Interactive Data Corporation (NYSE: IDC) today reported its
financial results for the first quarter ended March 31, 2006.
First-quarter 2006 service revenue grew 2.7% to $143.4 million from
$139.7 million in the first quarter of 2005. Net income for the
first quarter of 2006 was $19.8 million, or $0.21 per diluted
share, which includes $2.1 million of after-tax, stock-based
compensation expense associated with the first-time adoption of
Financial Accounting Standards Board Statement No. 123(R) (FAS
123R), compared with $23.7 million, or $0.25 per diluted share, in
the same quarter last year. "Interactive Data's core businesses
remained strong and performed in line with our plan for the first
quarter of 2006," stated Stuart Clark, Interactive Data's president
and chief executive officer. "Our growth was driven primarily by
our FT Interactive Data business while ComStock, CMS BondEdge and
eSignal achieved good underlying progress against their respective
business plans. The first quarter of 2006 was also the first full
quarter of ownership of the IS.Teledata business that we acquired
in mid-December 2005 and integration activity is now underway. One
of our top priorities with this German-based business has been to
bring its accounting in line with US GAAP standards and this
initiative resulted in the deferral of $1.6 million in
first-quarter 2006 service revenue, which we expect to recognize
later this year. We also completed our acquisition of the Quote.com
business in early March, resulting in the inclusion of
approximately 3 weeks of operating results for that operation.
Based on our progress thus far and the opportunities in front of
us, we remain on track to achieve our 2006 financial targets."
Clark commented, "Our first-quarter service revenue growth of 2.7%
over the same period last year was influenced by a number of
factors including a strong performance from our FT Interactive Data
business plus the contributions from our IS.Teledata and Quote.com
acquisitions. Our growth, however, was muted by the fact that the
first quarter of 2005 included the previously disclosed recognition
of $8.1 million in ComStock-related service revenue that was
reversed and deferred in the fourth quarter of 2004. The decline in
our net income for the first quarter of 2006 largely reflects the
inclusion of stock-based compensation expense, a higher effective
tax rate, higher depreciation and amortization costs associated
with our recent acquisitions, the profit impact associated with the
deferred IS.Teledata service revenue and approximately $0.9 million
in after-tax profit associated with the recognition of the $8.1
million in service revenue in the first quarter of 2005. Despite
lower reported net income, we generated excellent cash flow from
operations." "Operationally, our businesses executed well in the
first quarter of 2006. Within our institutionally oriented
businesses, renewal rates remained at approximately 95% for the
first quarter. FT Interactive Data achieved an important milestone
with its strategic alliance with Markit Group, announcing a new
service in March 2006 to provide independent valuations of credit
default swaps. Within Interactive Data's institutional businesses,
collaboration on product development and sales initiatives is also
yielding some very positive results," Clark noted. Clark concluded,
"During the first quarter of 2006, we spent $30.0 million to
acquire the Quote.com assets, $2.7 million to increase our
ownership of IS.Teledata to 99.6% from 95.1% at the end of 2005,
and $5.6 million for stock repurchases. Even with these
investments, we ended the first quarter with $165.7 million in
cash, cash equivalents and marketable securities, and we remain
debt free. We move forward with the financial strength, service
offerings, customer relationships and talented team necessary to
continue expanding our business around the world." Other
First-Quarter and Recent Operating and Financial Highlights 2006 to
2005 Comparisons - Service Revenue and Total Costs and Expenses: --
The following table highlights a number of items that may be
considered when comparing Interactive Data's first-quarter 2006
financial results with the same period one year ago. -0- *T Q106 v.
