Interactive Data Corporation Reports 12.1% Increase in EBITDA to $33.4 Million for the Third Quarter of 2002

Earnings Per Share Rise to $0.17 from $0.04 in the Third Quarter of 2001

Interactive Data Corporation (Nasdaq NM: IDCO) today announced results for the third quarter ended September 30, 2002.

Revenues increased 12.2% to $95.7 million from $85.3 million in the third quarter of 2001. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 12.1% to $33.4 million, or $0.36 per diluted share, from $29.8 million, or $0.32 per diluted share, in the same quarter last year. Net income rose to $15.8 million, or $0.17 per diluted share, from $3.8 million, or $0.04 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 third quarter of 2002 as compared to $9.7 million in the same period last year. For the nine month period in 2001, the company recorded $28.3 million in goodwill amortization expense, whereas for the same period this year, the company did not record any goodwill amortization expense.

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 14.9% (or 13.2% before the effects of foreign exchange), with most of that growth being driven by our data content business, FT Interactive Data. This division grew 16.2% with just under half that growth coming from the Securities Pricing Service (SPS) business that we acquired from Merrill Lynch at the end of January 2002.

"Excluding the SPS revenues, our data content business grew 8.7% compared to last year's third quarter. Retail revenues declined 6.9%, or $0.7 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 just under 88% of revenues in last year's third quarter.

"Our overall operating expenses rose 12.2% in the third 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 7.6%. As a result of all the above, our EBITDA increased 12.1%, from $29.8 million in the third quarter of 2001 to $33.4 million in this quarter. Driven by the profitability improvement and the elimination of goodwill expense, our earnings per share grew to $0.17 for the third quarter of 2002 versus $0.04 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 for our core institutional business. In addition, we have made very good progress on the integration of the SPS business, which has continued to deliver the benefits we expected.

"In terms of new products, a key milestone in the third quarter was the implementation of our Fair Value Information Service which is primarily aimed at mutual funds. That service went live in early July and we have now signed up our first two customers. We continue to anticipate this product will live up to our original expectations, although, in this environment, customers are taking longer to make purchase decisions."

 

 

Nine Month Results

For the nine months ended September 30, 2002, Interactive Data reported revenues of $278.6 million versus $253.5 million for the comparable period in 2001, an increase of 9.9%. Operating expenses rose 6.2% or $10.6 million during the same period. As a result, EBITDA rose 17.6% from $82.1 million, or $0.89 per diluted share, to $96.5 million, or $1.03 per diluted share. For the first nine months of 2002, net income totaled $43.7 million, or $0.47 per diluted share, versus $5.4 million, or $0.06 per diluted share, in the first nine months of 2001.

As of September 30, 2002, Interactive Data Corporation had no outstanding debt and had cash of $133.8 million.

 

 

Conference Call Information

Interactive Data Corporation's management will conduct a conference call Thursday (October 24th) at 11:00 a.m. Eastern Time to discuss the third quarter 2002 results and additional matters. The dial-in number for the call is 703-871-3022; 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, October 31, 2002. To access the replay, please dial 703-925-2533 or 888-266-2081, passcode #6215226.

 

 

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) 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.

 

 

