Interactive Data Corporation Reports Another Year of Strong Growth


Fourth-quarter Revenues Increase 24.8%; Net Income Rises 6.9%

BEDFORD, Mass.--(BUSINESS WIRE)--Feb. 12, 2004-- Interactive Data Corporation (NYSE: IDC) today reported fourth quarter revenues of $120.4 million, reflecting revenue growth over the comparable period in 2002 of 24.8% (or 21.4% before the effects of foreign exchange). Net income rose 6.9% to $18.2 million, or $0.19 per diluted share, compared with $17.0 million, or $0.18 per diluted share, in last year's same period.

For the full year of 2003, revenues increased by 18.0% to $442.7 million and net income rose by 18.9% to $72.2 million. Earnings per diluted share rose by 16.9% to $0.76.

"Interactive Data Corporation performed strongly again in 2003," said Stuart Clark, president and chief executive officer. "Despite continued difficult market conditions, we achieved very good growth in both revenues and net income and at the same time made significant investment and progress in the integration of both the ComStock and HyperFeed Technologies businesses that we acquired in 2003. As a result of these integration efforts, we incurred expected severance and restructuring charges, which together with other non-recurring costs in the fourth quarter totaled $3.2 million.

"New sales in the fourth quarter remained strong, continuing the positive trend we highlighted last quarter. Our FT Interactive Data and CMS BondEdge divisions in North America were the main beneficiaries of this trend.

"Overall cancellation and downgrade levels decreased in the fourth quarter as compared to the third quarter although they still ran at historically high levels in areas of ComStock's non-institutionally oriented business. Clients remain focused on containing costs but, despite this, renewal rates in our institutionally oriented business remained at or above the 95% level.

"The ComStock business that we acquired in February 2003 met our revenue expectations for 2003 and we have now expanded this area of our real-time business through the purchase of the HyperFeed Technologies customer base in November 2003. The integration of these businesses with our core operations is progressing well and a major milestone in our progress was the build-out of our new 50,000 sq. ft. data center in Boxborough, Massachusetts, which was completed at the beginning of January. This new data center will be the technology hub of our global business and will ultimately enable us to close or downsize other parts of our technology infrastructure.

"As we reported last quarter, our balance sheet and cash position leave us well placed to consider acquisitions and other investment opportunities capable of accelerating the development of our business in the areas of higher value products, relevant adjacent markets and geographic expansion."

