Verisk (Nasdaq:VRSK), a leading data analytics provider,
today announced results for the quarter ended March 31, 2020.
Scott Stephenson, chairman, president, and CEO, said, “During
these challenging times, we are laser-focused on providing
uninterrupted great service and support to our customers while also
protecting the well-being of our more than 9,000 Verisk teammates
around the world. We’re navigating through this time of
uncertainty from a position of strength and will continue to invest
in our business and our people to capitalize on our competitive
advantages over the long-term.”
Lee Shavel, CFO and executive vice president, said, “Normalizing
for the continued impact of the injunction, Verisk delivered
organic constant currency revenue growth of 5.8% and organic
constant currency adjusted EBITDA growth of 9.0% in first-quarter
2020. During the quarter, we returned $218 million to
shareholders through dividends and repurchases while continuing to
invest in our business, demonstrating the resilience of our
business model and the strength of our balance sheet.”
Summary of Results (GAAP and Non-GAAP)(in
millions, except per share amounts)Note: Adjusted EBITDA, diluted
adjusted EPS, and free cash flow are non-GAAP measures.
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2020 |
|
2019 |
|
Change |
Revenues |
$ |
689.8 |
|
|
$ |
625.0 |
|
|
10.4 |
% |
Net income |
|
171.7 |
|
|
|
134.4 |
|
|
27.8 |
|
Adjusted EBITDA |
|
318.0 |
|
|
|
291.8 |
|
|
9.0 |
|
Diluted GAAP EPS |
|
1.04 |
|
|
|
0.81 |
|
|
28.4 |
|
Diluted adjusted EPS |
|
1.17 |
|
|
|
1.03 |
|
|
13.6 |
|
Net cash provided by operating activities |
|
362.6 |
|
|
|
366.1 |
|
|
(1.0 |
) |
Free cash flow |
|
309.7 |
|
|
|
320.9 |
|
|
(3.5 |
) |
Revenue
Consolidated revenues increased 10.4%, and 5.0% on an OCC basis,
for first-quarter 2020. Normalizing for the impact of the
injunction on roof measurement solutions, which adjusts for $4
million of associated revenue in the prior-year period, OCC revenue
would have grown 5.8% in first-quarter 2020. Although we
experienced a decline in certain of our transactional revenues
during the last two weeks of March 2020 related to COVID-19, the
impact on first-quarter 2020 results was modest.
Revenues and Revenue Growth by Segment(in
millions)
|
|
|
|
|
|
|
Revenue Growth |
|
Three Months Ended |
|
Three Months Ended |
|
March 31, |
|
March 31, 2020 |
|
2020 |
|
2019 |
|
Reported |
|
OCC |
Underwriting & rating |
$ |
344.1 |
|
|
$ |
305.9 |
|
|
12.5 |
% |
|
8.4 |
% |
Claims |
|
145.3 |
|
|
|
147.7 |
|
|
(1.6 |
) |
|
0.4 |
|
Insurance |
|
489.4 |
|
|
|
453.6 |
|
|
7.9 |
|
|
5.9 |
|
Energy and Specialized Markets |
|
160.1 |
|
|
|
128.4 |
|
|
24.6 |
|
|
2.6 |
|
Financial Services |
|
40.3 |
|
|
|
43.0 |
|
|
(6.4 |
) |
|
3.0 |
|
Revenues |
$ |
689.8 |
|
|
$ |
625.0 |
|
|
10.4 |
|
|
5.0 |
|
Insurance segment revenue grew 7.9% in the first quarter of 2020
and 5.9% on an OCC basis. Normalizing for the impact of the
injunction on roof measurement solutions, Insurance revenue would
have grown 6.9% on an OCC basis.
- Underwriting & rating revenue increased 12.5% in the
quarter and 8.4% on an OCC basis, resulting primarily from an
annual increase in prices derived from continued enhancements to
the content of the solutions within industry-standard insurance
programs as well as selling expanded solutions to existing
customers in commercial and personal lines. In addition,
catastrophe modeling services contributed to the growth.
- Claims revenue declined 1.6% in the quarter and grew 0.4% on an
OCC basis. Both reported and OCC growth were negatively impacted by
the injunction ruling against roof measurement solutions as well as
tougher comparisons from the prior-year period. Normalizing for the
impact of the injunction on roof measurement solutions, Claims
revenue would have grown 3.6% on an OCC basis. Growth was primarily
driven by claims analytics revenue and repair cost estimating
solutions revenue.
