Interactive Data Corporation (NYSE: IDC) today reported its
financial results for the first quarter ended March 31, 2007.
Interactive Data�s first-quarter 2007 revenue grew 13.3% to $162.5
million from $143.4 million in the first quarter of 2006. Net
income for the first quarter of 2007 was $25.6 million, or $0.27
per diluted share, a 29.2% increase over net income of $19.8
million, or $0.21 per diluted share, in the first quarter of 2006.
�Our first-quarter 2007 results represent a good start to the
year,� stated Stuart Clark, Interactive Data�s president and chief
executive officer. �Our revenue growth in the first quarter of 2007
primarily reflects expansion within our Pricing and Reference Data,
Real-Time Services and eSignal businesses. Our first-quarter 2007
net income increased mainly as a result of our revenue growth and
prudent spending. Other factors contributing to the net income
increase in the first quarter were higher interest income and a
lower effective tax rate. In addition, our revenue and profit
growth in the first quarter was impacted by the deferral of $1.6
million in Managed Solutions revenue during the first quarter of
2006 that we recognized in subsequent quarters last year.� Clark
continued, �We were pleased that our overall organic revenue growth
for the first quarter of 2007 was 8.9%, which primarily reflects
strong performances at both our Pricing and Reference Data, and
Real-Time Services businesses. In our Real-Time Services business,
we are seeing that the investments that we have made to strengthen
our offerings and enhance the sales organization are translating
into improved results. Renewal rates at our institutionally
oriented businesses remained at approximately 95%.� Andrew
Hajducky, Interactive Data�s executive vice president and chief
financial officer, commented, �Interactive Data generated $38.1
million in net cash provided by operating activities in the first
quarter of 2007, a 30.8% increase over the same period in 2006
primarily as a result of our strong quarterly operating
performance. After spending $5.9 million to repurchase our common
stock and paying $11.7 million to stockholders in connection with
our first-ever quarterly dividend, we ended the first quarter of
2007 with cash, cash equivalents and short-term marketable
securities of $220.3 million and no outstanding debt. We move
forward with the requisite financial strength to implement the key
elements of our growth strategy.� Clark concluded, �Customers are
responding favorably to the sales, marketing and product
development activities now underway across our organization. We
believe that acquiring the assets comprising Xcitek�s market data
business, which we announced on April 4, will bring valuable new
corporate actions-related services and domain expertise to our
Pricing and Reference Data business. In addition to pursuing
strategic acquisitions, we plan to continue enhancing our
capabilities and offerings through internal investment aligned with
key industry trends impacting customers such as the proliferation
of highly complex securities, regulation and the desire to continue
automating key workflow processes. A number of the development
programs we have planned will be phased in throughout the remainder
of this year and into 2008. We remain enthusiastic about
Interactive Data�s ability to assist its customers in addressing a
number of the time-sensitive and mission-critical financial
information challenges they now face.� Other First-Quarter 2007 and
Recent Financial and Operating Highlights Effects of Foreign
Exchange: Interactive Data's first-quarter 2007 revenue was
positively impacted by $4.4 million due to the effects of foreign
exchange. First-quarter 2007 revenue before the effects of foreign
exchange grew by $14.7 million, or 10.2%, over the comparable
period in 2006. Total costs and expenses in the first quarter of
2007 were negatively impacted by $3.5 million due to the effects of
foreign exchange. First-quarter 2007 total costs and expenses
before the effects of foreign exchange increased by $8.7 million,
or 7.8%, over the first quarter of 2006. Institutional Services
Segment: Interactive Data Pricing and Reference Data reported
first-quarter 2007 revenue of $100.0 million, an 11.4% increase
over the prior year�s first quarter (or an increase of 8.7% before
the effects of foreign exchange). North American revenue for the
first quarter of 2007 increased 8.8% over the first quarter of
2006. First-quarter 2007 European revenue increased by 19.4% (or
increased by 7.2% before the effects of foreign exchange) from the
first quarter of last year. First-quarter 2007 revenue growth in
both North America and Europe was driven primarily by higher
usage-related revenue and new sales to institutional customers for
evaluated pricing and reference data services during the second
half of 2006. Interactive Data Pricing and Reference Data�s
Asia-Pacific first-quarter 2007 revenue increased 26.3% (or
increased 19.8% before the effects of foreign exchange) compared
with the prior year�s first quarter. Interactive Data Real-Time
Services generated first-quarter 2007 revenue of $32.4 million, an
increase of 21.5% over the same quarter last year (or an increase
of 14.7% before the effects of foreign exchange). The increase
reflects continued growth in the Managed Solutions and real-time
datafeed businesses, combined with the previously mentioned
first-quarter 2006 deferral of $1.6 million in Managed Solutions
revenue. In March 2007, our Real-Time Services business announced
DirectPlus, a new ultra-low latency direct exchange data service
that is planned for release later this quarter. In April 2007,
Interactive Data Managed Solutions, which is managed as part of the
Real-Time Services business, announced that it has added 20 new
customers in North America during the past year. Interactive Data
Fixed Income Analytics reported revenue for the first quarter of
2007 of $8.1 million, which was essentially flat with last year�s
first quarter. New sales and increased business with existing
customers were offset by the impact of cancellations primarily
caused by client consolidation activities. Highlights for this
business in the first quarter of 2007 included eight new BondEdge
installations and the addition of two new customers for its new
fixed income analytic datafeed service, bringing the total number
of customers for this service to 15. Active Trader Services
Segment: eSignal�s first-quarter 2007 revenue of $22.0 million
increased 16.4% from the same quarter last year (or an increase of
15.6% before the effects of foreign exchange). Quote.com, which was
acquired in March 2006, contributed $3.2 million and $0.8 million
in revenue to the first quarter of 2007 and 2006, respectively.
