TransUnion Reports Third Quarter 2014 Results
CHICAGO, IL--(Marketwired - Nov 6, 2014) -
- Revenue of $338 million, an increase of 13 percent on a GAAP basis (14 percent on a constant currency basis) compared with the third quarter of 2013
- Adjusted EBITDA of $113 million, an increase of 13 percent for the quarter with Adjusted EBITDA margin of 33.3 percent, essentially flat compared with the third quarter of 2013
- On November 3, 2014, TransUnion announced the acquisition of L2C, Inc. ("L2C"), an innovative provider of proprietary alternative data and analytics
TransUnion Holding Company, Inc., a global leader in information and risk management, today announced third quarter results. Total revenue was $338 million, an increase of 13 percent on a GAAP basis (14 percent on a constant currency basis) compared with the third quarter of 2013. Net loss attributable to the Company was $3 million, essentially flat compared with the third quarter of 2013. Adjusted net income attributable to the Company was $31 million, an increase of 32 percent compared with the third quarter of 2013.
Adjusted EBITDA was $113 million, an increase of 13 percent compared with the third quarter of 2013. Adjusted EBITDA margin was 33.3 percent, essentially flat compared with the third quarter of 2013 as we continue making investments in our strategic growth initiatives.
"In the third quarter, we generated strong top-line and Adjusted EBITDA growth across all business segments driven by healthy organic growth and from the performance of our recent acquisitions," said Jim Peck, TransUnion's president and chief executive officer. "We are starting to realize the benefits of our investments in support of our strategic objective to serve the broader, rapidly growing risk solutions market. Additionally, we announced on Monday that we have acquired L2C, Inc., an innovative provider of alternative data and analytics. This acquisition supports our strategy to provide the industry with highly predictive risk information solutions and we are excited about the possibilities the combination of our capabilities will bring to existing and new customer segments."
U.S. Information Services (USIS)
Total USIS revenue was $212 million, an increase of 12 percent compared with the third quarter of 2013. Online Data Services revenue was $141 million, an increase of 9 percent, driven by our acquisition of TLO and an increase in online credit report volume. Credit Marketing Services revenue was $35 million, an increase of 12 percent, due primarily to an increase in demand for custom data sets and archive information in the financial services and insurance markets. Decision Services revenue was $36 million, an increase of 29 percent, driven by our acquisition of eScan Data Systems and other increases in the healthcare market.
Operating income was $33 million, a decrease of 20 percent compared with the third quarter of 2013. Adjusted operating income was $35 million, a decrease of 16 percent. The decrease in operating income and adjusted operating income was due primarily to additional depreciation and amortization resulting from shortening the remaining useful lives of certain existing technology assets as a result of successfully achieving a major milestone for our new technology platform that confirmed our commitment to the plan to replace our existing technology platform. Operating and integration costs associated with our recent acquisitions also contributed to the decrease in operating income and adjusted operating income.
International revenue was $68 million, an increase of 12 percent (17 percent on a constant currency basis) compared with the third quarter of 2013, driven by increased volumes in all regions and the inclusion of revenue from our recent acquisitions of CIBIL and ZipCode. Developed markets revenue was $26 million, an increase of 6 percent (9 percent on a constant currency basis) compared with the third quarter of 2013. Emerging markets revenue was $42 million, an increase of 17 percent (22 percent on a constant currency basis) compared with the third quarter of 2013.
Operating income was $8 million, a decrease of 8 percent compared with the third quarter of 2013, due primarily to additional depreciation and amortization resulting from shortening the useful lives of existing technology assets as we migrate to our upgraded technology platform as part of our long-term strategic growth plan. Operating and integration costs associated with our recent acquisitions also contributed to the decrease in operating income.
Interactive revenue was $58 million, an increase of 15 percent compared with the third quarter of 2013, driven by an increase in the average number of subscribers and volume in our indirect channel and an increase in direct subscribers.
Operating income was $21 million, an increase of 28 percent compared with the third quarter of 2013, driven by the increase in revenue.
Liquidity and Capital Resources
Cash and cash equivalents were $103 million at September 30, 2014 and $111 million at December 31, 2013. Year-to-date cash provided by operating activities was $110 million. Year-to-date capital expenditures were $118 million compared with $54 million in the first nine months of 2013, due primarily to the upgrade of our technology platform and improvements to our corporate headquarters. Other cash used for investing activities included $55 million for acquisitions and purchases of noncontrolling interests, principally increasing our stake in CIBIL. Net cash provided by financing activities was $49 million due to an increase in net borrowings, partially offset by fees associated with the early redemption of the 11.375% notes and credit facility refinancing.