Energy and Specialized Markets segment revenue increased 24.6%
in the quarter and 2.6% on an OCC basis, resulting primarily from
growth in core research, increases in environmental health and
safety service revenues and weather analytics revenues. These
increases were partially offset by a decline in market and cost
intelligence solutions due to implementation projects that did not
reoccur and a decline in consulting revenues.
Financial Services segment revenue decreased 6.4% in the quarter
and grew 3.0% on an OCC basis. The impact of portfolio transactions
that closed in the quarter resulted in a net decrease in reported
revenues. On an OCC basis, revenue growth was driven by increases
in management information and regulatory reporting as well as fraud
and credit risk, offset in part by declines in portfolio management
and spend-informed analytics.
Net Income and Adjusted EBITDA
During first-quarter 2020, net income increased 27.8%, driven by
organic growth in the business, gains from dispositions, and a
lower level of acquisition-related costs (earn-outs). This was
partially offset by the timing shift of a $10 million expense
related to annual long-term equity incentive grants that was
recognized in the first quarter of this year as compared to the
second quarter in the prior year. Adjusted EBITDA increased 9.0%,
and 7.4% on an OCC basis, negatively impacted by the
above-mentioned timing shift in expense. Normalizing for the impact
of the injunction on roof measurement solutions, OCC adjusted
EBITDA would have grown 9.0% for first-quarter 2020.
EBITDA and Adjusted EBITDA by Segment(in
millions)Note: Consolidated EBITDA and adjusted EBITDA are non-GAAP
measures. Margin is calculated as a percentage of revenues.
|
Three Months Ended March 31, |
|
EBITDA |
|
EBITDA Margin |
|
Adjusted EBITDA |
|
Adjusted EBITDA Growth |
|
Adjusted EBITDA Margin |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
2020 Reported |
|
2020 OCC |
|
2020 |
|
2019 |
Insurance |
$ |
272.4 |
|
|
$ |
231.3 |
|
|
55.7 |
% |
|
51.0 |
% |
|
$ |
256.6 |
|
|
$ |
238.8 |
|
|
7.5 |
% |
|
8.0 |
% |
|
52.4 |
% |
|
52.7 |
% |
Energy and Specialized Markets |
|
50.2 |
|
|
|
37.2 |
|
|
31.4 |
|
|
29.0 |
|
|
|
50.2 |
|
|
|
39.7 |
|
|
26.3 |
|
|
1.8 |
|
|
31.4 |
|
|
30.9 |
|
Financial Services |
|
14.7 |
|
|
|
13.3 |
|
|
36.4 |
|
|
30.8 |
|
|
|
11.2 |
|
|
|
13.3 |
|
|
(16.0 |
) |
|
15.9 |
|
|
27.6 |
|
|
30.8 |
|
Consolidated |
$ |
337.3 |
|
|
$ |
281.8 |
|
|
48.9 |
|
|
45.1 |
|
|
$ |
318.0 |
|
|
$ |
291.8 |
|
|
9.0 |
|
|
7.4 |
|
|
46.1 |
|
|
46.7 |
|
Earnings Per Share
Diluted EPS increased 28.4% to $1.04 for the first quarter of
2020 due to the gains on sales of disposed businesses and a
decrease in acquisition-related costs (earn-outs). Diluted adjusted
EPS grew 13.6% to $1.17 for the first quarter of 2020, reflecting
organic growth in the business and lower average share count.
Cash Flow
Net cash provided by operating activities was $363 million for
the first quarter of 2020, down 1.0%. Capital expenditures were $53
million for the first quarter of 2020, up 17.0%. Free cash flow was
$310 million for the first quarter of 2020, down 3.5%, primarily
due to an increase in interest payments and the timing of certain
customer collections and operating expense payments.
Free cash flow represented 97.4% of adjusted EBITDA for the
first quarter of 2020, compared with 110.0% in the prior-year
period.
Dividend
On March 31, 2020, Verisk paid a cash dividend of 27 cents
per share of common stock issued and outstanding to the holders of
record as of March 13, 2020.
On April 29, 2020, Verisk’s Board of Directors approved a cash
dividend of 27 cents per share of common stock issued and
outstanding, payable on June 30, 2020, to holders of record as of
June 15, 2020.
Share Repurchases
Including the accelerated share repurchase (ASR) settled in the
first quarter of 2020, the company repurchased approximately 1.1
million shares at an average price of $154.56, for a total cost of
$174 million for the first quarter of 2020. At March 31, 2020,
the company had $454 million remaining under its share repurchase
authorization.
Conference Call
Verisk’s management team will host a live audio webcast on
Wednesday, May 6, 2020, at 8:30 a.m. EDT (5:30 a.m. PDT, 12:30 p.m.
