First Quarter Revenue of $150.8 million, up 5.4% on a GAAP Basis
and up 13.2% on a Constant Currency Basis; GAAP Diluted Net Income
Attributable to Solera Holdings, Inc. Per Common Share of $0.29, up
29.8%; Company Increases Fiscal 2010 Guidance; Company Announces
Quarterly Cash Dividend SAN DIEGO, Nov. 3 /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 first quarter of fiscal
year 2010. Results for the First Quarter Ended September 30, 2009:
GAAP Results: -- Revenue for the first quarter was $150.8 million,
a 5.4% increase over the prior year first quarter revenue of $143.0
million. After adjusting for changes in foreign currency exchange
rates ("FX Changes"), revenue for the first quarter of fiscal year
2010 increased by approximately 13.2% over the prior year first
quarter; -- GAAP net income attributable to Solera Holdings, Inc.
for the first quarter was $20.0 million, a 39.3% increase over the
prior year first quarter GAAP net income of $14.3 million; --
Diluted net income attributable to Solera Holdings, Inc. per common
share for the first quarter was $0.29, a 29.8% increase over the
prior year diluted net income attributable to Solera Holdings, Inc.
per common share of $0.22. "The first quarter represented a solid
quarter for us. While the global economy continues to be volatile,
our year-over-year growth in the first quarter accelerated compared
to the fourth quarter of fiscal 2009," said Tony Aquila, founder,
chairman and CEO of Solera Holdings, Inc. "Our continued discipline
on eliminating waste and focus on global operations is helping us
drive better efficiencies in the business as we achieved an
Adjusted EBITDA margin of 41.2% - up 310 basis points
year-over-year. I am pleased to report that we are increasing our
guidance for fiscal 2010." Non-GAAP Results: -- Adjusted EBITDA for
the first quarter was $62.1 million, a 14.0% increase over the
prior year first quarter Adjusted EBITDA of $54.5 million. After
adjusting for FX Changes, Adjusted EBITDA for the first quarter of
fiscal year 2010 increased by approximately 25.7% over the prior
year first quarter; -- Adjusted Net Income for the first quarter
was $34.5 million, a 22.3% increase over the prior year first
quarter Adjusted Net Income of $28.2 million; -- Adjusted Net
Income per diluted common share for the first quarter was $0.50, a
13.6% increase over the prior year first quarter Adjusted Net
Income per diluted common share of $0.44. Business Statistics for
the First Quarter September 30, 2009: -- EMEA revenue was $99.1
million for the first quarter, representing a 9.7% increase over
the prior year period revenue of $90.3 million. After adjusting for
FX Changes, EMEA revenue for the first quarter increased 19.9% over
the respective prior year period. After excluding HPI, Ltd.'s run
rate revenue from the first quarter, EMEA revenue increased 7.5%
over the prior year period, and after adjusting for FX changes,
increased 5.9% over the prior year period. HPI's run rate revenue
is its GAAP revenue during the three months ended March 31, 2009;
-- Americas revenue was $51.7 million for the first quarter,
representing a 1.9% decrease from the prior year period. After
adjusting for FX Changes, Americas revenue for the first quarter
increased 1.7% over the prior year period; -- Revenue from
insurance company customers was $59.7 million for the first
quarter, representing a 1.2% decrease from the prior year period.
After adjusting for FX Changes, revenue from insurance company
customers for the first quarter increased 5.6% over the prior year
period; -- Revenue from collision repair facility customers was
$53.9 million for the first quarter, representing a 0.6% increase
over the prior year period. After adjusting for FX Changes, revenue
from collision repair facility customers for the first quarter
increased 8.2% over the prior year period; -- Revenue from
independent assessors was $15.0 million for first quarter,
representing a 3.0% increase over the prior year period. After
adjusting for FX Changes, revenue from independent assessors for
the first quarter increased 10.6% over the prior year period; --
Revenue from automotive recycling and other customers was $22.2
million for the first quarter, representing a 53.5% increase over
the prior year period. After adjusting for FX Changes, revenue from
automotive recycling and other customers for the first quarter
increased 66.1% over the prior year period. Updated Fiscal Year
2010 Outlook: We are updating our previously issued outlook for our
full fiscal year ending June 30, 2010 as follows: Previous Fiscal
Year Current Fiscal Year 2010 Outlook 2010 Outlook
---------------------------- ---------------------------- Revenues
$594 million -- $602 million $627 million -- $632 million Net
Income $49 million -- $55 million $62 million -- $71 million
Adjusted Net Income $124 million -- $128 million $132 million --
$138 million Adjusted Net Income per diluted share $1.76 -- $1.83
$1.89 -- $1.97 Adjusted EBITDA $229 million -- $235 million $244
million -- $253 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
first quarter of fiscal year 2010, the U.S. dollar weakened versus
most major foreign currencies we use to transact our business. For
example, one Euro was equal to approximately $1.40 on June 30, 2009
and $1.46 on September 30, 2009. The change from June 30, 2009 to
September 30, 2009 represents a weakening of the U.S. dollar versus
the Euro of approximately 4%. The weakening of the U.S. dollar had
a positive comparable impact on our revenues, but a negative
comparable impact on our expenses for first quarter of fiscal year
2010 as compared to the prior year period. A hypothetical 5%
increase or decrease in the U.S. dollar versus other currencies in
which we transact our business would have resulted in an
approximately $5.8 million change to our revenues during the first
quarter of fiscal year 2010. 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.
