Exhibit 99.1
EARNINGS RELEASE AND ATTACHMENTS
1550 Peachtree Street, N.W. Atlanta, Georgia 30309 |
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NEWS RELEASE |
Contact: |
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Jeff Dodge Investor Relations (404) 885-8804 jeff.dodge@equifax.com |
David Rubinger Media Relations (404) 885-8555 david.rubinger@equifax.com |
Equifax Reports Record First Quarter Revenue of $314 million
and Earnings Per Share of 38 Cents
Atlanta, April 22, 2004Equifax Inc. (NYSE: EFX) today reported record revenue of $314 million in the first quarter of 2004, an increase of 4 percent over the first quarter of 2003. Net income from continuing operations was $51 million, up 13 percent. Earnings per share from continuing operations jumped 15 percent to 38 cents, exceeding analysts' average estimate.
"Equifax is off to an outstanding start in 2004," said Thomas F. Chapman, Equifax chairman and CEO. "We continue to execute our growth strategy and deliver exceptional results. Personal Solutions, formerly Consumer Direct, delivered record-setting revenues and profits. Within our North American business, we are growing and increasing our share with our largest customers while recording major new wins. Small business credit information produced record revenue as well, as we further integrate analytics into our offerings. And our businesses in Europe and Latin America had one of their strongest quarters ever for growth and profitability."
Highlights for the quarter...
Teleconference
Equifax's quarterly teleconference to discuss results will be held today at 9 a.m. (EDT). The live audio Webcast of the speakers' presentations will be available at www.equifax.com. Please note that Microsoft Media Player is required to access the Webcast. This can be downloaded from www.microsoft.com/windows/mediaplayer.
Equifax has presented in this press release and will discuss during the teleconference certain non-GAAP financial measures as defined by the Securities and Exchange Commission. As required by SEC rules, a reconciliation of such non-GAAP financial measures to the most comparable GAAP measures is provided in the "Common Questions & Answers (Unaudited)" portion of this press release. This information can also be found under the heading "Non-GAAP Financial Measures" in the Investor Center on the company's website at www.equifax.com.
About Equifax
Equifax Inc. is a global leader in turning information into intelligence. For businesses, Equifax provides faster and easier ways to find, approve and market to the appropriate customers. For consumers, Equifax offers easier, instantaneous ways to buy products or services and better insight into and management of their personal credit.
Equifax. Information that Empowers.
Statements in this press release that relate to Equifax's future plans, objectives, expectations, performance, events and the like may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Future events, risks and uncertainties, individually or in the aggregate, could cause our actual results to differ materially from those expressed or implied in these forward-looking statements. Those factors include, but are not limited to, changes in worldwide and U.S. economic conditions that materially impact consumer spending and consumer debt, changes in demand for the Company's products and services, risks associated with the integration of acquisitions and other investments, changes in laws governing our business, and certain other factors discussed under the caption "Risk Factors" in the Management's Discussion and Analysis section of the Company's annual report on Form 10-K for the year ended December 31, 2003, and in our other filings with the Securities and Exchange Commission. Equifax assumes no obligation to update any forward-looking statements to reflect events that occur or circumstances that exist after the date on which they were made.
