Interactive Data Reports Third Quarter 2014 Results
(firmenpresse) - NEW YORK, NY -- (Marketwired) -- 10/23/14 -- Interactive Data Corporation today reported its financial results for the third quarter ended September 30, 2014. Interactive Data's third quarter 2014 revenue was $233.5 million, a 4.1% increase from $224.3 million in the third quarter of 2013. Excluding the impact of changes in foreign exchange rates, Interactive Data's organic (non-GAAP) revenue for the third quarter of 2014 grew by 2.8% from the same quarter last year.
Interactive Data's third quarter 2014 income from operations was $58.1 million, compared with $41.2 million in the third quarter of 2013. Non-GAAP adjusted EBITDA (which excludes items that are either not part of the Company's ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) for the third quarter of 2014 was $93.5 million, compared with $88.5 million in the same period one year ago.
"During the third quarter we continued to produce revenue growth even as market conditions remained challenging," stated Stephen Daffron, Interactive Data's president and CEO. "Our organic revenue growth in the quarter was driven by continued growth in our Pricing and Reference Data segment, as well as expansion within our 7ticks trading infrastructure managed services area. We generated adjusted EBITDA growth of 5.6% in the quarter as we continue to take steps to prudently manage our cost structure."
Pricing and Reference Data Segment:
Interactive Data's Pricing and Reference Data segment reported third quarter 2014 revenue of $166.9 million, a 4.8% increase over $159.2 million in the third quarter of 2013. Excluding the impact of changes in foreign exchange rates, third quarter 2014 organic (non-GAAP) revenue for this segment increased by 3.8% from the same period last year. The segment's performance reflects continued growth in the Company's evaluated pricing and reference data services in North America. In August, the Company launched its Continuous Fixed Income Evaluated Pricing Service, which provides clients with greater pre-trade transparency support and price discovery capabilities on a continuous basis throughout the trading day. We believe this is a unique capability in the industry.
Trading Solutions Segment:
Interactive Data's Trading Solutions segment generated third quarter 2014 revenue of $66.6 million, an increase of 2.2% over $65.2 million in the same period one year ago. Excluding the impact of changes in foreign exchange rates, third quarter 2014 organic (non-GAAP) revenue for this segment increased 0.5% from the same period last year as growth in the 7ticks trading infrastructure managed services product area was mostly offset by declines in our other Trading Solutions product areas. We are continuing our investment in the coverage, quality, features, and functionality of our real-time Consolidated Feed offering.
Effects of Foreign Exchange:
The net effect of changes in foreign exchange rates increased third quarter 2014 income from operations by $0.7 million.
Refinancing Activity; Adjusted EBITDA:
As previously announced, in early May Interactive Data refinanced its debt and entered into a new $2.1 billion senior secured credit facility, consisting of a five-year $160 million Revolver (currently unfunded) and a seven year $1.9 billion Term Loan. Additionally, the Company completed the offering of $350 million in aggregate principal amount 5.875% Senior Notes due 2019.
As previously disclosed, the new credit agreement contains modified definitions that impact both Adjusted EBITDA and Covenant EBITDA. In order to provide consistency, we have reported Adjusted EBITDA for all periods presented, calculated under the new definitions within the new senior secured credit facility. The Company expects to be in a position to report on Covenant EBITDA when fourth quarter and full-year results are made available.
Balance Sheet Highlights:
As of September 30, 2014, Interactive Data had cash, cash equivalents and short-term investments of $304.6 million, compared with $254.8 million last quarter, $313.6 million at the same time last year and $360.2 million at the end of 2013. The Company's cash position as of September 30, 2014 reflects the 2014 use of approximately $94 million in cash, which together with the net proceeds of the new debt described above, was used to refinance the Company's existing debt and fund a dividend to Igloo Holdings Corporation, our parent entity, who in turn paid a dividend to its equity holders. The Company's total debt outstanding as of September 30, 2014 was approximately $2.25 billion compared to approximately $2.0 billion as of the same time last year.
For the nine months ended September 30, 2014, Interactive Data reported revenue of $699.9 million, an increase of $27.0 million, or 4.0%, from $672.9 million in the same period last year. Excluding the effects of foreign exchange, organic revenue growth was 2.7% during the first nine months of 2014.
For the nine months ended September 30, 2014, Interactive Data reported income from operations of $126.9 million, compared with $134.2 million in the same period one year ago. For the first nine months of 2014, non-GAAP adjusted EBITDA (which excludes items that are not part of the Company's ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) was $264.1 million, compared with $262.1 million in the same period one year ago.
Interactive Data Corporation will host a conference call to discuss the Company's third quarter 2014 results on Friday, October 24, 2014 at 8:30 a.m. ET. The dial-in number for the conference call is (785) 424-1827 and the related access code is IDCQ314. For those who cannot listen to this broadcast, a replay of the call will be available from October 24 at 12:00 p.m. until Friday, October 31, 2014 at 12:00 p.m., and it can be accessed by dialing (402) 220-2156 or (800) 753-5207.
