CCC Information Services Group Inc. Reports $0.26 EPS From Continuing Operations
CHICAGO--Oct. 22, 2002--CCC Information Services Group Inc. , a leading provider of software and information services to the automotive claims and collision repair industries, today reported net income from continuing operations of $7.0 million, or $0.26 per share, for the third quarter ended September 30, 2002 compared with net income from continuing operations of $1.2 million, or $0.05 per share, in the same quarter of 2001.Included in net income is a $2.0 million benefit, or $0.08 per share, related to research and development tax credits associated with prior tax years. Also included in net income is a pre-tax charge of $0.9 million, or $0.02 per share after-tax, reflecting a delay in subletting excess office space. This charge represents an adjustment to an existing accrual related to this excess office space that was originally recorded during the fourth quarter of 2001. If the company has not sublet this space by September of 2003, it will need to reevaluate this accrual at that time. The lease for this office space expires March 31, 2006. Excluding the $0.08 per share benefit, and the $0.02 per share charge, underlying EPS for the third quarter was $0.20 per share.
Revenue for the quarter grew 2.6% versus the same period a year ago, increasing from $46.6 million in the third quarter of 2001 to $47.8 million for the third quarter of 2002. Excluding the exited international segment, revenues grew 3.2% in the third quarter of 2002 compared to the prior year, rising from $46.3 million to $47.8 million.
Operating income rose to $8.3 million in the third quarter, compared with $3.9 million as reported in the same quarter of 2001. Operating income in the third quarter was $9.2 million, excluding the office space charge. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased to $10.6 million compared with $7.0 million, excluding the exited international segment, as reported in the third quarter a year ago. Excluding the office space charge, EBITDA was $11.5 million, in line with EBITDA for each of the first two quarters.
"We are pleased with the progress we are making against our goals and objectives," said Githesh Ramamurthy, chairman and chief executive officer of CCC Information Services Inc. "During the quarter we generated strong financial results, and worked to build the sales pipelines for our new products that will drive revenue growth in the future."
Revenue for the first nine months of the year grew 2.4% to $143.5 million from $140.1 million a year earlier (growth was 3.6% excluding the exited International segment). Operating profits for the first nine months of the year increased to $26.7 million, up from a loss of $1.3 million for the first nine months a year ago (operating profits for the first nine months of last year, excluding the exited International segment and the restructuring charges, were $5.1 million). Operating profits for the first nine months of the year, excluding the office space charge were $27.6 million.
The company also announced on Monday that it had purchased the Trust Preferred Securities. The securities, issued in February of 2001, were scheduled to mature in February 2006, with a call date of February 2004. The total amount of the purchase was $16.3 million, and was funded with a portion of the company's cash balance. The elimination of the 9% coupon payment, and the accretion expense on the securities, will add approximately $0.04 per share to EPS in 2003. During the fourth quarter of 2002, the company will incur a $2.5 million dollar pre-tax charge, or $0.06 per share after-tax, resulting from the difference between the par value and the accreted value of the securities on the balance sheet at the time of the purchase.
Based on its recent performance, CCC is providing revised guidance for the remainder of 2002. Guidance is as follows:
| -- | Revenue for the fourth quarter should grow in the 1-2% range, as we work closely with our customers to promote adoption of our new products |
| -- | Operating performance for the fourth quarter should approximate the underlying performance during the third quarter |
| -- | The new EBITDA target range, excluding the office space charge, is $45-$46 million for the full year 2002, up from prior guidance of $42-44 million |
| -- | Capital expenditures should total to about $8 million for the full year |
| -- | Finally, the earnings per share target range for the full year is $0.78 to $0.80 per share, up from prior guidance of $0.70 to $0.74 per share for the full year 2002. Please note that this revised range includes: |
| -- | An $0.08 per share benefit from the R&D tax credit |
| -- | A $0.02 per share charge related to the excess office space |
| -- | And a $0.06 per share charge that will be incurred in the fourth quarter due to the Trust Preferred purchase. |
In addition, the company provided the following preliminary guidance for 2003. Please note that this guidance excludes any benefits associated with business development opportunities:
-- Revenue growth in the low to mid-single digit range
-- EBITDA target range of $48 to $52 million
-- Earnings per share target range of $0.88 to $0.94 per share.
Concluded Ramamurthy, "Our financial performance is strong. We are confident in the strength of our products and we are excited about the growth opportunities that lie ahead. As we look to capitalize on these opportunities, we will remain focused on delivering solid, profitable growth."
About CCC
CCC Information Services Group Inc. , headquartered in Chicago, is a leading supplier of advanced software, communications systems, Internet and wireless-enabled technology solutions to the automotive claims and collision repair industries. Its technology-based products and services optimize efficiency throughout the entire claims management supply chain and facilitate communication amongst more than 15,000 collision repair facilities, 350 insurance companies, and a range of industry participants. For more information about CCC Information Services, visit our Web site at www.cccis.com.
This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are subject to the safe harbor provisions of those sections and the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in the Company's filings with the SEC, and that actual results or developments may differ materially from those in the forward-looking statements, and startup businesses are inherently uncertain. Specific factors that might cause actual results to differ from our expectations include, but are not limited to, competition in the automotive claims and collision repair industries, the ability to develop new products and services, the ability to protect trade secrets and proprietary information, the ability to generate the cash flow necessary to meet the Company's obligations, the outcome of certain legal proceedings, and other factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis, judgment, belief or expectation only as of the date hereof. The Company has based these forward-looking statements on information currently available and disclaims any intention or obligation to update or revise any forward-looking statement.
