CoStar Group, Inc. Announces Second Quarter 2002 Results; Company Reports Continued Positive Trend in Earnings.Business Editors BETHESDA Bethesda, city, United States Bethesda, uninc. city (1990 pop. 62,936), Montgomery co., W central Md., an affluent residential and commercial suburb of Washington, D.C. The area was settled in the late 17th cent. , Md.--(BUSINESS WIRE)--July 23, 2002 CoStar Group CoStar Group, Inc. (NASDAQ: CSGP) is a leading provider of information services to commercial real estate professionals in the United States and the United Kingdom. CoStar's suite of services offers customers access via the Internet to the most comprehensive database of , Inc. (Nasdaq:CSGP CSGP Combat Support Group (USAF squadron type) CSGP Computer Systems Group ), the leading provider of information services See Information Systems. to the U.S. commercial real estate industry, reported its eighth consecutive quarter of earnings improvement since the completion of its national platform in the second quarter of 2000.
Year 2001-2002 Quarterly Results
($'s in millions, except per share data)
2001 2002
------------------------------- --------------
Q1 Q2 Q3 Q4 Q1 Q2
------------------------------- --------------
Revenues $17.4 $18.1 $18.4 $18.6 $19.1 $19.5
EBITDA (3.7) (1.4) 0.2 1.3 1.3 1.4
Pro forma
net income
(loss) (4.6) (2.7) (0.9) 0.2 0.2 0.3
Pro forma
net income
(loss) per
share (0.29) (0.17) (0.06) 0.01 0.01 0.02
Net income
(loss) (7.6) (5.9) (4.0) (2.6) (1.6) (1.3)
Net income
(loss) per
share (0.49) (0.38) (0.26) (0.17) (0.10) (0.08)
The 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 net income for the second quarter of 2002, which excludes purchase amortization and the related income tax benefit, was $256,000, or $0.02 per share, an improvement over a pro forma loss of $(2.7) million or $(0.17) per share in the second quarter of 2001. In addition, 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 (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.
Revenues for the second quarter were $19.5 million, an increase of $1.5 million or 8.1 percent when compared to the second quarter of 2001. Revenues increased sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen by 2.5 percent over the first quarter of 2002. CoStar Group has reported revenue increases every quarter since its initial public offering in June June: see month. 1998. As of June 30, 2002, the Company had $42.1 million in cash, cash equivalents and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments, an increase of $440,000 from March 31, 2002. "Gross leasing activity, the principal revenue driver for commercial real estate brokers, is off more than 33 percent from its peak, yet our revenue grew 8 percent year over year," stated CoStar Group President & 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. Andrew C. Florance. "We continue to make progress in this very difficult operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. because our products are mission critical and have proven their value in helping brokers and owners generate revenue while saving time and money." "We have been able to improve gross margin percentages by more than 7% and reduce operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. by more than $6.6 million, or 19 percent during the first half of 2002 compared to the same period in 2001. These results are contributing to the improvement in both EBITDA and pro forma profit," he continued. "The 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. opportunity remains exceptional, and we are continuing to invest in our sales infrastructure and technology to ensure we are correctly positioned when market conditions improve," he continued. The Company had 81 account executives on June 30, 2002, an increase of 25 percent from March 31, 2002. In addition, the Company continues to secure endorsements from leading commercial real estate organizations. Year to date, CoStar has signed multi-year, multi-market renewal agreements with major national clients representing an aggregate value in excess of $16.5 million. In addition, the General Services Administration The General Services Administration (GSA) was established by section 101 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C.A. § 751). The GSA sets policy for and manages government property and records. Office of Portfolio Management signed a national agreement for CoStar Property(R) and CoStar COMPS Comps Another term for "same store sales," which helps investors determine how well a company's brand is doing and how the stores are increasing revenue. Notes: For example, you might hear that Wal-Mart's comps increased 9% last quarter. (R). "The major players in commercial real estate have recognized CoStar as the industry's information standard and have committed to long-term agreements," Florance stated. "For the third quarter, we continue to expect our revenues to grow approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 2 percent sequentially and we expect pro forma net income of approximately $.02 per share," stated Frank A. Carchedi, CoStar's Chief Financial Officer.
