UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 1, 2012
VERISK ANALYTICS, INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-34480 | 26-2994223 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
545 Washington Boulevard, Jersey City, NJ |
07310 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: (201) 469-2000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
On May 1, 2012, Verisk Analytics, Inc. (the Registrant) issued a press release announcing its financial results for the quarter ended March 31, 2012. A copy of the press release is annexed as Exhibit 99.1 and incorporated by reference herein. All information in the press release is furnished but not filed.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit No. |
Description | |
99.1 | Press Release, dated May 1, 2012. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
VERISK ANALYTICS, INC. | ||||||
Date: May 1, 2012 | By: | /s/ Kenneth E. Thompson | ||||
Name: Kenneth E. Thompson | ||||||
Title: Executive Vice President, General Counsel and Corporate Secretary |
Exhibit 99.1
Verisk Analytics, Inc., Reports First-Quarter 2012 Financial Results
Delivers 10.7% Revenue Growth and 17.5% Diluted Adjusted EPS Growth
JERSEY CITY, N.J., May 1, 2012 Verisk Analytics, Inc. (Nasdaq:VRSK), a leading source of information about risk, today announced results for the fiscal quarter ended March 31, 2012:
Financial Highlights
See Tables 4 and 5 for a reconciliation of non-GAAP financial measures to the relevant GAAP measures.
| Diluted GAAP earnings per share (diluted GAAP EPS) were $0.44 for first-quarter 2012. Diluted adjusted earnings per share (diluted adjusted EPS) were $0.47 for first-quarter 2012, an increase of 17.5% versus the same period in 2011. |
| Total revenue increased 10.7%, and excluding the impact of recent acquisitions, total revenue grew 7.7% for first-quarter 2012. Revenue growth in the first quarter was driven by a 16.9% increase in Decision Analytics revenue, with additional contribution from the 3.1% growth in Risk Assessment revenue. Risk Assessment revenue growth excluding the transfer of $2.9 million of revenue to Decision Analytics in first-quarter 2012 was 5.2%. |
| EBITDA increased 14.5% to $159.2 million for first-quarter 2012, with an EBITDA margin of 45.9%. |
| Net income was $74.6 million for first-quarter 2012 and adjusted net income was $79.8 million, an increase of 13.2% and 12.4%, respectively, versus the comparable period in 2011. |
| On March 30, 2012, the company closed the acquisition of MediConnect Global for a total purchase price of $348 million. The company funded the transaction from cash on hand and debt borrowings as reflected in the March 31, 2012 balance sheet. Income statement contributions from MediConnect will be included beginning in second-quarter 2012. |
| In first-quarter 2012, the company repurchased a total of $38.9 million of its common stock under its existing repurchase program. As of March 31, 2012, the company had $267.9 million remaining under its share repurchase authorization. |
Frank J. Coyne, chairman and chief executive officer, said, Were pleased to start 2012 with strong performance both from a top-line and bottom-line perspective. Our insurance solutions continue to grow nicely even in comparison to 2011, when we had the benefit of a more active storm season. Were also feeling positive effects from the improved performance of our insurance customers.
While the macroeconomic conditions in the mortgage market continue to be uncertain, we see longer-term opportunities as the market stabilizes, likely in 2013 and beyond. Our healthcare business continues to perform well, and we expect continued positive results in 2012. The addition of MediConnect to our solution set is valuable to our customers and will allow us to continue to be an analytics leader.
In aggregate, Im optimistic about our ability to further penetrate our vertical markets as well as expand our supply chain offerings, all of which will contribute to the long-term growth of our company, concluded Coyne.
Summary of Results for First-Quarter 2012
Table 1
Year-to-Date March 31, |
Change | |||||||||||
2012 | 2011 | % | ||||||||||
(in thousands, except per share amounts) | ||||||||||||
Revenues |
$ | 346,501 | $ | 312,869 | 10.7 | % | ||||||
EBITDA |
$ | 159,192 | $ | 139,057 | 14.5 | % | ||||||
Net income |
$ | 74,601 | $ | 65,876 | 13.2 | % | ||||||
Adjusted net income |
$ | 79,753 | $ | 70,949 | 12.4 | % | ||||||
Diluted GAAP EPS |
$ | 0.44 | $ | 0.37 | 18.9 | % | ||||||
Diluted adjusted EPS |
$ | 0.47 | $ | 0.40 | 17.5 | % |
Revenue
Revenue grew 10.7% for the quarter ended March 31, 2012. Excluding the effect of recent acquisitions (Bloodhound and Health Risk Partners), revenue grew 7.7%. Overall revenue growth was the result of continued double-digit growth in Decision Analytics and single-digit growth in Risk Assessment. For first-quarter 2012, Decision Analytics revenue represented approximately 58% of total revenue.