Excluding the contribution from Quote.com and the effects of
foreign exchange, eSignal�s underlying revenue growth in the first
quarter of 2007 was 3.2%. eSignal ended the first quarter of 2007
with over 62,250 direct subscription terminals, which includes
approximately 11,800 direct subscription terminals for
Quote.com-related services. eSignal continued to make progress with
the integration of the Quote.com operation during the first quarter
of 2007. In recent months, eSignal has received recognition from
three leading financial industry trade publications and
organizations: Technical Analysis of Stocks & Commodities,
Trade2Win and Shares magazine. Cash Position, Stock Buyback
Activities, and Quarterly Cash Dividend: As of March 31, 2007,
Interactive Data had no outstanding debt and had cash, cash
equivalents and marketable securities of $220.3 million. During the
first quarter of 2007, Interactive Data spent $5.9 million to
repurchase 244,000 shares of common stock at an average purchase
price of $24.02 per share as part of its existing October 2006
share buyback program. Entering the second quarter of 2007,
1,704,000 shares remained available for repurchase under the
existing October 2006 share buyback program. During the first
quarter of 2007, Interactive Data spent $11.7 million to pay its
first-ever quarterly cash dividend of $0.125 per share of common
stock to stockholders of record on March 1, 2007. Acquisition of
Xcitek Market Data On April 4, 2007, Interactive Data announced
that it signed an agreement to acquire the assets comprising the
market data division of Xcitek LLC, as well as the market data
assets of its affiliate Xcitax LLC, for $25.3 million in cash. This
acquisition represents an important element in Interactive Data's
strategy to expand its reference data services and support
enterprise-wide financial applications. We believe that the
addition of Xcitek Market Data's corporate actions data covering
North American securities will augment the corporate actions
content that Interactive Data Pricing and Reference Data collects,
processes and delivers to thousands of financial institutions and
redistribution partners around the world. The transaction is
expected to be completed during the second quarter of 2007, after
which Xcitek�s market data business will be integrated into
Interactive Data Pricing and Reference Data. 2007 Outlook We
anticipate that market conditions in 2007 will be similar to those
experienced in 2006. We expect that, although institutional
spending on financial market data and related services in 2007 may
again increase modestly over 2006 levels, customers will continue
to remain focused on controlling spending on such services. Based
on our results to date, our outlook for 2007, which excludes any
impact associated with the planned acquisition of the assets
comprising Xcitek�s market data business, is unchanged from the
original guidance we issued in February 2007: -- 2007 revenue
growth is expected to be in the range of 6% to 9% -- Our 2007
effective tax rate is expected to be in the range of 38.5% to 39.5%
-- 2007 net income is expected to grow in the high single-digit to
low double-digit range -- Capital expenditures in 2007 are expected
to be in the range of $35 million to $37 million Conference Call
Information Interactive Data Corporation's management will conduct
a conference call on Thursday, April 26, 2007 at 11:00 a.m. Eastern
Time to discuss the first-quarter 2007 results, related financial
and statistical information, and additional business matters. The
dial-in number for the conference call is (706) 679-4631 and the
related access code is 4528563. A live webcast of the conference
call, along with related slides, will be broadcast on 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 26 at 2:00 p.m. until Thursday, May 8, 2007 at 2:00 p.m., and
can be accessed by dialing (706) 645-9291 or (800) 642-1687, using
access code 4528563. A replay of the call, the related slides and
other financial and statistical information presented on the
conference call will also be available on the investor relations
section of the Company�s Web site at www.interactivedata.com after
the call is completed. 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 includes information regarding organic
revenue growth, which excludes the contribution of businesses
recently acquired, related intercompany eliminations 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 revenue for our Interactive Data Pricing and Reference
Data, Interactive Data Real-Time Services, Interactive Data Fixed
Income Analytics, and eSignal businesses. Management uses such
