Interactive Data Corporation announces second quarter 2002 earnings

Replay 2nd quarter earnings conference call (audiocast)

Earnings Per Share Rises to $0.15 from $0.01 in the Second Quarter of 2001

Interactive Data Corporation (Nasdaq:IDCO) today announced results for the second quarter ended June 30, 2002. Revenues increased 10.7% to $93.5 million from $84.4 million in the second quarter of 2001. EBITDA increased 15.8% to $32.1 million, or $0.34 per diluted share, from $27.7 million, or $0.30 per diluted share, in the same quarter last year. Net income rose to $14.5 million, or $0.15 per diluted share, from $1.4 million, or $0.01 per diluted share, in last year's same period.

On January 1, 2002, the company adopted Financial Accounting Standard No. 142, "Goodwill and Other Intangible Assets" ("FAS 142"). As a result, the company did not record any goodwill amortization expense in the second quarter of 2002 as compared to $9.3 million in the same period last year.

Stuart Clark, president and chief executive officer, commented, "We are pleased to report such strong results in light of the difficult economic environment that continues to affect many of our customers. Our institutional business increased 15.1% (or 14.3% before the effects of foreign exchange), with most of that growth being driven by our data content business, FT Interactive Data. This division grew 16.1% primarily due to a full quarter of revenues from the Securities Pricing Services (SPS) business that we acquired from Merrill Lynch at the end of January 2002.

Excluding the SPS revenues, our data content business grew 7.5% compared to last year's second quarter. Retail revenues declined 16.7%, or $2.0 million, primarily due to the continued and expected decline in broadcast revenues. As a result of these trends, institutional revenues accounted for just under 90% of the company's total revenues compared to 86.0% of revenues in last year's second quarter.

"Our overall operating expenses rose 8.2% in the second quarter of 2002 compared to the same period in 2001 due to the inclusion of SPS related costs. Excluding those costs, our operating expenses rose just 1.9%. This revenue growth, coupled with strong cost control, caused our EBITDA to increase 15.8%, from $27.7 million in the second quarter of 2001 to $32.1 million in this quarter. Driven by the profitability improvement and the elimination of goodwill expense our earnings per share grew to $0.15 for the second quarter of 2002 versus $0.01 in the same quarter a year ago."

Clark continued, "While market conditions remain difficult, we have concentrated on enhancing the value of our products, which has helped us maintain our 95% plus contract renewal rates. In addition, we have made very good progress on the integration of the SPS business, which continued to deliver the benefits we expected.

"In terms of new products, a key milestone in the second quarter was the implementation of our Fair Value Evaluation service for mutual funds. That service went live in early July and is currently being tested by a number of our mutual fund customers.

"We have previously given guidance for our 2002 financial results as 11-13% revenue growth and 11-15% EBITDA growth, and we continue to expect to achieve those targets, although with six months behind us we now feel we can most likely achieve revenue growth on the lower end of that range and EBITDA growth on the higher end of that range."

Six Months Results

For the six months ended June 30, 2002, Interactive Data reported revenues of $182.9 million versus $168.2 million for the comparable period in 2001, an increase of 8.7%. Operating expenses rose 3.3% or $3.9 million in the same period. As a result, EBITDA rose 20.7% from $52.3 million, or $0.57 per diluted share, to $63.1 million, or $0.67 per diluted share. For the first six months of 2002, net income totaled $27.9 million, or $0.30 per diluted share, versus $1.5 million, or $0.02 per diluted share, in the first six months of 2001.

As of June 30, 2002, Interactive Data Corporation had no outstanding debt and had cash of $98.3 million.

Conference Call Information

Interactive Data Corporation's management will conduct a conference call Thursday (July 25th) at 10:00 a.m. Eastern Time to discuss the second quarter 2002 results and additional matters. The dial-in number for the call is 703-871-3019; no access code is required. Investors and interested parties may also listen to the call via a live web broadcast available through the Investor Relations section of the Company's web site at www.interactivedatacorp.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 through Thursday, August 1, 2002. To access the replay, please dial 703-925-2533, passcode #6069484.