GMT) to discuss the financial results and business highlights. All
interested parties are invited to listen to the live event via
webcast on the Verisk investor website at
http://investor.verisk.com. The discussion is also available
through dial-in number 1-877-755-3792 for U.S./Canada participants
or 1-512-961-6560 for international participants.
A replay of the webcast will be available for 30 days on the
Verisk investor website and also through the conference call number
1-855-859-2056 for U.S./Canada participants or 1-404-537-3406 for
international participants using conference ID #3897875.
About Verisk
Verisk (Nasdaq:VRSK) is a leading data analytics provider
serving customers in insurance, energy and specialized markets, and
financial services. Using advanced technologies to collect and
analyze billions of records, Verisk draws on unique data assets and
deep domain expertise to provide first-to-market innovations that
are integrated into customer workflows. Verisk offers predictive
analytics and decision support solutions to customers in rating,
underwriting, claims, catastrophe and weather risk, global risk
analytics, natural resources intelligence, economic forecasting,
and many other fields. Around the world, Verisk helps customers
protect people, property, and financial assets.
Headquartered in Jersey City, N.J., Verisk operates in 30
countries and is a member of Standard & Poor’s S&P 500®
Index. In 2018, Forbes magazine named Verisk to its World’s Best
Employers list. For more information, please visit
www.verisk.com.
Contact:
Investor RelationsStacey BrodbarHead of
Investor RelationsVerisk201-469-4327IR@verisk.com
MediaBrett GarrisonEdelman (for
Verisk)917-639-4903Brett.Garrison@edelman.com
Forward-Looking Statements
This release contains forward-looking statements. These
statements relate to future events or to future financial
performance and involve known and unknown risks, uncertainties, and
other factors that may cause our actual results, levels of
activity, performance, or achievements to be materially different
from any future results, levels of activity, performance, or
achievements expressed or implied by these forward-looking
statements. This includes, but is not limited to, the potential
impacts of the COVID-19 pandemic on our operations and financial
performance, our expectation and ability to pay a cash dividend on
our common stock in the future, subject to the determination by the
Board of Directors and based on an evaluation of company earnings,
financial condition and requirements, business conditions, capital
allocation determinations, and other factors, risks, and
uncertainties. In some cases, you can identify forward-looking
statements by the use of words such as “may,” “could,” “expect,”
“intend,” “plan,” “target,” “seek,” “anticipate,” “believe,”
“estimate,” “predict,” “potential,” or “continue” or the negative
of these terms or other comparable terminology. You should not
place undue reliance on forward-looking statements, because they
involve known and unknown risks, uncertainties, and other factors
that are, in some cases, beyond our control and that could
materially affect actual results, levels of activity, performance,
or achievements.
Other factors that could materially affect actual results,
levels of activity, performance, or achievements can be found in
Verisk’s quarterly reports on Form 10-Q, annual reports on Form
10-K, and current reports on Form 8-K filed with the Securities and
Exchange Commission. If any of these risks or uncertainties
materialize or if our underlying assumptions prove to be incorrect,
actual results may vary significantly from what we projected. Any
forward-looking statement in this release reflects our current
views with respect to future events and is subject to these and
other risks, uncertainties, and assumptions relating to our
operations, results of operations, growth strategy, and liquidity.
We assume no obligation to publicly update or revise these
forward-looking statements for any reason, whether as a result of
new information, future events, or otherwise.
Notes Regarding the Use of Non-GAAP Financial
Measures
The company has provided certain non-GAAP financial information
as supplemental information regarding its operating results. These
measures are not in accordance with, or an alternative for, U.S.
GAAP and may be different from non-GAAP measures reported by other
companies. The company believes that its presentation of non-GAAP
measures provides useful information to management and investors
regarding certain financial and business trends relating to its
financial condition and results of operations. In addition, the
company’s management uses these measures for reviewing the
financial results of the company, for budgeting and planning
purposes, and for evaluating the performance of senior
management.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA
Expenses: EBITDA represents GAAP net income adjusted for
(i) depreciation and amortization of fixed assets; (ii)
amortization of intangible assets; (iii) interest expense; and (iv)
provision for income taxes. Adjusted EBITDA represents EBITDA
adjusted for acquisition-related costs (earn-outs), gain/loss from
dispositions (which include businesses held for sale), nonrecurring
gain/loss, and interest income on the subordinated promissory note.
Adjusted EBITDA expenses represent adjusted EBITDA net of revenues.
