ChoicePoint Releases Record Third Quarter Results.Business Editors & Insurance Writers ALPHARETTA, Ga.--(BUSINESS WIRE)--Oct. 25, 2000 Revenue up 18.8%, Earnings Per Share Increases 68% ChoicePoint ChoicePoint (NYSE: CPS) is a data aggregation company based in Alpharetta, near Atlanta, Georgia, USA, that acts as a private intelligence service to government and industry. Inc. (NYSE NYSE See: New York Stock Exchange : CPS (1) (Characters Per Second) The measurement of the speed of a serial printer or the speed of a data transfer between hardware devices or over a communications channel. CPS is equivalent to bytes per second. ) today reported record revenue and earnings for the third quarter of 2000. Revenues from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the increased 18.8 % to a record $151.5 million from $127.6 million in the third quarter of 1999. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 50.3% to $32.1 million, while operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: increased to a record 21.2% in the quarter from 16.5% in the third quarter of 1999. Earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
"I am extremely pleased with the team's performance this quarter on all fronts," commented Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Derek V. Smith Derek V. Smith has been the CEO of ChoicePoint since 1997. Previously, Smith was an executive for Equifax. He has a degree from Georgia Tech. Quotes
DBT Dibenzothiophene DBT Drive-By Truckers (band) DBT Design Basis Threat DBT Deutscher Bundestag (German Parliament) Online (DBT) we were able to exceed our integration objectives, and to continue to validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data the strategic direction and business model we have been developing over the last three years. In addition to the strong numbers and integration efforts, we made great progress on several strategic fronts including important new customer relationships, the addition of new talent to the team and the development and launch of new products and strategic partnerships to fuel our continued success. I am proud of our accomplishments and our ability to maintain momentum toward meeting our objectives for the future." Chief Financial Officer Michael Wood Michael Wood refers to:
In places:
Business Results Revenue from Insurance Services increased $8.7 million, or 13.4%, to $73.9 million in the third quarter of 2000 from $65.2 million in the third quarter of 1999. The results were driven by continued strong unit performance in personal lines and the commercial insurance software business, offset partially by a decline in laboratory testing revenue as a result of the continuing effects of Triple X legislation, which was effective January January: see month. 1, 2000. Operating income in Insurance Services was $28.7 million for the third quarter, up from $25.0 million in the third quarter of 1999. Operating profit margin Operating profit margin The ratio of operating profit to net sales. in Insurance Services for the third quarter was 38.8% compared with 38.3% for the third quarter of 1999. Excluding acquisition amortization, operating profit margin for the third quarter of 2000 was 40.4%. Revenue from Business & Government Services increased $15.2 million, or 24.9%, to $76.0 million in the third quarter of 2000 from $60.8 million in the third quarter of 1999. The results were driven by continued strong unit performance in public records, workplace solutions and direct marketing, as well as the acquisition of National Safety Alliance (NSA NSA abbr. National Security Agency Noun 1. NSA - the United States cryptologic organization that coordinates and directs highly specialized activities to protect United States information systems and to produce foreign ) in February February: see month. of 2000. Operating income in Business & Government Services was $14.1 million for the third quarter, up 289% from $3.6 million in the third quarter of 1999. Operating profit margin in Business & Government Services for the third quarter was a record 18.5% compared with 5.9% for the third quarter of 1999 and 14.8% in second quarter 2000, continuing the sequential One after the other in some consecutive order such as by name or number. profit improvement in this segment and primarily as a result of strong revenue growth in public records and workplace solutions, and cost synergies Cost Synergy In the context of mergers, cost synergy is the savings in operating costs expected after two companies, who compliment each other's strengths, join. Notes: The savings in operating costs usually come in the form of laying off employees. realized in public records. Excluding acquisition amortization, Business & Government Services operating profit margin for the third quarter of 2000 was 23.6%. Net income and EPS for the third quarter of 2000, were $17.5 million and $0.42, respectively, compared with $10.3 million and $0.25 for the third quarter of 1999, respectively. The effective tax rate decreased from 45.4% in the third quarter of 1999 to 40.0% in the third quarter of 2000 primarily as a result of continued state income tax initiatives. On May 16, 2000, ChoicePoint completed a merger with DBT. The merger has been accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. transaction and accordingly all current and prior period financial results include the combined results of ChoicePoint and DBT. Webcast ChoicePoint's third quarter results will be discussed in more detail on Thursday Thursday: see week. , October October: see month. 26, 2000, at 8:30am EST EST electroshock therapy. EST abbr. electroshock therapy via teleconference. The live audio webcast of the call will be available on ChoicePoint's website at www.choicepoint.net. There will also be a replay of the call available beginning at approximately 11:30am EST at the same web address. About ChoicePoint ChoicePoint is the leading provider of credential credential verb To determine or verify titles, qualifications, documents, completion of required training, and continuing education, in those persons who function in a professional or official capacity–eg, ER physician, neurosurgeon, etc. Cf Credentials. verification and identification services for making smarter decisions in today's fast paced world. The company serves the information needs of insurance, business, government and individual customers, including Fortune 1000 corporations, asset-based lenders and professional service providers, and federal, state and local governments. ChoicePoint is committed to the responsible use of information and the protection of personal privacy as fundamental planks of the Company's business model. For more information about ChoicePoint visit the Company's web site at www.choicepoint.net. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain written and oral statements made by or on behalf of the Company may constitute "forward-looking statements" as defined under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Words or phrases such as "should result," "are expected to," "we anticipate," "we estimate", "we project," or similar expressions are intended to identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. These risks and uncertainties include, but are not limited to, the following important factors: demand for the Company's services, product development, maintaining acceptable margins, ability to control costs, the impact of federal, state and local regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. on the Company's business, specifically the public records market and privacy matters affecting the Company, the impact of competition and the uncertainty of economic conditions in general. Additional information concerning these risks and uncertainties is contained in the Company's filings with the Securities and Exchange Commission, including the Company's and DBT's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 1999. Readers are cautioned not to place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made, and the Company undertakes no obligation to publicly update these statements based on events that may occur after this date.