EQUIFAX INC.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
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THREE MONTHS ENDED MARCH 31, |
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(In millions, except per share amounts) |
2004 |
2003 |
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Operating revenue | $ | 313.6 | $ | 301.6 | |||||
Costs and expenses: | |||||||||
Costs of services | 133.2 | 127.0 | |||||||
Selling, general and administrative expenses | 70.9 | 70.7 | |||||||
Depreciation | 4.2 | 3.9 | |||||||
Amortization | 17.5 | 19.3 | |||||||
Total costs and expenses | 225.8 | 220.9 | |||||||
Operating income | 87.8 | 80.7 | |||||||
Other income, net | 3.3 | 3.8 | |||||||
Minority interests in earnings, net of tax | (0.8 | ) | (0.6 | ) | |||||
Interest expense | (8.4 | ) | (11.7 | ) | |||||
Income from continuing operations before income taxes | 81.9 | 72.2 | |||||||
Provision for income taxes | (30.7 | ) | (27.1 | ) | |||||
Income from continuing operations | 51.2 | 45.1 | |||||||
Discontinued operations: | |||||||||
Loss from discontinued operations, net of income tax benefit of $0.0 in 2004 and $0.0 in 2003 | (0.4 | ) | (1.3 | ) | |||||
Net income | $ | 50.8 | $ | 43.8 | |||||
Per common share (basic): | |||||||||
Income from continuing operations | $ | 0.39 | $ | 0.33 | |||||
Discontinued operations | (0.00 | ) | (0.01 | ) | |||||
Net income | $ | 0.38 | * | 0.32 | |||||
Shares used in computing basic earnings per share | 132.9 | 135.4 | |||||||
Per common share (diluted): | |||||||||
Income from continuing operations | $ | 0.38 | $ | 0.33 | |||||
Discontinued operations | (0.00 | ) | (0.01 | ) | |||||
Net income | $ | 0.38 | $ | 0.32 | |||||
Shares used in computing diluted earnings per share | 135.1 | 136.8 | |||||||
Dividends per common share | $ | 0.020 | $ | 0.020 | |||||
SEGMENT REVENUE & OPERATING INCOME
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THREE MONTHS ENDED MARCH 31, |
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2004 |
2003 |
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Equifax revenue: | |||||||||
North America | |||||||||
Information Services | $ | 173.8 | $ | 163.6 | |||||
Marketing Services | 56.3 | 76.9 | |||||||
Personal Solutions | 25.0 | 14.8 | |||||||
North AmericaTotal | 255.1 | 255.3 | |||||||
Europe | 37.8 | 30.7 | |||||||
Latin America | 20.7 | 15.6 | |||||||
$ | 313.6 | $ | 301.6 | ||||||
Equifax operating income: | |||||||||
North America | |||||||||
Information Services | $ | 74.9 | $ | 72.5 | |||||
Marketing Services | 13.2 | 16.9 | |||||||
Personal Solutions | 6.8 | 1.7 | |||||||
North AmericaTotal | 94.9 | 91.1 | |||||||
Europe | 4.8 | 2.8 | |||||||
Latin America | 3.5 | 2.8 | |||||||
Corporate Expense | (15.4 | ) | (16.0 | ) | |||||
$ | 87.8 | $ | 80.7 | ||||||
EQUIFAX INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
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THREE MONTHS ENDED MARCH 31, |
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(In millions) |
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2004 |
2003 |
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Cash flows from operating activities: | ||||||||||
Net income | $ | 50.8 | $ | 43.8 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities of continuing operations: | ||||||||||
Loss from discontinued operations | 0.4 | 1.3 | ||||||||
Depreciation and amortization | 21.7 | 23.2 | ||||||||
Deferred income taxes | 9.3 | 3.0 | ||||||||
Changes in assets and liabilities, excluding effects of acquisitions: | ||||||||||
