EXHIBIT 99.1
OneSource Meets Guidance for the Third Quarter of 2003; Company
Continues its Record of Profitability and Positive Cash Flow
CONCORD, Mass.--(BUSINESS WIRE)--Oct. 16, 2003--OneSource
Information Services, Inc. (NASDAQ: ONES), a leading provider of
business information solutions, today announced financial results for
the third quarter ended September 30, 2003.
Third Quarter Financial Performance
Q3 Q2 Q3
(In millions, except per share data and 2003 2003 2002
percentages)
Annualized Contract Value (ACV) $53.0 $53.1 $55.2
Total Revenues $13.9 $14.4 $14.6
Gross Margin 68.0% 67.8% 69.1%
Net Income $0.7 $0.7 $1.1
Net Income Per Diluted Share $0.06 $0.06 $0.09
Comments on the Third Quarter
"We met our financial guidance and achieved our 13th consecutive
quarter of profitability," said Dan Schimmel, president and chief
executive officer of OneSource. "We are encouraged by the continued
interest in our business information solutions, particularly among our
target Global 5000 customers, a sector in which we increased business
in the third quarter of 2003. However, general economic conditions
remain challenging, and we continue to see longer sales cycles for
higher dollar purchase decisions."
OneSource generated $2.4 million in new and upgrade business in
the third quarter. Much of this business was driven by the company's
most recent offerings, such as the OneSource(R) Synergy(SM) Solutions
and OneSource Global Business Browser Asia Pacific product offerings.
OneSource added 36 new customers during the third quarter,
representing $1.0 million in new business. Financial services,
professional services and legal were among the strongest sectors for
the company. New Global 5000 customers included Dell, GMAC, Johnson
Controls, Nokia, Starwood Hotels & Resorts and Toyota.
OneSource also posted its best quarter in 2003 with respect to
upgrades, generating $1.4 million of additional revenue from existing
customers. Among the companies that expanded their relationships with
OneSource were ABN AMRO, ADP, Bank One, Georgia Pacific, Marsh &
McLennan and Zurich Financial Services. OneSource's dollar-based
renewal rate for the third quarter was 72%, which compares with 68%
and 80% for the first and second quarters of 2003, respectively.
OneSource's year-to-date dollar-based renewal rate on September 30,
2003 was 75%, which is unchanged from the year-to-date dollar-based
renewal rate at the end of the second quarter of 2003.
"We continue to strive to improve renewal rates through proactive
customer outreach and training that enable companies to realize the
full potential of our comprehensive solution set," continued Schimmel.
"In addition, we have been making a series of platform, content and
product enhancements to gain additional traction with Global 5000
customers."
Among the company's third quarter product initiatives was the
previously announced launch of the Catalyst(SM) product family of
business intelligence modules, which includes the Catalyst/Account
Intelligence Module for Siebel eBusiness Applications. This is a
component that should enable corporations running on Siebel 7 and
Siebel 7.5 to quickly access content from OneSource's Enhanced
Information Warehouse(TM) repository. OneSource intends to launch
additional Catalyst modules for other widely deployed applications and
technology platforms in the months ahead.
The company also announced the extension of its support for
eXtensible Business Reporting Language (XBRL) through the OneSource
AppLink(SM) software development kit (SDK) with dynamic, item-level
financial data from over 750,000 UK and European companies.
OneSource's initial deployment of XBRL data on 28,000 companies
worldwide took place in March of 2003. Using XBRL via the AppLink SDK,
OneSource customers can now integrate financial data on nearly 800,000
global companies from the OneSource Enhanced Information Warehouse
repository into standard business and custom financial applications.
Additionally, the company augmented the OneSource Enhanced
Information Warehouse repository with more than 121,000 executive
contacts. OneSource expects that these contacts will enable
OneSource's subscribers in sales, marketing and customer service
departments to identify and pursue business with difficult-to-find,
mid-level executives at more than 28,000 U.S. companies.
Nine-Month Financial Performance
Ended Ended
(In millions, except per share data and September 30, September 30,
percentages) 2003 2002
Total Revenues $42.8 $43.2
Gross Margin 67.8% 69.0%
Net Income $2.1 $3.3
Net Income Per Diluted Share $0.18 $0.26
Cash Flows from Operations $5.9 $12.3
For the first nine months of 2003, OneSource generated $5.9
million in cash from operations and ended the third quarter with $22.3
million in cash and cash equivalents. The company leveraged its cash
to repurchase approximately 431,000 shares of common stock at an
average price of $7.74 per share in the third quarter. In doing so, it
completed its third stock buyback program and spent approximately $1.8
million under a fourth stock buyback program. As announced in July
2003, OneSource's Board of Directors approved the repurchase of up to
$7 million worth of common stock under its fourth stock buyback
program. Since OneSource approved its initial stock buyback program in
2001, the company has repurchased approximately 2.7 million shares of
its common stock and has spent $20.3 million in repurchasing this
common stock.
