CCC Reports Record 1999 Fourth Quarter Results
27 January 2000
CCC Information Services Reports Record 1999 Fourth Quarter Results and Announces Business-to-Business e-Commerce Strategy
CHICAGO--Jan. 27, 2000--CCC Information Services Group Inc. , the leading provider of business solutions to the automobile claims industry, today announced record revenue and operating income for the fourth quarter of 1999. The results for the year were revenues of $207.8 million and operating income of $15.7 million.
Fourth Quarter Events
-- Record fourth quarter revenues of $55.3 million.
-- Record operating income of $7.3 million before a
reduction-in-force charge of $2.2 million.
-- Establishment of business-to-business strategy targeting the
automotive claims industry.
Quarterly Results
In announcing the results, Githesh Ramamurthy, President and Chief Executive Officer, said, "The fourth quarter operating income reflects our efforts during the past quarter to improve the financial performance across the entire business through both revenue growth and expense reduction."
Fourth quarter 1999 revenues of $55.3 million were $6.0 million, or 12.2%, higher than the same quarter last year. The increase in revenues was principally due to continued growth in the Company's Consumer Services business, in both the U.S. and Europe.
Fourth quarter operating income of $5.1 million grew $1.5 million, or 42.8%, from the same quarter last year. Operating expenses increased $4.5 million, or 9.8%, reflecting the growth in the Consumer Services business, as well as the $2.2 million reduction-in-force charge.
Equity in net losses from affiliates of $0.8 million related to the Company's continued investment in the European joint venture between CCC and Hearst Communications, Inc. which was established in the fourth quarter of 1998 to expand CCC's product offerings in Europe.
Fourth quarter 1999 earnings per share applicable to common stock were $0.05 versus losses per share of ($0.09) in the fourth quarter of 1998. Excluding non-cash losses from InsurQuote, earnings per share for the fourth quarter of 1998 were $0.08 versus earnings per share of $0.05 in the fourth quarter of 1999.
Year-to-Date Results
Revenues for the year ended December 31, 1999 of $207.8 million were 10.4% higher than last year. The increase in revenue was primarily attributable to continued growth in the Company's domestic and international Consumer Services business as well as growth in digital imaging and collision estimating products.
Operating income for the year ended December 31, 1999 of $15.7 million declined $4.3 million, or 21.3%, from last year. Year-over-year operating margin declined from 10.6% in 1998 to 7.6% in 1999. Operating expenses increased $23.9 million, or 14.2%, reflecting the growth in the Consumer Services business, increased expenditures to improve infrastructure and new business initiatives.
For the year ended December 31, 1999, net income applicable to common stock of $0.8 million increased from a loss of $0.03 million in 1998. Earnings per share applicable to common stock for the year increased to $0.03 from $0.00 reported for the same period last year.
Outlook
Mr. Ramamurthy commented on the Company's performance during the latest quarter and its outlook for future quarters, "The fourth quarter results were strong and the profit improvement initiatives we are completing should lay the foundation for continued profitable growth. We are also excited to announce that we are actively working on a business-to-business e-commerce strategy to address the substantial opportunities to raise customer satisfaction, lower processing costs and improve the overall profitability of the automobile claims industry participants. In the United States alone, nearly $100 billion is spent processing automotive claims. CCC, through its strong relationship with insurance companies and repair facilities, is uniquely positioned to create value for the industry participants. I look forward to providing updates over the coming months on the investments and alliances we will be establishing to deliver these solutions to the marketplace."
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.
Consolidated Operating Results and Selected
Consolidated Balance Sheet Data
(In thousands, except per share amounts)
Three Months Ended Year Ended
December 31, December 31,
---------------------- ------------------
(Unaudited) (Unaudited)
1999 1998 1999 1998
---- ---- ---- ----
Revenues:
Insurance Services $ 27,435 $ 25,090 $ 104,228 $ 101,376
Automotive Services 16,314 16,676 66,324 63,455
Consumer Services
11,522 7,608 37,245 22,710
Other -- (91) -- 628
-------- -------- --------- ---------
Net revenue 55,271 49,283 207,797 188,169
-------- -------- --------- ---------
Expenses:
Production and
customer support 17,617 14,646 63,343 48,242
Commissions,
royalties and
licenses 3,664 5,110 16,372 21,495
Selling, general
and administrative 18,027 15,855 76,480 60,053
Depreciation and
amortization 2,982 2,364 10,497 9,210
Product development
and programming 5,661 6,103 23,118 25,813
Reduction-in-force 2,242 -- 2,242 --
Litigation settlement -- 1,650 -- 1,650
Relocation of claims
settlement function -- -- -- 1,707
-------- -------- --------- ---------
Operating expenses 50,193 45,728 192,052 168,170
-------- -------- --------- ---------
Operating income 5,078 3,555 15,745 19,999
Interest expense (606) (132) (1,399) (258)
Other income, net 9 63 412 697
-------- -------- --------- ---------
Income before income taxes 4,481 3,486 14,758 20,438
Income tax provision (2,525) (1,527) (7,361) (8,860)
-------- -------- --------- ---------
Income before equity losses 1,956 1,959 7,397 11,578
Equity in net losses
of affiliates (835) (4,238) (6,645) (11,658)
Minority share in
earnings of subsidiaries (1) (15) -- (1)
-------- -------- --------- ---------
Net income (loss) 1,120 (2,294) 752 (81)
Dividends and accretion
on preferred stock -- 228 (2) 43
-------- -------- --------- ---------
Net income (loss)
applicable to
common stock $1,120 $ (2,066) $ 750 $ (38)
======== ======== ========= ==========
Per Share Data:
Net income (loss)
applicable to common stock
- Basic $ 0.05 $ (0.09) $ 0.03 $ --
======== ======== ======== =========
- Diluted $ 0.05 $ (0.09) $ 0.03 $ --
======== ======== ======== =========
Weighted average common and
common equivalent shares
outstanding
- Basic 21,920 23,972 22,856 24,616
======= ======== ========= ========
- Diluted 22,225 24,297 23,162 25,188
======= ========= ========= =========
December 31, December 31,
Selected Consolidated 1999 1998
Balance Sheet Data (Unaudited)
----------------------- ----------- -----------
Total assets $ 84,459 $ 79,018
Mandatorily redeemable -- 688
preferred stock
Stockholders' equity 15,261 35,303