POWAY, Calif., July 28 CA-1st-Advantage-ern
POWAY, Calif., July 28 /PRNewswire-FirstCall/ -- First Advantage
Corporation (Nasdaq: FADV) ("the Company"), a global risk mitigation and
business solutions provider, today announced operating results for the second
quarter ended June 30, 2008.
First Advantage reported income from continuing operations of $13.7
million (23 cents per diluted share) for the quarter ended June 30, 2008,
compared to $18.2 million (31 cents per diluted share) for the quarter ended
June 30, 2007. Results of operations for the quarter ended June 30, 2008
include a restructuring charge of $1.7 million ($1 million after tax or 2
cents per diluted share) primarily relating to consolidation of facilities in
the Employer Services and Lender Services segments. Earnings were negatively
impacted by $1.8 million in the Employer Services segment due to a portion of
the restructuring charge, and the expiration in the third quarter of 2007 of
the Hurricane Katrina tax credit legislation. This reduced operating margins
in this segment by approximately 3 percentage points. The Dealer Services,
Multifamily Services and Investigative and Litigation Support Services
segments all reported increased earnings and margins.
Total revenue for the company was $195.5 million and $210.1 million for
the quarters ended June 30, 2008 and 2007, respectively.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
were $35.3 million and $44 million for the quarters ended June 30, 2008 and
2007, respectively.
"Earnings in the Lender Services, Employer Services and Data Services
segments declined primarily due to the challenging economic environment in the
mortgage industry and a weakening U.S. labor market. We are in the midst of
aggressive cost reduction initiatives that will improve efficiencies in future
quarters," stated Anand Nallathambi, president and chief executive officer.
In the quarter ended June 30, 2008, the Company completed the previously
announced sale of Credit Management Solutions, Inc., its automotive consumer
credit software business, and of First Advantage Investigative Services, its
investigative and surveillance business. Loss from discontinued operations
for the quarter ended June 30, 2008 was $1.3 million, net of tax (2 cents per
diluted share). Income from discontinued operations for the quarter ended
June 30, 2007, also includes the results of operations for US SEARCH.com, the
Company's consumer location business which was sold in the fourth quarter of
2007. "Now that the strategic repositioning and disposition of non-strategic
assets are almost over, we remain committed to generating long-term
shareholder value by focusing on product expansion and enhancing operational
efficiencies," stated Mr. Nallathambi.
First Advantage's second quarter 2008 results will be discussed in more
detail on Monday, July 28, 2008, at 5:00 p.m. EDT, via teleconference and
webcast. The teleconference dial-in number is 888.889.1652 within the U.S.
and 210.795.9764 outside the U.S. The teleconference pass code is
"Advantage". The live audio webcast of the call will be accessible from the
Investor Relations section of First Advantage's Web site at www.FADV.com . An
audio replay of the teleconference call will be available through August 11,
2008, by dialing 800.839.3420 within the U.S., or 402.998.1036 outside the
U.S. An audio archive of the webcast will also be available for replay on
First Advantage's Web site following the call.
Summary Consolidated Income Statement (Unaudited)
(In thousands, except per
share amounts) Three Months Ended Six Months Ended
June 30, June 30,
20082007 2008 2007
Service revenue $182,423$196,641 $370,677 $387,828
Reimbursed government fee
revenue 13,122 13,470 27,147 27,544
Total revenue195,545 210,111397,824415,372
Cost of service revenue 53,487 58,461107,203117,300
Government fees paid 13,122 13,470 27,147 27,544
Total cost of sales 66,609 71,931134,350144,844
Gross margin 128,936 138,180263,474270,528
Salaries and benefits 62,927 62,745129,376133,386
Facilities and
telecommunications8,084 7,800 16,284 15,518
Other operating expenses 22,909 23,787 45,743 46,374
Depreciation and amortization 11,023 9,825 20,919 19,362
Income from operations23,993 34,023 51,152 55,888
Interest (expense) income:
Interest expense(1,075) (3,097)(1,500)(6,323)
Interest income172 309591641
Interest (expense)
income, net(903) (2,788) (909)(5,682)
Equity in earnings of investee --- 670--- 1,450
Income from continuing
operations before income
taxes and minority interest 23,090 31,905 50,243 51,656
Provision for income taxes 9,676 13,241 20,650 21,279
Income from continuing
operations before minority
interest 13,414 18,664 29,593 30,377
Minority interest (238)469 (325) 1,029
Income from continuing
operations 13,652 18,195 29,918 29,348
(Loss) income from
discontinued operations,
net of tax (1,264)152 (4,241) 242
Net income $12,388 $18,347$25,677$29,590
Per share amounts:
Basic earnings per share
Income from continuing
operations$0.23 $0.31 $0.50 $0.50
Loss from discontinued
operations, net of tax(0.02)--- (0.07) ---
Net income $0.21 $0.31 $0.43 $0.50
Diluted earnings per share
Income from continuing
operations$0.23 $0.31 $0.50 $0.50
Loss from discontinued
operations, net of tax(0.02)--- (0.07) ---
Net income $0.21 $0.31 $0.43 $0.50
Basic weighted-average
shares outstanding 59,435 58,954 59,297 58,665
Diluted weighted-average
shares outstanding 59,617 59,445 59,374 59,130
EBITDA calculation:
Net income $12,388 $18,347$25,677$29,590
Provision for income taxes 9,676 13,241 20,650 21,279
Interest expense 903 2,788909 5,682
Income (loss) from
discontinued operations,
net of tax1,264(152) 4,241 (242)
Depreciation and amortization 11,023 9,825 20,919 19,362
Earnings before interest,
taxes, depreciation and
amortization (EBITDA)* $35,254 $44,049$72,396$75,671
*EBITDA is not a measure of financial performance under generally accepted
accounting principles. EBITDA is used by certain investors to analyze and
compare companies.
