Interactive Data Corporation announce fourth quarter and full year results

This is the company's seventh full reporting period since the completion of the Interactive Data (now known as FT Interactive Data) merger with Data Broadcasting Corporation on March 1, 2000.

On a pro forma basis, reported as if the merged businesses had been combined on January 1, 2000 and excluding the financial results from the Federal News Service and MarketWatch.com businesses that were sold in January 2001, revenues for the fourth quarter of 2001 increased by 2.1% to $86.5 million from $84.7 million in the comparable period in 2000. Excluding the effects of foreign exchange, revenues increased by 3.2%. Pro forma EBITDA for the fourth quarter of 2001 increased by 22% to $32.3 million, or $0.36 per diluted share, from $26.4 million, or $0.29 per share, for the same period in 2000. EBITDA in the quarter was increased by a one-time recovery of previously written-off debt from Bridge Information Systems Inc. following the completion of its liquidation process. Without this increase of approximately $2 million, EBITDA for the quarter would have grown by 15%. The company reported a net loss of $1.0 million, or $0.01 per share, for the quarter compared to a loss of $1.9 million, or $0.02 per share, in last year's fourth quarter.

Stuart Clark, president and chief executive officer, commented, "In a period characterized by economic slowdown and uncertainty following the events of September 11th, we are pleased to deliver another quarter of strong performance. Our institutional business, which accounted for 88% of our fourth quarter revenues, continued to be extremely resilient. This segment grew by 8.1% before the effects of foreign exchange. Within this segment, growth came primarily from FT Interactive Data, our data content business, which continued to achieve strong levels of new sales across all geographic regions. Mitigating this, we saw a slowdown in sales at our CMS BondEdge division in the US, where revenue growth slowed to just over 3%. We believe this reduction in growth to be primarily attributable to cost-cutting across financial institutions, which, when linked to some business fall-out from the events of September 11th, caused cancellations generally to rise slightly.

"Revenues from our retail segment, which accounted for 12% of our fourth quarter revenues, decreased by 23%, primarily due to the continuing and expected decline in our legacy broadcast business. Nonetheless, this segment was again EBITDA positive, as it has been throughout the year. This is an impressive achievement, driven by an aggressive control of costs that did not weaken our efforts to improve eSignal's competitive standing. In fact, we are pleased to report that net subscriber levels to our retail products increased during each of the quarter's three months, and that the growth has continued into 2002.

"Looking at the prospects for 2002, we continue to be encouraged by the outlook," Mr. Clark said. "We started the year with a valuable addition to our FT Interactive Data business - the acquisition of the Merrill Lynch Securities Pricing Service. This acquisition, completed on January 31st, is expected to bring approximately $20 million of new revenues and a small positive EBITDA contribution this year, with a much more significant contribution to EBITDA in 2003. In addition, we are focused on making further progress in our European expansion efforts and in other new product initiatives. We launched the BondEdge analytics product in Europe in October 2001, and I am pleased to report that we signed up two customers in the UK for the product in the past few days. Our addition of European real-time streaming financial market data to eSignal will also boost our prospects in the region.

"Another important development for 2002 is our introduction of TurboFeed(TM) to FT Interactive Data's clients. TurboFeed, whose advanced technology meets the needs of clients looking for intra-day and real-time pricing data, is a strategic extension of our existing product line. Bringing this product to our institutional customers is the start of our initiatives to meet the needs of clients as they prepare for Straight Through Processing and settling trades within one day, beginning in mid-2005."

Mr. Clark concluded, "We are pleased that, following our efforts to simplify the structure of our business, the imminent accounting changes affecting the treatment of goodwill will enable us to simplify our income statement through the removal of the majority of amortization. This will make our operating income look more sensible in relation to the wonderful cash generation Interactive Data Corporation consistently delivers."

Financial Results Actual

For the quarter ended December 31, 2001, Interactive Data reported revenues of $86.5 million versus $85.7 million for the fourth quarter of 2000. EBITDA totaled $32.3 million, or $0.36 per diluted share, for the fourth quarter of 2001 versus $26.5 million, or $0.29 per share, for the same period in 2000. The company reported a net loss of $1.0 million, or $0.01 per share, versus a loss of $102.2 million, or $1.12 per share, in the fourth quarter of 2000. Interactive Data's results for the fourth quarter of 2000 included a net one-time charge after tax of approximately $90 million resulting from the disposal of its stake in MarketWatch.com, Inc.

Interactive Data's effective tax rate increased to 85% for the full year versus 65% in the first nine months of 2001 as a result of fourth quarter adjustments related to a shift in the mix of taxable income from foreign sourced income to the US, which has a higher effective tax rate, as well as a one-time $600,000 charge related to finalizing an IRS audit in the fourth quarter. Due to the elimination of goodwill amortization, which distorts the effective tax rate on the company's financial statement, the company expects to have a more normalized tax rate in 2002 of 38-40%.

For the twelve months ended December 31, 2001, Interactive Data reported revenues totaling $340.0 million versus $314.1 million for 2000. EBITDA totaled $114.3 million, or $1.24 per diluted share, compared to $92.5 million, or $1.08 per share, last year. Net income totaled $4.3 million, or $0.05 per share, versus a loss of $143.5 million, or $1.68 per share, for 2000.