Other Fourth Quarter Operating and Financial Highlights

 INTERACTIVE DATA CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSUnaudited(In thousands except per share data)Three MonthsEndedDecember 31-----------------------2003 2002 Change-----------------------SERVICE REVENUES $120,419 $96,458 24.8%COSTS & EXPENSESCost of Services 38,894 28,141 38.2%Selling, general & administrative 43,535 33,329 30.6%Depreciation 4,093 3,787 8.1%Amortization 5,413 3,488 55.2%-----------------------Total costs & expenses 91,935 68,745 33.7%-----------------------INCOME FROM OPERATIONS 28,484 27,713 2.8%Other income, net 189 491 -61.5%----------------------- INCOME BEFORE INCOME TAXES 28,673 28,204 1.7% Provision for Income Taxes 10,454 11,161 -6.3%----------------------- NET INCOME $18,219 $17,043 6.9%NET INCOME PER SHAREBasic $0.20 $0.19 5.3%Diluted $0.19 $0.18 5.6%WEIGHTED AVERAGE COMMON SHARES OUTSTANDINGBasic 92,754 91,572 1.3%Diluted 94,903 93,779 1.2%Twelve MonthsEndedDecember 31-------------------------2003 2002 Change-------------------------SERVICE REVENUES $442,690 $375,015 18.0%COSTS & EXPENSESCost of Services 141,631 110,321 28.4%Selling, general & administrative 149,129 133,225 11.9%Depreciation 16,807 14,500 15.9%Amortization 19,774 18,737 5.5%------------------------Total costs & expenses 327,341 276,783 18.3%------------------------INCOME FROM OPERATIONS 115,349 98,232 17.4%Other income, net 1,100 1,989 -44.7%------------------------ INCOME BEFORE INCOME TAXES 116,449 100,221 16.2% Provision for Income Taxes 44,248 39,488 12.1%------------------------ NET INCOME $72,201 $60,733 18.9%NET INCOME PER SHAREBasic $0.78 $0.67 16.4%Diluted $0.76 $0.65 16.9%WEIGHTED AVERAGE COMMON SHARES OUTSTANDINGBasic 92,319 91,159 1.3%Diluted 94,450 93,730 0.8%INTERACTIVE DATA CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS(In Thousands)December December31, 31,2003 2002------------------ ASSETS UnauditedCurrent Assets: Cash and cash equivalents $131,639 $153,243 Accounts receivable, net 75,730 53,924 Prepaid expenses and other current assets 6,828 5,366 Deferred income taxes 2,879 6,487------------------ Total current assets 217,076 219,020------------------ Property and equipment, net 46,193 36,786 Goodwill 462,588 381,790 Other intangible assets, net 182,305 125,003 Other assets 664 2,628------------------ Total Assets $908,826 $765,227==================LIABILITIES AND STOCKHOLDERS' EQUITYCurrent Liabilities: Accounts payable, trade $9,877 $10,805 Payable to affiliates 1,279 1,789 Accrued liabilities 62,576 52,938 Income taxes payable 12,948 9,235 Deferred revenue 30,336 22,786------------------ Total current liabilities 117,016 97,553 Deferred tax liabilities 27,443 3,305 Other liabilities 1,836 1,626------------------ Total Liabilities 146,295 102,484------------------Stockholders' Equity: Preferred stock - - Common stock 950 937 Additional paid-in capital 800,391 786,470 Treasury stock, at cost (26,980) (25,650) Accumulated deficit (22,197) (94,398) Accumulated other comprehensive income (loss) 10,367 (4,616)------------------ Total Stockholders' Equity 762,531 662,743------------------ Total Liabilities and Stockholders' Equity $908,826 $765,227==================INTERACTIVE DATA CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In Thousands)Twelve MonthsEndedDecember 31,2003 2002------------------Unaudited Cash flows provided by (used in) operatingactivities:Net income $72,201 $60,733 Adjustments to reconcile net income to net cashprovided by operating activities:Depreciation and amortization 36,581 33,237Tax benefit from exercise of stock options 3,776 4,873Deferred income taxes (543) 1,733Other non-cash items, net 1,892 256 Changes in operating assets and liabilities, net (4,353) (16,452)------------------ NET CASH PROVIDED BY OPERATING ACTIVITIES 109,554 84,380Cash flows provided by (used in) investingactivities:Purchase of fixed assets (21,503) (13,561)Acquisition of business (122,336) (48,000)Other investing activities 506 680------------------ NET CASH USED IN INVESTING ACTIVITIES (143,333) (60,881)Cash flows provided by (used in) financingactivities:Purchase of treasury stock (1,330) (1,377)Proceeds from exercise of stock options and employeestock purchase plan 9,925 10,411------------------ NET CASH PROVIDED BY FINANCING ACTIVITIES 8,595 9,034Effect of exchange rate on cash 3,580 2,188------------------ NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (21,604) 34,721 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 153,243 118,522------------------CASH AND CASH EQUIVALENTS AT END OF PERIOD $131,639 $153,243==================

 Reconciliation of Non-GAAP Measures as Required by Regulation GService Revenues before effects of Foreign Exchange: 

We include information regarding revenue growth before the effects of foreign exchange because we believe our revenue performance period to period on a constant dollar basis better reflects actual trends.

 Reconciliation of Non-GAAP Measures as Required by Regulation GEffect of Foreign Exchange - Services Revenues----------------------------------------------($ in Thousands)Q4 2003 Q4 2002 Growth-------- ------- ------Service Revenues 120,419 96,458 24.8%Effect of Foreign Exchange (3,356)----------------------- Service Revenues before Effects of ForeignExchange 117,063 96,458 21.4%

Total Costs & Expenses:

We include information regarding total costs and expenses excluding costs related to the ComStock and HyperFeed acquisitions, the effects of foreign exchange and severance, restructuring and non-recurring charges because we believe our core costs and expenses on a constant dollar basis better reflect actual trends.

 Reconciliation of Non-GAAP Measures as Required by Regulation GEffects of ComStock & HyperFeed Costs, Foreign Exchange &Restructuring Related Charges-----------------------------------------------($ in Thousands)Q4 2003 Q4 2002 Growth-------- ------- ------ Total Costs & Expenses 91,935 68,745 33.7%Total Costs & Expenses - ComStock &HyperFeed (18,378)Effect of Foreign Exchange (2,722)-------- ------- ------Total Costs & Expense before ComStock &HyperFeed Costs & Effects ofForeign Exchange 70,835 68,745 3.0%Severance, Restructuring & non-recurringCharges (3,222)-------- ------- ------ Total Costs & Expense before ComStock &HyperFeed Costs, Effects of ForeignExchange & Severance,Restructuring & non-recurring Charges 67,613 68,745 -1.6%

 CONTACT: Interactive Data CorporationSteven Crane, 781-687-8309Steven.Crane@ftid.comMedia Contact:Jeanne Murphy, 781-687-8548Jeanne.Murphy@ftid.comorLippert/Heilshorn & Assoc.Harriet Fried, 212-838-3777hfried@lhai.comSOURCE: Interactive Data Corporation