CCC Information Services Group Inc. (Nasdaq:CCCG) today reported
net income of $5.5 million, or $0.31 per diluted share, for the
second quarter ending June 30, 2005, compared to net income of $5.3
million, or $0.19 per diluted share for the same quarter in 2004.
Net income and earnings per share for 2005 reflect the impact of
the company's September 2004 self-tender transaction. Revenue for
the second quarter was $50.7 million, compared to $49.5 million for
the same quarter in 2004. Operating income was $11.3 million for
the quarter compared to $8.6 million for the second quarter in
2004. Operating margin was 22.2 percent, compared to 17.5 percent
for the same quarter in 2004. Operating income for this year's
second quarter included non-cash stock compensation expense of $0.7
million. The 2004 results include pre-tax charges of $0.9 million
for restructuring, and $0.8 million related to additional 401(k)
plan expenses. "The year is progressing as planned," said Githesh
Ramamurthy, Chairman and Chief Executive Officer. "We successfully
completed several new customer implementations during the quarter,
and based on June results, we expect stronger revenue and earnings
growth in the second half of the year." For the six months ended
June 30, 2005 the company reported net income of $10.9 million, or
$0.63 per diluted share. This compares to reported net income and
earnings per share for the first six months of 2004 of $11.6
million and $0.41 per share, respectively. Revenue and operating
income for the six months ended June 30, 2005 were $100.5 million
and $22.4 million, respectively, compared to $99.1 million and
$18.6 million for the prior year. Net income and earnings per share
for 2005 reflect the impact of the company's September 2004
self-tender transaction. Second Quarter Revenue and Expense
Highlights The product portfolio revenues for the second quarter,
including a comparison to the same quarter of 2004, are as follows:
($ in 000's) -0- *T Portfolio Q1 Q2 Q2 % Change 2005 2005 2004 vs.
Prior Year
----------------------------------------------------------------------
CCC Pathways $31,486 $31,992 $31,255 2.4% CCC Valuescope 10,495
10,274 10,161 1.1% Workflow 6,655 7,325 6,541 12.0% Information
Services Products 517 586 504 16.3% Other 568 564 1,012 (44.3)%
--------------------------- Total $49,721 $50,741 $49,473 2.6%
--------------------------------===========================-----------
*T Key revenue drivers for the second quarter, compared to the same
quarter of 2004, are as follows: -- The CCC Pathways and Workflow
portfolios grew due to the completion of implementations of new
insurance customers for CCC Pathways(R), Recycled Parts Service,
and CCC Autoverse(R). CCC Autoverse gained nine new customers in
the quarter bringing total customers using this workflow product to
forty-six. -- Other revenue was down due to the completion of the
planned phase out of the CARS(R) service in the third quarter of
2004, as well as a decrease in certain project-related revenue.
Operating expenses for the second quarter, compared to the same
quarter of 2004, are as follows: ($ in 000's) -0- *T Q1 Q2 Q2 %
Change 2005 2005 2004 vs. Prior Year
----------------------------------------------------------------------
Production and Customer Support $8,334 $8,655 $7,807 10.9%
Commissions, Royalties and Licenses 3,364 3,325 3,145 5.7% Selling,
General, and Administrative 17,689 18,507 19,105 (3.1)%
Depreciation and Amortization 1,978 2,052 1,805 13.7% Product
Development and Programming 7,196 6,936 8,089 (14.3)% Restructuring
Charges - - 886 ------------------------ Total Operating Expenses
$38,561 $39,475 $40,837 (3.3)%
--------------------------------------========================--------
*T Key operating expense highlights for the second quarter,
compared to the same quarter of 2004, are as follows: -- Production
and customer support expenses increased due to new customer
implementation and integration costs. -- Commissions, royalties and
licenses expenses increased due to new data license fees to support
the CCC Valuescope(R) product. -- Selling, general, and
administrative expenses were favorable as a result of the
organizational realignment that took place in mid-2004 as well as
the absence of the 401(k) plan expense charge that occurred last
year. Offsetting a portion of these favorable variances were
non-cash stock compensation expense and certain one-time consulting
expenses. -- Product development and programming expenses decreased
due to the favorable impact of the 2004 organization realignment
and lower consulting expenses. Guidance Update The company issued
the following guidance for the third quarter and full year 2005: --
Diluted earnings per share for the third quarter is expected to be
$0.34 to $0.35. For the full year, the company expects diluted
earnings per share to be in the $1.32 to $1.35 range. The company
is using a diluted share base of 17.5 million shares for both the
third quarter and full year. -- Revenue growth for the second half
is expected to be approximately 5 percent, resulting in full year
revenue growth of about 3 percent. -- Operating income for the
third quarter is expected to be in the $12 to $13 million range.