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 Nine Months EndedSeptember September----------------------------------------------------2002 2001 Change 2002 2001 Change------------------------- ------------------------ REVENUESInstitutional 85,729 74,618 14.9% 248,496 218,350 13.8%Retail-eSignal 8,957 8,474 5.7% 26,381 26,742 -1.3%-Broadcast 976 2,195 -55.5% 3,680 8,409 -56.2%------------------------- ------------------------Total Retail 9,933 10,669 -6.9% 30,061 35,151 -14.5%------------------------- ------------------------Total Revenues 95,662 85,287 12.2% 278,557 253,501 9.9% COSTS & EXPENSESCost of Services 27,947 25,433 9.9% 83,720 77,689 7.8%Selling, general& administrative 34,291 30,041 14.1% 98,356 93,747 4.9%------------------------- ------------------------ EBITDA 33,424 29,813 12.1% 96,481 82,065 17.6%Depreciation 3,634 3,105 17.0% 10,713 9,207 16.4%Amortization 4,299 17,793 -75.8% 15,249 60,133 -74.6%------------------------- ------------------------Total costs &expenses 70,171 76,372 -8.1% 208,038 240,776 -13.6%------------------------- ------------------------ INCOME FROMOPERATIONS 25,491 8,915 185.9% 70,519 12,725 454.2%Other income, net 657 934 -29.7% 1,498 2,383 -37.1%------------------------- ------------------------ INCOME BEFOREINCOME TAXES 26,148 9,849 165.5% 72,017 15,108 376.7% Provision forIncome Taxes 10,346 6,011 72.1% 28,327 9,758 190.3%------------------------- ------------------------ NET INCOME 15,802 3,838 311.7% 43,690 5,350 716.6% NET INCOME PERSHAREBasic 0.17 0.04 310.4% 0.48 0.06 718.1%Diluted 0.17 0.04 311.9% 0.47 0.06 705.1% WEIGHTED AVERAGECOMMON SHARESOUTSTANDINGBasic 91,376 91,085 0.3% 91,021 91,183 -0.2%Diluted 93,493 93,537 0.0% 93,716 92,391 1.4%
 INTERACTIVE DATA CORPORATIONBALANCE SHEET STATEMENT(In Thousands)September December30, 31,2002 2001----------------------------(Unaudited)---------------------------- ASSETS Current Assets:Cash and cash equivalents $133,776 $118,522Accounts receivable, net 57,499 46,792Receivable from affiliates 127 7Prepaid expenses and other currentassets 4,006 3,152Deferred income taxes 11,487 13,207----------------------------Total current assets 206,895 181,680---------------------------- Property and equipment, net 35,190 38,431 Goodwill 380,424 353,748 Other intangible assets, net 128,491 121,040 Other assets 2,951 3,084----------------------------Total Assets $753,951 $697,983============================ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities:Accounts payable, trade $8,598 $11,814Payable to affiliates 2,293 5,065Accrued liabilities 51,361 50,684Income taxes payable 8,046 13,578Deferred revenue 31,813 24,477----------------------------Total current liabilities 102,111 105,618Deferred tax liabilities 5,394 8,209Other liabilities 1,463 1,489----------------------------Total Liabilities 108,968 115,316---------------------------- Stockholders' Equity:Preferred stock - -Common stock 934 922Additional paid-in capital 783,767 771,084Treasury stock, at cost (24,273) (24,273)Accumulated deficit (111,441) (155,131)Accumulated other comprehensive loss (4,004) (9,935)Total Stockholders' Equity 644,983 582,667----------------------------Total Liabilities and Stockholders'Equity $753,951 $697,983============================ 
 INTERACTIVE DATA CORPORATIONCASH FLOW STATEMENT(In Thousands)Nine Months EndedSeptember 30,(Unaudited)---------------------2002 2001--------------------- Cash flows provided by (used in) operatingactivities:Net income 43,690 5,350Adjustments to reconcile net income to netcash provided by operating activities:Depreciation and amortization 25,962 69,340Tax benefit from exercise of stock options 4,347 643Deferred income taxes (842) -Other non-cash items, net 2,627 271 Changes in operating assets and liabilities, net (13,943) (10,982) NET CASH PROVIDED BY OPERATING ACTIVITIES 61,841 64,622--------------------- Cash flows provided by (used in) investingactivities:Purchase of fixed assets (9,245) (8,153)Net proceeds from sales of investments andbusiness - 43,224Acquisition of business (48,000) -Other investing activities 340 719--------------------- NET CASH PROVIDED BY (USED IN) INVESTINGACTIVITIES (56,905) 35,790 Cash flows provided by (used in) financingactivities:Distribution of dividends - (26,871)Purchase of treasury stock - (21,907)Proceeds from exercise of stock options 8,348 1,904--------------------- NET CASH PROVIDED BY (USED IN) FINANCINGACTIVITIES 8,348 (46,874) Effect of exchange rate on cash 1,970 9--------------------- NET INCREASE IN CASH AND CASH EQUIVALENTS 15,254 53,547 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 118,522 38,652--------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $133,776 $92,199===================== 

CONTACT:

Company:

Interactive Data Corporation, Bedford, MA
Steven Crane, 781/687-8309                
Steven_Crane@intdata.com

or

Investor Relations:

Lippert/Heilshorn & Associates, New York

 

Harriet Fried, 212/838-3777


Hfried@lhai.com