Data Broadcasting Reports 34% Increase in 2000 Pro Forma EBITDA to $93.4 Million
Integration of Financial Times Interactive Data and Muller Data with DBC Completed
BEDFORD, MA - Data Broadcasting Corporation (NASDAQ NM: DBCC) (DBC), a leading source of securities pricing, financial information and analytic tools to global institutional, professional and individual investors, today announced results for the fourth quarter and full year ended December 31, 2000. This is the Company's third full reporting period since the completion of its merger with Financial Times Interactive Data (FTID, formerly Financial Times Asset Management).
On a proforma basis, reported as if the DBC and FTID businesses had been combined on January 1, 1999, revenues for 2000 totaled $330.5 million, a 6% increase from 1999. Proforma EBITDA for the same period totaled $93.4 million, or $1.02 per share, a 34% increase from 1999.
Stuart Clark, president and chief executive officer, commented, "We are very pleased with the Company's progress in this first year of the merged business. Prior to the merger, we acquired Muller Data, a leading supplier of fixed income pricing data since 1971. Seven months later, DBC merged with FTID. The past year has thus been devoted to integrating our businesses and refining their focus on the most promising areas of opportunity. Our financial results indicate how successfully this process has been proceeding. In the proxy issued in connection with the merger, we stated that we expected the newly merged company to generate revenues of over $320 million and annual cash flow (EBITDA) of over $70 million. In fact, we substantially exceeded these targets, generating pro forma annual revenues of $330 million and annual EBITDA of $93.4 million.
Mr. Clark continued, "These results, which reflect the Company's strength in the institutional arena, were especially impressive given the slowdown in growth of the Company's eSignal product. The retail segment of our business, which accounts for approximately 16% of the Company's revenues, was impacted in 2000 by the sharp decline in the Nasdaq stock market and by customers who, as anticipated, have been migrating from broadcast to the internet as the platform of choice. Through new products and services, we are continuing to enhance this segment of our business and are moving closer to our goal of becoming the leading one-stop service provider to active online traders."
Mr. Clark added, "As previously announced, our first post-merger objective, which was to streamline and simplify DBC's activities to focus on our institutional and retail businesses, has now been essentially completed with the sale of our MarketWatch position and the subsequent sale in January of Federal News Service (FNS). Although the MarketWatch transaction entailed a net one-time charge after tax of approximately $90 million in the fourth quarter, going forward in 2001 the sale removes the equity loss and amortization associated with that investment and, as a result, we expect the Company's income before taxes to return to profitability."
Mr. Clark concluded, "During the past three months, our core institutional business, which provides the essential data and tools that the world's leading financial institutions need to value and manage their portfolios, process securities transactions and perform essential securities administration functions, contributed another strong quarter. The Company's leadership position in this marketplace helps us deliver consistent growth and excellent cash flow. Our business pipeline, a heavily qualified indicator of future business, looks very healthy as we head into 2001. Historically, our institutional business has been more resilient than most businesses to economic downturns."
Financial Results
For the year ended December 31, 2000, the Company reported revenues of $314.1 million versus $189.0 million for 1999. Results for the two periods are not comparable due to DBC's merger with FTID on March 1, 2000, which is being accounted for as a reverse merger. EBITDA totaled $92.5 million for 2000 versus $56.2 million for 1999. After giving effect to a pre-tax loss of $67.2 million from the Company's equity stake in MarketWatch.com, the impairment charge of $141.8 million related to the disposal of the MarketWatch.com shares and the $4.5 million write-off of a trademark no longer used, DBC reported a net loss of $143.5 million, or $1.68 per share.
For the three months ended December 31, 2000, DBC reported total revenues of $85.7 million versus $56.1 million for the same period in 1999, which was prior to the DBC/FTID merger. EBITDA for the fourth quarter of 2000 totaled $26.5 million, or $0.29 per share, versus $13.6 million, or $0.24 per share, a year ago. After giving effect to a pre-tax loss of $21.5 million from the Company's equity stake in MarketWatch.com, the previously described impairment charge of $141.8 million and the $4.5 million trademark write-off, DBC reported a net loss of $102.2 million, or $1.12 per share, versus a net loss of $2.1 million, or $0.04 per share, for the same period in 1999. Although MarketWatch.com's losses significantly impacted DBC's earnings per share during the quarter, they did not adversely impact its cash flow.
