10-QPeriod: Q3 FY2014

EQUIFAX INC Quarterly Report for Q3 Ended Sep 30, 2014

Filed October 23, 2014For Securities:EFX

Summary

Equifax Inc. reported solid third-quarter 2014 results, demonstrating revenue growth driven by strong performance in its U.S. Information Solutions and International segments. Revenue increased 7% year-over-year, boosted by acquisitions and organic growth in core non-mortgage businesses, though this was partially offset by the ongoing decline in mortgage refinancing activity. Net income attributable to Equifax showed a significant increase of 11% for the quarter, reaching $92.7 million, or $0.75 per diluted share. The company continues to focus on strategic investments, innovation, and operational efficiency, while also actively managing its capital structure through share repurchases and dividend payments, signaling confidence in its future prospects.

Financial Highlights

52 data points
Beta

Revenue

$613.40M

Net Income

$92.70M

15.1% Net Margin

EPS (Diluted)

$0.75

Total Assets

$4.71B

Cash & Equivalents

$115.00M

Free Cash Flow

$188.80M

Financial Statements
Beta
Revenue$613.40M
SG&A Expenses$197.80M
Operating Expenses$459.70M
Operating Income$153.70M
Interest Expense$17.10M
Net Income$92.70M
EPS (Basic)$0.77
EPS (Diluted)$0.75
Shares Outstanding (Basic)121.10M
Shares Outstanding (Diluted)123.50M

Key Highlights

  • 1Revenue increased by 7% to $613.4 million in Q3 2014 compared to Q3 2013, driven by acquisitions and core business growth.
  • 2Net income attributable to Equifax grew by 11% to $92.7 million for the quarter, resulting in diluted EPS of $0.75.
  • 3Acquisitions, notably TDX Group in the UK, contributed significantly to the International segment's 18% revenue growth.
  • 4USIS segment revenue grew 3% due to strong performance in Online Information Solutions, despite a slight decline in Mortgage Solutions.
  • 5The company repurchased 2.5 million shares for $186.6 million in the first nine months of 2014 and had $428.5 million available for future repurchases.
  • 6Operating margin for Workforce Solutions improved by 2.6 percentage points to 32.5%, driven by a higher mix of high-margin business and cost management.
  • 7Effective tax rate decreased to 32.5% for the quarter from 35.3% in the prior year, due to discrete tax benefits.

Frequently Asked Questions

Revenue growth in the third quarter of 2014 was primarily driven by a combination of acquisitions, notably the TDX Group acquisition in the UK, and organic growth in Equifax's core non-mortgage businesses across its USIS and International segments. This growth was partially tempered by the ongoing decline in mortgage refinancing activity.

Profitability improved significantly, with net income attributable to Equifax increasing by 11% to $92.7 million in the third quarter of 2014 compared to the same period in 2013. Diluted earnings per share also saw a corresponding increase to $0.75.

Equifax anticipates long-term average organic revenue growth between 6% and 8%, with an additional 1% to 2% from strategic acquisitions. Earnings per share are expected to grow at a somewhat faster rate than revenue over time due to operating and financial leverage.

The company is involved in several ongoing legal and regulatory matters, including investigations by state Attorneys General and the Consumer Financial Protection Bureau (CFPB) related to consumer reporting practices. While the company is cooperating and believes it has strong defenses, the outcomes are currently unpredictable and could result in adverse judgments or penalties.