information for evaluating its business, and for forecasting and
planning purposes. In addition, since we have historically reported
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 core total
costs and expenses which excludes total costs and expenses
associated with businesses recently acquired, and the effects of
foreign exchange management believes changes in our core total
costs and expenses on a constant dollar basis better reflect actual
trends in the core businesses. Management includes information
regarding core operating profit, which excludes revenue and costs
and expenses associated with recently acquired businesses,
intercompany eliminations and the effects of foreign exchange
because management believes changes in our core operating profit on
a constant dollar basis better reflect actual trends in the core
businesses. 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 all statements that are not historical
statements and include our statements discussing our goals,
beliefs, strategies, objectives, plans, future financial
conditions, results of operations and cash flows or projections, as
well as those appearing under the heading "Outlook," our statements
about expected market conditions, our expected growth and
profitability, and planned product and service developments, and
acquisitions; our statements related to any potential future stock
repurchase transactions, including our intention to repurchase
shares of our common stock from time to time under the stock
repurchase program, the source of funding for the stock repurchase
program, as well as the timing, nature and financial impact of any
such transactions related to the stock buyback program; and
statements related to dividends, including the timing, nature and
financial impact of issuing any dividends. 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 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,
or we may not be able to develop new or enhanced services or
offerings; (ix) our ability to negotiate and enter into strategic
acquisitions or alliances on favorable terms, if at all; (x) our
ability to realize the anticipated benefits from any strategic
acquisitions or alliances that we enter into; (xi) the regulatory
requirements applicable to our business and many of our customers,
including our Interactive Data Pricing and Reference Data
subsidiary, which is a registered investment adviser; (xii) our
ability to attract and retain key personnel; and (xiii) 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 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 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, Interactive Data Pricing and Reference Data,
Interactive Data Real-Time Services, Interactive Data Fixed Income
Analytics 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 Interactive
Data Pricing and Reference Data business includes Interactive Data
Pricing and Reference Data Corporation, a Delaware corporation. The
Interactive Data Real-Time Services business includes Interactive
Data Real-Time Services, Inc., a New York corporation. INTERACTIVE
DATA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (Unaudited) (In thousands except per share data) �
Three Months Ended March 31, � 2007� � � 2006� � Change � � REVENUE
$ 162,535� $ 143,429� 13.3% � COSTS AND EXPENSES: Cost of services
54,494� 49,269� 10.6% Selling, general and administrative 57,059�
50,785� 12.4% Depreciation 5,703� 5,285� 7.9% Amortization � 6,467�
� � 6,197� � 4.4% Total costs & expenses 123,723� 111,536�
10.9% � INCOME FROM OPERATIONS 38,812� 31,893� 21.7% Interest
income, net � 1,865� � � 1,193� � 56.3% INCOME BEFORE INCOME TAXES
40,677� 33,086� 22.9% Income tax expense � 15,058� � � 13,264� �
13.5% NET INCOME $ 25,619� � $ 19,822� � 29.2% � NET INCOME PER
SHARE: Basic $ 0.27� $ 0.21� 28.6% Diluted $ 0.27� $ 0.21� 28.6%
Cash dividends paid per common share $ 0.125� $ -� -� � WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING: Basic 93,522� 93,458� 0.1%
Diluted 96,253� 95,910� 0.4% INTERACTIVE DATA CORPORATION AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) �
� � March 31, December 31, � 2007� � � 2006� ASSETS (Unaudited) �
Current Assets: Cash and cash equivalents $ 177,085� $ 152,449�
Marketable securities 43,169� 43,296� Accounts receivable, net
99,028� 103,041� Prepaid expenses and other current assets 15,345�
13,840� Deferred income taxes � 2,431� � � 3,164� Total current
assets � 337,058� � � 315,790� Property and equipment, net 81,279�
81,988� Goodwill 537,890� 536,049� Other intangible assets, net
162,804� 168,969� Other assets � 1,199� � � 1,008� Total Assets $
