COSTAR GROUP, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
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0-24531
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52-2091509
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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1331 L Street, NW, Washington, DC
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20005
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(Address of principal executive offices)
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(Zip Code)
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Not Applicable
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(Former name or former address, if changed since last report.)
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COSTAR GROUP, INC.
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By:
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Date: July 27, 2011
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/s/ Brian J. Radecki
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Name: Brian J. Radecki
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Title: Chief Financial Officer
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Exhibit 99.1
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CoStar Group, Inc. Press Release Dated July 27, 2011.
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![]() |
Brian J. Radecki
Chief Financial Officer
(202) 336-6920
bradecki@costar.com
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Richard Simonelli
Director Strategic Communications &
Investor Relations
(202)346-6394
rsimonelli@costar.com
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·
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Record revenue of $62.1 million as quarterly sequential growth rate accelerates to 4.2%
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·
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Company raises revenue outlook for full year 2011 by $4 million
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·
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LoopNet shareholders approve merger agreement; $248 million equity offering completed
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Year 2010-2011 Quarterly Results - Unaudited
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(in millions, except per share data)
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||||||||||||||||||||||||
2010
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2011
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Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |||||||||||||||||||
Revenues
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$ | 55.1 | $ | 55.8 | $ | 57.1 | $ | 58.2 | $ | 59.6 | $ | 62.1 | ||||||||||||
EBITDA
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8.8 | 7.8 | 9.4 | 10.4 | 10.5 | 7.1 | ||||||||||||||||||
Net income
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2.9 | 3.3 | 3.4 | 3.8 | 4.5 | 2.6 | ||||||||||||||||||
Net income per share - diluted
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0.14 | 0.16 | 0.16 | 0.18 | 0.22 | 0.12 | ||||||||||||||||||
Weighted average outstanding shares - diluted
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20.6 | 20.6 | 20.7 | 20.9 | 21.0 | 22.4 | ||||||||||||||||||
Adjusted EBITDA
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10.8 | 13.3 | 13.8 | 13.4 | 12.6 | 14.3 | ||||||||||||||||||
Non-GAAP Net Income
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5.2 | 6.8 | 6.9 | 6.6 | 6.2 | 7.3 | ||||||||||||||||||
Non-GAAP Net Income per share - diluted
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0.25 | 0.33 | 0.33 | 0.32 | 0.29 | 0.33 |
CoStar Group, Inc.
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Condensed Consolidated Statements of Operations-Unaudited
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(in thousands, except per share data)
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||||||||||||||||
For the Three Months
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For the Six Months
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|||||||||||||||
Ended June 30,
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Ended June 30,
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|||||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
Revenues
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$ | 62,127 | $ | 55,838 | $ | 121,745 | $ | 110,931 | ||||||||
Cost of revenues
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22,412 | 20,360 | 44,978 | 41,560 | ||||||||||||
Gross margin
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39,715 | 35,478 | 76,767 | 69,371 | ||||||||||||
Operating expenses:
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||||||||||||||||
Selling and marketing
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14,280 | 12,880 | 27,526 | 25,509 | ||||||||||||
Software development
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5,135 | 4,123 | 10,403 | 8,320 | ||||||||||||
General and administrative
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15,845 | 13,452 | 26,744 | 24,727 | ||||||||||||
Purchase amortization
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546 | 532 | 1,089 | 1,222 | ||||||||||||
35,806 | 30,987 | 65,762 | 59,778 | |||||||||||||
Income from operations
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3,909 | 4,491 | 11,005 | 9,593 | ||||||||||||
Interest and other income, net
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178 | 196 | 380 | 434 | ||||||||||||
Income before income taxes
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4,087 | 4,687 | 11,385 | 10,027 | ||||||||||||
Income tax expense, net
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1,450 | 1,436 | 4,216 | 3,887 | ||||||||||||
Net income
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$ | 2,637 | $ | 3,251 | $ | 7,169 | $ | 6,140 | ||||||||
Net income per share - basic
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$ | 0.12 | $ | 0.16 | $ | 0.34 | $ | 0.30 | ||||||||
Net income per share - diluted
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$ | 0.12 | $ | 0.16 | $ | 0.33 | $ | 0.30 | ||||||||
Weighted average outstanding shares - basic
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22,011 | 20,278 | 21,271 | 20,275 | ||||||||||||
Weighted average outstanding shares - diluted
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22,426 | 20,624 | 21,695 | 20,635 |
CoStar Group, Inc.