Pro Forma

On a pro forma basis, reported as if the merged businesses had been combined on January 1, 2000 and excluding the financial results from the Federal News Service and MarketWatch.com businesses that were sold in January 2001, for the year ended December 31, 2001, revenues increased 4.2% to $340.0 million from $326.4 million in the same period in 2000. Excluding the effects of foreign exchange, revenues increased by 5.3%. EBITDA increased 23% to $114.3 million from $92.9 million in 2000. Net income for 2001 totaled $4.3 million, or $0.05 per share, compared to a loss of $20.6 million, or $0.23 per share, for 2000.

As of December 31, 2001, the company had no outstanding debt and had cash of $118.5 million.


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 Twelve Months EndedDecember December--------------- ----------------2001 2000 2001 2000--------------- ---------------- REVENUESInstitutional 76,090 72,225 294,440 269,943Retail-eSignal 8,650 9,148 35,392 27,427-Broadcast 1,761 4,287 10,170 16,768--------------- ----------------Total 86,501 85,660 340,002 314,138 COSTS & EXPENSESCost of Services 25,929 26,963 103,618 105,524Selling, general & administrative 28,319 32,165 122,066 116,091--------------- ---------------- EBITDA 32,253 26,532 114,318 92,523Depreciation 3,044 3,606 12,251 12,671Amortization 16,281 20,745 76,414 78,415--------------- ----------------Total costs & expenses 73,573 83,479 314,349 312,701--------------- ---------------- INCOME (LOSS) FROM OPERATIONS 12,928 2,181 25,653 1,437Equity in loss fromMarketwatch.com, Inc. - (21,453) - (67,229)Write off of Trademark (4,528) (4,528)Loss on disposal of stakein MarketWatch.com, Inc. (141,844) (141,844)Other income, net 499 579 2,882 1,170--------------- ---------------- INCOME (LOSS) BEFORE INCOME TAXES 13,427 (165,065) 28,535 (210,994) Provision (Benefit) for IncomeTaxes 14,465 (62,837) 24,223 (67,522)--------------- ---------------- NET INCOME (LOSS) (1,038)(102,228) 4,312 (143,472) NET INCOME (LOSS) PER SHAREBasic (0.01) (1.12) 0.05 (1.68)Diluted (0.01) (1.12) 0.05 (1.68) WEIGHTED AVERAGE COMMON SHARES OUTSTANDINGBasic 89,827 91,202 90,844 85,560Diluted 89,827 91,202 92,510 85,560INTERACTIVE DATA CORPORATION AND SUBSIDIARIESPROFORMA SELECTED FINANCIAL DATA(Unaudited)(In thousands except per share data)Three Months Ended Twelve Months EndedDecember December-------------------- -----------------------2001 2000 Change 2001 2000 Change-------------------- ----------------------- REVENUESInstitutional 76,090 71,313 6.7% 294,440 272,340 8.1%Retail-eSignal 8,650 9,148 -5.4% 35,392 32,551 8.7%-Broadcast 1,761 4,287 -58.9% 10,170 21,547 -52.8%-------------------- -----------------------Total 86,501 84,748 2.1% 340,002 326,438 4.2% COSTS & EXPENSESCost of Services 25,929 26,365 -1.7% 103,618 110,929 -6.6%Selling, general &administrative 28,319 31,953 -11.4% 122,066 122,581 -0.4%-------------------- ----------------------- EBITDA 32,253 26,430 22.0% 114,318 92,928 23.0%Depreciation 3,044 3,583 -15.0% 12,251 13,619 -10.0%Amortization 16,281 20,745 -21.5% 76,414 84,389 -9.5%-------------------- -----------------------Total costs &expenses 73,573 82,646 -11.0% 314,349 331,518 -5.2%-------------------- ----------------------- INCOME (LOSS) FROMOPERATIONS 12,928 2,102 515.0% 25,653 (5,080) 605.0%Equity in loss fromMarketwatch.com, Inc. - - - -Other income, net 499 579 -13.8% 2,882 1,538 87.4%-------------------- ----------------------- INCOME (LOSS) BEFOREINCOME TAXES 13,427 2,681 400.8% 28,535 (3,542) 905.6% Provision (Benefit)for Income Taxes 14,465 4,629 212.5% 24,223 17,066 41.9%-------------------- ----------------------- NET INCOME (LOSS) (1,038) (1,948) 46.7% 4,312 (20,608) 120.9% NET INCOME (LOSS) PERSHAREBasic (0.01) (0.02) 0.05 (0.23)Diluted (0.01) (0.02) 0.05 (0.23) WEIGHTED AVERAGECOMMON SHARESOUTSTANDINGBasic 89,827 91,202 90,844 91,202Diluted 89,827 91,202 92,510 91,202 
Conference Call Information

Interactive Data Corporation's management will conduct a conference call Monday, February 11th at 11:00 a.m. Eastern Time to discuss the fourth quarter 2001 results and additional matters. The dial-in number for the call is 212-896-6077; 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 until Monday, February 18, 2002. To access the replay, please dial 800-633-8284 and request reservation #20233561.

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) a decline in activity levels in the securities markets, which could lower demand for the Company's products and services; (iv) consolidation of financial services, both within an industry and across industries, which could lower demand for the Company's products and services; (v) 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; (vi) prolonged outage at one of the Company's data centers; (vii) the acceptance of the Internet as a reliable real-time distribution platform by institutional customers; (viii) the ability of the Company to broaden its subscriber base by adding more individual investors outside of the Company's traditional "active-trader" market; (ix) the potential obsolescence of the Company's services due to the introduction of new technologies; and (x) 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.

 

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