Accounts receivable, net | (15.9 | ) | (10.6 | ) | ||||||
Current liabilities, excluding debt | (6.6 | ) | (6.0 | ) | ||||||
Other current assets | (13.2 | ) | 0.8 | |||||||
Other long-term liabilities, excluding debt | 4.5 | (0.2 | ) | |||||||
Other assets | (20.2 | ) | (26.9 | ) | ||||||
Other | 0.8 | | ||||||||
Cash provided by operating activities | 31.6 | 28.4 | ||||||||
Investing activities: | ||||||||||
Additions to property and equipment | (3.3 | ) | (3.8 | ) | ||||||
Additions to other assets, net | (5.2 | ) | (9.0 | ) | ||||||
Acquisitions, net of cash acquired | (5.6 | ) | (12.7 | ) | ||||||
Deferred payments on prior year acquisitions | (1.3 | ) | (0.5 | ) | ||||||
Cash used by investing activities | (15.4 | ) | (26.0 | ) | ||||||
Financing activities: | ||||||||||
Net short-term borrowings | 0.5 | 6.5 | ||||||||
Additions to long-term debt | 4.4 | 5.1 | ||||||||
Payments on long-term debt | | (0.5 | ) | |||||||
Treasury stock purchases | (30.0 | ) | (19.4 | ) | ||||||
Dividends paid | (2.8 | ) | (2.9 | ) | ||||||
Proceeds from exercise of stock options | 12.6 | 2.7 | ||||||||
Other | (2.9 | ) | 0.3 | |||||||
Cash used by financing activities | (18.2 | ) | (8.2 | ) | ||||||
Effect of foreign currency exchange rates on cash | (1.2 | ) | 0.7 | |||||||
Cash provided by discontinued operations | 0.9 | 0.4 | ||||||||
Decrease in cash and cash equivalents | (2.3 | ) | (4.7 | ) | ||||||
Cash and cash equivalents, beginning of year | 39.3 | 30.5 | ||||||||
Cash and cash equivalents, end of period | $ | 37.0 | $ | 25.8 | ||||||
EQUIFAX INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except par values) |
March 31, 2004 |
December 31, 2003 |
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(Unaudited) |
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ASSETS | |||||||||
Current Assets: | |||||||||
Cash and cash equivalents | $ | 37.0 | $ | 39.3 | |||||
Trade accounts receivable, net of allowance for doubtful accounts of $11.4 in 2004 and $11.9 in 2003 | 191.3 | 175.4 | |||||||
Other receivables | 17.1 | 13.3 | |||||||
Deferred income tax assets | 13.5 | 15.5 | |||||||
Prepaid expenses and other current assets | 49.0 | 42.4 | |||||||
Total current assets | 307.9 | 285.9 | |||||||
Property and Equipment: | |||||||||
Land, buildings and improvements | 30.6 | 31.6 | |||||||
Data processing equipment and furniture | 121.5 | 121.7 | |||||||
152.1 | 153.3 | ||||||||
Less accumulated depreciation | 107.6 | 106.3 | |||||||
44.5 | 47.0 | ||||||||
Goodwill, net | 725.1 | 724.3 | |||||||
Purchased Data Files, net | 244.0 | 247.9 | |||||||
Other Assets | 269.1 | 248.2 | |||||||
Assets of Discontinued Operations | | | |||||||
$ | 1,590.6 | $ | 1,553.3 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Current Liabilities: | |||||||||
Short-term debt and current maturities | $ | 165.1 | $ | 160.5 | |||||
Accounts payable | 9.2 | 13.4 | |||||||
Accrued salaries and bonuses | 17.6 | 34.4 | |||||||
Other current liabilities | 166.0 | 146.5 | |||||||
Total current liabilities | 357.9 | 354.8 | |||||||
Long-Term Debt | 660.1 | 663.0 | |||||||
Deferred Revenue | 11.8 | 12.0 | |||||||
Deferred Income Tax Liabilities | 51.6 | 44.3 | |||||||
Other Long-Term Liabilities | 102.3 | 99.1 | |||||||
Liabilities of Discontinued Operations | 9.3 | 8.6 | |||||||
Total liabilities | 1,193.0 | 1,181.8 | |||||||
Commitments and Contingencies | |||||||||
Shareholders' Equity: | |||||||||
Preferred stock, $0.01 par value: Authorized10.0; Issuednone | | | |||||||
Common stock, $1.25 par value: | |||||||||
Authorized shares300.0 | |||||||||