Table 2A
Year-to-Date March 31, |
Change | |||||||||||
2012 | 2011 | % | ||||||||||
(in thousands) | ||||||||||||
Decision Analytics revenues by category: |
||||||||||||
Insurance |
$ | 116,336 | $ | 105,300 | 10.5 | % | ||||||
Mortgage and financial services |
34,275 | 32,696 | 4.8 | % | ||||||||
Healthcare |
30,448 | 15,617 | 95.0 | % | ||||||||
Specialized markets |
20,473 | 18,713 | 9.4 | % | ||||||||
|
|
|
|
|||||||||
Total Decision Analytics |
$ | 201,532 | $ | 172,326 | 16.9 | % | ||||||
|
|
|
|
Within the Decision Analytics segment, revenue grew 16.9% for first-quarter 2012, and organic growth was 9.6% excluding acquisitions and the transfer of property-specific revenue to Decision Analytics as discussed below. Growth in the quarter was driven by strong increases in healthcare and good contributions from our insurance-facing and specialized markets revenue categories.
2
Within the insurance vertical, revenue growth was 10.5% for the first quarter of 2012, all of which was organic. During the quarter, our loss quantification solutions delivered double-digit growth as a result of new customer contracts and new offerings such as our contents tools. Catastrophe modeling solutions continued good growth, benefiting from new and expanded use of our models, including use of our models in almost all catastrophe bond issuances in the quarter. Our insurance fraud claims solutions also continued good revenue growth driven by annual invoice increases for certain solutions.
In the mortgage and financial services vertical, revenue increased 4.8% in first-quarter 2012 and, after adjusting for the 2012 transition of appraisal tool revenue into the mortgage category from Risk Assessment, declined 4.1%. The decline in revenue reflected continued lower volumes in our forensic audit solutions for certain customers, which were not offset by growth from new customers. Our underwriting solutions experienced growth in the quarter that outpaced the underlying origination market.
In the healthcare vertical, revenue grew 95.0% in the first quarter. Total revenue growth included the 2011 acquisitions of Bloodhound and Health Risk Partners. The 2012 acquisition of MediConnect will be included beginning in second-quarter 2012. Organic growth was 32.9% in the first quarter, reflecting continued customer implementations and new customer sales.
In the specialized markets category, revenue grew 9.4% in first-quarter 2012 driven by good growth in both our environmental health and safety solutions and our weather and climate analytics.
Table 2B
Year-to-Date | ||||||||||||
March 31, | Change | |||||||||||
2012 | 2011 | % | ||||||||||
(in thousands) | ||||||||||||
Risk Assessment revenues by category: |
||||||||||||
Industry-standard insurance programs |
$ | 99,134 | $ | 92,857 | 6.8 | % | ||||||
Property-specific rating and underwriting information |
32,557 | 34,497 | (5.6 | )% | ||||||||
Statistical agency and data services |
7,724 | 7,742 | (0.2 | )% | ||||||||
Actuarial services |
5,554 | 5,447 | 2.0 | % | ||||||||
|
|
|
|
|||||||||
Total Risk Assessment |
$ | 144,969 | $ | 140,543 | 3.1 | % | ||||||
|
|
|
|
Within the Risk Assessment segment, revenue grew 3.1% for the quarter and 5.2% excluding the transfer of property-specific revenue to Decision Analytics as discussed below. The overall increase within the segment was due primarily to 6.8% revenue growth in industry-standard insurance programs resulting primarily from growth in 2012 invoices effective from January 1 as well as good performance from premium leakage solutions.
Property-specific rating and underwriting information revenue declined 5.6% including the transfer of $2.9 million of revenue in first-quarter 2012 from property-specific revenue into the mortgage revenue category of Decision Analytics. Excluding the impact of this transfer, property-specific rating and underwriting information revenue grew 2.8%, as new sales and higher volumes from certain customers offset lower volumes from others. Statistical agency and data services declined 0.2% in the first quarter, and actuarial services were up 2.0%.
