10-QPeriod: Q3 FY2015

EQUIFAX INC Quarterly Report for Q3 Ended Sep 30, 2015

Filed October 22, 2015For Securities:EFX

Summary

Equifax Inc. reported solid financial results for the third quarter and the first nine months of 2015, demonstrating continued growth and operational efficiency. For the third quarter, total operating revenue increased by 9% year-over-year to $667.4 million, and for the nine-month period, revenue grew by 10% to $1,997.3 million. This growth was driven by strong performance across most segments, particularly U.S. Information Solutions (USIS) and Workforce Solutions, which saw revenue increases of 12% and 13% respectively in the quarter. Net income attributable to Equifax rose by 27% to $117.9 million in the third quarter, with diluted earnings per share (EPS) reaching $0.98, up from $0.75 in the prior year period. The company's financial health remains robust, supported by substantial cash flow from operations. Equifax also actively managed its capital structure, repurchasing $196.3 million in common stock and increasing its quarterly dividend to $0.29 per share during the first nine months. While international revenue faced headwinds from unfavorable foreign exchange rates, overall revenue growth, improved operating margins in key segments, and effective cost management contributed to a positive financial outlook.

Financial Highlights

53 data points
Beta

Revenue

$667.40M

Net Income

$117.90M

17.7% Net Margin

EPS (Diluted)

$0.98

Total Assets

$4.54B

Cash & Equivalents

$108.50M

Free Cash Flow

$247.20M

Financial Statements
Beta
Revenue$667.40M
SG&A Expenses$217.20M
Operating Expenses$493.10M
Operating Income$174.30M
Interest Expense$15.80M
Net Income$117.90M
EPS (Basic)$1.00
EPS (Diluted)$0.98
Shares Outstanding (Basic)118.40M
Shares Outstanding (Diluted)120.60M

Key Highlights

  • 1Total operating revenue for the third quarter of 2015 increased by 9% to $667.4 million, and by 10% to $1,997.3 million for the first nine months.
  • 2Net income attributable to Equifax grew by 27% to $117.9 million in Q3 2015, with diluted EPS rising to $0.98 from $0.75 in Q3 2014.
  • 3U.S. Information Solutions (USIS) and Workforce Solutions segments showed strong revenue growth of 12% and 13% respectively in Q3 2015.
  • 4Despite negative foreign exchange impacts, international revenue remained flat in Q3 2015 due to strong local currency growth in Europe and Latin America.
  • 5Operating expenses increased by 7% in Q3 2015, driven by higher cost of services and SG&A, partly due to restructuring charges and litigation expenses.
  • 6The company repurchased $196.3 million of its common stock and increased its quarterly dividend to $0.29 per share during the first nine months of 2015.
  • 7Cash provided by operating activities increased significantly by $123.4 million for the nine months ended September 30, 2015, reaching $536.8 million.

Frequently Asked Questions

Revenue growth was primarily driven by strong performance in the U.S. Information Solutions (USIS) and Workforce Solutions segments. USIS saw robust increases in its Online Information Solutions, particularly from direct-to-consumer resellers and mortgage-related services. The Workforce Solutions segment benefited from significant growth in Verification Services, especially in mortgage, auto, and pre-employment screening.

Unfavorable foreign exchange rates negatively impacted reported revenues and expenses. For the third quarter, foreign exchange rates reduced revenue by $21.5 million (3%). While local currency revenue grew in international segments like Europe and Latin America, the U.S. dollar translation resulted in flat or slightly decreased reported revenues for the International segment.

In the first quarter of 2015, Equifax recorded a $20.7 million restructuring charge ($13.2 million net of tax) primarily related to a reduction in headcount (approximately 300 positions) and costs associated with real estate exits and integration. This charge impacted selling, general, and administrative expenses and contributed to the increase in general corporate expenses for the nine-month period.

Equifax continues to return value to shareholders through share repurchases and dividends. During the first nine months of 2015, the company repurchased approximately 2.1 million shares for $196.3 million and increased its quarterly dividend to $0.29 per share. The company has $667.2 million remaining under its share repurchase authorization as of September 30, 2015.