Issued shares180.5 in 2004 and 180.4 in 2003 | |||||||||
Outstanding shares132.5 in 2004 and 132.7 in 2003 | 225.0 | 225.5 | |||||||
Paid-in capital | 433.0 | 432.5 | |||||||
Retained earnings | 1,127.1 | 1,079.0 | |||||||
Accumulated other comprehensive loss | (297.9 | ) | (296.1 | ) | |||||
Treasury stock, at cost, 43.2 shares in 2004 and 42.3 shares in 2003 | (1,025.8 | ) | (995.5 | ) | |||||
Stock held by employee benefits trusts, at cost, 5.7 shares in 2004 and 5.4 shares in 2003 | (63.8 | ) | (73.9 | ) | |||||
Total shareholders' equity | 397.6 | 371.5 | |||||||
$ | 1,590.6 | $ | 1,553.3 | ||||||
Common Questions & Answers (Unaudited)March 31, 2004
(Dollars in millions, except per share amounts)
Equifax North America revenue consists of the following components:
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2004 |
2003 |
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Q1 |
Q1 |
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Equifax North America Revenue: | |||||||
U.S. Consumer and Commercial Services | $ | 132.0 | $ | 126.4 | |||
Mortgage Services | 18.4 | 16.7 | |||||
Canadian Operations | 23.4 | 20.5 | |||||
Total North America Information Services | 173.8 | 163.6 | |||||
Credit Marketing Services | 32.1 | 38.5 | |||||
Direct Marketing Services | 24.2 | 38.4 | |||||
Total Marketing Services | 56.3 | 76.9 | |||||
Personal Solutions | 25.0 | 14.8 | |||||
$ | 255.1 | $ | 255.3 | ||||
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2003 |
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Q4 |
Q3 |
Q2 |
Q1 |
Year |
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Equifax North America: | |||||||||||||||||
Information Services | $ | 61.9 | $ | 80.0 | $ | 83.0 | $ | 72.0 | $ | 296.9 | |||||||
Marketing Services | 19.4 | 7.1 | 4.9 | 17.4 | 48.8 | ||||||||||||
Personal Solutions | 3.4 | 2.3 | 1.8 | 1.7 | 9.2 | ||||||||||||
Restructuring and Other Charges | (30.6 | ) | | | | (30.6 | ) | ||||||||||
North AmericaTotal | 54.1 | 89.4 | 89.7 | 91.1 | 324.3 | ||||||||||||
Operating expenses as a percent of revenue are as follows for continuing operations:
|
Q1 |
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2004 |
2003 |
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Operating Expenses: | |||||
Costs of services | 43 | % | 42 | % | |
Selling, general and administrative | 23 | % | 23 | % | |
Depreciation & amortization | 7 | % | 8 | % | |
73 | % | 73 | % | ||
Depreciation and amortization is as follows:
|
2004 Q1 |
2003 Q1 |
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Depreciation & Amortization: | ||||||
Equifax North America | $ | 14.3 | $ | 16.2 | ||
Equifax Europe | 3.2 | 2.6 | ||||
Equifax Latin America | 1.8 | 1.3 | ||||
General Corporate | 2.4 | 3.1 | ||||
$ | 21.7 | $ | 23.2 | |||
The favorable US dollar impact on revenue and operating income is as follows:
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2004 Revenue |
2004 Operating Income |
2003 Revenue |
2003 Operating Income |
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Q1 |
% |
Q1 |
% |
Q1 |
% |
Q1 |
% |
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Canada | $ | 3.0 | 14 | % | $ | 1.0 | 16 | % | $ | 1.1 | 6 | % | $ | 0.3 | 6 | % | |||||
Europe | 4.9 | 16 | % | 0.7 | 23 | % | 3.9 | 13 | % | 0.3 | 13 | % | |||||||||
Latin America | 3.1 | 20 | % | 0.6 | 23 | % | (5.1 | ) | -26 | % | (1.0 | ) | -23 | % | |||||||
$ | 11.0 | 4 | % | $ | 2.3 | 3 | % | $ | (0.1 | ) | 0 | % | $ | (0.4 | ) | 0 | % | ||||
Cash provided by operating activities was $31.6 million and $28.4 million for the first quarter of 2004 and 2003, espectively.