Business & Financial Outlook
Schimmel said, "Based on recent trends in IT spending and our
near-term sales forecast, we are reducing our full-year guidance for
ACV, revenues and cash flow. We are also reducing our guidance for net
income based solely on anticipated expenses related to the previously
announced unsolicited letter from ValueAct Capital Partners, L.P."
OneSource undertakes no obligation to update the guidance below,
which is subject to change. Please note that OneSource provides
earnings guidance in accordance with Generally Accepted Accounting
Principles (GAAP). As a result, the company's earnings guidance is
based upon net income and net income per diluted share.
OneSource's financial expectations for the full year 2003, which
are subject to change, are as follows:
-- ACV in the range of $50 million to $56 million.
-- Revenues in the range of $56 million to $58 million.
-- Net income per diluted share in the range of $0.18 to $0.23.
This figure includes anticipated expenses of between $600,000
and $800,000 related to the unsolicited letter from ValueAct
Capital Partners, L.P.
-- Cash flow from operations in the range of $6 million to $9
million.
Special Committee Review
On October 3, 2003, OneSource announced that it had received an
unsolicited letter from ValueAct Capital Partners, L.P. expressing its
interest in acquiring OneSource's business. ValueAct currently holds
approximately a 32% ownership interest in OneSource. OneSource's Board
of Directors subsequently formed a special committee of outside
independent directors to evaluate OneSource's strategic options to
maximize shareholder value. The special committee has engaged Morgan
Stanley & Co. and Portico Capital Securities LLC to assist it in this
review.
Third-Quarter Conference Call Reminder
In conjunction with this news release, OneSource plans to Webcast
its quarterly conference call at 11:00 a.m. ET today, October 16,
2003. On the call, OneSource President and Chief Executive Officer Dan
Schimmel and Chief Financial Officer Roy Landon will discuss the
company's financial results and expectations as well as its strategy
for long-term growth. Investors interested in listening to the Webcast
should log onto www.onesource.com at least 15 minutes prior to the
event's broadcast. Select "Investors" to access the Webcast.
About OneSource Information Services, Inc.
OneSource, a recognized leader in business information solutions,
delivers unparalleled company, executive, and industry intelligence
that make business professionals more effective and productive in
completing their critical daily tasks. OneSource products and services
support a company's vital business processes including serving their
customers, finding and leveraging new opportunities, and managing
suppliers and partners.
OneSource combines and organizes content from over 2,500
information sources supplied by more than 30 world-class content
providers, creating an unequalled information resource encompassing
corporate families, industries, executives, financials, news, analyst
reports, and trade and business press articles. Using its Global
Business Taxonomy(TM) system, OneSource links this in-depth
information on over 1.7 million companies worldwide resulting in the
most extensive company-linked repository of business information in
the world.
Users of OneSource products work faster, smarter, and more
productively, whether leveraging OneSource business information
through the Web-based OneSource Business Browser(SM) product line or
through enterprise applications or portals integrated seamlessly via
the OneSource AppLink SDK. To help customers link the OneSource
Enhanced Information Warehouse repository into their preferred
enterprise applications, OneSource provides consulting and integration
services.
OneSource is headquartered in Concord, MA, with offices located in
North America, Europe, and the Pacific Rim. Product information is
available at www.onesource.com. Customers include Bank One, Chubb,
Citigroup, Cisco, Hewlett Packard, Deloitte & Touche, i2 Technologies,
Orange, Royal & SunAlliance, SAS Institute, and Sun Microsystems.
OneSource, Business Browser, Synergy, Global Business Taxonomy,
Catalyst, AppLink, Enhanced Information Warehouse and/or other
OneSource product and service names referenced herein are either
trademarks or service marks or registered trademarks or service marks
of OneSource Information Services, Inc. or its subsidiaries in the
United States and/or other countries. All other product and service
names mentioned herein are trademarks or service marks of their
respective owners.
Safe Harbor Statement
This news release contains certain forward-looking statements that
are based on the current beliefs and expectations of OneSource's
management, as well as assumptions made by, and information currently
available to, OneSource's management. Such statements include, but are
not limited to, those regarding OneSource's expectations for revenues,
net income per diluted share, cash flow from operations, and ACV for
the full year 2003; OneSource's expectation that the enhancement of
the Enhanced Information Warehouse repository with more than 121,000
executive contacts will enable its subscribers in sales, marketing and
customer service departments to identify and pursue business with
difficult-to-find, mid-level executives at more than 28,000 U.S.
companies; OneSource's competitive position; the functionality and
effectiveness of OneSource products and services, including, but not
limited to, the Catalyst modules; OneSource's intent to launch further
Catalyst modules; and OneSource's ability to increase renewal rates,
generate larger contracts, and gain additional blue-chip customers.