Q105 Q106 Notes Q105 Notes ------------------- -------------------
-------------------- Service Q106 service -- Includes $8.7 --
Includes the revenue revenue of $143.4 million in previously
million, an service revenue disclosed increase of 2.7% from
acquired recognition of from $139.7 businesses $8.1 million in
million in Q105 service revenue -- Includes the that was negative
impact reversed and of $2.2 million deferred from associated with
prior periods foreign exchange -- Includes $0.9 million in --
Includes the ComStock service deferral of revenue from $1.6 million
services associated with provided to IS.Teledata IS.Teledata and
services that Quote.com, both did not meet of which were certain
revenue subsequently recognition acquired by criteria Interactive
Data. -- Includes $0.3 million in ComStock service revenue from
services provided to Quote.com, which was subsequently acquired by
Interactive Data. Total Q106 total costs -- Includes $3.6 --
Includes the costs and expenses of million in previously and $111.5
million, an pre-tax, disclosed expenses increase of $8.0 stock-
recognition of million, or 7.8% compensation $6.7 million in from
$103.5 expense direct SG&A million in Q105 associated costs
that were with FAS reversed and No.123(R) deferred from prior
periods -- Includes $11.1 million in total costs and expenses
associated with acquired businesses -- Includes the positive impact
of $1.7 million associated with foreign exchange *T Institutional
Services Segment: -- FT Interactive Data's first-quarter 2006
service revenue of $89.8 million grew 4.4% over the prior year's
first quarter (or an increase of 6.2% before the effects of foreign
exchange). North American service revenue for the first quarter of
2006 increased 6.5% over the prior year's first quarter primarily
as a result of new evaluated services and related reference data
sales closed in late 2005. First-quarter 2006 European service
revenue declined by 2.2% (or increased 5.5% before the effects of
foreign exchange) from the first quarter of last year. FT
Interactive Data generated strong new sales in both the United
States and Europe, and attracted robust client interest for its new
credit default swap valuation service during the quarter. FT
Interactive Data's Asia-Pacific first-quarter 2006 service revenue
declined 2.7% (or increased 1.2% before the effects of foreign
exchange) compared with the prior year's first quarter. -- ComStock
generated first-quarter 2006 service revenue of $26.7 million, a
decline of 3.8% over the same quarter last year (or a decline of
1.9% before the effects of foreign exchange). ComStock's 2006
first-quarter service revenue includes $7.9 million from the
IS.Teledata business, which was acquired in mid-December 2005. In
addition, as detailed above, $1.6 million in service revenue
associated with IS.Teledata services was deferred in the first
quarter of 2006 although such amounts are expected to be recognized
later this year. First-quarter 2005 service revenue included the
previously disclosed recognition of $8.1 million that was reversed
and deferred in the fourth quarter of 2004 as well as $0.9 million
from providing real-time services to IS.Teledata and Quote.com
(both IS.Teledata and Quote.com were subsequently acquired by
Interactive Data and, accordingly, service revenue associated with
these businesses is now classified as an intercompany transaction).
During the first quarter of 2006, ComStock upgraded its data
distribution network and won new business with a number of hedge
fund clients who are using ComStock's real-time market data to
power their algorithmic trading applications. -- CMS BondEdge's
service revenue for the first quarter of 2006 increased by 1.8%
over last year's first quarter to $8.1 million. CMS BondEdge's
first-quarter 2006 performance was highlighted by nine new client
installations, additional purchases by existing customers and the
launch of an enhanced evaluations service in Europe in
collaboration with FT Interactive Data that takes advantage of CMS
BondEdge's analytical capabilities. Active Trader Services Segment:
-- eSignal's first-quarter 2006 service revenue of $18.9 million
increased 5.3% over 2005's first-quarter service revenue (or an
increase of 5.7% before the effects of foreign exchange). The
increase reflects the contribution of Quote.com, which was acquired
in early March 2006, and growth in eSignal's direct subscriber
base, partially offset by the expected cancellation of a
distribution relationship for FutureSource-related services in
early 2005. The Quote.com business contributed $0.8 million in
first-quarter 2006 service revenue. eSignal ended the first quarter
of 2006 with approximately 61,200 direct subscription terminals,
which includes approximately 13,900 direct subscription terminals
for Quote.com-related services. In late March and early April 2006,
eSignal launched new private-label services with partners such as
the Chicago Board of Trade and America Online. Acquisition of
Quote.com: -- On March 6, 2006, Interactive Data completed the
acquisition of the assets of Quote.com and certain other related
assets from Lycos, Inc. for $30.0 million in cash. The acquisition
included the subscription-based QCharts(TM) and LiveCharts(TM)
services that provide real-time streaming data and decision support
tools that help active traders formulate investment strategies, as
well as Quote.com, a financial news and analysis website, and
RagingBull(TM), an online investment community and message board
site. Capital Expenditures: -- Approximately $1.9 million, or 30%,
of the $6.5 million in first-quarter 2006 capital expenditures were
associated with facility relocation activities. Cash Position and
Stock Buyback Activities: -- As of March 31, 2006, Interactive Data
had no outstanding debt and had cash, cash equivalents and
marketable securities of $165.7 million. Interactive Data
repurchased a total of 248,000 shares at an average price of $22.66
per share during the first quarter of 2006. Entering the second
quarter of 2006, 200,000 shares of common stock remained available
for repurchase under the Company's current stock buyback program.