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Reconciliation of Non-GAAP Financial Measures-Unaudited
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(in thousands, except per share data)
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Reconciliation of Net Income to Non-GAAP Net Income
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For the Three Months
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For the Six Months
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|||||||||||||||
Ended June 30,
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Ended June 30,
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|||||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
Net income
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$ | 2,637 | $ | 3,251 | $ | 7,169 | $ | 6,140 | ||||||||
Income tax expense, net
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1,450 | 1,436 | 4,216 | 3,887 | ||||||||||||
Income before income taxes
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4,087 | 4,687 | 11,385 | 10,027 | ||||||||||||
Purchase amortization and other related costs
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854 | 847 | 1,704 | 2,037 | ||||||||||||
Stock-based compensation expense
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2,201 | 1,939 | 4,265 | 3,946 | ||||||||||||
Acquisition related costs
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5,007 | - | 5,330 | - | ||||||||||||
Restructuring and related costs
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- | 103 | - | 103 | ||||||||||||
Headquarters acquisition and transition related costs *
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- | 958 | - | 1,157 | ||||||||||||
Settlements and Impairments
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- | 2,825 | (272 | ) | 2,825 | |||||||||||
Non-GAAP Income before income taxes
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12,149 | 11,359 | 22,412 | 20,095 | ||||||||||||
Assumed rate for income tax expense, net **
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40 | % | 40 | % | 40 | % | 40 | % | ||||||||
Assumed provision for income tax expense, net
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(4,860 | ) | (4,544 | ) | (8,965 | ) | (8,038 | ) | ||||||||
Non-GAAP Net Income
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$ | 7,289 | $ | 6,815 | $ | 13,447 | $ | 12,057 | ||||||||
Net Income per share - diluted
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$ | 0.12 | $ | 0.16 | $ | 0.33 | $ | 0.30 | ||||||||
Non-GAAP Net Income per share - diluted
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$ | 0.33 | $ | 0.33 | $ | 0.62 | $ | 0.58 | ||||||||
Weighted average outstanding shares - diluted
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22,426 | 20,624 | 21,695 | 20,635 | ||||||||||||
* Includes building depreciation of approximately $275,000 for the three months ended June 30, 2010, and approximately $459,000 for the six months ended June 30, 2010
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** A 40% tax rate is assumed in order to approximate the Company's long-term effective corporate tax rate.
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Reconciliation of Net Income to EBITDA and Adjusted EBITDA
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For the Three Months
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For the Six Months
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Ended June 30,
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Ended June 30,
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|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net income
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$ | 2,637 | $ | 3,251 | $ | 7,169 | $ | 6,140 | ||||||||
Purchase amortization in cost of revenues
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308 | 315 | 615 | 815 | ||||||||||||
Purchase amortization in operating expenses
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546 | 532 | 1,089 | 1,222 | ||||||||||||
Depreciation and other amortization
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2,354 | 2,459 | 4,936 | 4,917 | ||||||||||||
Interest income, net
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(178 | ) | (196 | ) | (380 | ) | (434 | ) | ||||||||
Income tax expense, net
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1,450 | 1,436 | 4,216 | 3,887 | ||||||||||||
EBITDA
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$ | 7,117 | $ | 7,797 | $ | 17,645 | $ | 16,547 | ||||||||
Stock-based compensation expense
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2,201 | 1,939 | 4,265 | 3,946 | ||||||||||||
Acquisition related costs
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5,007 | - | 5,330 | - | ||||||||||||
Restructuring and related costs
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- | 103 | - | 103 | ||||||||||||
Headquarters acquisition and transition related costs ***
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- | 683 | - | 698 | ||||||||||||
Settlements and Impairments
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- | 2,825 | (272 | ) | 2,825 | |||||||||||
Adjusted EBITDA
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$ | 14,325 | $ | 13,347 | $ | 26,968 | $ | 24,119 | ||||||||
*** Does not include building depreciation of approximately $275,000 for the three months ended June 30, 2010, and approximately $459,000 for the six months ended June 30, 2010
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CoStar Group, Inc.
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Condensed Consolidated Balance Sheets
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(in thousands)
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June 30,
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December 31,
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|||||||
2011
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2010
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|||||||
(Unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 547,617 | $ | 206,405 | ||||
Short-term investments
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3,605 | 3,722 | ||||||
Accounts receivable, net
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13,336 | 13,094 | ||||||
Deferred income taxes, net
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7,519 | 5,203 | ||||||
Prepaid and other current assets
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5,693 | 5,809 | ||||||
Income tax receivable
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852 | 4,940 | ||||||
Total current assets
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578,622 | 239,173 | ||||||
Long-term investments
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29,014 | 29,189 | ||||||
Deferred income taxes, net
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12,502 | - | ||||||
Property and equipment, net
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37,146 | 69,921 | ||||||
Goodwill
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80,466 | 79,602 | ||||||
Intangible and other assets, net
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17,457 | 18,774 | ||||||
Deposits and other assets
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2,649 | 2,989 | ||||||
Total assets
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$ | 757,856 | $ | 439,648 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities:
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Accounts payable and accrued expenses
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$ | 35,594 | $ | 33,999 | ||||
Income taxes payable
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7,156 | - | ||||||
Deferred revenue
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17,466 | 16,895 | ||||||
Total current liabilities
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60,216 | 50,894 | ||||||
Deferred gain on sale of building
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32,594 | - | ||||||
Deferred rent
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17,374 | 4,032 | ||||||
Deferred income taxes, net
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- | 1,450 | ||||||
Income taxes payable
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1,808 | 1,770 | ||||||
Stockholders' equity
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645,864 | 381,502 | ||||||
Total liabilities and stockholders' equity
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$ | 757,856 | $ | 439,648 |
CoStar Group, Inc.