On a proforma basis, revenues rose 6% to $85.7 million for the fourth quarter ended December 31, 2000 versus $80.9 million for the same period in 1999. EBITDA rose by 59% to $26.5 million from $16.7 million a year earlier. The proforma income from operations was $2.2 million in the fourth quarter of 2000, excluding nonrecurring items, compared to a loss of $10.1 million the previous year.
Per share results for the current fourth quarter are calculated on 62% more weighted average shares outstanding than in the comparable period in 1999, and per share results for the full year are calculated on 52% more weighted average shares outstanding than in 1999, primarily reflecting the issuance of 56.4 million shares in conjunction with the merger.
Because DBC owned more than 20% but less than 50% of MarketWatch.com, the Company's results for the fourth quarter and full year include MarketWatch.com's net losses in accordance with equity accounting rules. Although these losses had a significant negative impact on DBC's earnings per share during the quarter and year, these losses did not adversely impact DBC's cash flow. The sale of the Company's interest in MarketWatch will significantly simplify DBC's income statement in 2001 and thereafter.
Revenue for the quarter and the year ended December 31, 2000 reflects the application of SEC Staff Accounting Bulletin 101 (SAB 101), which reduced revenue and cost of sales by $1.9 million and $7.7 million, respectively, but had no impact on net income.
Conference Call Information
Data Broadcasting Corporation's management will conduct a conference call today at 11:00 a.m. Eastern Time to discuss the fourth quarter 2000 and year-end results. The dial-in number for the call is 212-896-6134. Investors and interested parties may listen to the call via a live web broadcast available through the Investor Relations section of the Company's web site at www.dbc.com and through www.StreetEvents.com. To listen, please register and download audio software at the site at least 15 minutes prior to the call. A replay will be available on both web sites shortly after the call. In addition, a telephone replay will be available for seven days beginning at 1:00 p.m. ET on February 8th. To access the replay, please dial 800-633-8284 or 858-812-6440 and request reservation #17769690.
About Data Broadcasting Corporation
Data Broadcasting Corporation is a leading global provider of financial and business information to institutional and individual investors. The Company supplies time sensitive pricing, dividend, corporate action and descriptive information for more than 3.5 million securities traded around the world, including hard-to-value unlisted fixed income instruments. At the core of the business are its extensive database expertise and technology resources.
DBC delivers real-time, end-of-day and historically archived data to customers through a variety of products featuring Internet, dedicated line, satellite and dial-up delivery protocols. Through a broad range of partnerships and alliances, the Company provides links to most of the world's best-known financial service and software companies for trading, analysis, portfolio management and valuation.
DBC, with approximately 1,700 employees, is headquartered in Bedford, Massachusetts and has more than 20 offices in North America, Europe, Asia and Australia, including the world's key financial centers of New York, London and Tokyo. Pearson plc (NYSE: PSO), an international media company, whose businesses include the Financial Times Group, Pearson Education, and the Penguin Group, is a 60% shareholder in DBC.
Forward-looking and cautionary statements
Matters discussed in this release include forward-looking statements that involve risks and uncertainties, and actual results may be materially different. Factors that could cause actual results to differ include the response of competitors to the Company's new services, acceptance of the Internet as a valid real-time distribution platform by institutional customers, activity levels in the securities markets and other risk factors listed in the Company's 10-K and 10-Q reports to the Securities and Exchange Commission.