The company believes these measures are useful and meaningful
because they allow for greater transparency regarding the company’s
operating performance and facilitate period-to-period
comparison.
Adjusted Net Income and Diluted Adjusted EPS:
Adjusted net income represents GAAP net income adjusted for (i)
amortization of intangible assets, net of tax; (ii)
acquisition-related costs (earn-outs), net of tax; (iii) gain/loss
from dispositions (which include businesses held for sale), net of
tax; (iv) nonrecurring gain/loss, net of tax; and (v) interest
income on the subordinated promissory note, net of tax. Diluted
adjusted EPS represents adjusted net income divided by
weighted-average diluted shares. The company believes these
measures are useful and meaningful because they allow evaluation of
the after-tax profitability of the company’s results excluding the
after-tax effect of acquisition-related costs and nonrecurring
items.
Free Cash Flow: Free cash flow represents net
cash provided by operating activities determined in accordance with
GAAP minus payments for capital expenditures. The company believes
free cash flow is an important measure of the recurring cash
generated by the company’s operations that may be available to
repay debt obligations, repurchase its stock, invest in future
growth through new business development activities, or make
acquisitions.
Organic Constant Currency (OCC): The company’s
operating results, such as, but not limited to, revenue and
adjusted EBITDA, reported in U.S. dollars are affected by foreign
currency exchange rate fluctuations because the underlying foreign
currencies in which it transacts change in value over time compared
with the U.S. dollar; accordingly, it presents certain constant
currency financial information to assess how the company performed
excluding the impact of foreign currency exchange rate
fluctuations. The company calculates constant currency by
translating comparable prior-year-period results at the currency
exchange rates used in the current period. The company defines
“organic” as operating results excluding the effect of recent
acquisitions and dispositions (which include businesses held for
sale) that have occurred over the past year. An acquisition is
included as organic at the beginning of the calendar quarter that
occurs subsequent to the one-year anniversary of the acquisition
date. Once an acquisition is included in its current-period
organic base, its comparable prior-year-period operating results
are also included to calculate organic growth. A disposition (which
includes a business held for sale) is excluded from organic at the
beginning of the calendar quarter in which the disposition occurs
(or when a business meets the held-for-sale criteria under U.S.
GAAP). Once a disposition is excluded from its current-period
organic base, its comparable prior-year-period operating results
are also excluded to calculate organic growth. The organic
presentation enables investors to assess the growth of the business
without the impact of recent acquisitions for which there is no
prior-year comparison. A disposition’s results are removed from all
prior periods presented to allow for comparability. The company
believes organic constant currency is a useful and meaningful
measure to enhance investors’ understanding of the continuing
operating performance of its business and to facilitate the
comparison of period-to-period performance because it excludes the
impact of foreign exchange rate movements, acquisitions, and
dispositions.
See page 10 for a reconciliation of consolidated adjusted
EBITDA, a segment results summary and a reconciliation of adjusted
EBITDA, and a reconciliation of segment adjusted EBITDA margin. See
page 11 for a reconciliation of adjusted EBITDA expenses, a
reconciliation of diluted adjusted EPS, and a reconciliation of net
cash provided by operating activities to free cash flow.
Attached Financial Statements
Please refer to the full Form 10-Q filing for the complete
financial statements and related notes.
