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First Advantage Corporation Reports Operating Results for the First Quarter of 2009

April 27, 2009

POWAY, Calif., April 27 /PRNewswire-FirstCall/ — First Advantage Corporation (Nasdaq: FADV) (“the Company”), a global risk mitigation and business solutions provider, today announced operating results for the first quarter ended March 31, 2009.

First Advantage reported income from continuing operations of $10.8 million (18 cents per diluted share) for the quarter ended March 31, 2009, compared to $16.2 million (27 cents per diluted share) for the quarter ended March 31, 2008.

Service revenue for the Company was $190.0 million and $188.3 million for the quarters ended March 31, 2009 and 2008, respectively.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were $29.3 million and $37.1 million for the quarters ended March 31, 2009 and 2008, respectively.

Effective with the first quarter 2009, First Advantage has five reportable business segments: Credit Services, Data Services, Employer Services, Multifamily Services and Investigative and Litigation Support Services. The new reporting structure reflects the strategic consolidation of the former Lender Services and Dealer Services segments and consumer credit reporting, which was formerly part of Data Services.

“We are pleased with the results of our first quarter as we began to see an easing of the credit markets as evidenced by increased mortgage refinance activity in our Credit Services segment,” stated Anand Nallathambi, president and chief executive officer. “As we mentioned earlier this year, we had already begun to see an increase in refinance activity during the early part of the first quarter. We are optimistic these lending trends will continue throughout the remainder of the year as liquidity increases, interest rates remain low and the federal housing rescue plan takes effect.”

Employer Services, despite the negative impact of the economic downturn and increasing levels of unemployment, continues to benefit from strategic cost reduction initiatives implemented in early 2008. Going forward, company management is taking a cautiously optimistic view that, while they see the housing markets improving, the broad-scale economic recovery in hiring and employment-related services is still awhile away.

In the Investigative and Litigation Support Services segment, the pipeline and overall demand is still healthy, but the transactional levels are lower than they have been historically. Project assignments are being delayed and process milestones are being stretched out as First Advantage customers manage through the economic pressures.

“Company-wide we have reduced operating expenses by 16 percent from the first quarter of 2008. Across the enterprise, we continue to manage down costs, placing emphasis on both improving our cost structure and focusing on business and product development initiatives to position us for growth when the markets stabilize,” stated Mr. Nallathambi.

First Advantage’s first quarter 2009 results will be discussed in more detail on Monday, April 27, 2009, at 5:00 p.m. ET, 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 May 11, 2009, by dialing 800.224.1285 within the U.S., or 402.220.3691 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 Income Statement (Unaudited)
    (In thousands, except per share amounts)        Three Months Ended
                                                          March 31,
                                                   2009               2008

     Service revenue                            $190,040           $188,254
     Reimbursed government fee revenue            12,978             14,025
       Total revenue                             203,018            202,279
     Cost of service revenue                      81,340             53,716
     Government fees paid                         12,978             14,025
       Total cost of sales                        94,318             67,741
         Gross margin                            108,700            134,538
     Salaries and benefits                        53,167             66,449
     Facilities and telecommunications             6,659              8,200
     Other operating expenses                     19,347             22,834
     Depreciation and amortization                10,686              9,896
         Total operating expenses                 89,859            107,379
         Income from operations                   18,841             27,159
     Other (expense) income:
       Interest expense                             (375)              (425)
       Interest income                               213                419
         Total other (expense), net                 (162)                (6)
     Income from continuing operations before
      income taxes                                18,679             27,153
     Provision for income taxes                    7,846             10,974
     Income from continuing operations            10,833             16,179
     Loss from discontinued operations, net
      of tax                                        ----             (2,977)
     Net income                                   10,833             13,202
       Less:  Net income (loss) attributable
        to non-controlling interest                  219                (87)
     Net income attributable to First Advantage
      Corporation (FADV)                         $10,614            $13,289

    Basic income per share:
       Income from continuing operations
        attributable to FADV shareholders          $0.18              $0.27
       Loss from discontinued operations
        attributable to FADV shareholders, net
        of tax                                      ----              (0.05)
       Net income attributable to FADV
        shareholders                               $0.18              $0.22

    Diluted income per share
       Income from continuing operations
        attributable to FADV shareholders          $0.18              $0.27
       Loss from discontinued operations
        attributable to FADV shareholders, net
        of tax                                      ----              (0.05)
       Net income attributable to FADV
        shareholders                               $0.18              $0.22

    Weighted-average common shares
      outstanding:
       Basic                                      59,585             59,159
       Diluted                                    59,612             59,234

    Amounts attributable to FADV shareholders
        Income from continuing operations, net
         of tax                                  $10,614            $16,266
        Loss from discontinued operations, net
         of tax                                     ----             (2,977)
        Net income                               $10,614            $13,289

    EBITDA calculation:
    Net income attributable to FADV
     shareholders                                $10,614            $13,289
    Provision for income taxes                     7,846             10,974
    Interest expense                                 162                  6
    Loss from discontinued operations, net of
     tax                                             ---              2,977
    Depreciation and amortization                 10,686              9,896
    Earnings before interest, taxes,
    Depreciation and amortization (EBITDA)*      $29,308            $37,142

    *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 March 31,
    (In thousands, except percentages)        2009          2008

    Service revenue
    Credit Services                          $64,419       $74,902
    Data Services                             59,100        18,967
    Employer Services                         37,451        53,687
    Multifamily Services                      17,903        18,349
    Investigative & Litigation
     Support Services                         11,726        23,503
    Corporate                                   (559)       (1,154)
    Consolidated                            $190,040      $188,254

    Income (Loss) from operations
    Credit Services                          $14,747       $16,347
    Data Services                              5,646         3,770
    Employer Services                           (500)        3,471
    Multifamily Services                       5,674         4,772
    Investigative & Litigation
     Support Services                          1,146         9,525
    Corporate                                 (7,872)      (10,726)
    Consolidated                             $18,841       $27,159

    Operating margin percentage of service
     revenue
    Credit Services                            22.89%        21.82%
    Data Services                               9.55%        19.88%
    Employer Services                          -1.34%         6.47%
    Multifamily Services                       31.69%        26.01%
    Investigative & Litigation
     Support Services                           9.77%        40.53%
    Corporate                                    N/A           N/A
    Consolidated                                9.91%        14.43%

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; 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 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 2008 Annual Report on Form 10-K and any subsequent amendments, for a further discussion of these and other risks.

    Contacts:
    Henri Van Parys                         Cindy Williams
    Corporate Communications Manager        Director - Investor Relations
    727.214.1072                            727.214.3438
    henri.vanparys@FADV.com                 cindy.williams@FADV.com

SOURCE First Advantage Corporation


Source: newswire



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