Fiscal Year Revenue of $557.7 Million, Up 3.3% on a GAAP basis and
up 12.9% on a Constant Currency Basis; Fourth Quarter Revenue of
$144.1 Million, Down 1.0% on a GAAP basis and up 13.6% on a
Constant Currency Basis. Board of Directors Approves First
Quarterly Cash Dividend. Company Issues Guidance for Fiscal Year
2010. SAN DIEGO, Aug. 27 /PRNewswire-FirstCall/ -- Solera Holdings,
Inc. (NYSE: SLH), the leading global provider of software and
services to the automobile insurance claims processing industry,
today reported results for the fourth quarter and fiscal year ended
June 30, 2009. Results for the Fourth Quarter and Fiscal Year Ended
June 30, 2009: GAAP Results -- Revenue for the fiscal year was
$557.7 million, a 3.3% increase over the prior fiscal year revenue
of $539.9 million. After adjusting for changes in foreign currency
exchange rates ("FX Changes"), revenue for fiscal year 2009
increased by approximately 12.9% over the prior fiscal year; --
Revenue for the fourth quarter was $144.1 million, a 1.0% decrease
over the prior year fourth quarter revenue of $145.5 million. After
adjusting for FX Changes, revenue for the fourth quarter of fiscal
year 2009 increased by approximately 13.6% over the prior year
fourth quarter; -- GAAP net income for the fiscal year was $57.8
million, a $57.2 million improvement over the prior fiscal year net
income of $0.6 million; -- GAAP net income for the fourth quarter
was $11.8 million, a $33.4 million improvement over the prior year
fourth quarter net loss of $21.6 million; -- Diluted net income per
share for the fiscal year was $0.85, a $0.84 per share improvement
over the prior fiscal year diluted net income per share of $0.01;
-- Diluted net income per share for the fourth quarter was $0.17, a
$0.50 per share improvement over the prior year fourth quarter
diluted net loss per share of $0.34. "Our fourth quarter topped off
a respectable performance in fiscal 2009. Despite a very
challenging global economy, we turned in solid growth rates," said
Tony Aquila, founder, chairman and CEO of Solera Holdings, Inc.
"Reflecting our track record of strong cash flows, we are very
pleased to announce our first quarterly dividend. The dividend
enhances stockholders' total return while we continue to be very
focused on pursuing our long-term growth opportunities." Non-GAAP
Results -- Adjusted EBITDA for the fiscal year was $208.6 million,
a 12.4% increase over the prior fiscal year Adjusted EBITDA of
$185.5 million. After adjusting for FX Changes, Adjusted EBITDA for
fiscal year 2009 increased by approximately 28.2% over the prior
fiscal year; -- Adjusted EBITDA for the fourth quarter was $52.3
million, a 2.7% increase over the prior year fourth quarter
Adjusted EBITDA of $50.9 million. After adjusting for FX Changes,
Adjusted EBITDA for the fourth quarter of fiscal year 2009
increased by approximately 24.6% over the prior year fourth
quarter; -- Adjusted Net Income for the fiscal year was $109.0
million, a 38.5% increase over the prior fiscal year Adjusted Net
Income of $78.7 million; -- Adjusted Net Income for the fourth
quarter was $27.3 million, a 22.8% increase over the prior year
fourth quarter Adjusted Net Income of $22.2 million; -- Adjusted
Net Income per diluted share for the fiscal year was $1.61, a 32.0%
increase over the prior year Adjusted Net Income per diluted share
of $1.22; -- Adjusted Net Income per diluted share for the fourth
quarter was $0.39, a 14.7% increase over the prior year fourth
quarter Adjusted Net Income per diluted share of $0.34. Business
Statistics for the Fourth Quarter and Fiscal Year ended June 30,
2009: -- EMEA revenues were $92.9 million and $351.7 million for
the fourth quarter and the full fiscal year, respectively,
representing no increase and a 5.3% increase over the respective
prior year periods. After adjusting for FX Changes, EMEA revenues
for the fourth quarter and full fiscal year increased 19.4% and
17.9%, respectively, over the respective prior year periods. After
excluding revenue during the fourth quarter and full fiscal year
from the acquisition of HPI, Ltd. and the FX Changes, EMEA revenue
for the fourth quarter and full fiscal year increased 4.7% and
9.5%, respectively, over the respective prior year periods; --
Americas revenues were $51.2 million and $206.0 million for the
fourth quarter and the full fiscal year, respectively, representing
a 2.7% decrease and a 0.1% increase over the respective prior year
periods. After adjusting for FX Changes, Americas revenues for the
fourth quarter and full fiscal year increased 3.5% and 4.8%,
