CCC Information Services Reports Final 1998 Results; Announces New Strategic Investor In InsurQuote.CHICAGO--(BUSINESS WIRE)--March 31, 1999--CCC Information Services See Information Systems. Group Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CCCG CCCG Canadian Conference on Computational Geometry CCCG Climate Change Co-ordinating Group ), the leading provider of business solutions to the automobile automobile, self-propelled vehicle used for travel on land. The term is commonly applied to a four-wheeled vehicle designed to carry two to six passengers and a limited amount of cargo, as contrasted with a truck, which is designed primarily for the transportation of claims industry, previously reported its preliminary 1998 financial results on January January: see month. 28, 1999. Highlights of the release included record revenues of $188.2 million, representing an 18.5% increase over 1997. At that time, CCC CCC A very speculative grade assigned to a debt obligation by a rating agency. Such a rating indicates default or considerable doubt that interest will be paid or principal repaid. Also called Caa. also reported that these were preliminary numbers and the Company would report final results at a later date. The primary reason for revising 1998 preliminary results is the calculation of the impact of applying the equity method of accounting for its investment in InsurQuote Systems Inc. InsurQuote is a leading developer and provider of insurance rating software and information products and services. The Company has finalized See finalization. these calculations which will result in an adjustment to net income of $12.4 million. The Company has also identified an additional $2.7 million in pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern adjustments to net income which arose during the extended closing process, including the settlement in March 1999 of a dispute with a former independent sales representative that arose late in the fourth quarter of 1998. Summary of Non-Cash Accounting Treatment for InsurQuote The Company had accounted for its investment in InsurQuote on the cost method during 1998. In connection with the year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. closing process, this accounting treatment was reviewed and it was determined that the equity method should be applied. This treatment is a non-cash event. Notwithstanding the Company's 19.9% common stock equity share, the Company has recorded 100% of InsurQuote's net losses for the period from the Company's investment, February February: see month. 10, 1998, to December December: see month. 31, 1998. The recording of 100% of InsurQuote's losses was based in part on the Company's $20.0 million investment being the primary source of funding for InsurQuote's operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. during the year. Accordingly, prior quarters have been restated to reflect the investment in InsurQuote on the equity method. As a result, reported net income for quarters ended March 31, 1998, June June: see month. 30, 1998, September September: see month. 30, 1998, and December 31, 1998 have been adjusted to reflect equity losses of InsurQuote of $1.2 million, $3.1 million, $3.2 million and $4.0 million, respectively, and the elimination of other income of $0.1 million, $0.2 million, $0.2 million and $0.4 million respectively. The Company has not recorded any income tax benefit on the InsurQuote losses. At December 31, 1998, the Company's investment in InsurQuote was written down to $8.1 million. InsurQuote Gets New Strategic Partner CCC is pleased to announce that a new strategic partner today invested $20 million in InsurQuote. "We are pleased to have this strategic investor as our new partner in our InsurQuote investment," said Dave Phillips Phil·lips A trademark used for a screw with a head having two intersecting perpendicular slots and for a screwdriver with a tip shaped to fit into these slots. , Chairman and Chief Executive Officer. "This investment further endorses CCC's confidence in the power of InsurQuote's unique technology for both Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the consumers and CCC's insurance clients. The engine is a 32 bit, multi-threaded, multi-processor system capable of processing more than 1,000 rate quotes per second. This powerful technology will enable the CCC and InsurQuote partnership to deliver unique rating tools to insurance companies." As a result of the new investment, CCC's voting equity ownership will fall to 14.9%. If CCC were to convert its preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. and exercise its warrants, its new fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ownership percentage would be 31.8%, down from 37.7%. CCC will continue to record 100% of InsurQuote losses through today. These losses, all to be recorded in the first quarter of 1999, approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. $4.1 million and will leave CCC's investment in InsurQuote at approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $4.0 million at March 31, 1999. As a result of the new investment in InsurQuote, no further losses are currently expected to be recorded by CCC after the first quarter of 1999. The Company plans to discuss the accounting treatment during the next regularly scheduled conference call on April 22, 1999. Other Final Adjustments As part of the extended year-end closing process, CCC identified various