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||||||||||||||||
Results of Segments-Unaudited
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(in thousands)
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||||||||||||||||
For the Three Months
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For the Six Months
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|||||||||||||||
Ended June 30,
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Ended June 30,
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|||||||||||||||
2011
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2010
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2011
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2010
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Revenues
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United States
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$ | 57,540 | $ | 51,538 | $ | 112,576 | $ | 102,155 | ||||||||
International
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External customers
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4,587 | 4,300 | 9,169 | 8,776 | ||||||||||||
Intersegment revenue *
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224 | 359 | 478 | 691 | ||||||||||||
Total international revenue
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4,811 | 4,659 | 9,647 | 9,467 | ||||||||||||
Intersegment eliminations
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(224 | ) | (359 | ) | (478 | ) | (691 | ) | ||||||||
Total Revenues
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$ | 62,127 | $ | 55,838 | $ | 121,745 | $ | 110,931 | ||||||||
EBITDA
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United States
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$ | 8,262 | $ | 10,173 | $ | 19,623 | $ | 19,585 | ||||||||
International **
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(1,145 | ) | (2,376 | ) | (1,978 | ) | (3,038 | ) | ||||||||
Total EBITDA
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$ | 7,117 | $ | 7,797 | $ | 17,645 | $ | 16,547 | ||||||||
* Intersegment revenue is attributable to services performed by Property and Portfolio Research Ltd., a wholly owned subsidiary of Property and Portfolio Research, Inc. (PPR), for PPR. Intersegment revenue is recorded at what the Company believes approximates fair value. U.S. EBITDA includes a corresponding cost for the services performed by Property and Portfolio Research Ltd. for PPR.
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** International EBITDA includes a corporate allocation of approximately $100,000 for each of the three month periods ended June 30, 2011 and 2010, and approximately $100,000 and $300,000 for the six months ended June 30, 2011 and 2010, respectively.
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Reconciliation of Non-GAAP Financial Measures with 2010-2011 Quarterly Results - Unaudited
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(in millions, except per share data)
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Reconciliation of Net Income to Non-GAAP Net Income
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2010
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2011
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|||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |||||||||||||||||||
Net income
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$ | 2.9 | $ | 3.3 | $ | 3.4 | $ | 3.8 | $ | 4.5 | $ | 2.6 | ||||||||||||
Income tax expense, net
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2.5 | 1.4 | 2.9 | 3.4 | 2.8 | 1.5 | ||||||||||||||||||
Income before income taxes
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5.4 | 4.7 | 6.3 | 7.2 | 7.3 | 4.1 | ||||||||||||||||||
Purchase amortization and other related costs
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1.2 | 0.8 | 0.9 | 0.9 | 0.8 | 0.8 | ||||||||||||||||||
Stock-based compensation expense
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2.0 | 1.9 | 1.8 | 2.6 | 2.1 | 2.2 | ||||||||||||||||||
Acquisition related costs
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- | - | - | - | 0.3 | 5.0 | ||||||||||||||||||
Restructuring and related costs
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- | 0.1 | 1.3 | - | - | - | ||||||||||||||||||
Headquarters acquisition and transition related costs *
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0.1 | 1.0 | 1.2 | 0.3 | - | - | ||||||||||||||||||
Settlements and Impairments
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- | 2.8 | - | - | (0.3 | ) | - | |||||||||||||||||
Non-GAAP Income before income taxes
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8.7 | 11.3 | 11.5 | 11.0 | 10.2 | 12.1 | ||||||||||||||||||
Assumed rate for income tax expense, net **
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40 | % | 40 | % | 40 | % | 40 | % | 40 | % | 40 | % | ||||||||||||
Assumed provision for income tax expense, net
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(3.5 | ) | (4.5 | ) | (4.6 | ) | (4.4 | ) | (4.0 | ) | (4.8 | ) | ||||||||||||
Non-GAAP Net Income
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$ | 5.2 | $ | 6.8 | $ | 6.9 | $ | 6.6 | $ | 6.2 | $ | 7.3 | ||||||||||||
Non-GAAP Net Income per share - diluted
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$ | 0.25 | $ | 0.33 | $ | 0.33 | $ | 0.32 | $ | 0.29 | $ | 0.33 | ||||||||||||
Weighted average outstanding shares - diluted
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20.6 | 20.6 | 20.7 | 20.9 | 21.0 | 22.4 | ||||||||||||||||||