VERISK ANALYTICS,
INC.CONSOLIDATED BALANCE SHEETS
(UNAUDITED)As of March 31, 2020, and
December 31, 2019
|
2020 |
|
2019 |
|
|
|
|
|
|
|
(in millions, except forshare and per
share data) |
ASSETS |
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
204.4 |
|
|
$ |
184.6 |
|
Accounts receivable, net of allowance for doubtful accounts of
$13.8 and $11.7, respectively |
|
523.3 |
|
|
|
441.6 |
|
Prepaid expenses |
|
66.6 |
|
|
|
60.9 |
|
Income taxes receivable |
|
— |
|
|
|
25.9 |
|
Other current assets |
|
19.7 |
|
|
|
17.8 |
|
Current assets held for sale |
|
— |
|
|
|
14.1 |
|
Total current assets |
|
814.0 |
|
|
|
744.9 |
|
Noncurrent assets: |
|
|
|
|
|
Fixed assets, net |
|
549.3 |
|
|
|
548.1 |
|
Operating lease right-of-use assets, net |
|
208.6 |
|
|
|
218.6 |
|
Intangible assets, net |
|
1,306.6 |
|
|
|
1,398.9 |
|
Goodwill |
|
3,742.6 |
|
|
|
3,864.3 |
|
Deferred income tax assets |
|
9.1 |
|
|
|
9.8 |
|
Other noncurrent assets |
|
297.9 |
|
|
|
159.8 |
|
Noncurrent assets held for sale |
|
— |
|
|
|
110.8 |
|
Total assets |
$ |
6,928.1 |
|
|
$ |
7,055.2 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
Current liabilities: |
|
|
|
|
|
Accounts payable and accrued liabilities |
$ |
315.6 |
|
|
$ |
375.0 |
|
Acquisition-related liabilities |
|
109.5 |
|
|
|
111.2 |
|
Short-term debt and current portion of long-term debt |
|
444.0 |
|
|
|
499.4 |
|
Deferred revenues |
|
668.4 |
|
|
|
440.1 |
|
Operating lease liabilities |
|
38.7 |
|
|
|
40.6 |
|
Income taxes payable |
|
21.7 |
|
|
|
6.8 |
|
Current liabilities held for sale |
|
— |
|
|
|
18.7 |
|
Total current liabilities |
|
1,597.9 |
|
|
|
1,491.8 |
|
Noncurrent liabilities: |
|
|
|
|
|
Long-term debt |
|
2,652.4 |
|
|
|
2,651.6 |
|
Deferred income tax liabilities |
|
349.6 |
|
|
|
356.0 |
|
Operating lease liabilities |
|
198.6 |
|
|
|
208.1 |
|
Other liabilities |
|
49.1 |
|
|
|
48.8 |
|
Noncurrent liabilities held for sale |
|
— |
|
|
|
38.1 |
|
Total liabilities |
|
4,847.6 |
|
|
|
4,794.4 |
|
Commitments and
contingencies |
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Common stock, $.001 par value; 2,000,000,000 shares authorized;
544,003,038 shares issued; 162,498,132 and 163,161,564 shares
outstanding, respectively |
|
0.1 |
|
|
|
0.1 |
|
Additional paid-in capital |
|
2,404.6 |
|
|
|
2,369.1 |
|
Treasury stock, at cost, 381,504,906 and 380,841,474 shares,
respectively |
|
(4,018.9 |
) |
|
|
(3,849.9 |
) |
Retained earnings |
|
4,353.4 |
|
|
|
4,228.4 |
|
Accumulated other comprehensive losses |
|
(658.7 |
) |
|
|
(486.9 |
) |
Total stockholders’ equity |
|
2,080.5 |
|
|
|
2,260.8 |
|
Total liabilities and stockholders’ equity |
$ |
6,928.1 |
|
|
$ |
7,055.2 |
|
VERISK ANALYTICS,
INC.CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)For the Three Months Ended
March 31, 2020 and 2019
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
|
|
|
|
|
|
|
(in millions, except for share and per share
data) |
Revenues |
$ |
689.8 |
|
|
$ |
625.0 |
|
Operating expenses: |
|
|
|
|
|
Cost of revenues (exclusive of items shown separately below) |
|
257.7 |
|
|
|
231.4 |
|
Selling, general and administrative |
|
112.1 |
|
|
|
111.4 |
|
Depreciation and amortization of fixed assets |
|
46.1 |
|
|
|
46.6 |
|
Amortization of intangible assets |
|
41.0 |
|
|
|
33.2 |
|
Other operating income |
|
(19.4 |
) |
|
|
— |
|
Total operating expenses |
|
437.5 |
|
|
|
422.6 |
|
Operating income |
|
252.3 |
|
|
|
202.4 |
|
Other income (expense): |
|
|
|
|
|
Investment loss and others, net |
|
(2.1 |
) |
|
|
(0.4 |
) |
Interest expense |
|
(33.5 |
) |
|
|
(31.9 |
) |
Total other expense, net |
|
(35.6 |
) |
|
|
(32.3 |
) |
Income before income taxes |
|
216.7 |
|
|
|
170.1 |
|
Provision for income taxes |
|
(45.0 |
) |
|
|
(35.7 |
) |
Net income |
$ |
171.7 |
|
|
$ |
134.4 |
|
Basic net income per share |
$ |
1.05 |
|
|
$ |
0.82 |
|
Diluted net income per share |
$ |
1.04 |
|
|
$ |
0.81 |
|
Weighted-average shares
outstanding: |
|
|
|
|
|
Basic |
|
162,894,306 |
|
|
|
163,528,343 |
|
Diluted |
|
165,724,120 |
|
|
|
166,544,945 |
|
VERISK ANALYTICS,
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)For the Three Months Ended March 31,
2020 and 2019