| Three Months Ended Dec 31 | Twelve Months Ended Dec 31 | |||
|---|---|---|---|---|
| 2000 | 1999 | 2000 | 1999 | |
| REVENUES | ||||
| Institutional | 73,166 | 56,145 | 269,943 | 188,956 |
| Retail - eSignal | 9,062 | 27,427 | ||
| Retail - Broadcast | 3,432 | 16,768 | ||
| Total | 85,660 | 56,145 | 314,138 | 188,956 |
COSTS & EXPENSES | ||||
| Cost of Services | 26,963 | 17,068 | 105,524 | 55,031 |
| Selling, general & administrative | 32,165 | 25,480 | 116,091 | 77,743 |
| EBITDA | 26,532 | 13,597 | 92,523 | 56,182 |
| Depreciation | 3,606 | 2,380 | 12,671 | 6,681 |
| Amortization | 20,745 | 11,762 | 78,415 | 31,897 |
| Total costs & expenses | 83,479 | 56,690 | 312,701 | 171,352 |
| INCOME (LOSS) FROM OPERATIONS | 2,181 | (545) | 1,437 | 17,604 |
| Equity inloss from MarketWatch.com, Inc. | (21,453) | (67,229) | ||
| Loss on disposal of stake of MarketWatch.com, Inc. | (141,844) | (141,844) | ||
| Write off of Trademark | (4,528) | (4,528) | ||
| Other income, net | 579 | (299) | 1,170 | 241 |
| INCOME (LOSS) BEFORE INCOME TAXES | (165,065) | (844) | (210,994) | 17,845 |
| Provision (Benefit) for Income Taxes | (62,837) | 1,269 | (67,522) | 11,648 |
| NET INCOME (LOSS) | (102,228) | (2,113) | (143,472) | 6,197 |
NET INCOME (LOSS) PER SHARE | ||||
| Basic | (1.12) | (0.04) | (1.68) | 0.11 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||
| Basic | 91,202 | 56,424 | 85,560 | 56,424 |
| Three Months Ended Dec 31 | Twelve Months Ended Dec 31 | |||||
|---|---|---|---|---|---|---|
| 2000 | 1999 | Change (%) | 2000 | 1999 | Change (%) | |
REVENUES | ||||||
| Institutional | 73,166 | 69,020 | 6% | 276,361 | 258,217 | 7% |
| Retail | ||||||
| - eSignal | 9,062 | 4,123 | 120% | 32,551 | 13,400 | 143% |
| - Broadcast | 3,432 | 7,791 | (56%) | 21,547 | 39,641 | -46% |
| Total | 85,660 | 80,934 | 6% | 330,459 | 311,258 | 6% |
COSTS & EXPENSES | ||||||
| Cost of Services | 26,963 | 26,532 | 2% | 113,592 | 105,466 | 8% |
| Selling, general & administrative | 32,165 | 37,686 | (15%) | 123,472 | 136,226 | (9%) |
| EBITDA | 26,532 | 16,716 | 59% | 93,395 | 69,566 | 34% |
| Depreciation | 3,606 | 3,199 | 13% | 13,739 | 13,924 | (1%) |
| Amortization | 20,745 | 23,570 | (12%) | 84,389 | 88,539 | (5%) |
| Total costs & expenses | 83,479 | 90,987 | (8%) | 335,192 | 344,155 | (3%) |
| INCOME (LOSS) FROM OPERATIONS | 2,181 | (10,053 | 122% | (4,733) | (32,897 | 86% |
| Equity in operating loss from MarketWatch.com, Inc. | (21,453) | (19,402) | (11%) | (79,543) | (69,041 | (15%) |
| Loss on disposal of stake of MarketWatch.com, Inc. | (141,844) | (141,844) | ||||
| Write off of Trademark | (4,528) | (4,528) | ||||
| Other income, net | 579 | (193 | (400%) | 1,538 | 1,450 | 6% |
| INCOME (LOSS) BEFORE INCOME TAXES | (165,065) | (29,648) | (457%) | (229,110) | (100,488) | (128%) |
| Provision (Benefit) for Income Taxes | (62,837) | (14,976) | (320%) | (73,623) | (27,624) | (167%) |
| NET INCOME (LOSS) | (102,228) | (14,672) | (597%) | (155,487) | (72,864) | |
NET INCOME (LOSS) PER SHARE | ||||||
| Basic | (1.12) | (0.16) | (1.70) | (0.80) | ||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||||||
| Basic | 91,202 | 91,202 | 91,202 | 91,202 | ||
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