Segment Financial Information (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
(In thousands, except
percentages) 20082007 2008 2007
Service revenue
Lender Services $33,680 $43,682$72,994$90,294
Data Services 27,882 32,615 56,511 66,312
Dealer Services 24,955 27,489 50,881 54,825
Employer Services 55,511 57,971109,198112,796
Multifamily Services 19,986 19,676 38,335 37,281
Investigative & Litigation
Support Services 21,178 15,752 44,681 28,075
Corporate (769) (544)(1,923)(1,755)
Consolidated$182,423$196,641 $370,677 $387,828
Income (Loss) from operations
Lender Services $5,518 $11,686$14,983$24,342
Data Services 5,561 9,976 11,694 20,661
Dealer Services4,646 3,743 9,165 7,411
Employer Services 3,004 6,799 6,475 11,910
Multifamily Services 6,569 5,866 11,341 10,180
Investigative & Litigation
Support Services 7,535 5,027 17,060 7,948
Corporate (8,840) (9,074) (19,566) (26,564)
Consolidated $23,993 $34,023$51,152$55,888
Operating margin percentage
of service revenue
Lender Services16.38% 26.75% 20.53% 26.96%
Data Services 19.94% 30.59% 20.69% 31.16%
Dealer Services18.62% 13.62% 18.01% 13.52%
Employer Services 5.41% 11.73% 5.93% 10.56%
Multifamily Services 32.87% 29.81% 29.58% 27.31%
Investigative & Litigation
Support Services 35.58% 31.91% 38.18% 28.31%
CorporateN/A N/AN/AN/A
Consolidated 13.15% 17.30% 13.80% 14.41%
About First Advantage Corporation
First Advantage Corporation (Nasdaq: FADV) combines industry expertise
with information to create products and services that organizations worldwide
use to make smarter business decisions. First Advantage is a leading provider
of consumer credit information in the mortgage, automotive and specialty
finance markets; business credit information in the transportation industry;
lead generation services; motor vehicle record reports; employment background
verifications; occupational health services; applicant tracking systems;
recruiting solutions; skills and behavioral assessments; business tax
consulting services; corporate and litigation investigations; computer
forensics; electronic discovery; data recovery; due diligence reporting;
resident screening; property management software and renters insurance. First
Advantage ranks among the top companies in all of its major business lines.
First Advantage is headquartered in Poway, Calif., and has more than 4,700
employees in offices throughout the United States and abroad. More
information about First Advantage can be found at www.FADV.com .
First Advantage is a majority-owned subsidiary of The First American
Corporation (NYSE: FAF), a FORTUNE 500(R) company that traces its history to
1889. First American is America's largest provider of business information,
supplying businesses and consumers with valuable information products to
support the major economic events of people's lives. Additional information
about the First American Family of Companies can be found at www.firstam.com .
Certain statements in this press release including those related to cost
reduction initiatives and impact on improved efficiencies in the future
quarters, product expansion and enhanced operational efficiencies are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. Risks and uncertainties exist that may cause results to
differ materially from those set forth in these forward-looking statements.
Factors that could cause the anticipated results to differ from those
described in the forward-looking statements include: general volatility of the
capital markets and the market price of the company's Class A common stock;
interest rate fluctuations; changes in the real estate market; changes in
employment trends; limit on access to public records; the company's ability to
successfully raise capital; the company's ability to identify and complete
acquisitions and successfully integrate businesses it acquires; changes in
applicable government regulations; heightened regulations and regulatory
scrutiny; the degree and nature of the company's competition; increases in the
company's expenses; inability to realize the benefits of offshore strategy;
continued consolidation among the company's competitors and customers;
unanticipated technological changes and requirements; the company's ability to
identify suppliers of quality and cost-effective data; and other risks
identified from time-to-time in the company's SEC filings. The forward-looking
statements speak only as of the date they are made. The company does not
undertake to update forward-looking statements to reflect circumstances or
events that occur after the date the forward-looking statements are made.
Investors are advised to consult the company's filings with the SEC, including
its 2007 Annual Report on Form 10-K, 2008 First Quarter Report on Form 10-Q
and any subsequent amendments, for a further discussion of these and other
risks.
Contacts:
Henri Van Parys Cindy Williams
Corporate Communications Manager Investor Relations Manager
727.214.1072 727.214.3438
henri.vanparys@FADV.com clwilliams@FADV.com
SOURCE First Advantage Corporation