|
2020 |
|
2019 |
|
|
|
|
|
|
|
(in millions) |
Cash flows from operating
activities: |
|
|
|
|
|
Net income |
$ |
171.7 |
|
|
$ |
134.4 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
Depreciation and amortization of fixed assets |
|
46.1 |
|
|
|
46.6 |
|
Amortization of intangible assets |
|
41.0 |
|
|
|
33.2 |
|
Amortization of debt issuance costs and original issue discount,
net of original issue premium |
|
0.3 |
|
|
|
0.9 |
|
Provision for doubtful accounts |
|
1.5 |
|
|
|
1.2 |
|
Gain on sale of assets |
|
(19.4 |
) |
|
|
— |
|
Stock-based compensation expense |
|
19.6 |
|
|
|
9.2 |
|
Realized loss (gain) on available-for-sale securities, net |
|
0.5 |
|
|
|
(0.4 |
) |
Deferred income taxes |
|
(0.1 |
) |
|
|
3.3 |
|
Loss on disposal of fixed assets, net |
|
0.3 |
|
|
|
— |
|
|
|
|
|
|
|
Changes in assets and liabilities, net of effects from
acquisitions: |
|
|
|
|
|
Accounts receivable |
|
(96.5 |
) |
|
|
(81.6 |
) |
Prepaid expenses and other assets |
|
(18.5 |
) |
|
|
(2.2 |
) |
Operating lease right-of-use assets, net |
|
9.3 |
|
|
|
8.8 |
|
Income taxes |
|
41.0 |
|
|
|
25.3 |
|
Acquisition-related liabilities |
|
0.2 |
|
|
|
8.4 |
|
Accounts payable and accrued liabilities |
|
(62.0 |
) |
|
|
(35.8 |
) |
Deferred revenues |
|
237.6 |
|
|
|
217.7 |
|
Operating lease liabilities |
|
(10.5 |
) |
|
|
(9.1 |
) |
Other liabilities |
|
0.5 |
|
|
|
6.2 |
|
Net cash provided by operating activities |
|
362.6 |
|
|
|
366.1 |
|
Cash flows from investing
activities: |
|
|
|
|
|
Acquisitions, net of cash acquired of $0 and $3.7,
respectively |
|
— |
|
|
|
(69.1 |
) |
Proceeds from sale of assets |
|
23.1 |
|
|
|
— |
|
Purchase of investments in a nonpublic company |
|
(63.8 |
) |
|
|
— |
|
Capital expenditures |
|
(52.9 |
) |
|
|
(45.2 |
) |
Other investing activities, net |
|
6.1 |
|
|
|
(6.0 |
) |
Net cash used in investing activities |
|
(87.5 |
) |
|
|
(120.3 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
Repayments of short-term debt, net |
|
(75.0 |
) |
|
|
(245.0 |
) |
Proceeds from issuance of short-term debt with original maturities
greater than three months |
|
20.0 |
|
|
|
— |
|
Repayments of current portion of long-term debt |
|
— |
|
|
|
(250.0 |
) |
Proceeds from issuance of long-term debt, inclusive of original
issue premium and net of original issue discount |
|
— |
|
|
|
397.9 |
|
Payment of debt issuance costs |
|
— |
|
|
|
(2.9 |
) |
Repurchases of common stock |
|
(173.8 |
) |
|
|
(75.0 |
) |
Proceeds from stock options exercised |
|
19.2 |
|
|
|
11.6 |
|
Dividends paid |
|
(43.9 |
) |
|
|
(40.9 |
) |
Other financing activities, net |
|
(1.9 |
) |
|
|
(2.1 |
) |
Net cash used in financing activities |
|
(255.4 |
) |
|
|
(206.4 |
) |
Effect of exchange rate changes |
|
(0.2 |
) |
|
|
0.6 |
|
Increase in cash and cash equivalents |
|
19.5 |
|
|
|
40.0 |
|
Cash and cash equivalents classified within current assets held for
sale, beginning of period |
|
0.3 |
|
|
|
— |
|
Cash and cash equivalents, beginning of period |
|
184.6 |
|
|
|
139.5 |
|
Cash and cash equivalents, end of period |
$ |
204.4 |
|
|
$ |
179.5 |
|
Supplemental disclosures: |
|
|
|
|
|
Income taxes paid |
$ |
4.1 |
|
|
$ |
7.5 |
|
Interest paid |
$ |
22.6 |
|
|
$ |
15.3 |
|
Noncash investing and financing
activities: |
|
|
|
|
|
Debt issuance costs included in accounts payable and accrued
liabilities |
$ |
— |
|
|
$ |
1.0 |
|
Deferred tax asset established on date of acquisition |
$ |
— |
|
|
$ |
0.1 |
|
Right-of-use assets obtained in exchange for new operating lease
liabilities |
$ |
— |
|
|
$ |
247.6 |
|
Finance lease obligations |
$ |
1.5 |
|
|
$ |
1.7 |
|
Operating lease additions, net of terminations |
$ |
1.6 |
|
|
$ |
— |
|
Fixed assets included in accounts payable and accrued
liabilities |
$ |
0.7 |
|
|
$ |
0.7 |
|
Dividend payable included in other liabilities |
$ |
1.0 |
|
|
$ |
0.1 |
|
Gain on sale of assets |
$ |
3.5 |
|
|
$ |
— |
|
Held for sale assets contributed to a nonpublic company |
$ |
65.9 |
|
|
$ |
— |
|
Non-GAAP Reconciliations
Consolidated Adjusted EBITDA Reconciliation(in
millions)Note: Adjusted EBITDA is a non-GAAP measure. Margin is
calculated as a percentage of consolidated revenues.
