CCC Information Services Reports Second Quarter Results
22 July 1999
CCC Information Services Reports Second Quarter Results
CHICAGO--July 22, 1999--CCC Information Services Group Inc. , the leading provider of business solutions to the automobile claims industry, today announced 10.4% revenue growth for its second quarter ended June 30, 1999.Second Quarter Events
| - | Revenues increased to $51.0 million. |
| - | Operating income totaled $0.6 million. |
| - | One-time charges of $3.3 million recorded. |
In announcing the results, Githesh Ramamurthy, Chief Executive Officer, said, "The second quarter operating profit is clearly disappointing. However, we have also taken key actions that focus the business, improve service levels seen by our customers, and reduce operating costs going forward. While substantial investments in internal systems in the operating areas have impacted costs negatively this quarter, these investments will result in improved core business profitability."
Second quarter 1999 revenues of $51.0 million were $4.8 million, or 10.4% higher than the same quarter last year. The increase in revenues was principally due to continued growth in the Company's Consumer Services business, formerly known as Outsourcing, continued growth in digital imaging and revenue from CCC International, an investment made in Europe in the second half of 1998.
Second quarter operating income of $0.6 million declined $4.1 million from the same quarter last year. Several one-time events must be considered in evaluating the year over year results. In the second quarter of 1998, the Company recorded a $1.7 million charge associated with the decision to relocate the processing operations of the claims settlement division to South Dakota. Adjusting for that charge, the second quarter 1998 operating income would have been $6.4 million. In the second quarter of 1999, there were $3.3 million of one-time events. These charges included; $1.2 million for the stock repurchase from a charitable trust, controlled by the chairman, Dave Phillips; $1.3 million in consulting costs for projects aimed at improving the internal telecommunications and customer service infrastructure; and $0.8 million in severance costs for the re-alignment of the Automotive Services Division. Adjusting for the one-time charges, operating margin declined from 13.9% in 1998 to 7.7% in 1999. After the one-time charges, operating expenses increased $7.3 million or 18.3%, reflecting the growth in the consumer services business, spending against new initiatives such as Europe and Pathways Enterprise Solution, and continued growth in expenditures to improve service levels.
Equity in net losses from affiliates, all of which are non-cash, totaled $0.5 million related to the European joint venture between CCC and Hearst Communications Inc. which was established in the fourth quarter of 1998.
Second quarter 1999 earnings per share; applicable to common stock on a diluted basis was $0.0 versus earnings per share of ($0.01) in the second quarter of 1998. Adjusting 1998 for the non-cash loss from InsurQuote, which is not applicable in the second quarter of 1999, the earnings per share for the second quarter of 1998 was $0.11 versus earnings per share of $0.00 in the second quarter of 1999.
Outlook
Mr. Ramamurthy commented on the Company's performance during the latest quarter and its outlook for future quarters, "We are optimistic about our near term opportunities in Europe, bodily injury and the roll out of Pathways Enterprise Solution. We expect the contract renewals and Pathways conversion process to continue to go well, providing the platform to deliver our next technological advance into the marketplace in the beginning of next year."
Some of the statements contained in this release 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 1998 Annual Report on Form 10-K for a discussion of associated risks.
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
Three Months and Year-to-Date Period Ended June 30, 1999
(In thousands, except per share amounts)
Three Months Ended Year-to-Date Period Ended
Condensed Operating June 30, 1999 June 30, 1999
Results
---------------------- -------------------------
(Unaudited) (Unaudited)
1999 1998 1999 1998
---- ---- ---- ----
Revenues $ 50,968 $ 46,147 $100,877 $ 90,838
Operating expenses 50,337 41,458 93,927 78,993
-------- -------- -------- ----------
Operating income 631 4,689 6,950 11,845
Interest expense (186) (1) (381) (65)
Other income, net 189 112 228 462
-------- -------- -------- ----------
Income before income
taxes 634 4,800 6,797 12,242
Income tax provision (58) (2,046) (2,737) (5,208)
Net income before
equity 576 2,754 4,060 7,034
losses
Equity in net losses of
affiliates (501) (3,036) (4,996) (4,217)
-------- -------- -------- ----------
Net income (loss) 75 (282) (936) 2,817
Dividends and accretion
on preferred stock (1) (97) (2) (191)
-------- -------- -------- ----------
Net income (loss) $ 74 $ (379) $ (938) $ 2,626
applicable to common
stock
======== ======== ======== ==========
Per Share Data:
Net income (loss)
applicable to
common stock
Basic $ - $ (0.02) $ (0.04) $ -
======== ======== ======== ==========
Diluted $ - $ (0.01) $ (0.04 $ -
======== ======== ======== ==========
Weighted average common
and common equivalent
shares outstanding
Basic 23,381 24,859 23,550 23,807
======== ======== ======== ==========
Diluted 23,685 25,493 23,910 24,959
======== ======== ======== ==========
June 30, December 31,
Selected Balance Sheet Data 1999 1998
--------------------------- ----- ----
(Unaudited)
Total assets $ 75,946 $ 79,018
Mandatorily redeemable
preferred stock - 688
Stockholders' equity 23,541 35,303