Quarterly Dividend: The Audit Committee of the Board of Directors
has approved a quarterly cash dividend of $0.0625 per share of
outstanding common stock and per outstanding restricted stock unit.
The dividend will be payable on December 21, 2009 to stockholders
and restricted stock unit holders of record at the close of
business on November 23, 2009. Earnings Conference Call: We will
host our first quarter ended September 30, 2009 earnings call today
at 5:00 p.m. (Eastern Time) - November 3, 2009. The conference call
will be webcast live in listen-only mode and can be accessed by
visiting the Investor Relations section of the Solera website:
http://www.solerainc.com/. A webcast replay will be available on
the website until midnight on November 17, 2009. A live audiocast
will also be accessible to the public by calling (866) 804-6920 or
from outside the U.S., (857) 350-1666. When prompted, the following
access code is required: 90060406. Callers should dial in
approximately 10 minutes before the call begins. For those unable
to participate in the live audiocast, a replay will be available
until midnight on November 17, 2009. To access the replay, dial
(888) 286-8010 or, from outside the U.S., (617) 801-6888 and enter
the following access code when prompted: 27079716. SOLERA HOLDINGS,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (In
thousands, except per share amounts) (Unaudited)
-----------------------------------------------------------------------
Three Months Ended September 30, ----------------- 2009 2008
-------- -------- Revenues $150,769 $142,992 -------- -------- Cost
of revenues : Operating expenses 32,971 33,279 Systems development
and programming costs 16,648 16,258 -------- -------- Total cost of
revenues (excluding depreciation and amortization) 49,619 49,537
Selling, general and administrative expenses 39,950 38,734
Depreciation and amortization 21,635 21,236 Restructuring charges
1,729 471 Interest expense 8,764 11,066 Other (income) expense, net
414 (3,498) -------- -------- 122,111 117,546 -------- --------
Income before income tax provision 28,658 25,446 Income tax
provision 6,531 9,009 -------- -------- Net income $22,127 $16,437
Less: Net income attributable to noncontrolling interest 2,144
2,090 -------- -------- Net income attributable to Solera Holdings,
Inc. $19,983 $14,347 ======== ======== Net income attributable to
Solera Holdings, Inc. per common share: Basic $0.29 $0.22 ========
======== Diluted $0.29 $0.22 ======== ======== Dividends per share
$0.06 $- ======== ======== Weighted average shares used in the
calculation of net income attributable to Solera Holdings, Inc. per
common share: Basic 69,291 64,365 ======== ======== Diluted 69,358
64,445 ======== ======== 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
common share. We believe that Adjusted EBITDA, Adjusted Net Income
and Adjusted Net Income per diluted common 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 common 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 common
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 common 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 common 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 common share as
supplemental information. -- Adjusted EBITDA is a non-GAAP
financial measure that represents GAAP net income attributable to
Solera Holdings, Inc., excluding interest expense, income tax
provision, depreciation and amortization, stock-based compensation
expense, restructuring charges, other (income) expense, net and
acquisition-related costs. Acquisition-related costs consist of
transaction costs associated with acquisitions or potential
acquisitions and 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 attributable to Solera Holdings, Inc., the most directly
comparable GAAP measure, is provided in the attached table. Three
Months Ended September 30, ------------------ 2009 2008 -------
------- Reconciliation to Adjusted EBITDA: Net income attributable
to Solera Holdings, Inc. $19,983 $14,347 Add: Income tax provision
6,531 9,009 ------- ------- Net income attributable to Solera
Holdings, Inc. before income tax provision 26,514 23,356 Add:
Depreciation and amortization 21,635 21,236 Add: Interest expense
8,764 11,066 Add: Stock-based compensation expense 1,488 1,568 Add:
Restructuring charges 1,729 471 Add: Other (income) expense, net
414 (3,498) Add: Acquisition-related costs 1,595 308 -------
------- Adjusted EBITDA $62,139 $54,507 ======= ======= -- Adjusted
Net Income is a non-GAAP financial measure that represents GAAP net
income attributable to Solera Holdings, Inc., plus the following
items: provision for income taxes, amortization of
acquisition-related intangibles, stock-based compensation expense,
restructuring charges, other (income) expense, net and
acquisition-related costs. Acquisition-related costs consist of