issues which represent adjustments of an additional $2.7 million of pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta losses. The adjustments included: - $1.6 million related to a final settlement of a dispute with a former independent sales representative. The dispute arose when the representative relationship ended last November November: see month. as a part of CCC's reevaluation Noun 1. reevaluation - the evaluation of something a second time (or more) rating, valuation, evaluation - an appraisal of the value of something; "he set a high valuation on friendship" of a non-core business. This adjustment amount became quantifiable Quantifiable Can be expressed as a number. The results of quantifiable psychological tests can be translated into numerical values, or scores. Mentioned in: Psychological Tests during settlement discussions, which completed in March, 1999. - $1.1 million which represents adjustments to estimates for employee bonus related to staff retention, as well as costs associated with the previously reported wind-down of the ABRA pilot program. CCC's restated 1998 quarterly fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of are as follows:
----------------------------------------------------------------------
Quarter As Originally Impact of IQ Other Restated
Reported Adjustments Adjustments
----------------------------------------------------------------------
March 31, 1998 .17 (.05) .12
June 30, 1998 .11 (.12) (.01)
September 30, 1998 .11 (.13) (.02)
December 31, 1998 .17 (.19) (.07) (.09)
---------------------------------------- -------- --------------------
---------------------------------------- -------- --------------------
Full Year .56 (.49) (.07) 0.00
---------------------------------------- -------- --------------------
"It is important to realize that a substantial portion of the final adjustments to 1998 earnings reflect the resolution of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. events," stated Mr. Phillips. "As we discussed last summer, CCC continues to focus on its five growth drivers: insurance and autobody claims tools, auto claims outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. services, casualty claims tools, underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. tools, and international claims tools and outsourcing." CCC Information Services Group Inc. is the automotive claims industry's leading provider of business solutions. Connecting people, processes and information, CCC's innovative technology-based capabilities ensure that the right information is always available at the right time and to the right person - to make the right business decision.
CCC Information Services Group Inc.
Condensed Operating Results and Selected Balance Sheet Data
Three Months and Year Ended December 31, 1998
(In thousands, except per share amounts)
Three Months Ended
Condensed Operating Results December 31, 1998
---------------------------
--------------------------------
(Unaudited)
1998 1997
----- -----
Revenues $ 49,283 $ 43,583
Relocation of claims
settlement function - -
Litigation settlement 1,650 -
Other operating expenses 44,078 36,460
------- -------
Operating income 3,555 7,123
Interest expense (132) (33)
Other income, net 63 445
--- ----
Income before income taxes 3,486 7,535
Income tax provision (1,527) (3,017)
------- -------
Net income before minority
interest
and equity losses 1,959 4,518
Minority share in earnings
of subsidiary (15) -
Equity in net loss of
InsurQuote (4,027) -
Equity in net loss of joint
venture (211) -
----- -----
Net income (loss) (2,294) 4,518
Dividends and accretion
on preferred stock 228 (94)
---- ----
Net income (loss) applicable
to common stock $ (2,066) $ 4,424
========= ========
Per Share Data:
Net income (loss)
applicable
to common stock
- Basic $ (0.09) $ 0.18
======== =======
- Diluted $ (0.09) $ 0.18
======== =======
Weighted average
common and common
equivalent shares
outstanding
- Basic 23,972 24,194
======= =======
- Diluted 24,297 25,182
======= =======
Year Ended
Condensed Operating Results December 31, 1998
---------------------------
-------------------------------
1998 1997
----- ----
Revenues $ 188,169 $ 159,106
Relocation of claims
settlement function 1,707 -
Litigation settlement 1,650 -
Other operating expenses 164,813 133,401
-------- -------
Operating income 19,999 25,705
Interest expense (258) (139)
Other income, net 697 1,505
---- -----
Income before income taxes 20,438 27,071
Income tax provision (8,860) (11,239)
------- --------
Net income before minority
interest
and equity losses 11,578 15,832
Minority share in earnings
of subsidiary (1) -
Equity in net loss of
InsurQuote (11,447) -
Equity in net loss of joint
venture (211) -
----- -----
Net income (loss) (81) 15,832
Dividends and accretion
on preferred stock 43 (365)
--- -----
Net income (loss) applicable
to common stock $ (38) $ 15,467
====== ========
Per Share Data:
Net income (loss)
applicable
to common stock
- Basic $ (0.00) $ 0.65
======== ======
- Diluted $ (0.00) $ 0.62
======== ======
Weighted average
common and common
equivalent shares
outstanding
- Basic 24,616 23,807
======= ======
- Diluted 25,188 24,959
======= ======
December 31,
---------------------------
Selected Balance Sheet Data 1998 1997
--------------------------- ----- ----
Total Assets $ 79,018 $ 83,494
Mandatorily redeemable
preferred stock 688 5,054
Stockholders' equity 35,303 45,827
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