ChoicePoint Inc.
Financial Highlights (a)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------------------
(Dollars in thousands,
except per share data) 2000 1999 2000 1999
---- ---- ---- ----
Financial information excluding
merger costs, unusual items and
gain on sale:
Insurance Services revenue $ 73,942 $ 65,223 $222,563 $189,071
Business & Government
Services revenue 75,958 60,814 219,352 173,602
Royalty revenue 1,604 1,533 4,795 4,681
Revenue from divested &
discontinued lines (b) - 2,115 - 7,116
-------- -------- -------- --------
Total revenue $151,504 $129,685 $446,710 $374,470
======== ======== ======== ========
Insurance Services operating
income $ 28,678 $ 24,968 $ 83,492 $ 69,163
Business & Government Services
operating income 14,075 3,615 29,966 12,806
Royalty operating income 953 841 2,855 2,612
Divested and discontinued
lines operating income (b) - 528 - 2,650
Corporate (c) (11,580) (8,583) (31,697) (23,925)
-------- -------- -------- --------
Operating income before merger
costs and unusual items $ 32,126 $ 21,369 $ 84,616 $ 63,306
Interest expense, net 2,938 2,550 9,143 7,116
-------- -------- -------- --------
Income before income taxes 29,188 18,819 75,473 56,190
Provision for income taxes 11,675 8,540 30,557 24,165
-------- -------- -------- --------
Net income $ 17,513 $ 10,279 $ 44,916 $ 32,025
======== ======== ======== ========
Effective tax rate 40.0% 45.4% 40.5% 43.0%
======== ======== ======== ========
Earnings per share -
diluted (d) $ 0.42 $ 0.25 $ 1.08 $ 0.79
======== ======== ======== ========
Cash earnings per share -
diluted (e) $ 0.50 $ 0.33 $ 1.34 $ 1.01
======== ======== ======== ========
Weighted average shares -
diluted (d) 42,092 40,402 41,712 40,610
======== ======== ======== ========
EBITDA (f) $ 45,078 $ 33,430 $124,347 $ 99,210
======== ======== ======== ========
Acquisition amortization
(pre-tax) (g) $ 5,072 $ 4,158 $ 15,072 $ 12,160
======== ======== ======== ========
Acquisition amortization
(after-tax) (g) $ 3,646 $ 3,130 $ 10,934 $ 9,164
======== ======== ======== ========
Financial information including
merger costs, unusual items and
gain on sale:
Total revenue $151,504 $129,685 $446,710 $ 374,470
======== ======== ======== ========
Operating income before merger
costs and unusual items 32,126 21,369 84,616 63,306
Merger costs and unusual items - - 28,949 2,400
-------- -------- -------- --------
Operating income 32,126 21,369 55,667 60,906
Gain on sale - - - 2,513
Interest expense, net 2,938 2,550 9,143 7,116
-------- -------- -------- --------
Pretax income 29,188 18,819 46,524 56,303
Provision for income taxes 11,675 8,540 22,188 24,260
-------- -------- -------- --------
Net income $ 17,513 $ 10,279 $ 24,336 $ 32,043
======== ======== ======== ========
Earnings per share (d) $ 0.42 $ 0.25 $ 0.58 $ 0.79
======== ======== ======== ========
(a) Certain prior period amounts have been restated to include
DBT's results.
(b) Revenue and operating income from divested and discontinued lines
in 1999 consists primarily of the operating results of
ChoicePoint Limited. ChoicePoint Limited, the Company's United
Kingdom-based insurance services division, was sold in January
2000 with no material gain on the sale of the business. In prior
years, ChoicePoint Limited's operating results were included in
the Insurance Services group.
(c) Corporate expenses represent costs of support functions,
incentives and profit sharing that benefit both segments.
(d) Earnings per share and weighted average shares reflect the
2-for-1 stock split paid on November 24, 1999 and the effect of
exchanging each share of DBT for .525 shares of ChoicePoint
common stock.
(e) Cash earnings per share represent earnings per share before
acquisition amortization (after-tax) see note (g). The Company
has included Cash EPS because such data are used by certain
investors to analyze and compare companies.
(f) Earnings before interest, taxes, depreciation and amortization
("EBITDA") is presented not as a substitute for income from
operations, net income or cash flows from operating activities.
The Company has included EBITDA data (which are not a measure of
financial performance under generally accepted accounting
principles) because such data are used by certain investors to
analyze and compare companies on the basis of operating
performance, leverage and liquidity, and to determine a company's
ability to service debt.
(g) Acquisition amortization includes goodwill and other
intangible amortization related to
acquisitions.
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