Forward-looking and Cautionary Statements

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and is subject to the safe-harbor created by such Act. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from those contemplated in the forward-looking statements. Such factors include, but are not limited to: (i) the presence of competitors with greater financial resources than the Company's and their strategic response to the Company's services and products; (ii) changes in technology, which could affect the competitiveness of the Company's products and services; (iii) maintaining relationships with key suppliers and providers of market data; (iv) a decline in activity levels in the securities markets, which could lower demand for the Company's products and services; (v) consolidation of financial services, both within an industry and across industries, which could lower demand for the Company's products and services; (vi) the loss of key employees assigned to work associated with the integration of the recently acquired businesses of the Company and other delays in integration; (vii) prolonged outage at one of the Company's data centers; (viii) the acceptance of the Internet as a reliable real-time distribution platform by institutional customers; (ix) the ability of the Company to broaden its subscriber base by adding more individual investors outside of the Company's traditional "active-trader" market; (x) the potential obsolescence of the Company's services due to the introduction of new technologies; and (xi) other trends in competitive or economic conditions affecting the Company's financial condition or results of operations not presently contemplated. The Company undertakes no obligation to update these forward-looking statements.

Notes

About Interactive Data Corporation

Interactive Data Corporation is a leading global provider of securities pricing, financial information, and analytic tools 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.

The company links to most of the world's best-known financial service and software companies for trading, analysis, portfolio management, and valuation.

Interactive Data Corporation is headquartered in Bedford, Massachusetts. Through its branded businesses, FT Interactive Data, CMS BondEdge, and eSignal, Interactive Data Corporation has approximately 1,600 employees in 22 offices in North America, Europe, Asia, and Australia.

Pearson plc (NYSE:PSO), an international media company, whose businesses include the Financial Times Group, Pearson Education, and the Penguin Group, owns approximately 60 percent of Interactive Data Corporation.

 

 

 INTERACTIVE DATA CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)(In thousands except per share data)Three Months Ended Six Months EndedJune 30, June 30,-------------------------------------------------------2002 2001 Change 2002 2001 Change------------------------- ------------------------ REVENUESInstitutional 83,627 72,647 15.1% 162,767 143,732 13.2%RetaileSignal 8,606 9,011 -4.5% 17,424 18,268 -4.6%Broadcast 1,220 2,781 -56.1% 2,704 6,214 -56.5%------------------------ ------------------------------------------------ ------------------------ Total Retail 9,826 11,792 -16.7% 20,128 24,482 -17.8%------------------------ ------------------------ Total Revenues 93,453 84,439 10.7% 182,895 168,214 8.7% COSTS & EXPENSES Cost ofServices 28,759 25,705 11.9% 55,773 52,256 6.7% Selling, general &administrative 32,604 31,013 5.1% 64,065 63,706 0.6%------------------------ ------------------------ EBITDA 32,090 27,721 15.8% 63,057 52,252 20.7%Depreciation 3,676 3,015 21.9% 7,079 6,102 16.0%Amortization 4,746 20,875 -77.3% 10,950 42,340 -74.1%------------------------ ------------------------------------------------ ------------------------Total costs &expenses 69,785 80,608 -13.4% 137,867 164,404 -16.1%------------------------ ------------------------- INCOME FROMOPERATIONS 23,668 3,831 517.8% 45,028 3,810 1081.8%Other income,net 449 791 -43.2% 841 1,449 -42.0%------------------------ ------------------------- INCOME BEFORE INCOMETAXES 24,117 4,622 421.8% 45,869 5,259 772.2% Provision for IncomeTaxes 9,601 3,267 193.9% 17,981 3,747 379.9%------------------------ ------------------------- NET INCOME 14,516 1,355 971.3% 27,888 1,512 1744.4% NET INCOME PER SHAREBasic 0.16 0.01 972.9% 0.31 0.02 1752.3%Diluted 0.15 0.01 947.5% 0.30 0.02 1704.9% WEIGHTED AVERAGE COMMON SHARES OUTSTANDINGBasic 91,116 91,253 -0.2% 90,843 91,232 -0.4%Diluted 94,121 92,032 2.3% 93,832 91,818 2.2% 

 

Contact Information

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Investor Relations Contact:

 

Harriet Fried, 212/838-3777


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Lippert/Heilshorn & Associates, New York

 

Media Contact:

 

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