In addition to presenting our results in accordance with generally accepted accounting principles (GAAP) in this press release, we also disclose the following non-GAAP information:
Management includes information regarding organic revenue. Organic revenue excludes the impact of foreign exchange rate fluctuations, as well as, if applicable, the contribution of businesses recently acquired (and related intercompany eliminations). Management believes reporting organic revenue is useful information for stakeholders as it facilitates a fuller understanding of period-to-period changes in revenue and underlying business trends.
Management includes organic revenue for our Pricing and Reference Data and Trading Solutions segments because management believes this additional level of detail provides further insight into underlying performance trends.
Management includes information regarding earnings before interest, other income, income taxes, depreciation and amortization (EBITDA) and adjusted EBITDA. Adjusted EBITDA is defined as earnings before interest, other income, income taxes, depreciation and amortization, stock-based compensation expense, and other non-cash, non-operational or non-recurring items, in each case as applicable for the underlying periods. Management considers adjusted EBITDA to be an important indicator of the Company's operational profitability and cash generation strength. Management also believes these metrics provide transparency into and useful information regarding the Company's operating results, because items that are either not part of the Company's ongoing core operating expenses, do not require a cash outlay, or are not otherwise expected to recur in the ordinary course of business are eliminated.
Management includes information regarding free cash flow, which we define as adjusted EBITDA less capital expenditures. Management considers free cash flow to be an important measure of the Company's cash generation strength that supports the Company's ability to repay its debt obligations and invest in future growth through new business development activities or acquisitions.
Management uses these non-GAAP financial measures, in addition to GAAP financial measures, as the basis for measuring the Company's core operating performance and comparing current period performance to that of prior periods, and to the performance of our competitors. Such measures are also used by management in their financial and operating decision-making, and for forecasting and planning purposes.
The non-GAAP financial measures of the Company's results of operations included in this press release should not be considered in isolation from comparable measures determined in accordance with GAAP. The non-GAAP financial measures should not be considered to be superior to, or a substitute for, the Company's results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the comparable GAAP financial measures are set forth in the accompanying tables. The non-GAAP measures presented may not be comparable to similarly titled measures reported by other companies.
This press release may contain forward-looking statements. Forward-looking statements include all statements that are not historical statements and include statements discussing the Company's goals, beliefs, strategies, objectives, plans, future financial conditions, future challenges and opportunities. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: (i) the implementation of strategies designed to improve revenue and profit growth; (ii) the impact of cost-cutting pressures across the industries the Company serves; (iii) general worldwide economic conditions and related uncertainties; (iv) consolidation of financial services companies, within and across industries; (v) a decline in activity levels in the securities markets, weak or declining financial performance of market participants or the failure of market participants; (vi) the intensity of competition the Company faces; (vii) a prolonged outage at one of the Company's data centers or other major disruptions of the Company's computer operations or those of the Company's suppliers, including outages or disruptions that result in the failure to timely deliver services or otherwise adversely impact the quality of the Company's services; (viii) the Company's ability to maintain relationships with its key suppliers and providers of market data; (ix) the Company's ability to maintain relationships with service bureaus and custodian banks; (x) the need to develop new products and services, and to adapt to legal, regulatory, technology or other changes or new competitive offerings; (xi) the Company's cost and operational optimization plans may not be effective or yield the expected efficiencies or may take longer than anticipated, including the Company's unified technology platform project; (xii) risks related to the Company's substantial leverage, including the Company's ability to raise additional capital to fund operations or react to changes in the economy or the Company's industry and market sectors, and the Company's exposure to interest rate risk on its variable rate debt (to the extent the risk is not mitigated by any interest rate hedge and cap arrangements that may be in place from time to time); (xiii) the Company is subject to regulatory oversight and it provides services to financial institutions who are subject to regulatory oversight, and enforcement actions by regulatory agencies can be time-consuming, costly and could harm our Company's reputation; (xiv) the Company's ability to maintain its registered investment adviser status; (xv) the risks of doing business internationally; (xvi) intellectual property related risks, including any allegations that the Company infringes the intellectual property rights of others; (xvii) the Company's ability to attract and retain qualified management and other key personnel; (xviii) the Company's ability to negotiate and enter into any strategic acquisitions or alliance on favorable terms, if at all; and (xix) the Company's ability to realize the anticipated benefits from any strategic acquisitions or alliances that it may be a party to. While the Company may elect to update forward-looking statements at some point in the future, the Company specifically disclaims any obligation to do so, even if management estimates change and, therefore, you should not rely on these forward-looking statements as representing the Company's views as of any date subsequent to today.
Interactive Data Corporation is a trusted leader in financial information. Thousands of financial institutions and active traders, as well as hundreds of software and service providers, subscribe to our fixed income evaluations, reference data, real-time market data, trading infrastructure services, fixed income analytics, desktop solutions and web-based solutions. Interactive Data's offerings support clients around the world with mission-critical functions, including portfolio valuation, regulatory compliance, risk management, electronic trading and wealth management. Interactive Data has over 2,500 employees in offices worldwide.
For more information, please visit .
COMPANY CONTACTS
Investors:
Vincent Chippari
Senior Vice President and Chief Financial Officer
781-687-8250
Media:
Anne O'Brien
Senior Vice President, Marketing
212-771-6956
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