10-KPeriod: FY2007

EQUIFAX INC Annual Report, Year Ended Dec 31, 2007

Filed February 27, 2008For Securities:EFX

Summary

Equifax Inc. reported solid revenue growth of 19% for the fiscal year ended December 31, 2007, reaching $1.84 billion. This growth was primarily driven by the strategic acquisition of TALX Corporation, which contributed $179.4 million in revenue, and strong performance in its International, North America Personal Solutions, and North America Commercial Solutions segments. Despite the revenue increase, operating income saw a modest rise of 11% to $486.2 million, resulting in a slight decrease in operating margin to 26.4% from 28.2% in the prior year. This margin compression is attributed to increased operating expenses, particularly from the TALX acquisition and ongoing investments in technology and infrastructure, as well as weaker performance in the U.S. consumer credit and mortgage markets. The company ended the year with a strong balance sheet, although long-term debt increased significantly to $1.17 billion due to the TALX acquisition and related refinancing. Equifax continued its commitment to shareholder returns through significant share repurchases totaling $718.7 million during the year. Management anticipates continued revenue growth in most segments for 2008, with the exception of the U.S. Consumer Information Solutions segment, which is expected to remain flat due to current economic conditions.

Key Highlights

  • 1Revenue increased by 19% to $1.84 billion in 2007, largely due to the acquisition of TALX.
  • 2Operating income grew by 11% to $486.2 million, but operating margin declined to 26.4% from 28.2%.
  • 3TALX acquisition significantly boosted the International and North America Personal Solutions segments and contributed $179.4 million in revenue.
  • 4U.S. Consumer Information Solutions (USCIS) revenue remained flat, impacted by weak mortgage and credit marketing markets.
  • 5Long-term debt increased substantially to $1.17 billion, primarily due to financing the TALX acquisition and share repurchases.
  • 6Equifax repurchased $718.7 million of its common stock in 2007, demonstrating a commitment to shareholder returns.
  • 7The company faces competitive pressures and economic uncertainties, particularly in its core U.S. consumer credit reporting business.

Frequently Asked Questions

The acquisition of TALX Corporation on May 15, 2007, was a significant driver of Equifax's 2007 performance. It contributed $179.4 million in revenue and expanded the company's service offerings into payroll and human resources outsourcing. However, it also led to an increase in operating expenses, including depreciation and amortization, and contributed to the overall increase in long-term debt.

The USCIS segment's revenue was flat in 2007 compared to 2006, with a slight decrease in operating margin. This performance was primarily due to weakness in the U.S. mortgage, credit marketing, and direct marketing sectors, which offset growth in Online Consumer Information Solutions.

Equifax expects continued revenue growth in its International, North America Personal Solutions, and North America Commercial Solutions segments in 2008. However, the company anticipates that revenue from its U.S. Consumer Information Solutions (USCIS) segment will remain flat due to current economic conditions.

Following the TALX acquisition, Equifax's long-term debt increased significantly to $1.17 billion. The company financed the acquisition with a combination of debt and equity. Equifax plans to manage its debt through its strong cash flow generation from operating activities and has the flexibility to raise additional capital through debt or equity markets if needed.