ChoicePoint Reports Strong Third Quarter Results.ALPHARETTA, Ga.--(BUSINESS WIRE)--Oct. 20, 1998--ChoicePoint 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 results for the third quarter of 1998, showing continued strong financial performance from the property and casualty insurance market and increasing contribution from business and government markets. Comparable revenues increased 11.2% over prior year to $101.9 million for the third quarter, and 11.7% to $303.1 million for the nine months year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. . 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. was $16.2 million for the third quarter, and $47.7 million for the nine months, an increase of 2.7% and 9.6% respectively over the prior year. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: were 15.9% for the third quarter, and 15.7% for the nine months. Key financial measures for the Company, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become and Economic Value Added Economic value added (EVA) A method of performance evaluation that adjusts accounting performance for investors' required return on investment. Suppose a division produces a 12% return on capital invested. (EVA Eva to marry winner of singing contest. [Ger. Opera: Wagner, Meistersinger, Westerman, 225–228] See : Prize 1. Eva - A toy ALGOL-like language used in "Formal Specification of Programming Languages: A Panoramic Primer", F.G. ), continued to show strong results. EBITDA was $24.1 million and $69.8 million for the third quarter and the first nine months of 1998, respectively, while EVA results were $2.0 million for the third quarter, and $6.8 million for the first nine months of 1998. Net income increased 5.3% over the prior year for the third quarter, and 16.8% over the prior year for the first nine months. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.55 for the third quarter was up 5.8% over pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma 1997. "With one full year of results in as an independent company, I'm pleased by the consecutive quarters of strong performance for ChoicePoint. We started out with a challenge to strategically reposition our business for long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. accelerated growth, and have made significant progress while maintaining record financial results," commented Derek Smith Derek Smith can refer to any of the following people
Revenue from Property and Casualty Insurance Services increased $7.2 million, or 15.0%, from $48.3 million in the third quarter of 1997 to $55.5 million in the third quarter of 1998. The results were driven by continued strong unit performance in personal lines products. Excluding the effect of the sale of the paramedical par·a·med·i·cal adj. 1. Of, relating to, or being a person trained to give emergency medical treatment or assist medical professionals. 2. examinations business in December 1997, revenue from Life and Health Insurance Services decreased $1.4 million, or 6.5%, from $20.8 million in the third quarter of 1997 to $19.4 million in the third quarter of 1998. The decrease compared to the prior year was primarily due to unit decline in traditional field-based life and health inspection products, and was consistent with the run-rate decrease in the first six months of this year. Revenue from Business and Government Services increased $4.4 million, or 19.7%, from $22.5 million in the third quarter of 1997 to $27.0 million in the third quarter of 1998. Revenues increased in the majority of product lines within this market, with incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. revenue from acquisitions made since the third quarter 1997 contributing $3.3 million of the increase. Operating income for the third quarter of 1998 was $16.2 million as compared to $15.8 million in the third quarter of 1997. Included in operating results were $1.8 million of expenses for the third quarter 1998, and $0.3 million for the third quarter 1997, incurred to modify existing computer systems and applications to address the Year 2000 issue. Year 2000 expenses were $3.0 million for the first nine months of 1998, and $0.8 million for the first nine months of 1997. Operating margins were 15.9% in the third quarter of 1998 primarily as a result of strong revenue performance in property and casualty personal lines. Operating margin for the first nine months of 1998 was 15.7%. Chief Financial Officer Doug Curling curling, winter sport, similar in principle to bowls and quoits (see horseshoe pitching), played on an ice court by teams of four. Each player hurls a squat, circular stone—weighing 38 lb (17. commented, "I feel good about our strategic and financial progress this quarter. We were able to show operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. improvement over prior year, despite continuing revenue decline and cost pressures in our field-based personal lines offerings. At the same time, we have several important strategic activities in process and are very focused on completing the business retooling initiatives we set out to achieve post-spinoff." Net income for the third quarter of 1998 was $8.2 million, an increase of 5.3% from the third quarter of 1997. ChoicePoint is the leading provider of intelligent information to help businesses, governments and individuals better understand with whom they do business. Through the identification, retrieval, storage, analysis and delivery of data, ChoicePoint helps their customers make better, more timely and more informed business decisions. The Company serves the risk management information needs of the property and casualty insurance market, the life and health market, and the business and government markets, including Fortune 1000 corporations, asset-based lenders and professional service providers, and local, state and federal governments. For more information about ChoicePoint financial results, products and services and current events, visit the Company's web site at www.choicepointinc.com. NOTE TO EDITORS: The Company undertakes no obligation to publicly release any revisions to any forward-looking statement 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. contained herein to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or occurring after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of unanticipated events. The Company's actual results may differ materially from those projected in forward-looking statements made by, or on behalf of, the Company. -0-
ChoicePoint Inc.
Financial Highlights
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
(In thousands, except per 1998 1997 1998 1997
share data and percentages)
Property and Casualty
revenue $ 55,498 $ 48,272 $167,181 $142,171
Life and Health
revenue(a) 19,434 35,690 59,830 110,621
Business and Government
revenue 26,955 22,527 76,128 65,172
Total operating revenue 101,887 106,489 303,139 317,964
Operating income 16,242 15,810 47,736 43,567
Interest expense 1,801 1,674 5,271 4,915
Income before income taxes 14,441 14,136 42,465 38,652
Provision for income taxes 6,253 6,358 18,387 18,033
Net income $ 8,188 $ 7,778 $ 24,078 $ 20,619
Effective tax rates 43.3% 45.0% 43.3% 46.7%
Earnings per share-basic $ .57 $ 1.65
Weighted average shares-
basic 14,474 14,575
Earnings per share-
diluted $ .55 $ 1.60
Weighted average shares-
diluted 14,851 15,029
Pro forma earnings per
share-basic(b) $ .53 $ 1.38
Pro forma weighted average
shares-basic(b) 14,584 14,584
Pro forma earnings per share-
diluted(b) $ .52 $ 1.36
Pro forma weighted average
shares-diluted(b) 14,852 14,852
EBITDA(c) $ 24,069 $ 22,803 $ 69,844 $ 63,967
(a) In December, 1997, ChoicePoint sold its paramedical examination
business. Revenue from this business was $14,901,000 for the
three months ended September 30, 1997, and $46,472,000 for the
nine months ended September 30, 1997.
(b) Pro forma earnings per share data has been presented since the
companies that comprise ChoicePoint were majority-owned
subsidiaries of Equifax or one of its affiliates and were
recapitalized as part of the spinoff. The pro forma earnings per
share present the consolidated results of ChoicePoint assuming
that the transactions contemplated by the spinoff had been
completed as of the beginning of 1997. The basic and diluted shares
on August 7, 1997, the date of the spinoff, were used for the
1997 pro forma earnings per share data.
(c) EBITDA represents income before taxes, plus depreciation and
amortization and interest expense. 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.
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