Exhibit 99.1
100 Carillon ParkwayŸ St. Petersburg, FL 33701
NEWS FOR IMMEDIATE RELEASE
First Advantage Contacts: | ||
Renee Svec | Cindy Williams | |
Director of Marketing & Communications | Investor Relations Manager | |
727.214.3411, ext. 212 | 727.214.3411, ext. 260 | |
rsvec@fadv.com | clwilliams@fadv.com |
FIRST ADVANTAGE CORPORATION REPORTS
OPERATING RESULTS FOR THE THIRD QUARTER OF 2005
ST. PETERSBURG, Fla., Oct. 25, 2005—First Advantage Corporation (NASDAQ: FADV), a global risk mitigation and business solutions provider, today announced operating results for the third quarter of 2005.
First Advantage reported net income of $16.0 million (30 cents per diluted share) for the quarter ended Sept. 30, 2005. Net income was $13.0 million (26 cents per diluted share) for the quarter ended Sept. 30, 2004.
Revenues for the company were $169.9 million and $134.1 million for the quarters ended Sept. 30, 2005, and Sept. 30, 2004, respectively.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were $35.1 million and $28.7 million for the quarters ended Sept. 30, 2005, and Sept. 30, 2004, respectively.
“We are very pleased to report our third quarter operating results, inclusive of the Credit Information Group (CIG) we recently acquired from our parent company, The First American Corporation”, said John Long, chief executive officer of First Advantage Corporation. “The operating results for the quarter demonstrate the earnings and cash flow potential of the combined companies, which we intend to leverage to pursue future opportunities.”
In addition to CIG, First Advantage also acquired Phoenix Research Corporation, Jenark Business Systems, Inc. and Recruiternet, Inc. during the third quarter, and Road Manager Financial Services, Inc. and True Data Partners in October. In September, First Advantage also entered into a $225 million senior secured credit facility with a syndicate of financial institutions led by Banc of America, which will be used to refinance existing debt, support future acquisitions and provide ongoing working capital.
Management estimates that diluted earnings per share will be in the range of 22 cents to 26 cents for the fourth quarter ending Dec. 31, 2005.
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First Advantage Corporation Reports Operating Results for the Third Quarter of 2005
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First Advantage’s third quarter results will be discussed in more detail on Tuesday, Oct. 25, 2005, at 5:00 p.m. ET, via teleconference and webcast. The teleconference dial-in number is 888.566.0007 within the United States and 312.470.0008 outside the U.S. The teleconference pass code is “Advantage”. The live audio webcast of the call will be accessible on the Investor Relations section of First Advantage’s website atwww.FADV.com. An audio replay of the teleconference call will be available through Nov. 2, 2005, by dialing 800.645.7417 within the United States, or 402.220.0256 outside the U.S. An audio archive of the webcast will also be available for replay on First Advantage’s website following the call.
First Advantage will host an Investor’s Half-Day at the NASDAQ MarketSite in New York City on Wednesday, Nov. 9, 2005 to provide analysts and investors with the opportunity to hear the company’s continuing growth strategy, operational plans and most recent financial results. Additionally, the company will provide 2006 earnings guidance. Attendance is by registration only; however, the media and general public are welcome to listen via webcast beginning at 8:05 a.m. ET from the Investor Relations section of the company’s website atwww.FADV.com. A replay of the webcast will also be made available on the company’s website shortly after the conclusion of the live presentation.