respectively, over the respective prior year periods; -- Revenues
from insurance company customers were $58.7 million and $231.9
million for the fourth quarter and the full fiscal year,
respectively, representing a 1.7% decrease and a 5.4% increase over
the respective prior year periods. After adjusting for FX Changes,
revenues from insurance company customers for the fourth quarter
and full fiscal year increased 11.6% and 13.7%, respectively, over
the respective prior year periods; -- Revenues from collision
repair facility customers were $51.4 million and $203.6 million for
the fourth quarter and the full fiscal year, respectively,
representing a 6.3% decrease and a 0.3% decrease over the
respective prior year periods. After adjusting for FX Changes,
revenue from collision repair facility customers for the fourth
quarter and full fiscal year increased 8.0% and 10.2%,
respectively, over the respective prior year periods; -- Revenues
from independent assessors were $13.6 million and $54.1 million for
the fourth quarter and the full fiscal year, respectively,
representing a 13.7% decrease and a 5.5% decrease over the
respective prior year periods. After adjusting for FX Changes,
revenue from independent assessors for the fourth quarter and full
fiscal year increased 0.9% and 2.3%, respectively, over the
respective prior year periods; -- Revenues from automotive
recycling and other customers were $20.5 million and $68.0 million
for the fourth quarter and the full fiscal year, respectively,
representing a 34.2% increase and a 16.6% increase over the
respective prior year periods. After adjusting for FX Changes,
revenue from automotive recycling and other customers for the
fourth quarter and full fiscal year increased 55.2% and 29.5%,
respectively, over the respective prior year periods. Fiscal Year
2010 Outlook: Our initial outlook for our full fiscal year ending
June 30, 2010 is as follows: Fiscal Year 2010 Outlook
------------------------ Revenues $594 million -- $602 million Net
Income $49 million -- $55 million Adjusted Net Income $124 million
-- $128 million Adjusted Net Income per diluted share $1.76 --
$1.83 Adjusted EBITDA $229 million -- $235 million The Fiscal Year
2010 outlook above assumes constant currency exchange rates from
those currently prevailing, no acquisitions, and a 28% tax rate to
calculate Adjusted Net Income. Exchange rates between most of the
major foreign currencies we use to transact our business and U.S.
dollars have fluctuated significantly over the last few years, and
we expect that they will continue to fluctuate during fiscal year
2010. The majority of our revenues and costs are denominated in
Euros, Pound Sterling, Swiss francs, Canadian dollars and other
international currencies. During fiscal year 2009, the U.S. dollar
strengthened significantly versus most major foreign currencies we
use to transact our business. For example, one Euro was equal to
approximately $1.58 on June 30, 2008, $1.44 on September 30, 2008,
$1.41 on December 31, 2008, $1.32 on March 31, 2009 and $1.40 on
June 30, 2009. The change from June 30, 2008 to June 30, 2009
represents a strengthening of the U.S. dollar versus the Euro of
approximately 11.1%. The strengthening of the U.S. dollar had a
negative comparable impact on our revenues, but a positive
comparable impact on our expenses for fiscal year 2009 as compared
to fiscal year 2008. A hypothetical 5% increase or decrease in the
U.S. dollar versus other currencies in which we transact our
business would have resulted in a $20.6 million change to our
revenues during fiscal year 2009. All percentage amounts and ratios
were calculated using the underlying data in whole dollars. We
measure constant currency, or the effects on our results that are
attributed to FX Changes, by measuring the incremental difference
between translating the prior period and the current results at the
monthly average rates for the same period from the prior year. Tax
Provision Our tax provision for the fiscal year 2009 was $26.7
million at an effective rate of 28.7%. Our fourth quarter fiscal
year 2009 tax provision was $3.5 million at an effective rate of
19.9%. Our fourth quarter fiscal year 2008 tax provision of $26.7
million included a $30.0 million valuation allowance for deferred
tax assets pursuant to the requirements of Statement of Financial
Accounting Standards No. 109, or SFAS 109. Approximately $27.1
million of the valuation allowance related primarily to cumulative
net operating losses incurred in several of our U.S. subsidiaries.