Operating income for the full year is expected to be in the $47 to
$49 million range. Both the third quarter and full year guidance
includes the impact of the non-cash stock compensation expense. The
company will be hosting its second quarter earnings call to discuss
results at 11:00 AM EDT. A live web cast will be made available at
www.cccis.com. About CCC CCC Information Services Group Inc.
(Nasdaq:CCCG), headquartered in Chicago, is a leading supplier of
advanced software, communications systems, and Internet and
wireless-enabled technology solutions to the automotive claims and
collision repair industries. Its technology-based products and
services optimize efficiency throughout the entire claims
management supply chain and facilitate communication among
approximately 21,000 collision repair facilities, 350 insurance
companies and a range of industry participants. For more
information about CCC Information Services, visit CCC's Web site at
www.cccis.com. This release contains statements that constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934 and are subject to the safe harbor provisions of those
sections and the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that any such forward-looking statements
are not guarantees of future performance and involve risks and
uncertainties, including those described in the Company's filings
with the SEC, and that actual results or developments may differ
materially from those in the forward-looking statements. Specific
factors that might cause actual results to differ from expectations
include, but are not limited to, competition in the automotive
claims and collision repair industries, the ability to develop new
products and services, the prolonged sales and implementation cycle
of some of the company's new products, the ability to protect trade
secrets and proprietary information, the ability to generate the
cash flow necessary to meet the Company's obligations, the outcome
of certain legal proceedings, and other factors. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis, judgment, belief
or expectation only as of the date hereof. The Company has based
these forward-looking statements on information currently available
and disclaims any intention or obligation to update or revise any
forward-looking statement. -0- *T CCC INFORMATION SERVICES GROUP
INC. AND SUBSIDIARIES CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
(In thousands, except per share amounts) (Unaudited) Three Months
Six Months Ended Ended June 30, June 30, ----------------
----------------- 2005 2004 2005 2004 ------- ------- --------
------- Revenues............................$50,741 $49,473
$100,462 $99,076 Expenses: Production and customer support....
8,655 7,807 16,989 16,156 Commissions, royalties and licenses 3,325
3,145 6,689 6,319 Selling, general and administrative 18,507 19,105
36,196 37,035 Depreciation and amortization...... 2,052 1,805 4,030
3,908 Product development and programming 6,936 8,089 14,132 16,126
Restructuring charges.............. -- 886 -- 886 ------- -------
-------- ------- Total operating expenses............ 39,475 40,837
78,036 80,430 Operating income.................... 11,266 8,636
22,426 18,646 Interest expense.................... (2,802) (126)
(5,594) (272) Other income, net................... 199 80 333 167
Equity in income of ChoiceParts investment.........................
133 94 258 203 ------- ------- -------- ------- Income before
income taxes.......... 8,796 8,684 17,423 18,744 Income tax
provision................ (3,323) (3,341) (6,531) (7,194) -------
------- -------- ------- Net income..........................$
5,473 $ 5,343 $ 10,892 $11,550 ======= ======= ======== ======= Per
Share Data: Income per common share:
Basic..............................$ 0.34 $ 0.20 $ 0.67 $ 0.43
======= ======= ======== =======
Diluted............................$ 0.31 $ 0.19 $ 0.63 $ 0.41
======= ======= ======== ======= Weighted average shares
outstanding: Basic.............................. 16,209 26,643
16,179 26,558 Diluted............................ 17,452 27,824
17,404 27,875 CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM BALANCE SHEETS (In thousands, except share
amounts) (Unaudited) June 30, December 31, ASSETS 2005 2004
--------- --------- Cash and cash
equivalents.........................$ 30,640 $ 19,958 Accounts
receivable (net of allowances of $1,972 and $2,357 at June 30, 2005
and December 31, 2004, respectively)..............................