Financial Highlights
CoStar Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
For the For the
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
(unaudited) (unaudited)
Revenues $19,539 $18,073 $38,600 $35,427
Cost of revenues (a) 6,937 7,516 14,033 15,506
------- ------- ------- -------
Gross Margin 12,602 10,557 24,567 19,921
Operating expenses:
Selling and
marketing 5,565 5,944 11,234 12,853
Software
development 1,385 1,357 2,782 2,586
General and
administrative 6,235 7,659 12,102 15,360
Purchase
amortization 898 1,907 1,791 3,697
------- ------- ------- -------
14,083 16,867 27,909 34,496
------- ------- ------- -------
Loss from
operations (b) (1,481) (6,310) (3,342) (14,575)
Other income, net 214 374 453 949
------- ------- ------- -------
Net loss before
income taxes (1,267) (5,936) (2,889) (13,626)
Income tax benefit 0 41 0 82
------- ------- ------- -------
Net loss $(1,267) $(5,895) $(2,889) $(13,544)
======= ======= ======= =======
Net loss per share $ (0.08) $ (0.38) $ (0.18) $ (0.87)
======= ======= ======= =======
Pro forma net income
(loss) (c) $ 256 $(2,700) $ 481 $ (7,266)
======= ======= ======= =======
Pro forma net income
(loss) per share $ 0.02 $ (0.17) $ 0.03 $ (0.47)
======= ======= ======= =======
Weighted average
common shares 15,742 15,610 15,730 15,592
======= ======= ======= =======
(a) Includes purchase amortization of $625 and $1,329 for the
three month periods and $1,579 and $2,663 for the six month
periods ended June 30, 2002 and 2001, respectively
(b) Includes depreciation and other amortization of $1,329 and
$1,629 for the three month periods and $2,680 and $3,083 for
the six month periods ended June 30, 2002 and 2001,
respectively
(c) Pro forma net income (loss) excludes purchase amortization and
the related tax benefit.
CoStar Group, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
June 30, March 31, December 31,
2002 2002 2001
(unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 29,843 $ 31,154 $ 30,746
Short-term investments 12,240 10,489 11,256
Accounts receivable, net 6,391 6,282 5,983
Prepaid and other current
assets 380 530 957
------- ------- -------
Total current assets 48,854 48,455 48,942
Property and equipment net 11,067 11,085 11,876
Intangible and other assets,
net 59,024 60,340 62,471
Deposits 281 325 357
------- ------- -------
Total assets $ 119,226 $ 120,205 $ 123,646
======= ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and
accrued expenses $ 9,224 $ 8,884 $ 11,095
Deferred revenue 4,508 4,843 4,532
------- ------- -------
Total current liabilities 13,732 13,727 15,627
Stockholders' equity 105,494 106,478 108,019
------- ------- -------
Total liabilities and
stockholders' equity $ 119,226 $ 120,205 $ 123,646
======= ======= =======
Management will conduct a conference call to discuss earnings results for the quarter ended June 30, 2002, at 11:00 am ET, Wednesday Wednesday: see week. , July July: see month. 24, 2002. This conference call will be broadcast live over the 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 at www.costar.com/corporate/investor. If you would like to join by telephone, please call (888) 688-0419 within the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. or (706) 634-0964 outside the United States. A replay of the conference call will be available two hours after the live call concludes through midnight on August 1, 2002. The replay telephone number is (800) 642-1687 within the United States or (706) 645-9291 outside the United States. Refer to conference ID 4602876. The replay will also be available over the Internet through midnight on August 1, 2002. About CoStar Group, Inc. Headquartered in Bethesda, MD, CoStar Group, Inc. (Nasdaq:CSGP), is the leading provider of information services to the U.S. commercial real estate industry. CoStar's suite of products offers customers access to the most comprehensive, verified ver·i·fy tr.v. ver·i·fied, ver·i·fy·ing, ver·i·fies 1. To prove the truth of by presentation of evidence or testimony; substantiate. 2. database of commercial real estate information in 50 U.S. markets. The company has approximately 800 employees and contractors in 29 offices nationally, including the industry's largest professional research organization. This news release includes "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. ," which involve many risks and uncertainties that could cause actual results to differ materially from these statements. Factors that could cause or contribute to such differences include, but are not limited to, successful adoption of the Company's products, competition, changes or consolidations in the commercial real estate industry, the economy, managerial execution, development of CoStar's sales force, renewal rates, data quality, employee retention, and the Company's ability to control costs. More information about potential factors that could cause actual results to differ materially include, but are not limited to, those stated in CoStar's Form 10-Q Form 10-Q See 10-Q. for the quarter ended March 31, 2002 under the heading "Risk Factors". In addition to these statements, there can be no assurance that CoStar's revenues will grow at the rates specified spec·i·fy tr.v. spec·i·fied, spec·i·fy·ing, spec·i·fies 1. To state explicitly or in detail: specified the amount needed. 2. To include in a specification. 3. herein, that CoStar will grow during the current economic climate, or that CoStar's third quarter pro forma net income will be as stated in this press release. All forward-looking statements are based on information available to CoStar on 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" , and CoStar assumes no obligation to update such statements. |
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