|
Three Months Ended March 31, |
|
2020 |
|
2019 |
|
Total |
|
Margin |
|
Total |
|
Margin |
Net income |
$ |
171.7 |
|
|
24.9 |
% |
|
$ |
134.4 |
|
|
21.5 |
% |
Depreciation and amortization of fixed assets |
|
46.1 |
|
|
6.7 |
|
|
|
46.6 |
|
|
7.5 |
|
Amortization of intangible assets |
|
41.0 |
|
|
6 |
|
|
|
33.2 |
|
|
5.3 |
|
Interest expense |
|
33.5 |
|
|
4.8 |
|
|
|
31.9 |
|
|
5.1 |
|
Provision for income taxes |
|
45.0 |
|
|
6.5 |
|
|
|
35.7 |
|
|
5.7 |
|
EBITDA |
|
337.3 |
|
|
48.9 |
|
|
|
281.8 |
|
|
45.1 |
|
Acquisition-related costs (earn-outs) |
|
0.1 |
|
|
— |
|
|
|
10.0 |
|
|
1.6 |
|
Gain from dispositions |
|
(19.4 |
) |
|
(2.8 |
) |
|
|
— |
|
|
— |
|
Adjusted EBITDA |
|
318.0 |
|
|
46.1 |
|
|
|
291.8 |
|
|
46.7 |
|
Adjusted EBITDA from acquisitions and dispositions |
|
(8.0 |
) |
|
2.2 |
|
|
|
(1.9 |
) |
|
0.3 |
|
Organic adjusted EBITDA |
$ |
310.0 |
|
|
48.3 |
|
|
$ |
289.9 |
|
|
47.0 |
|
Segment Results Summary and Adjusted EBITDA
Reconciliation(in millions)Note: Organic revenues and
adjusted EBITDA are non-GAAP measures.
|
Three Months Ended March 31, 2020 |
|
Three Months Ended March 31, 2019 |
|
Insurance |
|
Energy and Specialized Markets |
|
Financial Services |
|
Insurance |
|
Energy and Specialized Markets |
|
Financial Services |
Revenues |
$ |
489.4 |
|
|
$ |
160.1 |
|
|
$ |
40.3 |
|
|
$ |
453.6 |
|
|
$ |
128.4 |
|
|
$ |
43.0 |
|
Revenues from acquisitions and dispositions |
|
(17.8 |
) |
|
|
(28.9 |
) |
|
|
(1.7 |
) |
|
|
(7.6 |
) |
|
|
— |
|
|
|
(5.4 |
) |
Organic revenues |
$ |
471.6 |
|
|
$ |
131.2 |
|
|
$ |
38.6 |
|
|
$ |
446.0 |
|
|
$ |
128.4 |
|
|
$ |
37.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
$ |
272.4 |
|
|
$ |
50.2 |
|
|
$ |
14.7 |
|
|
$ |
231.3 |
|
|
$ |
37.2 |
|
|
$ |
13.3 |
|
Acquisition-related costs (earn-outs) |
|
0.1 |
|
|
|
— |
|
|
|
— |
|
|
|
7.5 |
|
|
|
2.5 |
|
|
|
— |
|
Gain from dispositions |
|
(15.9 |
) |
|
|
— |
|
|
|
(3.5 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted EBITDA |
|
256.6 |
|
|
|
50.2 |
|
|
|
11.2 |
|
|
|
238.8 |
|
|
|
39.7 |
|
|
|
13.3 |
|
Adjusted EBITDA from acquisitions and dispositions |
|
0.8 |
|
|
|
(8.6 |
) |
|
|
(0.2 |
) |
|
|
0.5 |
|
|
|
1.1 |
|
|
|
(3.5 |
) |
Organic adjusted EBITDA |
$ |
257.4 |
|
|
$ |
41.6 |
|
|
$ |
11.0 |
|
|
$ |
239.3 |
|
|
$ |
40.8 |
|
|
$ |
9.8 |
|
Segment Adjusted EBITDA Margin
ReconciliationNote: Segment adjusted EBITDA margin is
calculated as a percentage of respective segment revenues.