3
Cost of Revenue
Cost of revenue increased 7.0% in first-quarter 2012 and 3.2% excluding acquisitions. The increase relates primarily to the impact of 2011 annual compensation increases and increased headcount, primarily in Decision Analytics, in support of the growth of our business. Cost of revenue decreased 3.9% for Risk Assessment and increased 13.7% for Decision Analytics (7.6% excluding recent acquisitions) in first-quarter 2012.
Selling, General and Administrative
Selling, general and administrative expense, or SG&A, increased 9.6% in first-quarter 2012 and 5.1% excluding recent acquisitions. The increase relates primarily to the impact of 2011 annual compensation increases and increased headcount in support of the growth of our business. SG&A increased 2.5% for Risk Assessment. SG&A grew 14.1% for Decision Analytics and 6.8% excluding recent acquisitions.
EBITDA
For first-quarter 2012, consolidated EBITDA grew 14.5% to $159.2 million, with a consolidated EBITDA margin of 45.9%.
Table 3
Year-to-Date | ||||||||||||
March 31, | Change | |||||||||||
2012 | 2011 | % | ||||||||||
(in thousands) | ||||||||||||
Segment EBITDA: |
||||||||||||
Decision Analytics |
$ | 79,257 | $ | 64,898 | 22.1 | % | ||||||
EBITDA margin |
39.3 | % | 37.7 | % | ||||||||
Risk Assessment |
$ | 79,935 | $ | 74,159 | 7.8 | % | ||||||
EBITDA margin |
55.1 | % | 52.8 | % | ||||||||
Total EBITDA |
$ | 159,192 | $ | 139,057 | 14.5 | % | ||||||
EBITDA margin |
45.9 | % | 44.4 | % |
Risk Assessment segment EBITDA grew 7.8% and Decision Analytics segment EBITDA grew 22.1% in first-quarter 2012 versus the previous year, as shown in Table 3.
The first-quarter 2012 EBITDA margin in Risk Assessment increased to 55.1% from 52.8% in first-quarter 2011 because revenue outpaced our primary costs, which were personnel-related. The first-quarter 2012 EBITDA margin for Decision Analytics increased to 39.3% from 37.7% in first-quarter 2011 because revenue outpaced our primary costs, which were personnel-related, and capitalization of some employee salaries related to certain internally developed software projects increased.
4
Net Income and Adjusted Net Income
Net income increased 13.2% in first-quarter 2012 driven by growth in the business, which was partially offset by increased borrowing costs associated with higher debt levels due to acquisitions and share buybacks. Adjusted net income grew 12.4% for first-quarter 2012. The table below sets forth a reconciliation of net income to adjusted net income and adjusted EPS based on historical results:
Table 4
Year-to-Date | ||||||||||||
March 31, | Change | |||||||||||
2012 | 2011 | % | ||||||||||
(in thousands, except per share amounts) | ||||||||||||
Net income |
$ | 74,601 | $ | 65,876 | 13.2 | % | ||||||
plus: Amortization of intangibles |
8,587 | 8,455 | ||||||||||
less: Income tax effect on amortization of intangibles |
(3,435 | ) | (3,382 | ) | ||||||||
|
|
|
|
|||||||||
Adjusted net income |
$ | 79,753 | $ | 70,949 | 12.4 | % | ||||||
|
|
|
|
|||||||||
Basic adjusted EPS |
$ | 0.48 | $ | 0.42 | 14.3 | % | ||||||
|
|
|
|
|||||||||
Diluted adjusted EPS |
$ | 0.47 | $ | 0.40 | 17.5 | % | ||||||
|
|
|
|
|||||||||
Weighted average shares outstanding |
||||||||||||
Basic |
164,836,992 | 169,030,227 | ||||||||||
|
|
|
|
|||||||||
Diluted |
171,350,820 | 176,964,192 | ||||||||||
|
|
|
|
Net Cash Provided by Operating Activities and Capital Expenditures
Net cash provided by operating activities was $189.6 million and increased $44.0 million, or 30.2%, for the three-month period ended March 31, 2012, compared with the same period in 2011. This growth was the result of a $12.5 million increase caused by the improved profitability of the business, a $28.2 million decrease in working capital, and a $3.1 million decrease in interest paid due to the semiannual timing of certain bond interest payments.
