EXHIBIT 99.1
OneSource Announces First-Quarter Financial Results;
Reports Sequential Growth in Customer Base and ACV
CONCORD, Mass.--(BUSINESS WIRE)--April 22, 2004--OneSource
Information Services, Inc. (NASDAQ: ONES), a leading provider of
business information solutions, today announced financial results for
the first quarter ended March 31, 2004.
First Quarter Financial Performance
Q1 Q4 Q1
(In millions, except per share data and 2004 2003 2003
percentages)
Annualized Contract Value (ACV) $53.2 $52.7 $54.3
Total Revenues $14.3 $14.5 $14.5
Gross Margin 67.8% 69.4% 67.5%
Net Income (Loss) $(0.2)(a) $0.4(b) $0.7
Net Income (Loss) per Diluted Share $(0.02)(a) $0.04(b) $0.06
(a) Includes $669,000 in charges associated with the work of the
special committee and the proposed merger with affiliates of
ValueAct Capital Partners, L.P., and $535,000 in charges
associated with severance costs for OneSource's previous chief
executive officer.
(b) Includes $853,000 in charges associated with the work of the
special committee.
Comments on the First Quarter
"This was a good quarter for OneSource," said Martin Kahn,
executive chairman and interim chief executive officer of OneSource.
"The corporate spending environment appears to be improving, and
existing customers are responding to our strategy and our product
offerings. As a result, new and upgrade business was solid, renewals
remained strong, and we met our guidance for both ACV and revenues for
the first quarter of 2004. Earnings per share were less than we
anticipated due to expenses incurred in connection with the execution
of the merger agreement with affiliates of ValueAct Capital."
OneSource generated $3 million in new and upgrade business in the
first quarter of 2004. Among the new customers added were Allen &
Overy, Convergys Corporation, National Bank of Canada, Nortel Networks
and Saul, Ewing L.L.P. Among the customers that upgraded their level
of service with OneSource were Drake Beam Morin, Grant Thornton,
Honeywell, MCI and Oracle.
OneSource's dollar-based renewal rate for the first quarter of
2004 was 79%, better than its 78% dollar-based renewal rate for the
full year 2003, and up substantially from 68% in the first quarter of
2003. "Our strong renewals in the first quarter continue a trend that
began during the middle of 2003," said Kahn. "At that time, we began
taking steps to improve our performance in account management,
customer service and professional services. On the product front,
OneSource implemented a new quality initiative to enhance the
accuracy, timeliness and completeness of the business content in
OneSource products. We also began launching a series of platform,
content and product enhancements. Each of these initiatives has been
well received by our customers."
During the first quarter of 2004, OneSource announced its plans to
release new Synergy(SM) Solution offerings tailored for sales and
marketing professionals in the commercial banking, insurance, legal,
and accounting industries. "Powered by a new version of our AppLink
Pro software development kit," Kahn said, "these new solutions will
support more advanced and customized searches of the OneSource
Enhanced Information Warehouse repository, helping users improve their
productivity in tasks such as preparing for sales calls and assessing
customer risk profiles."
Proposed Acquisition by ValueAct Capital Partners
On April 6, 2004, OneSource filed a preliminary proxy statement
and a transaction statement on Schedule 13E-3 with the United States
Securities and Exchange Commission relating to the proposed merger
with affiliates of ValueAct Capital Partners, L.P. In the proposed
merger, each share of common stock of OneSource outstanding at the
time of the merger (other than shares held by ValueAct Capital and its
affiliates), will be converted into the right to receive $8.40 per
share in cash. ValueAct Capital and its affiliates currently hold
approximately a 32% ownership interest in OneSource, according to its
most recent filing with the Securities and Exchange Commission. As a
result, the cash consideration to be paid in connection with the
proposed merger is approximately $68.9 million.
Business & Financial Outlook
"OneSource entered the second quarter with considerable momentum
and a strong pipeline of business," said Kahn. "We expect to begin
seeing higher ACV and top-line growth as corporate spending continues
to increase. We're delivering on our product strategy, our marketing
group is doing a great job getting the word out, and our sales people
are executing well."
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 second quarter of 2004
are as follows:
-- ACV in the range of $52 million to $56 million.
-- Revenues in the range of $14 million to $15 million.
-- Net income per diluted share in the range of $0.02 to $0.05.
This figure includes anticipated expenses of between $500,000
and $600,000 related to the proposed merger with affiliates of
ValueAct Capital Partners, L.P.
Given OneSource's proposed merger with affiliates of ValueAct
Capital Partners, L.P., OneSource is not updating its financial
guidance for full year 2004.
First-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, April 22, 2004.