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First Advantage Corporation Reports Operating Results for the Third Quarter of 2005
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Summary Income Statement (Unaudited)
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Service revenue | $ | 157,746,000 | $ | 122,865,000 | $ | 437,022,000 | $ | 356,526,000 | ||||||||
Reimbursed government fee revenue | 12,200,000 | 11,208,000 | 36,669,000 | 33,569,000 | ||||||||||||
Total revenue | 169,946,000 | 134,073,000 | 473,691,000 | 390,095,000 | ||||||||||||
Cost of service revenue | 49,881,000 | 37,219,000 | 133,026,000 | 112,901,000 | ||||||||||||
Government fees paid | 12,200,000 | 11,208,000 | 36,669,000 | 33,569,000 | ||||||||||||
Total cost of sales | 62,081,000 | 48,427,000 | 169,695,000 | 146,470,000 | ||||||||||||
Gross margin | 107,865,000 | 85,646,000 | 303,996,000 | 243,625,000 | ||||||||||||
Salaries and benefits | 46,646,000 | 37,018,000 | 130,308,000 | 105,876,000 | ||||||||||||
Facilities and telecommunications | 6,205,000 | 5,125,000 | 18,974,000 | 14,991,000 | ||||||||||||
Other operating expenses | 20,193,000 | 15,323,000 | 57,845,000 | 49,601,000 | ||||||||||||
Depreciation and amortization | 6,685,000 | 5,878,000 | 19,085,000 | 17,134,000 | ||||||||||||
Income from operations | 28,136,000 | 22,302,000 | 77,784,000 | 56,023,000 | ||||||||||||
Interest (expense) income: | ||||||||||||||||
Interest expense | (1,580,000 | ) | (714,000 | ) | (4,115,000 | ) | (1,665,000 | ) | ||||||||
Interest income | 22,000 | 150,000 | 48,000 | 567,000 | ||||||||||||
Interest (expense) income, net | (1,558,000 | ) | (564,000 | ) | (4,067,000 | ) | (1,098,000 | ) | ||||||||
Equity in earnings in investee | 280,000 | 349,000 | 1,232,000 | 986,000 | ||||||||||||
Income before income taxes | 26,858,000 | 22,087,000 | 74,949,000 | 55,911,000 | ||||||||||||
Provision for income taxes | 10,835,000 | 9,125,000 | 32,251,000 | 23,067,000 | ||||||||||||
Net income | $ | 16,023,000 | $ | 12,962,000 | $ | 42,698,000 | $ | 32,844,000 | ||||||||
Per share amounts: | ||||||||||||||||
Basic earnings per share | $ | .30 | $ | .26 | $ | .82 | $ | .67 | ||||||||
Basic weighted-average shares outstanding | 53,200,609 | 49,683,345 | 52,132,551 | 49,318,123 | ||||||||||||
Diluted earnings per share | $ | .30 | $ | .26 | $ | .81 | $ | .66 | ||||||||
Diluted weighted-average shares outstanding | 53,964,766 | 50,128,761 | 52,616,858 | 49,646,664 | ||||||||||||
EBITDA calculation: | ||||||||||||||||
Net income | $ | 16,023,000 | $ | 12,962,000 | $ | 42,698,000 | $ | 32,844,000 | ||||||||
Provision for income taxes | 10,835,000 | 9,125,000 | 32,251,000 | 23,067,000 | ||||||||||||
Interest expense | 1,580,000 | 714,000 | 4,115,000 | 1,665,000 | ||||||||||||
Depreciation and amortization | 6,685,000 | 5,878,000 | 19,085,000 | 17,134,000 | ||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA)* | $ | 35,123,000 | $ | 28,679,000 | $ | 98,149,000 | $ | 74,710,000 | ||||||||
* | EBITDA is not a measure of financial performance under generally accepted accounting principles. EBITDA is used by certain investors to analyze and compare companies. |
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First Advantage Corporation Reports Operating Results for the Third Quarter of 2005
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Segment Financial Information (Unaudited)
Three Months Ended Sept. 30, | Nine Months Ended Sept. 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
Service revenue | ||||||||||||||||
Lender Services | $ | 43,907,000 | $ | 33,870,000 | $ | 128,963,000 | $ | 103,480,000 | ||||||||
Data Services | 22,100,000 | 16,678,000 | 61,860,000 | 56,794,000 | ||||||||||||
Dealer Services | 29,219,000 | 18,355,000 | 72,252,000 | 53,022,000 | ||||||||||||
Employer Services | 37,673,000 | 31,952,000 | 104,451,000 | 84,664,000 | ||||||||||||
Multi Family Services | 17,544,000 | 15,711,000 | 49,134,000 | 41,838,000 | ||||||||||||
Investigative & Litigation Support Services | 8,237,000 | 6,770,000 | 23,142,000 | 18,687,000 | ||||||||||||
Corporate | (934,000 | ) | (471,000 | ) | (2,780,000 | ) | (1,959,000 | ) | ||||||||
Consolidated | $ | 157,746,000 | $ | 122,865,000 | $ | 437,022,000 | $ | 356,526,000 | ||||||||
Income (loss) from operations | ||||||||||||||||
Lender Services | $ | 12,971,000 | $ | 9,125,000 | $ | 37,596,000 | $ | 31,012,000 | ||||||||
Data Services | 7,206,000 | 5,102,000 | 20,956,000 | 8,541,000 | ||||||||||||