13,973 12,721 Other current assets..............................
8,346 7,790 --------- --------- Total current
assets........................... 52,959 40,469 Property and
equipment (net of accumulated depreciation and amortization of
$41,132 and $37,530 at June 30, 2005 and December 31, 2004,
respectively).................................... 11,134 12,151
Intangible assets (net of accumulated amortization of $1,997 and
$1,569 at June 30, 2005 and December 31, 2004,
respectively)................. 870 1,298
Goodwill.......................................... 15,747 15,747
Deferred income taxes (net of valuation allowance of $11,599 at
June 30, 2005 and December 31,
2004)............................................ 9,618 9,420
Investments....................................... 1,036 778 Other
assets...................................... 4,989 3,770 ---------
--------- Total assets...................................$ 96,353 $
83,633 ========= ========= LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable..................................$ 6,536 $ 7,728
Accrued expenses.................................. 18,009 19,468
Income taxes payable.............................. -- 97 Deferred
revenues................................. 7,807 6,886 Current
portion of long-term debt................. 861 -- ---------
--------- Total current liabilities...................... 33,123
34,179 Long-term debt.................................... 168,752
169,613 Other liabilities................................. 1,238
1,716 --------- --------- Total
liabilities.............................. 203,203 205,508 ---------
--------- Commitments and contingencies Preferred stock ($1.00 par
value, 100 shares authorized, issued and outstanding)..............
-- -- Common stock ($0.10 par value, 40,000,000 shares authorized,
16,568,826 and 16,144,124 shares outstanding at June 30, 2005 and
December 31, 2004, respectively)..............................
1,657 1,614 Additional paid-in capital........................
16,195 7,298 Deferred stock compensation.......................
(5,862) (292) Other comprehensive income........................
835 72 Accumulated deficit............................... (67,423)
(78,315) Treasury stock, at cost (4,460,501 common shares in
treasury at................................... June 30, 2005 and
December 31, 2004)........... (52,252) (52,252) --------- ---------
Total stockholders' deficit....................... (106,850)
(121,875) --------- --------- Total liabilities and stockholders'
deficit.......$ 96,353 $ 83,633 ========= ========= CCC INFORMATION
SERVICES GROUP INC. AND SUBSIDIARIES CONSOLIDATED INTERIM
STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited) Six Months
Ended June 30, ---------------- 2005 2004 ------- ------- Operating
Activities: Net
income...........................................$10,892 $11,550
Adjustments to reconcile net income to net cash provided by
operating activities: Restructuring
charges........................... -- 886 Equity in income of
ChoiceParts................. (258) (203) Depreciation and
amortization of property and
equipment...................................... 3,602 3,481
Amortization of intangible assets.............. 428 428 Deferred
income tax provision................... (198) 393 Restricted stock
compensation, non-cash......... 1,422 23 Income tax benefit related
to exercise of stock
options........................................ 338 -- Other,
net...................................... 31 65 Changes in:
Accounts receivable, net........................ (1,252) (3,928)
Other current assets............................ (556) (224) Other
assets.................................... (456) 170 Accounts
payable................................ (1,192) 885 Accrued
expenses................................ (1,459) (1,165) Income
taxes payable............................ (97) (934) Other current
liabilities....................... -- 91 Deferred
revenues............................... 921 (47) Other
liabilities............................... (478) (1,035) -------
------- Net cash provided by operating activities............
11,688 10,436 ------- ------- Investing Activities: Capital
expenditures................................. (2,587) (3,089)
Proceeds from sale of short-term investments......... -- 7,004
------- ------- Net cash provided by (used for) investing
activities. (2,587) 3,915 ------- ------- Financing Activities:
Proceeds from exercise of stock options.............. 1380 2,583
Proceeds from employee stock purchase plan........... 201 216
Principal repayments of capital lease obligations.... -- (158)
------- ------- Net cash provided by financing
activities............ 1,581 2,641 ------- ------- Net increase in
cash and cash equivalents............. 10,682 16,992 Cash and cash
equivalents: Beginning of period...................................
19,958 20,755 ------- ------- End of
period.........................................$30,640 $37,747
======= ======= Supplemental Disclosure: Cash paid:
Interest..........................................$ 5,329 $ 81
Taxes............................................. 6,527 6,213 *T
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