Outlook We anticipate that market conditions will remain unchanged
to those experienced during the first quarter of 2006. We believe
that spending on market data and related services by customers in
the financial services industry will be balanced by their continued
focus on cost containment initiatives. As a result of both the
organic expansion of our business and the impact of the previously
announced IS.Teledata and Quote.com acquisitions, we currently
expect that 2006 service revenue growth will be in the mid-teens.
We expect that 2006 net income will decline slightly versus 2005 as
a result of recording $8.0 million to $10.0 million of estimated
after-tax, stock-based compensation expenses associated with the
adoption of Financial Accounting Standards Board Statement No.
123(R), "Share-Based Payment." The effective tax rate for 2006 is
expected to be in the range of 38.0% to 39.5%. We anticipate that
non-GAAP income from operations, which excludes the impact of
Financial Accounting Standards Board Statement No. 123(R), will
grow in the high single-digit to low double-digit range in 2006.
2006 capital expenditures are expected to be in the range of $40.0
million to $43.0 million. This includes capital expenditures of
approximately $10.0 million to $12.0 million associated with the
planned relocation of Interactive Data's corporate headquarters in
Bedford, Massachusetts and ComStock's Harrison, New York facility
during the year. Approximately 50% of the capital expenditures
associated with these facility activities will be reimbursed by the
landlords of these facilities during 2006. Conference Call
Information Interactive Data Corporation's management will conduct
a conference call Thursday, April 27, at 11:00 a.m. Eastern Time to
discuss the first-quarter 2006 results, related financial and
statistical information, and additional business matters. The
dial-in number for the conference call is (706) 679-4631; the
related access code is 7524851. Investors and interested parties
may also listen to the call and view related slides via a live web
broadcast available through the Investor Relations section of the
Company's web site at www.interactivedata.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. For
those who cannot listen to the live broadcast, a replay of the call
will be available from April 27 at 2:00 p.m. until Thursday, May
11, 2006 at 2:00 p.m., and can be accessed by dialing (706)
645-9291 or (800) 642-1687, using access code 7524851. This press
release and other financial and statistical information to be
presented on the conference call will be accessible on the Investor
Relations section of the Company's web site at
www.interactivedata.com. The web site is not incorporated by
reference into this press release. Non-GAAP Information In an
effort to provide investors with additional information regarding
our results on a generally accepted accounting principles (GAAP)
basis, we also disclose the following non-GAAP information, which
management believes provides the following useful information to
investors: -- Management refers to growth rates at constant foreign
currency exchange rates so that business results can be viewed
without the impact of changing foreign currency exchange rates,
thereby facilitating period-to-period comparisons of our underlying
business. Generally, when the U.S. dollar either strengthens or
weakens against other currencies, the growth at constant currency
rates will be higher or lower than growth reported at actual
exchange rates. -- Management refers to organic growth, which
excludes the contribution of businesses acquired or closed during
the past 12 months, and the effects of foreign currency exchange
rates because management believes that facilitating
period-to-period comparisons of our organic revenue growth on a
constant dollar basis better reflects actual trends. As part of
determining organic growth, management refers to service revenue
for our FT Interactive Data, ComStock, CMS BondEdge, and eSignal
businesses. Management uses such information for evaluating its
business, and for forecasting and planning purposes. In addition,
since we have historically reported service revenue for these
businesses to the investment community as part of our reports on
Form 10-K and Form 10-Q, we believe that continuing to offer such
information provides consistency in our financial reporting. --
Management includes information regarding total costs and expenses
excluding total costs and expenses associated with businesses
acquired or closed during the past 12 months, and the effects of
foreign exchange, because management believes changes in our core
total costs and expenses on a constant dollar basis better reflect
actual trends. -- Management refers to non-GAAP income from
operations, which excludes the estimated impact of the adoption of