Capital expenditures were $15.9 million in the three months ended March 31, 2012, a decrease of $2.8 million over the same period in 2011 due to the completion of the computing system periodic upgrade in 2011. Capital expenditures were 4.6% of revenue in the three months ended March 31, 2012. Net cash provided by operating activities less capital expenditures represented more than 100% of EBITDA in the first three months of 2012 because of the typical first-quarter payments for annual contracts for a portion of our business.
Share Repurchases and Revolving Credit Facility
The company continued to balance its internal investment and acquisition initiatives with share repurchases. In first-quarter 2012, the company repurchased shares for a total cost of $38.9 million at an average price of $42.40. At March 31, 2012, the company had $267.9 million remaining under its share repurchase authorization.
5
Conference Call
Verisks management team will host a live audio webcast on Wednesday, May 2, 2012, at 8:30 a.m. Eastern time (5:30 a.m. Pacific time) 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 706-758-8912 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 404-537-3406 for international participants using Conference ID #72639222.
About Verisk Analytics
Verisk Analytics (Nasdaq:VRSK) is a leading provider of information about risk to professionals in insurance, healthcare, mortgage, government, supply chain, and risk management. Using advanced technologies to collect and analyze billions of records, Verisk Analytics draws on vast industry expertise and unique proprietary data sets to provide predictive analytics and decision support solutions in fraud prevention, actuarial science, insurance coverages, fire protection, catastrophe and weather risk, data management, and many other fields. In the United States and around the world, Verisk Analytics helps customers protect people, property, and financial assets. For more information, visit www.verisk.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. 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 Verisks 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, such as EBITDA, EBITDA margin, adjusted net income, and adjusted EPS, 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 companys management uses these measures for reviewing the financial results of the company and for budgeting and planning purposes.
6
EBITDA
Table 5 below sets forth a reconciliation of net income to EBITDA based on our historical results:
Table 5
Year-to-Date | ||||||||||||
March 31, | Change | |||||||||||
2012 | 2011 | % | ||||||||||
(in thousands) | ||||||||||||
Net income |
$ | 74,601 | $ | 65,876 | 13.2 | % | ||||||
Depreciation and amortization of fixed and intangible assets |
20,231 | 19,760 | 2.4 | % | ||||||||
Investment income and realized gain on securities, net |
(435 | ) | (372 | ) | 16.9 | % | ||||||
Interest expense |
16,385 | 9,615 | 70.4 | % | ||||||||
Provision for income taxes |
48,410 | 44,178 | 9.6 | % | ||||||||
|
|
|
|
|||||||||
EBITDA |
$ | 159,192 | $ | 139,057 | 14.5 | % | ||||||
|
|
|
|
EBITDA is a financial measure that management uses to evaluate the performance of our segments. The company defines EBITDA as net income before investment and other income, realized gain on securities, interest expense, income taxes, and depreciation and amortization of fixed and intangible assets.
Although EBITDA is frequently used by securities analysts, lenders, and others in their evaluation of companies, EBITDA has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our statement of cash flow reported under U.S. GAAP. Management uses EBITDA in conjunction with traditional U.S. GAAP operating performance measures as part of its overall assessment of company performance. Some of these limitations are as follows:
| EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments. |
| EBITDA does not reflect changes in, or cash requirement for, our working capital needs. |
| Although depreciation and amortization are noncash charges, the assets being depreciated and amortized often will have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements. |
| Other companies in our industry may calculate EBITDA differently than we do, limiting the usefulness of their calculations as comparative measures. |
Attached Financial Statements
Please refer to the full Form 10-Q filing for the complete financial statements and related notes.