Our tax provision in the fourth quarter of fiscal year 2009
benefited from certain tax planning strategies, principally
implemented in Europe during the fourth quarter of fiscal year
2009. Quarterly Dividend: The Board of Directors has approved our
first quarterly cash dividend of $0.0625 per share of outstanding
common stock and per outstanding restricted stock unit. The
dividend will be payable on September 28, 2009 to stockholders and
restricted stock unit holders of record at the close of business on
September 18, 2009. Earnings Conference Call: We will host our
fourth quarter and fiscal year ended June 30, 2009 earnings call
today at 5:00 p.m. (Eastern Time) - August 27, 2009. The conference
call will be webcast live on the Internet and can be accessed by
visiting: http://www.solerainc.com/. A replay will be available on
the Solera website until midnight on September 10, 2009. A live
audio broadcast of the call will be accessible to the public by
calling (866) 700-7477 or for international callers, (617)
213-8840; please enter the following access code when prompted:
82982200. Callers should dial in approximately ten minutes before
the call begins. SOLERA HOLDINGS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND TWELVE
MONTH PERIODS ENDED JUNE 30, 2009 AND 2008 (In thousands, except
per share amounts) (Unaudited)
------------------------------------------------------------------------
Three Months Twelve Months Ended June 30, Ended June 30,
---------------- --------------- 2009 2008 2009 2008 ---- ---- ----
---- Revenues $144,135 $145,533 $557,691 $539,853 -------- --------
-------- -------- Cost of revenues : Operating expenses 32,903
33,585 128,424 131,715 Systems development and programming costs
15,282 17,728 60,212 66,666 ------ ------ ------ ------ Total cost
of revenues (excluding depreciation and amortization) 48,185 51,313
188,636 198,381 Selling, general and administrative expenses 43,669
42,576 162,223 154,532 Depreciation and amortization 22,732 25,379
86,146 95,266 Restructuring charges 3,564 10,449 4,976 13,286
Interest expense 8,952 11,442 38,565 45,730 Other income - net
(513) (3,191) (15,656) (9,518) ---- ------ ------- ------ 126,589
137,968 464,890 497,677 ------- ------- ------- ------- Income
before income tax provision and minority interests 17,546 7,565
92,801 42,176 Income tax provision 3,484 26,694 26,650 34,335
Minority interest in net income of consolidated subsidiaries 2,221
2,444 8,326 7,243 ----- ----- ----- ----- Net income (loss) $11,841
$(21,573) $57,825 $598 ======= ======== ======= ==== Net income
(loss) per share: Basic $0.17 $(0.34) $0.86 $0.01 ===== ======
===== ===== Diluted $0.17 $(0.34) $0.85 $0.01 ===== ====== =====
===== Weighted average shares used in the calculation of net income
per share: Basic 69,156 63,985 67,252 63,500 ====== ====== ======
====== Diluted 69,555 63,985 67,732 64,737 ====== ====== ======
====== Non-GAAP Financial Measures We use a number of non-GAAP
financial measures that are not intended to be used in lieu of GAAP
presentations, but are provided because management believes that
they provide additional information with respect to the performance
of our fundamental business activities and are also frequently used
by securities analysts, investors and other interested parties to
facilitate the evaluation of our business on a comparable basis to
other companies. The three primary non-GAAP financial measures that
we use are Adjusted EBITDA, Adjusted Net Income, and Adjusted Net
Income per diluted share. We believe that Adjusted EBITDA, Adjusted
Net Income and Adjusted Net Income per diluted share are useful to
investors in providing information regarding our operating results
and our continuing operations. We rely on Adjusted EBITDA as a
primary measure to review and assess the operating performance of
our company and our management team in connection with our
executive compensation and bonus plans. Adjusted EBITDA also allows
us to compare our current operating results with corresponding
prior periods as well as to the operating results of other
companies in our industry. We present Adjusted Net Income and
Adjusted Net Income per diluted share because we believe both of
these measures provide useful information regarding our operating
results in addition to our GAAP measures. We believe that Adjusted
Net Income and Adjusted Net Income per diluted share provide
investors with valuable insight into our profitability exclusive of
unusual adjustments, and provide further insight into the cash
impact resulting from the different treatments of goodwill for
financial reporting and tax purposes. Adjusted EBITDA, Adjusted Net
Income and Adjusted Net Income per diluted share have limitations
as analytical tools, and you should not consider them in isolation
or as a substitute for net income, earnings per share and other
consolidated income statement data prepared in accordance with
accounting principles generally accepted in the United States.