Financial Accounting Standards Board Statement No. 123(R),
"Share-Based Payment," because our historical financial performance
did not include this expense. As a result, we believe that
continuing to offer such information about our financial
performance provides consistency in our financial reporting. The
above measures are non-GAAP financial measures and should not be
considered in isolation from (and are not intended to represent an
alternative measure of) revenue, total costs and expenses, earnings
or cash flows provided by operating activities, each as determined
in accordance with GAAP. In addition, the above measures may not be
comparable to similarly titled measures reported by other
companies. 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
federal securities laws, and is subject to the safe-harbor created
by such Act and laws. Forward-looking statements include our
statements discussing our goals, beliefs, strategies, objectives,
plans, future financial conditions, results of operations and cash
flows or projections, including those appearing under the heading
"Outlook," those statements about expected market conditions,
current expectations and our expected growth, and product and
service developments, and potential alliances and acquisitions.
These statements are subject to known and unknown risks,
uncertainties, assumptions and other factors that may cause actual
results to be materially different from those contemplated by the
forward-looking statements. Such factors include, but are not
limited to: (i) the presence of competitors with greater financial
resources than ours and their strategic response to our services
and offerings; (ii) the possibility of a prolonged outage or other
major unexpected operational difficulty at any of our key
facilities; (iii) our ability to maintain relationships with our
key suppliers and providers of financial market data; (iv) our
ability to maintain our relationships with service bureaus and
custodian banks; (v) a decline in activity levels in the securities
markets; (vi) consolidation of financial services companies, both
within an industry and across industries; (vii) the continuing
impact of cost-containment pressures across the industries we
serve; (viii) new offerings by competitors or new technologies that
could cause our offerings or services to become less competitive or
obsolete; (ix) our ability to develop new and enhanced service
offerings and our ability to market and sell those new and enhanced
offerings successfully to new and existing customers; (x) our
ability to negotiate and enter into strategic alliances or
acquisitions on favorable terms, if at all; (xi) our ability to
derive the anticipated benefits from our strategic alliances or
acquisitions in the desired time frame, if at all; (xii) potential
regulatory investigations of us or our customers relating to our
services; (xiii) the regulatory requirements applicable to our
business, including our FT Interactive Data Corporation subsidiary,
which is a registered investment adviser; (xiv) our ability to
attract and retain key personnel; (xv) the ability of our majority
shareholder to exert influence over our affairs, including the
ability to approve or disapprove any corporate actions submitted to
a vote of our stockholders; and (xvi) other factors identified in
our most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission. We undertake no obligation to
update these forward-looking statements. About Interactive Data
Corporation Interactive Data Corporation (NYSE: IDC) is a leading
global provider of financial market data, analytics and related
services to financial institutions, active traders and individual
investors. The Company's businesses supply time-sensitive pricing,
evaluations, dividend, corporate action and reference data for more
than 3.5 million securities traded around the world, including
hard-to-value instruments. Many of the world's best-known financial
service and software companies subscribe to the Company's services
in support of their trading, analysis, portfolio management and
valuation activities. Through its businesses, FT Interactive Data,
ComStock, CMS BondEdge and eSignal, Interactive Data has
approximately 2,200 employees in offices located throughout North
America, Europe, Asia and Australia, and is headquartered in
Bedford, MA. Pearson plc (NYSE: PSO; LSE:PSON), an international
media company, whose businesses include the Financial Times Group,
Pearson Education, and the Penguin Group, owns approximately 62
percent of the outstanding common stock of Interactive Data
Corporation. For more information, please visit
www.interactivedata.com. The FT Interactive Data business includes
FT Interactive Data Corporation, a Delaware corporation. The
ComStock business includes ComStock, Inc., a New York corporation.