1,120,230� � $ 1,103,804� � LIABILITIES AND STOCKHOLDERS' EQUITY �
Current Liabilities: Accounts payable, trade $ 19,310� $ 25,787�
Accrued liabilities 65,547� 75,053� Payable to affiliates 2,386�
5,156� Income taxes payable 24,686� 17,042� Deferred revenue �
32,946� � � 27,343� Total current liabilities � 144,875� � �
150,381� Deferred tax liabilities 34,863� 35,773� Other liabilities
� 6,549� � � 6,065� Total Liabilities � 186,287� � � 192,219� �
Stockholders' Equity: Preferred stock -� -� Common stock 999� 993�
Additional paid-in capital 900,044� 887,071� Treasury stock, at
cost (111,550) (105,690) Accumulated earnings 110,143� 96,230�
Accumulated other comprehensive income � 34,307� � � 32,981� Total
Stockholders' Equity � 933,943� � � 911,585� Total Liabilities and
Stockholders' Equity $ 1,120,230� � $ 1,103,804� INTERACTIVE DATA
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (In Thousands) � � Three Months Ended March 31,
(Unaudited) � 2007� � � 2006� � Cash flows provided by (used in)
operating activities: Net income $ 25,619� $ 19,822� Adjustments to
reconcile net income to net cash provided by operating activities:
� Depreciation and amortization 12,170� 11,482� Excess tax benefits
from stock-based compensation (541) (2,047) Deferred income taxes
(895) (776) Amortization of discounts and premiums on marketable
securities, net 111� 53� Stock-based compensation 3,557� 4,241�
Other non-cash items, net -� 421� Changes in operating assets and
liabilities, net � (1,942) � � (4,073) NET CASH PROVIDED BY
OPERATING ACTIVITIES 38,079� 29,123� � Cash flows provided by (used
in) investing activities: Purchase of fixed assets (4,941) (6,485)
Acquisition of business -� (32,851) Purchase and sale of marketable
securities � 17� � � (7,904) NET CASH USED IN INVESTING ACTIVITIES
(4,924) (47,240) � Cash flows provided by (used in) financing
activities: Purchase of treasury stock (5,860) (5,617) Proceeds
from exercise of stock options and employee stock purchase plan
8,146� 6,627� Excess tax benefits from stock-based compensation
541� 2,047� Common stock cash dividends � (11,706) � � -� NET CASH
PROVIDED BY (USED IN) FINANCING ACTIVITIES (8,879) 3,057� � Effect
of exchange rate on cash and cash equivalents � 360� � � 474� NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 24,636� (14,586)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD � 152,449� � �
147,368� � CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 177,085� �
$ 132,782� RECONCILIATION OF NON-GAAP MEASURES � Revenue Before
Effects of Foreign Exchange, Acquisition-Related Revenue and
Intercompany Eliminations Resulting from Acquisitions (In
thousands) � Three Months Ended � � March 31, � � � 2007� � � 2006�
� Change Revenue Institutional Services: Pricing and Reference Data
$ 100,040� $ 89,772� 11.4% Real-Time Services 32,423� 26,678� 21.5%
Fixed Income Analytics � 8,082� � � 8,091� � -0.1% Institutional
Services total 140,545� 124,541� 12.9% � Active Trader Services:
eSignal � 21,990� � � 18,888� � 16.4% Active Trader Services total
21,990� 18,888� 16.4% � Total revenue 162,535� 143,429� 13.3% �
Effects of foreign exchange � (4,416) � � -� � -� � Non-GAAP
revenue before effects of foreign exchange 158,119� 143,429� 10.2%
� Revenue � Quote.com � (3,177) � � (805) � 294.6% � Non-GAAP
Revenue before effects of foreign exchange and acquisition-related
revenue 154,942� 142,624� 8.6% � Intercompany eliminations
resulting from acquisitions � -� � � (288) � -� � Non-GAAP revenue
before above factors $ 154,942� � $ 142,336� � 8.9% RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES (CONTINUED) � Total Costs and
Expenses Before Effects of Acquisition-Related Total Costs and
Expenses, and Foreign Exchange (In thousands) � Three Months Ended
March 31, � 2007� � � 2006� � Change � Total costs & expenses $
123,723� $ 111,536� 10.9% � Effects of foreign exchange � (3,473) �
� -� � -� � Total costs & expenses before the effects of
foreign exchange 120,250� 111,536� 7.8% � Total costs &
expenses � Quote.com � (1,703) � � (528) � 222.5% � Non-GAAP total
costs & expenses before above factors $ 118,547� � $ 111,008� �
6.8% RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (CONTINUED) �
Operating Profit Before Effects of Acquisitions, Related
Intercompany Eliminations, and Foreign Exchange (In thousands) �
Three Months Ended March 31, � 2007� � � 2006� � Change � Non-GAAP
revenue before above factors $ 154,942� $ 142,336� 8.9% � Non-GAAP
total costs and expenses before above factors � 118,547� � �
111,008� � 6.8% � Non-GAAP operating profit from core businesses $
36,395� � $ 31,328� � 16.2%
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