transaction costs associated with acquisitions or potential
acquisitions and 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. We use a 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
attributable to Solera Holdings, Inc., the most directly comparable
GAAP measure, is provided in the attached table. -- Adjusted Net
Income per diluted common 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 common share
to GAAP net income attributable to Solera Holdings, Inc. per common
share, the most directly comparable GAAP measure, is provided in
the attached table. Three Months Ended September 30,
---------------- 2009 2008 ------- ------- Reconciliation to
Adjusted Net Income: Net income attributable to Solera Holdings,
Inc. $19,983 $14,347 Add: Income tax provision 6,531 9,009 -------
------- Net income attributable to Solera Holdings, Inc. before
income tax provision 26,514 23,356 Add: Amortization of acquisition
related intangibles 15,771 15,807 Add: Stock-based compensation
expense 1,488 1,568 Add: Restructuring charges 1,729 471 Add: Other
(income) expense, not including interest income 853 (2,288) Add:
Acquisition-related costs 1,595 307 ------- ------- Adjusted Net
Income before income tax provision 47,950 39,221 Less: Assumed
provision for income taxes at 28% (13,426) (10,982) ------- -------
Adjusted Net Income $34,524 $28,239 ======= ======= Adjusted Net
Income per share: Basic $0.50 $0.44 ======= ======= Diluted $0.50
$0.44 ======= ======= Weighted average shares used in the
calculation of Adjusted Net Income per share: Basic 69,291 64,365
======= ======= Diluted 69,358 64,445 ======= ======= SOLERA
HOLDINGS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS AS OF SEPTEMBER 30, 2009 AND JUNE 30, 2009 (In thousands,
except per share amounts)
-------------------------------------------------------------------------
September 30, June 30, 2009 2009 (Unaudited) (Unaudited)(1)
------------ --------------- Assets Current Assets: Cash and cash
equivalents $246,773 $223,420 Short term investments 12,403 11,941
Accounts receivable, net 105,129 98,565 Other receivables 11,847
12,177 Other current assets 22,700 19,550 Deferred income tax
assets 4,010 4,392 ---------- ---------- Total current assets
402,862 370,045 Property and equipment, net 56,453 50,784 Goodwill
666,690 651,099 Intangible assets, net 312,346 322,843 Other
noncurrent assets 12,970 13,660 Noncurrent deferred income tax
assets 10,044 10,178 ---------- ---------- Total assets $1,461,365
$1,418,609 ========== ========== Liabilities and Stockholders'
Equity Current Liabilities: Accounts payable $30,206 $30,447
Accrued expenses and other current liabilities 104,642 104,414
Income taxes payable 12,602 17,462 Deferred income tax liabilities
848 1,037 Current portion of long-term debt 6,072 5,880 ----------
---------- Total current liabilities 154,370 159,240 Long-term debt
603,875 592,200 Noncurrent liabilities 37,970 36,935 Noncurrent
deferred income tax liabilities 53,220 53,965 ---------- ----------
Total liabilities 849,435 842,340 Redeemable noncontrolling
interests 95,570 92,012 Stockholders' equity: Solera Holdings, Inc.
stockholders' equity: Common Shares, $0.01 par value, 150,000
shares authorized; 69,634 and 69,531 issued and outstanding, as of
September 30, 2009 and June 30, 2009, respectively 530,043 526,547
Accumulated deficit (36,724) (52,332) Accumulated other
comprehensive income 16,319 3,113 ---------- ---------- Total
Solera Holdings, Inc. stockholders' equity 509,638 477,328
Noncontrolling interests 6,722 6,929 ---------- ---------- Total
stockholder's equity 516,360 484,257 ---------- ---------- Total
liabilities and stockholders' equity $1,461,365 $1,418,609
========== ========== (1) Derived from audited consolidated
financial statements as of June 30, 2009. SOLERA HOLDINGS, INC. AND
SUBSIDIARIES SELECTED STATEMENTS OF CASH FLOWS INFORMATION FOR THE
THREE MONTHS ENDED SEPTEMBER 30, 2009 and 2008 (In thousands)
(Unaudited) -----------------------------------------------------
Three Months ended September 30, ------------------- 2009 2008
--------- --------- Net cash provided by operating activities
$30,396 $33,817 Net cash used in investing activities (8,194)
(7,559) Net cash used in financing activities (7,117) (1,965)
Effect of exchange rate changes 8,268 (13,635) -------- --------
Net increase in cash and cash equivalents 23,353 10,658 Cash and
cash equivalents, beginning of period 223,420 149,311 --------
-------- Cash and cash equivalents, end of period $246,773 $159,969
======== ======== Supplemental Cash Flow Information: Cash paid for
interest $8,419 $10,915 Cash paid for income taxes $12,865 $5,339
Supplemental Disclosure of Non-cash Investing and Finance
Activities: Capital assets financed $3,143 $329 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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