On the call, Executive Chairman and Interim Chief Executive Officer
Martin Kahn and Chief Financial Officer Roy Landon will discuss
OneSource's financial results and expectations, and the other matters
discussed in this release. 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" on OneSource's homepage 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 makes business professionals more effective and productive in
completing their critical daily tasks. OneSource(R) 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.
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, Deloitte & Touche, Hewlett Packard, i2 Technologies,
Orange, Royal & Sun Alliance, SAS Institute, and Sun Microsystems.
OneSource, Synergy, 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 ACV,
revenues, and net income per diluted share for the second quarter of
2004; the purchase of all of OneSource's outstanding shares of common
stock, excluding shares of common stock held by ValueAct Capital
Partners, L.P. and its affiliates, for $8.40 per share in cash;
OneSource's competitive position; the release of new Synergy Solution
offerings tailored for sales and marketing professionals in the
commercial banking, insurance, legal, and accounting industries; and
the functionality and effectiveness of OneSource products and
services. 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.
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 most recent Annual Report on Form 10-K.
OneSource Information Services, Inc.
Condensed Consolidated Statements of Income (Loss)
(In thousands, except per share data, and unaudited)
Three months ended
March 31,
2004 2003
Revenues $14,339 $14,496
Cost of revenues 4,623 4,709
Gross profit 9,716 9,787
Operating expenses:
Selling and marketing 4,457 4,444
Platform and product development 2,582 2,691
General and administrative (1) 2,998 1,507
Amortization of acquired intangible assets 81 81
Total operating expenses 10,118 8,723
Income (loss) from operations (402) 1,064
Interest income 160 112
Interest expense (39) (3)
Income (loss) before provision for income
taxes (281) 1,173
Provision (benefit) for income taxes (99) 434
Net income (loss) $(182) $739
Net income (loss) per share:
Basic $(0.02) $0.06
Diluted $(0.02) $0.06
Weighted average common shares outstanding:
Basic 11,639 11,680
Diluted 11,639 12,119
(1) Results for the three months ended March 31, 2004 include $669,000
of merger-related expenses and $535,000 of severance costs.
OneSource Information Services, Inc.
Condensed Consolidated Balance Sheets
(In thousands and unaudited)
March 31, Dec. 31,
2004 2003
ASSETS
Cash and cash equivalents $ 25,265 $ 22,794
Accounts receivable, net 7,642 16,705
Deferred subscription costs and other current
assets 3,918 3,990
Total current assets 36,825 43,489
Property and equipment, net 5,038 4,612
Goodwill and acquired intangible assets, net 5,254 5,335
Deferred income taxes 1,480 1,480
Other assets, net 6,145 5,647
Total assets $ 54,742 $ 60,563
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 1,046 $ 1,046
Accounts payable and accrued expenses 6,830 9,066
Deferred revenues 26,111 29,520
Deferred income taxes 692 692
Total current liabilities 34,679 40,324
Long-term debt 1,266 1,528
Total liabilities 35,945 41,852
Stockholders' equity:
Common stock 133 133
Additional paid-in capital 36,767 36,720
Accumulated deficit (6,983) (6,801)
Accumulated other comprehensive income 1,063 941
Treasury stock, at cost (12,183) (12,282)
Total stockholders' equity 18,797 18,711
Total liabilities and stockholders' equity $ 54,742 $ 60,563
OneSource Information Services, Inc.
Condensed Consolidated Statements Of Cash Flows
(In thousands and unaudited)
Three months ended
March 31,
2004 2003
Cash flows relating to operating activities:
Net income (loss) $ (182) $ 739
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 717 800
Amortization of acquired intangible assets 81 81
Stock-based employee compensation expense 56 ----
Tax benefits of stock options ---- 204
Loss on disposal of fixed assets 1 8
Changes in operating assets and liabilities 3,359 2,756
Net cash provided by operating activities 4,032 4,588
Cash flows relating to investing activities:
Increase in restricted time deposits (603) ----
Purchases of property and equipment (890) (642)
Capitalization of software development costs (163) (802)
Net cash used by investing activities (1,656) (1,444)
Cash flows relating to financing activities:
Issuance of stock pursuant to stock options and
employee stock purchase plan 89 442
Repurchase of common stock for treasury ---- (1,304)
Proceeds from issuance of long-term debt ---- 1,537
Repayments of long-term debt (261) ----
Net cash provided (used) by financing activities (172) 675
Effect of exchange rate changes on cash and cash
equivalents 267 (181)
Increase in cash and cash equivalents 2,471 3,638
Cash and cash equivalents, beginning of period 22,794 23,096
Cash and cash equivalents, end of period $25,265 $26,734
CONTACT: Investor Contact:
OneSource Information Services, Inc.
Roy Landon, 978-318-4377
Roy_Landon@onesource.com
or
Media Contact:
Sharon Merrill Associates, Inc.
Jason Fredette, 617-542-5300
jfredette@InvestorRelations.com