Because of these limitations, Adjusted EBITDA, Adjusted Net Income,
and Adjusted Net Income per diluted share should not be considered
as a replacement for net income. We compensate for these
limitations by relying primarily on our GAAP results and using
Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per
diluted share as supplemental information. -- Adjusted EBITDA is a
non-GAAP financial measure that represents GAAP net income (loss)
allocable to common stockholders/unitholders, excluding interest,
taxes, depreciation and amortization, stock-based compensation,
restructuring charges, other income - net and acquisition-related
costs. Acquisition-related costs consist of transaction costs
(including costs associated with potential acquisitions that we did
not ultimately pursue and acquisitions not yet completed at June
30, 2009 and therefore charged to results of operations in
contemplation of our adoption of Statement of Financial Accounting
Standards No. 141 (revised), Business Combinations, in the first
quarter of fiscal year 2010), retention-related compensation costs,
legal and professional fees, severance costs and other transition
costs associated with our acquisition of the Claims Services Group
from ADP in April 2006. A reconciliation of our Adjusted EBITDA to
GAAP net income (loss) allocable to common
stockholders/unitholders, the most directly comparable GAAP
measure, is provided in the attached table. Three Months Twelve
Months Ended June 30, Ended June 30, ----------------
--------------- 2009 2008 2009 2008 ---- ---- ---- ----
Reconciliation to Adjusted EBITDA Net income (loss) $11,841
$(21,573) $57,825 $598 Add: Income tax provision 3,484 26,694
26,650 34,335 ----- ------ ------ ------ Net income before income
tax 15,325 5,121 84,475 34,933 Add: Depreciation and amortization
22,732 25,379 86,146 95,266 Add: Interest expense 8,952 11,442
38,565 45,730 Add: Stock-based compensation expense 1,863 1,475
6,711 4,848 Add: Restructuring charges 3,564 10,449 4,976 13,286
Add: Other income - net (513) (3,191) (15,656) (9,518) Add:
Acquisition related costs 360 212 3,339 954 --- --- ----- ---
Adjusted EBITDA $52,283 $50,887 $208,556 $185,499 ======= =======
======== ======== Adjusted Net Income is a non-GAAP financial
measure that represents GAAP net income (loss) allocable to common
stockholders/unitholders, plus the following items: provision for
income taxes, amortization of acquisition-related intangibles,
stock-based compensation expense, restructuring charges, other
income - net and acquisition-related costs. Acquisition-related
costs consist of transaction costs (including costs associated with
potential acquisitions that we did not ultimately pursue and
acquisitions not yet completed at June 30, 2009 and therefore
charged to results of operations in contemplation of our adoption
of Statement of Financial Accounting Standards No. 141 (revised),
Business Combinations, in the first quarter of fiscal year 2010),
retention-related compensation costs, legal and professional fees,
severance costs and other transition costs associated with our
acquisition of the Claims Services Group from ADP in April 2006.