7
VERISK ANALYTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2012 (Unaudited) and December 31, 2011
2012 unaudited |
2011 | |||||||
(In thousands, except for share and per share data) | ||||||||
ASSETS | ||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 114,930 | $ | 191,603 | ||||
Available-for-sale securities |
4,968 | 5,066 | ||||||
Accounts receivable, net of allowance for doubtful accounts as of March 31, 2012 and December 31, 2011 of $3,990 and $4,158, respectively |
194,540 | 153,339 | ||||||
Prepaid expenses |
28,619 | 21,905 | ||||||
Deferred income taxes, net |
13,500 | 3,818 | ||||||
Federal and foreign income taxes receivable |
18,891 | 25,242 | ||||||
State and local income taxes receivable |
4,856 | 11,433 | ||||||
Other current assets |
39,536 | 41,248 | ||||||
|
|
|
|
|||||
Total current assets |
419,840 | 453,654 | ||||||
Noncurrent assets: |
||||||||
Fixed assets, net |
124,781 | 119,411 | ||||||
Intangible assets, net |
375,742 | 226,424 | ||||||
Goodwill |
933,298 | 709,944 | ||||||
Deferred income taxes, net |
| 10,480 | ||||||
Other assets |
38,382 | 21,193 | ||||||
|
|
|
|
|||||
Total assets |
$ | 1,892,043 | $ | 1,541,106 | ||||
|
|
|
|
|||||
LIABILITIES AND STOCKHOLDERS DEFICIT | ||||||||
Current liabilities: |
||||||||
Accounts payable and accrued liabilities |
$ | 144,974 | $ | 162,992 | ||||
Acquisition related liabilities |
250 | 250 | ||||||
Short-term debt and current portion of long-term debt |
130,478 | 5,554 | ||||||
Pension and postretirement benefits, current |
2,912 | 4,012 | ||||||
Fees received in advance |
288,942 | 176,842 | ||||||
|
|
|
|
|||||
Total current liabilities |
567,556 | 349,650 | ||||||
Noncurrent liabilities: |
||||||||
Long-term debt |
1,099,285 | 1,100,332 | ||||||
Pension benefits |
99,757 | 109,161 | ||||||
Postretirement benefits |
15,792 | 18,587 | ||||||
Deferred income taxes, net |
39,868 | | ||||||
Other liabilities |
80,043 | 61,866 | ||||||
|
|
|
|
|||||
Total liabilities |
1,902,301 | 1,639,596 | ||||||
Commitments and contingencies |
||||||||
Stockholders deficit: |
||||||||
Common stock, $.001 par value; 1,200,000,000 shares authorized; 544,003,038 shares issued and 165,550,091 and 164,285,227 outstanding as of March 31, 2012 and December 31, 2011, respectively |
137 | 137 | ||||||
Unearned KSOP contributions |
(648 | ) | (691 | ) | ||||
Additional paid-in capital |
917,884 | 874,808 | ||||||
Treasury stock, at cost, 378,452,947 and 379,717,811 shares as of March 31, 2012 and December 31, 2011, respectively |
(1,501,414 | ) | (1,471,042 | ) | ||||
Retained earnings |
651,186 | 576,585 | ||||||
Accumulated other comprehensive losses |
(77,403 | ) | (78,287 | ) | ||||
|
|
|
|
|||||
Total stockholders deficit |
(10,258 | ) | (98,490 | ) | ||||
|
|
|
|
|||||
Total liabilities and stockholders deficit |
$ | 1,892,043 | $ | 1,541,106 | ||||
|
|
|
|
8
VERISK ANALYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended March 31, 2012 and 2011
2012 | 2011 | |||||||
(In thousands, except for share and per share data) | ||||||||
Revenues |
$ | 346,501 | $ | 312,869 | ||||
Expenses: |
||||||||
Cost of revenues (exclusive of items shown separately below) |
133,330 | 124,556 | ||||||
Selling, general and administrative |
53,979 | 49,256 | ||||||
Depreciation and amortization of fixed assets |
11,644 | 11,305 | ||||||
Amortization of intangible assets |
8,587 | 8,455 | ||||||
|
|
|
|
|||||
Total expenses |
207,540 | 193,572 | ||||||
|
|
|
|
|||||
Operating income |
138,961 | 119,297 | ||||||
Other income/(expense): |
||||||||
Investment income |
105 | 10 | ||||||
Realized gain on securities, net |
330 | 362 | ||||||
Interest expense |
(16,385 | ) | (9,615 | ) | ||||
|
|
|
|
|||||
Total other expense, net |
(15,950 | ) | (9,243 | ) | ||||
|
|
|
|
|||||
Income before income taxes |
123,011 | 110,054 | ||||||
Provision for income taxes |
(48,410 | ) | (44,178 | ) | ||||
|
|
|
|
|||||
Net income |
$ | 74,601 | $ | 65,876 | ||||
|
