 2009. For the nine months ended September 30, 2010 compared with the nine months ended September 30, 2009, accrued expenses and deferred rent increased by $4.0 million, accounts payable increased by $3.1 million and cash provided by operations was higher by $5.8 million. These increases were offset by increased accounts receivable of $7.1 million, excess tax benefits from stock option exercises of $3.7 million and higher prepaid expenses and other current assets of $3.5 million.
Net cash used in investing activities was $78.8 million for the nine months ended September 30, 2010 as compared to $11.1 million for the nine months ended September 30, 2009. The increase of $67.7 million was primarily attributable to an increase of $70.6 million in funds received from and held on behalf of Ultimate s customers using the UltiPro tax filing offering (“UltiPro Tax Filing Customer Funds”), with such funds being invested by us in overnight repurchase agreements backed by U.S. Treasury or U.S. Government Agency securities and an increase of $0.4 million in cash purchases of marketable securities, partially offset by an increase in cash provided from the maturities of marketable securities of $2.6 million and, to a lesser extent, a decrease in capitalized software costs of $0.6 million.
Net cash provided by financing activities was $68.2 million for the nine months ended September 30, 2010 as compared to $0.6 million for the nine months ended September 30, 2009. The $67.6 million increase was primarily related to an increase of $70.6 million in UltiPro Tax Filing Customer Funds received, a $6.2 million increase in proceeds from the issuance of Common Stock from employee and non-employee director stock option exercises and excess tax benefits from stock option exercises of $3.7 million, partially offset by a $12.6 million increase in repurchases of Common Stock pursuant to Ultimate s stock repurchase plan, and, to a lesser extent, an increase in net shares acquired to settle employee tax withholding liabilities of $0.7 million,
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