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Equifax posts rise in Q2 net income

24 July 2007  |  1130 views  |  0 Source: Equifax

Equifax (NYSE:EFX) today reported second quarter results.

Revenue increased to $454.5 million, up 17 percent compared to the second quarter of 2006. Diluted earnings per share ("EPS") was 51 cents, a 4 percent decrease from the second quarter of 2006. On a non-GAAP basis, diluted EPS adjusted for acquisition-related amortization expense and excluding the favorable net impact of several 2006 litigation- related matters, increased 8 percent to 57 cents from the second quarter of 2006. Our second quarter operating results include TALX Corporation subsequent to the date of acquisition on May 15, 2007.

"In the second quarter we completed, ahead of schedule, the acquisition of TALX, a leading provider of employment and income verification and human resources outsourcing services," said Richard F. Smith, Equifax Chairman and Chief Executive Officer. "At the same time, we kept our focus on customers of the traditional Equifax businesses and, excluding the impact of TALX, delivered 8 percent revenue growth, including double-digit growth in our International, North America Personal Solutions and North America Commercial Solutions businesses."

Second Quarter 2007 Highlights
  • Solid double-digit revenue growth in our International, North America Personal Solutions and North America Commercial Solutions operating segments and the acquisition of TALX contributed to a 17 percent increase in revenue in the second quarter of 2007, when compared to the same period in 2006.
  • Operating margin was 26.4 percent compared to 24.9 percent in the second quarter of 2006.
  • Operating income grew to $119.8 million, up 24 percent from the second quarter of 2006. On a non-GAAP basis, excluding the impact of the second quarter 2006 litigation matters mentioned above, operating income grew 8 percent.
  • Net income rose to $70.1 million, a one percent increase from the second quarter of 2006, which included the favorable net impact of the 2006 litigation-related matters. On a non-GAAP basis excluding the impact of these litigation matters, neet income increased 9 percent.
  • Total debt increased to $1.2 billion in the second quarter of 2007, from $503.9 million at December 31, 2006. The increase resulted primarily from our issuance of an aggregate of $550 million of ten- and thirty-year fixed rate senior notes in late June, assumption of $75 million in senior guaranteed notes of TALX and commencement of a commercial paper program on May 22, 2007 to refinance certain other outstanding debt.
  • We repurchased 4.2 million of our common shares for $179.3 million in the quarter, as part of our previously announced share repurchase programs.


U.S. Consumer Information Solutions

Total revenue was $250.0 million in the second quarter of 2007, a 2 percent increase from the second quarter of 2006. Solid demand for our online consumer information solutions product lines was partially offset by weakness in the mortgage and marketing services markets. Operating margin for U.S. Consumer Information Solutions was 40.4 percent in the second quarter of 2007 versus 41.5 percent in the second quarter of 2006.
  • Online Consumer Information Solutions revenue was $165.4 million, up 5 percent compared to the second quarter of 2006.
  • Mortgage Reporting Solutions revenue was $19.0 million, down 1 percent compared to the second quarter of 2006.
  • Credit Marketing Services revenue was $39.6 million, down 3 percent compared to the second quarter of 2006.
  • Direct Marketing Services revenue was $26.0 million, down 9 percent compared to the second quarter of 2006.


International

Total revenue was $115.3 million in the second quarter of 2007, a 15 percent increase from the second quarter of 2006. In local currency, revenue was up 9 percent when compared to the same period in the prior year. Operating margin for International was 29.0 percent in the second quarter of 2007, down from 29.7 percent in the second quarter of 2006.
  • Europe revenue was $45.2 million, up 20 percent compared to the second quarter of 2006. In local currency, revenue was up 11 percent when compared to the same period in the prior year.
  • Latin America revenue was $44.1 million, up 14 percent compared to the second quarter of 2006. In local currency, revenue was up 9 percent when compared to the same period in the prior year.
  • Canada Consumer revenue was $26.0 million, up 8 percent compared to the second quarter of 2006. In local currency, revenue was up 6 percent when compared to the same period in the prior year.


North America Personal Solutions

Total revenue rose to $38.6 million, a 24 percent increase from the second quarter of 2006. Operating margin was 19.0 percent versus a negative margin in the second quarter of 2006. Operating margin for the second quarter of 2006 included the impact of a $14 million loss contingency related to certain litigation matters. On a non-GAAP basis, excluding the impact of the loss contingency, operating margin was 9 percent in the second quarter of 2006.

North America Commercial Solutions

Total revenue rose to $15.3 million, a 41 percent increase from the second quarter of 2006. Operating margin was 6.4 percent, down from 13.5 percent in the second quarter of 2006.

TALX

Total revenue was $35.3 million, and operating margin was 12.8 percent, for the period from the acquisition on May 15, 2007 through June 30, 2007, meeting our expectations. For the full calendar quarter, transaction volume for The Work Number business unit was 3.5 million, up 15 percent from the second quarter of 2006. In addition, almost 5.3 million total records were added, bringing total records in the database to 152.3 million.

REad the consolidated statement here:» Download the document now 35.2 kb (PDF File)

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