-0- *T INTERACTIVE DATA CORPORATION AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands
except per share data) Three Months Ended March 31,
-------------------------- 2006 2005 Change -------- --------
------ SERVICE REVENUE $143,429 $139,652 2.7% COSTS & EXPENSES
Cost of services(a) 49,269 41,828 17.8% Selling, general &
administrative(a) 50,785 51,663 -1.7% Depreciation 5,285 4,559
15.9% Amortization 6,197 5,444 13.8% -------- -------- ------ Total
costs & expenses 111,536 103,494 7.8% -------- -------- ------
INCOME FROM OPERATIONS 31,893 36,158 -11.8% Other income, net 1,193
1,014 17.7% -------- -------- ------ INCOME BEFORE INCOME TAXES
33,086 37,172 -11.0% Income Tax expense 13,264 13,499 -1.7%
-------- -------- ------ NET INCOME $ 19,822 $ 23,673 -16.3% NET
INCOME PER SHARE Basic $ 0.21 $ 0.25 -16.0% Diluted $ 0.21 $ 0.25
-16.0% WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic 93,458
93,238 0.2% Diluted 95,910 96,106 -0.2%
------------------------------------------- --------- ---------
------ Three Months Ended March 31, ------------------- 2006 2005
-------- -------- (a) Includes stock-based compensation expense
related to the adoption of FAS 123(R) of: Cost of services $ 1,387
$ - Selling, general & administrative 2,178 - -------- --------
Total $ 3,565 $ - INTERACTIVE DATA CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) March December
31, 31, 2006 2005 ---------- -------- ASSETS Unaudited Current
Assets: Cash and cash equivalents $ 132,782 $147,368 Marketable
securities 32,870 25,019 Accounts receivable, net 90,439 84,553
Interest receivable 903 751 Prepaid expenses and other current
assets 11,820 10,458 Deferred income taxes 1,711 1,509 ----------
-------- Total current assets 270,525 269,658 ---------- --------
Property and equipment, net 65,409 64,252 Goodwill 517,655 480,179
Other intangible assets, net 185,317 182,156 Other assets 689 675
---------- -------- Total Assets $1,039,595 $996,920 ==========
======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities:
Accounts payable, trade $ 15,758 $ 18,032 Payable to affiliates 112
892 Accrued liabilities 56,968 68,747 Income taxes payable 11,279
2,045 Deferred revenue 30,411 23,988 ---------- -------- Total
current liabilities 114,528 113,704 ---------- -------- Deferred
tax liabilities 36,891 23,864 Other liabilities 2,295 3,946
---------- -------- Total Liabilities 153,714 141,514 ----------
-------- Stockholders' Equity: Preferred stock - - Common stock 984
979 Additional paid-in capital 861,404 848,137 Treasury stock, at
cost (80,204) (74,587) Accumulated earnings 97,271 77,449
Accumulated other comprehensive income 6,426 3,428 ----------
-------- Total Stockholders' Equity $ 885,881 $855,406 ----------
-------- Total Liabilities and Stockholders' Equity $1,039,595
$996,920 ========== ======== INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In
Thousands) Three Months Ended March 31, (Unaudited) 2006 2005
-------- --------- Cash flows provided by (used in) operating
activities: Net income $ 19,822 $ 23,673 Adjustments to reconcile
net income to net cash provided by operating activities:
Depreciation and amortization 11,482 10,003 Tax benefit from
exercise of stock options - 1,221 Excess tax benefits from stock
based compensation (2,047) - Deferred income taxes (776) (649)
Amortization of discounts and premiums on marketable securities,
net 53 618 Other non-cash items, net 4,662 251 Changes in operating
assets and liabilities, net (4,073) (10,800) -------- --------- NET