Non-GAAP Financial Measures
This earnings release presents changes in revenue on a constant currency basis, Adjusted EBITDA, Adjusted EBITDA Margin, segment Adjusted Operating Income, segment Adjusted Operating Margin, Adjusted Effective Tax Rate and Adjusted Net Income (Loss) Attributable to the Company. These are important financial measures for the Company but are not financial measures as defined by GAAP. We present these financial measures as supplemental measures of our operating performance because we believe they provide meaningful information regarding our performance and provide a basis to compare operating results between periods. In addition, our board of directors and executive management team use Adjusted EBITDA as a compensation measure. These financial measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as alternative measures of GAAP. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. Because of these limitations, these non-GAAP financial measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP, including revenue, operating income, operating margin, effective tax rate, net income (loss) attributable to the Company or cash provided by operating activities. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the attached Schedules.
Earnings Conference Call
In conjunction with this release, TransUnion will host a conference call today, Nov. 6, 2014, at 8:00 a.m. (CT) via a teleconference to discuss the business trends supporting third quarter 2014 results. The discussion will be available via replay on the Investor Relations page at TransUnion.com shortly after the teleconference. This earnings release is also available on that website. The teleconference dial-in information is:
Domestic dial-in: 844-464-3935
International dial-in: 765-507-2624
Teleconference code: 22580352
As a global leader in information and risk management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering high quality data, and integrating advanced analytics and enhanced decision-making capabilities. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion reaches businesses and consumers in 33 countries around the world.
This earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion's management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Factors that could cause TransUnion's actual results to differ materially from those described in the forward-looking statements can be found in TransUnion Holding's and TransUnion Corp.'s combined Annual Report on Form 10-K for the year ended December 31, 2013 and TransUnion Holding's Form 10-Q for the quarter ended September 30, 2014 which have been filed with the Securities and Exchange Commission and are available on TransUnion's website (http://www.transunion.com/corporate/about-transunion/investor-relations.page) and on the Securities and Exchange Commission's website (www.sec.gov). Many of these factors are beyond our control. The forward-looking statements contained in this earnings release speak only as of the date of this earnings release. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements to reflect the impact of events or circumstances that may arise after the date of this earnings release.
|TRANSUNION HOLDING COMPANY, INC. AND SUBSIDIARIES|
|Consolidated Balance Sheets|
|(in millions, except per share data)|
|September 30, |
|December 31, |
|Cash and cash equivalents||$||103.1||$||111.2|
|Trade accounts receivable, net of allowance of $1.0 and $0.7||196.3||165.0|
|Other current assets||66.1||73.5|
|Total current assets||365.5||349.7|
|Property, plant and equipment, net of accumulated depreciation and amortization of $109.1 and $70.2||170.0||150.4|
|Other intangibles, net of accumulated amortization of $356.8 and $227.5||1,929.8||1,934.0|
|Liabilities and stockholders' equity|
|Trade accounts payable||$||92.7||$||100.3|
|Short-term debt and current portion of long-term debt||27.7||13.8|
|Other current liabilities||128.1||133.5|
|Total current liabilities||248.5||247.6|
|Redeemable noncontrolling interests||16.1||17.6|
|Common stock, $0.01 par value; 200.0 million shares authorized at September 30, 2014 and December 31, 2013, 111.0 million and 110.7 shares issued at September 30, 2014 and December 31, 2013, respectively, and 110.5 million shares and 110.2 million shares outstanding as of September 30, 2014 and December 31, 2013, respectively||1.1||1.1|
|Additional paid-in capital||1,128.5||1,121.8|
|Treasury stock at cost; 0.5 million shares at September 30, 2014 and December 31, 2013, respectively||(4.3||)||(4.1||)|
|Accumulated other comprehensive loss||(104.0||)||(73.2||)|
|Total TransUnion Holding Company, Inc. stockholders' equity||604.2||627.9|
|Total stockholders' equity||770.6||714.5|
|Total liabilities and stockholders' equity||$||4,579.4||$||4,492.3|
|TRANSUNION HOLDING COMPANY, INC. AND SUBSIDIARIES|
|Consolidated Statements of Income (Loss) (Unaudited)|
|Three Months Ended |
|Nine Months Ended |
|Cost of services (exclusive of depreciation and amortization below)||124.7||115.9||378.0||354.9|
|Selling, general and administrative||105.4||86.3||309.1||264.5|
|Depreciation and amortization||67.3||48.0||174.1||138.5|
|Total operating expenses||297.4||250.2||861.2||757.9|