CCC Information Services Group Inc. and Subsidiaries
Consolidated Operating Results
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Year-to-Date Period
September 30, Ended September 30,
-----------------------------------------------
2002 2001 2002 2001
-----------------------------------------------
Revenues:
CCC U.S. $ 47,797 $ 46,328 $143,475 $138,483
CCC International -- 264 -- 1,627
-----------------------------------------------
Net revenue 47,797 46,592 143,475 140,110
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Expenses:
Production and
customer support 6,702 7,225 21,412 25,173
Commissions, royalties
and licenses 2,767 2,528 7,758 7,536
Selling, general
and administrative 19,635 23,120 58,370 69,381
Depreciation and
amortization 2,295 2,895 7,147 9,133
Product development
and programming 7,242 6,973 21,222 24,035
Restructuring charges 869 -- 869 6,199
-----------------------------------------------
Total operating expenses 39,510 42,741 116,778 141,457
-----------------------------------------------
Operating income (loss) 8,287 3,851 26,697 (1,347)
Interest expense (160) (1,145) (556) (3,584)
Other income, net 76 44 286 731
Loss on investment
securities and note -- -- -- (27,595)
CCC Capital Trust minority
interest expense (475) (410) (1,384) (944)
Equity in income (loss)
of ChoiceParts investment 47 (481) (295) (2,152)
-----------------------------------------------
Income (loss) from
continuing operations
before income taxes 7,775 1,859 24,748 (34,891)
Income tax (provision)
benefit (754) (946) (7,215) 17,116
-----------------------------------------------
Income (loss) from
continuing operations
before equity losses 7,021 913 17,533 (17,775)
Equity in net income
(losses) of affiliate -- 259 -- (2,354)
-----------------------------------------------
Income (loss) from
continuing operations 7,021 1,172 17,533 (20,129)
Income (loss) from
discontinued operations,
net of tax 354 -- 354 (6,982)
-----------------------------------------------
Net income(loss) $ 7,375 $ 1,172 $ 17,887 $(27,111)
Per Share Data:
---------------
Income (loss) per
common share -
basic from:
Continuing operations $ 0.27 $ 0.05 $ 0.68 $ (0.92)
Discontinued
operations 0.01 -- 0.01 (0.32)
===============================================
Income (loss) per
common share - basic $ 0.28 $ 0.05 $ 0.69 $ (1.24)
===============================================
Income (loss) per
common share -
diluted from:
Continuing operations $ 0.26 $ 0.05 $ 0.65 $ (0.92)
Discontinued
operations 0.01 -- 0.01 (0.32)
===============================================
Income (loss) per
common share - diluted $ 0.27 $ 0.05 $ 0.66 $ (1.24)
===============================================
Weighted average common
shares outstanding
- Basic 25,873 21,821 25,800 21,794
===============================================
- Diluted 26,904 21,895 26,912 21,794
===============================================
CCC Information Services Group Inc. and Subsidiaries
Consolidated Balance Sheet
(In thousands, except per share amounts)
(Unaudited)
September 30, December 31,
2002 2001
------------- ------------
(Unaudited) (Audited)
ASSETS
Cash $ 24,210 $ 766
Accounts receivable (net of reserves of
$2,404 and $2,288 at September 30, 2002
and December 31, 2001, respectively) 12,514 11,346
Income tax receivable 1,617 --
Current portion deferred income taxes -- 5,322
Other current assets 7,371 6,461
------------ ------------
Total current assets 45,712 23,895
Property and equipment (net of
accumulated depreciation of $32,546 and
$25,376 at September 30, 2002 and
December 31, 2001, respectively) 10,661 13,487
Goodwill 4,896 4,896
Deferred income taxes (net of valuation
allowance of $11,599 and $11,489 at
September 30, 2002 and
December 31, 2001, respectively) 12,590 18,587
Investments 282 302
Other assets 739 1,027
Net assets of discontinued operations 20 --
------------ ------------
Total assets $ 74,900 $ 62,194
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Book overdraft $ -- $ 1,205
Accounts payable 7,269 7,658
Accrued expenses 25,696 28,570
Income taxes payable 4,661 --
Current portion of deferred revenues 5,903 6,297
Other current liabilities 470 421
------------ ------------
Total current liabilities 43,999 44,151
Long-term debt -- 6,500
Deferred revenues 23 66
Other liabilities 3,660 4,382
Net liabilities of
discontinued operations -- 536
------------ ------------
Total liabilities 47,682 55,635
------------ ------------
Company obligated mandatorily
redeemable preferred securities of
subsidiary trust holding solely
company-guaranteed debentures 13,649 13,370
------------ ------------
Common stock ($0.10 par value,
40,000,000 shares authorized, 25,888,981
and 25,503,567 shares outstanding at
September 30, 2002 and December 31, 2001,
respectively) 2,987 2,967
Additional paid-in capital 125,695 124,188
Accumulated deficit (67,700) (85,587)
Accumulated other comprehensive loss (10) (10)
Note receivable from officer (1,200) --
Treasury stock, at cost ($0.10 par
value, 4,094,665 and 4,286,665 common
shares in treasury at September 30, 2002
and December 31, 2001, respectively) (46,203) (48,369)
------------ ------------
Total stockholders' equity (deficit) 13,569 (6,811)
------------ ------------
Total liabilities and stockholders'
equity (deficit) $ 74,900 $ 62,194
============ ============