10-Q/APeriod: Q3 FY1998

EQUIFAX INC Quarterly Report (Amendment) for Q3 Ended Sep 30, 1998

Filed October 6, 2000For Securities:EFX

Summary

Equifax Inc. (EFX) reported strong revenue and operating income growth for the nine months and third quarter ended September 30, 1998. The company's revenue increased by 17.3% year-to-date and 23.6% for the third quarter, driven by robust performance across its North American Information Services, Payment Services, Equifax Europe, and Equifax Latin America segments. Acquisitions played a significant role in this growth, contributing approximately 9.4% to the year-to-date revenue increase and 13.8% to the third quarter. Despite increased interest expenses due to higher borrowings for acquisitions and share repurchases, and significant investment in its "Year 2000" program, Equifax maintained healthy operating leverage. Net income from continuing operations saw a moderate increase of 15.3% year-to-date, and diluted EPS from continuing operations grew by 18.4%. The company also highlighted its proactive approach to managing Year 2000 readiness, with an estimated total cost of $48 million for the program, of which $21 million had been incurred by September 30, 1998.

Key Highlights

  • 1Operating revenue grew by 17.3% year-to-date and 23.6% in the third quarter, demonstrating strong top-line momentum.
  • 2Acquisitions significantly contributed to revenue growth, accounting for approximately 9.4% of the year-to-date increase and 13.8% of the third-quarter increase.
  • 3Operating income increased by 19.1% year-to-date and 20.4% in the third quarter, showcasing effective operating leverage.
  • 4Net income from continuing operations increased by 15.3% year-to-date, and diluted EPS from continuing operations grew by 18.4%, indicating solid profitability.
  • 5The company is actively managing its 'Year 2000' program, with an estimated total cost of $48 million, and has incurred $21 million of these costs by September 30, 1998.
  • 6Significant investments were made in acquisitions, particularly in Brazil, totaling $474.7 million in the first nine months, financed by debt and operating cash flow.
  • 7The company maintained a strong liquidity position, with $522 million available under its revolving credit facility and approximately $125 million authorized for future share repurchases.

Frequently Asked Questions

Equifax's revenue growth was primarily driven by strong performance across all its operating segments, including North American Information Services, Payment Services, Equifax Europe, and Equifax Latin America. Significant contributions also came from recent acquisitions, particularly in Brazil, and increased demand from industries like finance and telecommunications.

Equifax has a comprehensive 'Year 2000' program focusing on IT systems, electronic data interchange, non-IT systems, and vendor relationships. The company estimates the total cost for this program to be $48 million, with $21 million incurred by September 30, 1998. The expected per-share impact is estimated at $0.09 for 1998 and $0.08 for 1999. While they are working towards readiness, the company acknowledges the potential for adverse effects if systems, both internal and external, fail.

During the nine months, Equifax issued new notes and debentures totaling $400 million to fund acquisitions and share repurchases. The company also repurchased approximately $97.4 million of its common shares in the open market and from an employee trust. As of September 30, 1998, approximately $125 million remained authorized for future share repurchases.

Equifax Europe saw revenue growth driven by U.K. Consumer Information Services and improved performance across industries, with operating income benefiting from revenue growth and acquisition integration. Equifax Latin America experienced significant revenue increases due to acquisitions in Brazil and consolidation of operations in Argentina and Chile, leading to substantial operating income growth.