Because such statements involve risks and uncertainties, actual
actions and strategies and the timing and expected results thereof may
differ materially from those expressed or implied by such
forward-looking statements, and OneSource's future results,
performance, or achievements could differ materially from those
expressed in, or implied by, any such forward-looking statements. Such
risks include, but are not limited to, complementing the OneSource
product line with new products and services, which may divert
management and technical attention and financial resources;
OneSource's reliance on generating revenues from its Web-based product
line; political, economic, and business fluctuations in domestic and
international markets; a third party initiating a takeover attempt of
OneSource notwithstanding the Board's adoption of a shareholder
rights plan; and competition in the business information services
industry. In addition to the factors noted above, other risks,
uncertainties, assumptions, and factors that could affect OneSource's
financial results are described in OneSource's recent filings with the
United States Securities and Exchange Commission including its Annual
Report on Form 10-K for the fiscal year ended December 31, 2002.
OneSource Information Services, Inc.
Condensed Consolidated Statement of Income
(In thousands, except per share data, and unaudited)
Three months ended Nine months ended
September 30, September 30,
2003 2002 2003 2002
Revenues:
Web-based product $13,522 $14,042 $41,456 $41,494
CD Rom product and other 368 515 1,329 1,660
Total revenues 13,890 14,557 42,785 43,154
Cost of revenues 4,442 4,501 13,791 13,368
Gross profit:
Web-based product 9,463 9,979 28,890 29,397
CD Rom product and other (15) 77 104 389
Total gross profit 9,448 10,056 28,994 29,786
Operating expenses:
Selling and marketing 4,133 4,385 12,927 12,297
Platform and product development 2,683 2,279 8,004 7,673
General and administrative 1,522 1,677 4,734 4,543
Amortization of other intangible
assets 82 115 245 345
Total operating expenses 8,420 8,456 25,910 24,858
Income from operations 1,028 1,600 3,084 4,928
Interest income, net 75 95 301 299
Income before provision for
income taxes 1,103 1,695 3,385 5,227
Provision for income taxes 413 627 1,269 1,934
Net income $690 $1,068 $2,116 $3,293
Basic net income per share $0.06 $0.09 $0.18 $0.28
Diluted net income per share $0.06 $0.09 $0.18 $0.26
Weighted average common shares
outstanding:
Basic 11,311 11,797 11,515 11,927
Diluted 11,705 12,368 11,901 12,623
OneSource Information Services, Inc.
Condensed Consolidated Balance Sheet
(In thousands and unaudited)
September 30, December 31,
2003 2002
ASSETS
Cash and cash equivalents $ 22,318 $ 23,096
Accounts receivable, net 6,690 16,499
Deferred subscription costs and other
current assets 3,812 5,339
Total current assets 32,820 44,934
Property and equipment, net 4,568 3,629
Goodwill and other intangible assets, net 5,417 5,662
Other assets, net 5,578 4,573
Total assets $ 48,383 $ 58,798
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 948 $ -
Accounts payable and accrued expenses 7,398 11,032
Deferred revenues 23,342 30,257
Total current liabilities 31,688 41,289
Long-term debt 1,639 -
Total liabilities 33,327 41,289
Stockholders' equity:
Common stock 133 133
Additional paid-in capital 35,791 35,128
Accumulated deficit (5,922) (5,856)
Accumulated other comprehensive income 644 437
Treasury stock, at cost (15,590) (12,333)
Total stockholders' equity 15,056 17,509
Total liabilities and stockholders'
equity $ 48,383 $ 58,798
OneSource Information Services, Inc.
Condensed Consolidated Statement Of Cash Flows
(In thousands and unaudited)
Nine months ended
September 30,
2003 2002
Cash flows relating to operating activities:
Net income $ 2,116 $ 3,293
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,308 2,383
Amortization of other intangible assets 245 345
Amortization of unearned compensation relating to
grants of stock options -- 70
Tax benefits of stock options 615 554
Loss on disposal of fixed assets (5) 7
Changes in operating assets and liabilities 629 5,609
Net cash provided by operating activities 5,908 12,261
Cash flows relating to investing activities:
Proceeds from restricted time deposits 603 --
Purchases of property and equipment (2,686) (1,437)
Capitalization of software development costs (2,255) (1,047)
Net cash used by investing activities (4,338) (2,484)
Cash flows relating to financing activities:
Issuance of stock pursuant to stock options and
employee stock purchase plan 1,256 852
Repurchase of common stock (6,647) (4,976)
Proceeds from equipment line advance 2,843 --
Repayment of equipment line (256) --
Net cash used by financing activities (2,804) (4,124)
Effect of exchange rate changes on cash and cash
equivalents 456 314
Increase in cash and cash equivalents (778) 5,967
Cash and cash equivalents, beginning of year 23,096 18,162
Cash and cash equivalents, end of period $ 22,318 $24,129
CONTACT: OneSource Information Services, Inc.
Investor Contact:
Roy Landon, 978-318-4377
Roy_Landon@onesource.com
or
Sharon Merrill Associates, Inc.
Media Contact:
Jason Fredette, 617-542-5300
jfredette@InvestorRelations.com