Total debt was comprised of the following:
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Mar 31 2004 |
Dec 31 2003 |
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Senior Notes and DebenturesLong-term | $ | 648.2 | $ | 648.0 | ||
Senior Notes and DebenturesCurrent | | | ||||
Revolving Credit Facility | 143.2 | 139.0 | ||||
Other Long-term Obligations | 11.9 | 14.9 | ||||
Other Short-term Debt & Current Maturities | 21.9 | 21.6 | ||||
$ | 825.2 | $ | 823.5 | |||
Capital expenditures, excluding property and equipment and other assets purchased in acquisitions, were as follows:
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2004 Q1 |
2003 Q1 |
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Capital Expenditures | $ | 8.5 | $ | 12.8 | ||
As of March 31, 2004, approximately $97.0 million remained authorized for future share repurchases. We invested $30.0 million on open market stock purchases during the first quarter of 2004.
Non-GAAP Financial Measures (Unaudited)
RECONCILIATION OF REVENUE TO REVENUE EXCLUDING MORTGAGE-RELATED AND eMARKETING REVENUE
(In millions) |
Q1 2004 |
Q1 2003 |
Increase |
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Revenue | $ | 313.6 | $ | 301.6 | |||||
Mortgage-related and eMarketing revenue | 57.1 | 72.8 | |||||||
Revenueexcluding Mortgage-related and eMarketing revenue | $ | 256.5 | $ | 228.8 | 12 | % | |||
RECONCILIATION OF NORTH AMERICAN REVENUE TO NORTH AMERICAN REVENUE EXCLUDING MORTGAGE-RELATED AND eMARKETING REVENUE
(In millions) |
Q1 2004 |
Q1 2003 |
Increase |
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RevenueNorth America | $ | 255.1 | $ | 255.3 | ||||||
Mortgage-related and eMarketing revenue | 57.1 | 72.8 | ||||||||
RevenueNorth Americaexcluding Mortgage-related and eMarketing | $ | 198.0 | $ | 182.5 | 9 | % | ||||
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES FOR THE QUARTER ENDED MARCH 31, 2004 AND 2003, TO FREE CASH FLOW FOR THE QUARTER ENDED MARCH 31, 2004 AND 2003
(In millions) |
Q1 2004 |
Q1 2003 |
Increase |
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Cash provided by operating activities for the quarter ended March 31, 2004 and 2003 | $ | 31.6 | $ | 28.4 | |||||||
Adjustments to reconcile cash provided by operating activities for the quarter March 31, 2004 and 2003, to free cash flow for the quarter ended March 31, 2004 and 2003: | |||||||||||
Additions to property and equipment for the three months ended March 31, 2004 and 2003 | (3.3 | ) | (3.8 | ) | |||||||
Additions to other assets, net, for the three months ended March 31, 2004 and 2003 | (5.2 | ) | (9.0 | ) | |||||||
Free cash flow for the quarter ended March 31, 2004 and 2003 | $ | 23.1 | $ | 15.6 | 48 | % | |||||
Notes to our Non-GAAP Financial Measures
Revenue excluding Mortgage-related and eMarketing revenue is a Non-GAAP financial measure and is intended to supplement investors' understanding of our core business activities, unaffected by the fluctuations of the mortgage industry and the performance of our eMarketing business. Revenue excluding Mortgage-related and eMarketing revenue is useful to management and investors for comparative purposes.
We calculate free cash flow by subtracting capital-related expenditures from cash provided by operations. Free cash flow is useful to management and the Company's investors in measuring the cash generated by the Company that is available to be used for business and strategic initiatives. Free cash flow is not a measurement of liquidity under GAAP and should not be considered as an alternative to cash flows from operating activities as a measure of liquidity. In addition, our calculation of free cash flow may be different from the calculation used by other companies and therefore, comparability may be limited.