*Includes building depreciation
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||||||||||||||||||||||||
** A 40% tax rate is assumed in order to approximate the Company's long-term effective corporate tax rate.
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Reconciliation of Net Income to EBITDA and Adjusted EBITDA
|
||||||||||||||||||||||||
2010 | 2011 | |||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |||||||||||||||||||
Net income
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$ | 2.9 | $ | 3.3 | $ | 3.4 | $ | 3.8 | $ | 4.5 | $ | 2.6 | ||||||||||||
Purchase amortization
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1.2 | 0.8 | 0.9 | 0.9 | 0.8 | 0.8 | ||||||||||||||||||
Depreciation and other amortization
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2.4 | 2.5 | 2.4 | 2.5 | 2.6 | 2.4 | ||||||||||||||||||
Interest income, net
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(0.2 | ) | (0.2 | ) | (0.2 | ) | (0.2 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||
Income tax expense, net
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2.5 | 1.4 | 2.9 | 3.4 | 2.8 | 1.5 | ||||||||||||||||||
EBITDA
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$ | 8.8 | $ | 7.8 | $ | 9.4 | $ | 10.4 | $ | 10.5 | $ | 7.1 | ||||||||||||
Stock-based compensation expense
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2.0 | 1.9 | 1.8 | 2.6 | 2.1 | 2.2 | ||||||||||||||||||
Acquisition related costs
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- | - | - | - | 0.3 | 5.0 | ||||||||||||||||||
Restructuring and related costs
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- | 0.1 | 1.3 | - | - | - | ||||||||||||||||||
Headquarters acquisition and transition related costs ***
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- | 0.7 | 1.3 | 0.4 | - | - | ||||||||||||||||||
Settlements and Impairments
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- | 2.8 | - | - | (0.3 | ) | - | |||||||||||||||||
Adjusted EBITDA
|
$ | 10.8 | $ | 13.3 | $ | 13.8 | $ | 13.4 | $ | 12.6 | $ | 14.3 | ||||||||||||
*** Does not include building depreciation
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Reconciliation of Forward-Looking Guidance, Net Income to Non-GAAP Net Income
|
||||||||||||||||
(in thousands, except per share data)
|
||||||||||||||||
Guidance Range
|
Guidance Range
|
|||||||||||||||
For the Three Months
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For the Twelve Months
|
|||||||||||||||
Ended September 30, 2011
|
Ended December 31, 2011
|
|||||||||||||||
Low
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High
|
Low
|
High
|
|||||||||||||
Net income
|
$ | (800 | ) | $ | 1,000 | $ | 9,700 | $ | 13,200 | |||||||
Income tax expense, net
|
(500 | ) | 600 | 5,900 | 8,000 | |||||||||||
Income before income taxes
|
(1,300 | ) | 1,600 | 15,600 | 21,200 | |||||||||||
Purchase amortization and other related costs
|
900 | 800 | 3,500 | 3,300 | ||||||||||||
Stock-based compensation expense
|
1,800 | 1,700 | 8,800 | 8,200 | ||||||||||||
Acquisition related costs
|
5,000 | 4,000 | 12,500 | 10,500 | ||||||||||||
Restructuring and related costs
|
1,650 | 1,400 | 1,700 | 1,400 | ||||||||||||
Headquarters acquisition and transition related costs
|
- | - | - | - | ||||||||||||
Settlements and Impairments
|
- | - | (272 | ) | (272 | ) | ||||||||||
Non-GAAP Income before income taxes
|
8,050 | 9,500 | 41,828 | 44,328 | ||||||||||||
Assumed rate for income tax expense, net *
|
40 | % | 40 | % | 40 | % | 40 | % | ||||||||
Assumed provision for income tax expense, net
|
(3,220 | ) | (3,800 | ) | (16,731 | ) | (17,731 | ) | ||||||||
Non-GAAP Net Income
|
$ | 4,830 | $ | 5,700 | $ | 25,097 | $ | 26,597 | ||||||||
Net Income per share - diluted
|
$ | (0.03 | ) | $ | 0.04 | $ | 0.41 | $ | 0.56 | |||||||
Non-GAAP Net Income per share - diluted
|
$ | 0.19 | $ | 0.23 | $ | 1.07 | $ | 1.13 | ||||||||
Weighted average outstanding shares - diluted
|
25,300 | 25,300 | 23,500 | 23,500 | ||||||||||||
* A 40% tax rate is assumed in order to approximate the Company's long-term effective corporate tax rate.
|
||||||||||||||||
** Projections exclude impacts of the consolidation of LoopNet and related costs that are contingent on closing that transaction.
|
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