CCC Information Services Reports Record Quarterly Revenue And Operating Profits
22 January 1998
CCC Information Services Reports Record Quarterly Revenue And Operating Profits
CHICAGO, Jan. 22 -- CCC Information Services Group Inc.
, the leading provider of business solutions to the automobile
claims industry, today announced record revenue growth and operating profits
for its fourth quarter ended December 31, 1997.
Fourth Quarter Highlights
-- Revenues increased 24% to $43.6 million.
-- Operating income increased 51% to $7.1 million.
-- Farmers renews a multi-year contract with exclusivity provisions for
CCCs Pathways Workflow Platform.
-- Claims outsourcing revenue achieved $1.0 million for the quarter.
Quarterly Results
In announcing the results, David M. Phillips, Chairman and Chief Executive
Officer, said, Fourth quarter revenue growth of 24% and full year revenue
growth of 21%, combined with another major contract win is consistent with
CCCs goal of generating growth on a contractual basis. The continued
partnership with Farmers Insurance is the result of CCCs commitment to
developing claims solutions for the future.
Fourth quarter 1997 revenues of $43.6 million were $8.5 million, or 24%,
higher than the same quarter last year. The increase in revenues was due to
additional workflow/collision estimating software licensing in both the
autobody and insurance markets and higher demand for the Company's valuation
services. CCC also experienced continued growth in revenues from network fees
and strong revenue gains from its digital imaging product. Finally, the
achievement of $1.0 million in claims outsourcing revenue reflects the ramp-up
of this new initiative.
As a result of higher revenues, fourth quarter operating income of
$7.1 million was $2.4 million, or 51%, higher than the same quarter last year.
Operating margins for the quarter increased to 16.3% in 1997 from 13.4% in
1996. Operating expenses increased in terms of dollars due principally to an
increase in commissions, royalties, and license fees driven by the additional
workflow/collision estimating seats which carry both a commission and a data
royalty, as well as the start-up costs associated with the outsourcing
initiative. The fourth quarter operating margin improvement was achieved
despite the continuing investment in new product development, in particular
for enterprise-wide autobody shop management system solutions as well as data
warehouse investments. Both of these initiatives are expected to contribute
to performance by the end of 1998.
Fourth quarter 1997 earnings per share applicable to common stock on a
diluted basis were $0.18, or a 12.5% increase from the $0.16 reported for the
fourth quarter of 1996. The 1996 results benefited from the accelerated
release of income tax valuation allowances.
Full Year Results Reflect Consistent Pattern of Growth
Revenues for the year ended December 31, 1997 of $159.1 million are 21.5%
higher than last year. The increase in revenue is primarily attributable to
higher revenues from workflow/collision estimating software licensing and
valuation services. Workflow/collision estimating software revenue increased
due to an increase in the number of units in both the autobody and insurance
markets. Valuation services revenue increased due to higher transaction
volume.
As a result of higher revenues, operating income for the year ended
December 31, 1997 increased $5.6 million to $25.7 million, a 27.7% increase
over last year.
Net income applicable to common stock increased from $8.2 million in 1996
to $15.5 million, an increase of 90%, for the year ended December 31, 1997.
Earnings per share applicable to common stock on a diluted basis for the year
increased to $0.62 or a 55% increase from the $0.40 reported for the same
period last year. The earnings per share applicable to common stock for the
same period last year included the favorable impact of reversing income tax
valuation allowances, $4.7 million, offset by IPO related adjustments for
accelerated preferred stock accretion, $4.5 million, the extraordinary loss on
the early retirement of debt, $678 thousand, and the overall effects of the
recapitalization, including the increase in the number of common stock shares
outstanding.
Outlook
The following statements are based on current expectations. Some of these
statements are forward-looking and actual results may differ materially.
Please see the Company's offering prospectus and 1996 Annual Report on Form
10-K for a discussion of associated risks.
Mr. Phillips commented on the Company's performance during the latest
quarter and its outlook for future quarters, We are very pleased that we were
able to achieve our financial targets in 1997. We are particularly pleased
that we were able to accomplish this important goal despite the considerable
investment required to set the foundation for future revenue growth. During
1997, we invested over $20 million in product engineering, substantially
expanded our customer service capability and made investments in several
products that will benefit us in the future. At the same time, we added close
to 6,000 seats and built a claims outsourcing business from the ground up. I
expect 1998 to be an exciting year.
CCC Information Services Group Inc. is the automotive claims industry's
leading provider of business solutions. Connecting people, processes and
information, CCC's innovative technology-based capabilities ensure that the
right information is always available -- at the right time and to the right
person -- to make the right business decision.
CCC INFORMATION SERVICES GROUP INC.
Condensed Operating Results and Selected Balance Sheet Data
Quarter Ended December 31, 1997
(In thousands, except per share amounts)
Condensed Operating Results
Quarter Ended Full Year Ended
December 31 December 31
(Unaudited) (Unaudited)
1997 1996 1997 1996
Revenues $ 43,583 $ 35,050 $ 159,105 $ 130,977
Operating expenses 36,460 30,339 133,400 110,846
Operating income 7,123 4,711 25,705 20,131
Interest expense (33) (54) (139) (2,562)
Other income, net 445 174 1,505 636
Income before income taxes 7,535 4,831 27,071 18,205
Income tax provision (3,017) (718) (11,239) (2,683)
Income before extraordinary
item and dividends and
accretion on preferred
stock 4,518 4,113 15,832 15,522
Extraordinary loss on
early retirement of
debt, net of income
taxes -- -- -- (678)
Net income 4,518 4,113 15,832 14,844
Dividends and accretion
on preferred stock (95) (87) (366) (6,694)
Net income (loss)
applicable to
common stock $ 4,423 $ 4,026 $ 15,466 $ 8,150
Earnings Per Share:
Income before extraordinary
item and dividends and
accretion on preferred
stock $ 0.18 $ 0.16 $ 0.63 $ 0.76
Extraordinary loss on
early retirement of
debt, net of income
taxes -- -- -- (0.03)
Dividends and accretion
on preferred stock -- -- (0.01) (0.33)
Net income (loss)
applicable to common
stock $ 0.18 $ 0.16 $ 0.62 $ 0.40
Weighted average common
and common equivalent
shares outstanding 25,180 24,765 24,958 20,367
Selected Balance Sheet Data
December 31, 1997 December 31, 1996
(Unaudited)
Total assets $ 83,494 $ 58,268
Long-term debt 0 111
Mandatorily redeemable
preferred stock 5,054 4,688
Stockholders' equity 45,827 24,293
SOURCE CCC Information Services Group Inc.