|
|
|
|||||
Basic net income per share |
$ | 0.45 | $ | 0.39 | ||||
|
|
|
|
|||||
Diluted net income per share |
$ | 0.44 | $ | 0.37 | ||||
|
|
|
|
|||||
Weighted average shares outstanding: |
||||||||
Basic |
164,836,992 | 169,030,227 | ||||||
|
|
|
|
|||||
Diluted |
171,350,820 | 176,964,192 | ||||||
|
|
|
|
9
VERISK ANALYTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended March 31, 2012 and 2011
2012 | 2011 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 74,601 | $ | 65,876 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
Depreciation and amortization of fixed assets |
11,644 | 11,305 | ||||||
Amortization of intangible assets |
8,587 | 8,455 | ||||||
Amortization of debt issuance costs and original issue discount |
545 | 309 | ||||||
Allowance for doubtful accounts |
355 | 151 | ||||||
KSOP compensation expense |
2,931 | 3,111 | ||||||
Stock based compensation |
4,446 | 3,818 | ||||||
Noncash charges associated with performance-based appreciation awards |
| 546 | ||||||
Realized gain on securities, net |
(330 | ) | (362 | ) | ||||
Deferred income taxes |
(349 | ) | (158 | ) | ||||
(Gain)/loss on disposal of assets |
(7 | ) | 96 | |||||
Other operating |
10 | 15 | ||||||
Changes in assets and liabilities, net of effects from acquisitions: |
||||||||
Accounts receivable |
(34,479 | ) | (37,475 | ) | ||||
Prepaid expenses and other assets |
(2,881 | ) | (7,890 | ) | ||||
Federal and foreign income taxes |
40,511 | 35,954 | ||||||
State and local income taxes |
6,754 | 4,830 | ||||||
Accounts payable and accrued liabilities |
(20,966 | ) | (22,100 | ) | ||||
Fees received in advance |
112,100 | 84,057 | ||||||
Pension and postretirement benefits |
(11,590 | ) | (4,349 | ) | ||||
Other liabilities |
(2,269 | ) | (608 | ) | ||||
|
|
|
|
|||||
Net cash provided by operating activities |
189,613 | 145,581 | ||||||
Cash flows from investing activities: |
||||||||
Acquisitions, net of cash acquired for 2012 and 2011 of $29,387 and $0, respectively |
(330,777 | ) | | |||||
Purchase of non-controlling equity investment in non-public companies |
(2,000 | ) | | |||||
Escrow funding associated with acquisitions |
(17,000 | ) | | |||||
Purchases of fixed assets |
(17,442 | ) | (13,648 | ) | ||||
Purchases of available-for-sale securities |
(791 | ) | (960 | ) | ||||
Proceeds from sales and maturities of available-for-sale securities |
898 | 1,154 | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
(367,112 | ) | (13,454 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds/(repayments) of short-term debt, net |
125,000 | (15,946 | ) | |||||
Payment of debt issuance costs |
| (256 | ) | |||||
Repurchase of Class A common stock |
(36,792 | ) | (73,578 | ) | ||||
Proceeds from stock options exercised |
14,589 | 3,579 | ||||||
Other financing |
(2,124 | ) | | |||||
|
|
|
|
|||||
Net cash provided by/(used in) financing activities |
100,673 | (86,201 | ) | |||||
|
|
|
|
|||||
Effect of exchange rate changes |
153 | 338 | ||||||
|
|
|
|
|||||
(Decrease)/increase in cash and cash equivalents |
(76,673 | ) | 46,264 | |||||
Cash and cash equivalents, beginning of period |
191,603 | 54,974 | ||||||
|
|
|
|
|||||
Cash and cash equivalents, end of period |
$ | 114,930 | $ | 101,238 | ||||
|
|
|
|
|||||
Supplemental disclosures: |
||||||||
Taxes paid |
$ | 1,239 | $ | 3,351 | ||||
|
|
|
|
|||||
Interest paid |
$ | 6,359 | $ | 9,479 | ||||
|
|
|
|
|||||
Noncash investing and financing activities: |
||||||||
Repurchase of Class A common stock included in accounts payable and accrued liabilities |
$ | 3,332 | $ | 2,070 | ||||
|
|
|
|
|||||
Deferred tax liability established on date of acquisition |
$ | 40,358 | $ | | ||||
|
|
|
|
|||||
Capital lease obligations |
$ | 422 | $ | 6,920 | ||||
|
|
|
|
|||||
Capital expenditures included in accounts payable and accrued liabilities |
$ | 1,505 | $ | 310 | ||||
|
|
|
|
10
G)E4WI.5&-Z:V,Y9"<_/@H\/V%D;V)E+7AA<"UF:6QT97)S
M(&5S8STB0U(B/SX*/'@Z>&%P;65T82!X;6QN