CASH PROVIDED BY OPERATING ACTIVITIES 29,123 24,317 Cash flows used
in investing activities: Purchase of fixed assets (6,485) (2,794)
Acquisition of business (32,851) (112) Purchase and sale of
marketable securities (7,904) (115,067) -------- --------- NET CASH
USED IN INVESTING ACTIVITIES (47,240) (117,973) Cash flows provided
by (used in) financing activities: Purchase of treasury stock
(5,617) (8,289) Proceeds from exercise of stock options and
employee stock purchase plan 6,627 4,275 Excess tax benefits from
stock based compensation 2,047 - -------- --------- NET CASH
PROVIDED BY (USED IN) FINANCING ACTIVITIES 3,057 (4,014) Effect of
exchange rate on cash 474 (993) -------- --------- NET DECREASE IN
CASH AND CASH EQUIVALENTS (14,586) (98,663) CASH AND CASH
EQUIVALENTS AT BEGINNING OF PERIOD 147,368 207,908 --------
--------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $132,782 $
109,245 ======== ========= RECONCILIATION OF NON-GAAP MEASURES
Service Revenue Before Effects of Foreign Exchange,
Acquisition-Related Service Revenue, Intercompany Eliminations
Resulting from Acquisitions, and the Recognition of Reversed and
Deferred Service Revenue (In thousands) Three Months Ended March
31, 2006 2005 Change -------- -------- ------ Service Revenue
Institutional Services FT Interactive Data $ 89,772 $ 86,028 4.4%
ComStock 26,678 27,734 -3.8% CMS BondEdge 8,091 7,948 1.8% --------
-------- ------ Institutional Services Total 124,541 121,710 2.3%
Active Trader Services eSignal 18,888 17,942 5.3% -------- --------
------ Active Trader Services Total 18,888 17,942 5.3% Total
Service Revenue 143,429 139,652 2.7% Effects of Foreign Exchange
2,202 - - -------- -------- ------ Non-GAAP Service Revenue before
Effects of Foreign Exchange 145,631 139,652 4.3% Service Revenue -
Quote.com (805) - - Service Revenue - IS.Teledata (7,863) - -
-------- -------- ------ Non-GAAP Service Revenue before Effects of
Foreign Exchange and Acquisition-Related Service Revenue $136,963
$139,652 -1.9% Intercompany Eliminations Resulting from
Acquisitions (288) (868) -------- -------- ------ Non-GAAP Service
Revenue before Effects of Foreign Exchange, Acquisition-Related
Service Revenue and Intercompany Eliminations Resulting from
Acquisitions $136,675 $138,784 -1.5% Recognition of Service Revenue
Reversed and Deferred in the Fourth Quarter of 2004 - (8,122) -
-------- -------- ------ Non-GAAP Service Revenue before Above
Factors $136,675 $130,662 4.6% ======== ======== ======
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED) Total
Costs and Expenses Before Effects of Stock-Based Compensation
Expense, Acquisition-related Total Costs and Expenses, Effects of
Foreign Exchange, and Recognition of Reversed and Deferred Costs
and Expenses (In thousands) Three Months Ended March 31, 2006 2005
Change -------- -------- ------ Total Costs & Expenses $111,536
$103,494 7.8% Stock-based Compensation Expense (3,565) - - Total
Costs & Expenses - Quote.com (528) - - Total Costs &
Expenses - IS.Teledata (10,573) - - Effects of Foreign Exchange
1,733 - - -------- -------- ------ Non-GAAP Total Costs &
Expenses Before Acquisition-related Costs and Effective of Foreign
Exchange $ 98,603 $103,494 -4.7% Recognition of Costs &
Expenses Reversed and Deferred in the Fourth Quarter of 2004 -
(6,702) - -------- -------- ------ Non-GAAP Total Costs &
Expenses Before Above Factors $ 98,603 $ 96,792 1.9% ========
======== ====== *T
Interactive Data (NYSE:IDC)
Historical Stock Chart
From Jun 2024 to Jul 2024
Interactive Data (NYSE:IDC)
Historical Stock Chart
From Jul 2023 to Jul 2024