|
Three Months Ended March 31, 2020 |
|
Three Months Ended March 31, 2019 |
|
Insurance |
|
Energy and Specialized Markets |
|
Financial Services |
|
Insurance |
|
Energy and Specialized Markets |
|
Financial Services |
EBITDA margin |
|
55.7 |
% |
|
|
31.4 |
% |
|
|
36.4 |
% |
|
|
51.0 |
% |
|
|
29.0 |
% |
|
|
30.8 |
% |
Acquisition-related costs (earn-outs) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1.7 |
|
|
|
1.9 |
|
|
|
— |
|
Gain from dispositions |
|
(3.3 |
) |
|
|
— |
|
|
|
(8.8 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Adjusted EBITDA margin |
|
52.4 |
|
|
|
31.4 |
|
|
|
27.6 |
|
|
|
52.7 |
|
|
|
30.9 |
|
|
|
30.8 |
|
Consolidated Adjusted EBITDA Expense
Reconciliation(in millions)Note: Adjusted EBITDA expenses
are a non-GAAP measure.
|
Three Months Ended |
|
March 31, |
|
2020 |
|
2019 |
Operating expenses |
$ |
437.5 |
|
|
$ |
422.6 |
|
Depreciation and amortization of fixed assets |
|
(46.1 |
) |
|
|
(46.6 |
) |
Amortization of intangible assets |
|
(41.0 |
) |
|
|
(33.2 |
) |
Investment income and others, net |
|
2.1 |
|
|
|
0.4 |
|
Acquisition-related costs (earn-outs) |
|
(0.1 |
) |
|
|
(10.0 |
) |
Gain from dispositions |
|
19.4 |
|
|
|
— |
|
Adjusted EBITDA expenses |
$ |
371.8 |
|
|
$ |
333.2 |
|
Diluted Adjusted EPS Reconciliation(in
millions, except per share amounts)Note: Diluted adjusted EPS is a
non-GAAP measure.
|
Three Months Ended |
|
March 31, |
|
2020 |
|
2019 |
Net income |
$ |
171.7 |
|
|
$ |
134.4 |
|
plus: Amortization of intangibles |
|
41.0 |
|
|
|
33.2 |
|
less: Income tax effect on amortization of intangibles |
|
(9.0 |
) |
|
|
(6.9 |
) |
plus: Acquisition-related costs and interest expense
(earn-outs) |
|
0.1 |
|
|
|
10.5 |
|
less: Income tax effect on acquisition-related costs and
interest expense (earn-outs) |
|
— |
|
|
|
(0.5 |
) |
less: Gain from dispositions |
|
(19.4 |
) |
|
|
— |
|
plus: Income tax effect on gain from dispositions |
|
9.6 |
|
|
|
— |
|
Adjusted net income |
$ |
194.0 |
|
|
$ |
170.7 |
|
|
|
|
|
|
|
Diluted EPS |
$ |
1.04 |
|
|
$ |
0.81 |
|
Diluted adjusted EPS |
$ |
1.17 |
|
|
$ |
1.03 |
|
|
|
|
|
|
|
Weighted-average diluted shares outstanding |
|
165.7 |
|
|
|
166.5 |
|
Free Cash Flow Reconciliation(in millions)Note:
Free cash flow is a non-GAAP measure.
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2020 |
|
2019 |
|
Change |
Net cash provided by operating activities |
$ |
362.6 |
|
|
$ |
366.1 |
|
|
(1.0 |
)% |
Capital expenditures |
|
(52.9 |
) |
|
|
(45.2 |
) |
|
17.0 |
|
Free cash flow |
$ |
309.7 |
|
|
$ |
320.9 |
|
|
(3.5 |
) |
Investor Relations
Stacey Brodbar
Head of Investor Relations
Verisk
201-469-4327
IR@verisk.com
Media
Brett Garrison
Edelman (for Verisk)
917-639-4903
Brett.Garrison@edelman.com
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