From this figure, we then subtract a provision for income taxes to
arrive at Adjusted Net Income. For periods ended June 30, 2008 and
prior, we used a 33% tax rate. For periods ending after June 30,
2008, we use a 28% tax rate. We use this 28% tax rate in order to
approximate our long-term effective corporate tax rate, which
includes certain benefits from net operating loss carryforwards,
tax deductible goodwill and amortization, and a low tax-rate
jurisdiction for a certain corporate holding company. A
reconciliation of our Adjusted Net Income to GAAP net income (loss)
allocable to common stockholders/unitholders, the most directly
comparable GAAP measure, is provided in the attached table. --
Adjusted Net Income per diluted share is a non-GAAP financial
measure that represents Adjusted Net Income (as defined above)
divided by the number of diluted shares outstanding for the period.
A reconciliation of our Adjusted Net Income per diluted share to
GAAP net income (loss) per share, the most directly comparable GAAP
measure, is provided in the attached table. Three Months Twelve
Months Ended June 30, Ended June 30, ----------------
--------------- 2009 2008 2009 2008 ---- ---- ---- ----
Reconciliation to Adjusted Net Income Net income (loss) $11,841
$(21,573) $57,825 $598 Add: Income tax provision 3,484 26,694
26,650 34,335 ----- ------ ------ ------ Net income before income
tax 15,325 5,121 84,475 34,933 Add: Amortization of acquisition
related intangibles 16,838 19,091 64,002 72,996 Add: Stock-based
compensation expense 1,863 1,475 6,711 4,848 Add: Restructuring
charges 3,564 10,449 4,976 13,286 Add: Other income -- not
including interest income FY09 (60) (3,191) (12,051) (9,518) Add:
Acquisition related costs 360 212 3,339 954 --- --- ----- ---
Adjusted income before income tax provision 37,890 33,157 151,452
117,499 Less: Assumed provision for income taxes at 28% and 33%
rate for June 30, 2009 and June 30, 2008, respectively (10,609)
(10,942) (42,407) (38,775) ------- ------- ------- ------- Adjusted
net income $27,281 $22,215 $109,045 $78,724 ======= =======
======== ======= Adjusted net income per share: Basic $0.39 $0.35
$1.62 $1.24 ===== ===== ===== ===== Diluted $0.39 $0.34 $1.61 $1.22
===== ===== ===== ===== Weighted average shares used in the
calculation of adjusted net income per share: Basic 69,156 63,985
67,252 63,500 ====== ====== ====== ====== Diluted 69,555 64,814
67,732 64,737 ====== ====== ====== ====== SOLERA HOLDINGS, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30,
2009 and 2008 (In thousands)
------------------------------------------------------------------------
June 30, June 30, 2009 2008 (Unaudited) (unaudited)(1) ------------
--------------- Assets Current Assets: Cash and cash equivalents
$223,420 $149,311 Short term investments 11,941 - Accounts
receivable, net 98,565 95,843 Other receivables 12,177 9,784 Other
current assets 19,550 18,314 Deferred income tax assets 4,392 4,802
----- ----- Total current assets 370,045 278,054 ------- -------
Property and equipment, net 50,784 49,243 Other Assets 13,660
22,980 Long-term deferred income tax assets 10,178 5,162 Goodwill
651,099 646,098 Intangible assets, net 322,843 330,218 -------
------- Total assets $1,418,609 $1,331,755 ========== ==========
Liabilities and Stockholders' Equity Current Liabilities: Accounts
payable $30,447 $32,191 Accrued expenses and other current
liabilities 104,414 103,597 Income taxes payable 17,462 12,449
Deferred income tax liabilities 1,037 842 Current portion of
long-term debt 5,880 6,336 ----- ----- Total current liabilities
159,240 155,415 ------- ------- Long-term debt 592,200 624,570
Other liabilities 36,935 33,475 Long-term deferred income tax
liabilities 53,965 36,558 ------ ------ Total liabilities 842,340
850,018 ------- ------- Minority interests in consolidated
subsidiaries 17,330 15,429 Stockholders' equity: Common Shares,
$0.01 par value, 150,000 shares authorized; 69,531 and 64,816
issued and outstanding, as of June 30, 2009 and 2008, respectively
604,952 510,900 Accumulated deficit (52,332) (110,157) Accumulated
other comprehensive income 6,319 65,565 ----- ------ Total
stockholders' equity 558,939 466,308 ------- ------- Total
liabilities and stockholders' equity $1,418,609 $1,331,755
========== ========== (1) Derived from audited consolidated
financial statements as of June 30, 2008. SOLERA HOLDINGS, INC. AND
SUBSIDIARIES SELECTED STATEMENTS OF CASH FLOWS INFORMATION FOR THE
TWELVE MONTHS ENDED JUNE 30, 2009 and 2008 (In thousands)
(Unaudited) ----------------------------------------------------