Dealer Services | 3,964,000 | 2,125,000 | 10,522,000 | 6,665,000 | ||||||||||||
Employer Services | 3,560,000 | 3,822,000 | 11,111,000 | 6,838,000 | ||||||||||||
Multi Family Services | 4,824,000 | 4,498,000 | 13,594,000 | 9,982,000 | ||||||||||||
Investigative & Litigation Support Services | 353,000 | 612,000 | 1,032,000 | 621,000 | ||||||||||||
Corporate | (4,742,000 | ) | (2,982,000 | ) | (17,027,000 | ) | (7,636,000 | ) | ||||||||
Consolidated | $ | 28,136,000 | $ | 22,302,000 | $ | 77,784,000 | $ | 56,023,000 | ||||||||
Operating margin percentage of service revenue | ||||||||||||||||
Lender Services | 29.54 | % | 26.94 | % | 29.15 | % | 29.97 | % | ||||||||
Data Services | 32.61 | % | 30.59 | % | 33.88 | % | 15.04 | % | ||||||||
Dealer Services | 13.57 | % | 11.58 | % | 14.56 | % | 12.57 | % | ||||||||
Employer Services | 9.45 | % | 11.96 | % | 10.64 | % | 8.08 | % | ||||||||
Multi Family Services | 27.50 | % | 28.63 | % | 27.67 | % | 23.86 | % | ||||||||
Investigative & Litigation Support Services | 4.29 | % | 9.04 | % | 4.46 | % | 3.32 | % | ||||||||
Corporate | N/A | N/A | N/A | N/A | ||||||||||||
Consolidated | 17.84 | % | 18.15 | % | 17.80 | % | 15.71 | % | ||||||||
About First Advantage Corporation
First Advantage Corporation (NASDAQ: FADV) combines industry expertise with information to create products and services that organizations worldwide use to make smarter business decisions. First Advantage is a leading provider of business credit information in the transportation industry; consumer credit information in the mortgage, automotive and subprime markets; motor vehicle record reports; supply chain security consulting; employment background verifications; occupational health services; applicant tracking systems; business tax consulting services; insurance fraud, corporate and litigation investigations; surveillance; computer forensics; electronic discovery; data recovery; due diligence reporting; resident screening; property management software; renters insurance and consumer location services. First Advantage ranks among the top three companies in all of its major business lines. First Advantage is headquartered in St. Petersburg, Fla., and has more than 3,700 employees in offices throughout the United States and abroad. More information about First Advantage can be found atwww.FADV.com.
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First Advantage Corporation Reports Operating Results for the Third Quarter of 2005
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First Advantage is a majority-owned subsidiary of The First American Corporation (NYSE: FAF), a Fortune 500 company that traces its history to 1889. First American is the nation’s largest data provider, supplying businesses and consumers with information resources in connection with the major economic events of people’s lives. Additional information about the First American Family of Companies can be found atwww.firstam.com.
Certain statements in this press release, including those related to the execution of the company’s growth strategy, product expansion, future cash flow, and fourth quarter earnings per share, are forward looking. Risks and uncertainties exist that may cause results to differ materially from those set forth in these forward-looking statements. Factors that could cause the anticipated results to differ from those described in the forward-looking statements include: general volatility of the capital markets and the market price of the company’s Class A common stock; the company’s ability to successfully raise capital; the company’s ability to identify and complete acquisitions and successfully integrate businesses it acquires; changes in applicable government regulations; the degree and nature of the company’s competition; increases in the company’s expenses; continued consolidation among the company’s competitors and customers; unanticipated technological changes and requirements; the company’s ability to identify suppliers of quality and cost-effective data, and other risks identified from time-to-time in the company’s SEC filings. The forward-looking statements speak only as of the date they are made. The company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. Investors are advised to consult the company’s filings with the SEC, including its 2004 Annual Report on Form 10-K, for a further discussion of these and other risks.
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