10-QPeriod: Q2 FY2012

EQUIFAX INC Quarterly Report for Q2 Ended Jun 30, 2012

Filed July 26, 2012For Securities:EFX

Summary

Equifax Inc. reported a strong second quarter and first six months of 2012, demonstrating significant year-over-year growth in both revenue and net income. Total operating revenue increased by 10% for both periods, driven by robust performance across most segments, particularly U.S. Consumer Information Solutions and Workforce Solutions. This growth was achieved despite the deconsolidation of its Brazilian business in the prior year, which had a notable impact on revenue comparisons. The company also saw a substantial increase in net income, more than doubling in the second quarter and increasing by 58% in the first six months, largely due to improved operating income and the favorable comparison against a prior year loss associated with the Brazilian transaction. Key financial metrics show positive momentum. Operating income grew by 16% and 17% for the quarter and year-to-date respectively, with operating margins expanding due to revenue growth outpacing expense increases and the beneficial effect of the Brazilian business deconsolidation. Diluted earnings per share attributable to Equifax also saw significant improvements, rising to $0.62 for the quarter and $1.21 year-to-date, up from $0.28 and $0.74 in the prior year, respectively. The company maintained a strong liquidity position, with significant cash provided by operating activities and ample availability under its senior credit facility.

Financial Highlights

51 data points
Beta

Revenue

$513.30M

Net Income

$76.40M

14.9% Net Margin

EPS (Diluted)

$0.62

Total Assets

$3.52B

Cash & Equivalents

$183.10M

Free Cash Flow

$149.00M

Financial Statements
Beta
Revenue$513.30M
SG&A Expenses$156.80M
Operating Expenses$384.30M
Operating Income$129.00M
Interest Expense$13.70M
Net Income$76.40M
EPS (Basic)$0.63
EPS (Diluted)$0.62
Shares Outstanding (Basic)120.30M
Shares Outstanding (Diluted)122.80M

Key Highlights

  • 1Revenue grew 10% in both the three and six months ended June 30, 2012, compared to the prior year, reaching $535.8 million and $1,058.5 million respectively.
  • 2Net income attributable to Equifax surged by 122% to $76.4 million for the second quarter and by 61% to $147.9 million for the first six months.
  • 3Diluted EPS increased significantly, from $0.28 to $0.62 in the second quarter and from $0.74 to $1.21 in the first six months, indicating strong profitability gains.
  • 4Operating income grew robustly by 16% in the quarter and 17% year-to-date, with operating margins improving by 1.3 and 1.4 percentage points, respectively.
  • 5U.S. Consumer Information Solutions and Workforce Solutions were key growth drivers, with revenue increasing by 19% and 20% respectively in the second quarter.
  • 6The company maintained a strong liquidity position, with cash provided by operating activities increasing by $53.4 million to $200.4 million for the first six months of 2012.
  • 7Equifax repurchased $51.1 million of its common stock in the first six months of 2012 and increased its quarterly dividend to $0.18 per share.

Frequently Asked Questions

Equifax reported a 10% increase in operating revenue for both the three and six months ended June 30, 2012, compared to the same periods in 2011. Revenue reached $535.8 million for the quarter and $1,058.5 million for the six-month period. This growth was observed across most segments, with notable strength in U.S. Consumer Information Solutions and Workforce Solutions.

Profitability significantly improved. Net income attributable to Equifax more than doubled in the second quarter, reaching $76.4 million, and increased by 61% to $147.9 million for the first six months. Diluted earnings per share (EPS) also saw substantial growth, rising from $0.28 to $0.62 in the second quarter and from $0.74 to $1.21 for the first six months of 2012.

The deconsolidation of the Brazilian business, which occurred in the second quarter of 2011, had a mixed impact. It negatively impacted revenue comparisons by $16.1 million for the second quarter and $35.4 million for the first six months of 2012. However, it also benefited operating income comparisons and margins, as the Brazilian business had negatively impacted margins in the prior year. Additionally, a pre-tax loss of $10.3 million recorded in the prior year related to this transaction (along with associated tax expenses) made the year-over-year net income comparison appear more favorable in 2012.

Equifax maintained a strong liquidity position. Cash provided by operating activities increased by $53.4 million to $200.4 million for the first six months of 2012. The company had $498.6 million available under its senior credit facility at June 30, 2012, with no outstanding borrowings. Equifax also continued to return capital to shareholders through share repurchases totaling $51.1 million and an increased quarterly dividend of $0.18 per share.