Twelve Months ended June 30, --------------- 2009 2008 ---- ----
Net cash provided by operating activities $128,874 $117,402 Net
cash used in investing activities (121,876) (19,135) Net cash
provided by/(used) in financing activities 76,739 (51,346) Effect
of exchange rate changes (9,628) 12,522 ------ ------ Net increase
in cash and cash equivalents 74,109 59,443 Cash and cash
equivalents, beginning of period 149,311 89,868 ------- ------ Cash
and cash equivalents, end of period $223,420 $149,311 ========
======== Supplemental Cash Flow Information: Cash paid for interest
$37,961 $44,913 Cash paid for income taxes $30,828 $23,341 -------
------- Supplemental Disclosure of Non-cash Investing and Financing
Activities: Capital assets financed $1,554 $3,735 Note payable from
acquisitions of business $17,330 ------- ------- About Solera
Solera is the leading global provider of software and services to
the automobile insurance claims processing industry. Solera is
active in over 50 countries across six continents. The Solera
companies include Audatex in the United States, Canada, and in more
than 45 additional countries, Informex in Belgium, Sidexa in
France, ABZ in The Netherlands, HPI in the United Kingdom,
Hollander serving the North American recycling market, and IMS
providing medical review services. For more information, please
refer to the company's website at http://www.solerainc.com/.
Cautions about Forward-Looking Statements: This press release
contains forward-looking statements, including statements about our
growth and growth opportunities, our expectations regarding changes
in foreign currency exchange rates, our business outlook for fiscal
year 2010, our business strategy, and statements about dividends,
historical results or performance that may suggest trends for our
business. These statements are based on our current expectations,
estimates and assumptions and are subject to many risks,
uncertainties and unknown future events that could cause actual
results to differ materially. Actual results may differ materially
from those set forth in this press release due to the risks and
uncertainties inherent in our business, including, without
limitation: our reliance on a limited number of customers for a
substantial portion of our revenues; unpredictability and
volatility of our operating results, which include the volatility
associated with foreign currency exchange risks, our sales cycle,
seasonality and other factors; risks associated with the
uncertainty in and volatility of global economic conditions; risks
associated with and possible negative consequences of acquisitions,
joint ventures, divestitures and similar transactions, including
our ability to successfully integrate HPI; effects of competition
on our software and service pricing and our business; time and
expenses associated with customers switching from competitive
software and services to our software and services; rapid
technology changes in our industry; effects of changes in or
violations by us or our customers of government regulations; costs
and possible future losses or impairments relating to our
acquisitions; the financial impact of future significant
restructuring and severance charges; the impact of changes in our
tax provision (benefit) or effective tax rate; use of cash to
service our debt and effects on our business of restrictive
covenants in our debt facility; our ability to obtain additional
financing as necessary to support our operations; our ability to
pay dividends in future periods; our reliance on third-party
information for our software and services; effects of system
failures or security breaches on our business and reputation; any
material adverse impact of current or future litigation on our
results or business; and our dependence on a limited number of key
personnel. For a discussion of these and other factors that could
impact our operations or financial results and cause our results to
differ materially from those in the forward-looking statements,
please refer to our filings with the Securities and Exchange
Commission, particularly our Quarterly Report on Form 10-Q for the
Quarter Ended March 31, 2009. Solera is under no obligation to (and
specifically disclaims any such obligation to) update or alter its
forward-looking statements whether as a result of new information,
future events or otherwise. DATASOURCE: Solera Holdings, Inc.
CONTACT: Kamal Hamid, Investor Relations of Solera Holdings, Inc.,
+1-858-946-1676, Web Site: http://www.solerainc.com/
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