Equifax Inc. (NYSE: EFX) today announced financial results for the quarter ended March 31, 2020.<\/p>\n
“During these unprecedented times, Equifax is focused on the health and safety of our employees while delivering for our customers and consumers. Despite this global challenge, we are continuing to invest in our three-year $1.25 billion<\/span> EFX 2020 cloud technology, data, and security transformation and rolling out new products to strengthen the company for the future,” said Mark W. Begor<\/span>, Equifax Chief Executive Officer. “Even with the impact of the pandemic in March, Equifax delivered its strongest quarterly revenue performance since the 2017 cyber event with broad based revenue and margin growth. The strong First Quarter performance follows our momentum in the second half of 2019 and positions us well to weather the economic impacts of Coronavirus. Our team is focused on providing enhanced solutions from our differentiated data assets to help our customers manage through these challenging times.”<\/p>\n Financial Results Summary<\/strong><\/p>\n The company reported revenue of $957.9 million<\/span> in the first quarter of 2020, up 13 percent compared to the first quarter of 2019 and up 15 percent on a local currency basis.<\/p>\n Net income attributable to Equifax of $112.6 million<\/span> was up in the first quarter of 2020 compared to a net loss attributable to Equifax of $555.9 million<\/span> in the first quarter of 2019.<\/p>\n First quarter diluted EPS attributable to Equifax was $0.92<\/span>, up compared to a loss of $4.57<\/span> in the first quarter of 2019.<\/p>\n Our results in the first quarter of 2019 included a pre-tax accrual of $690.0 million<\/span> for losses associated with certain legal proceedings and investigations related to the 2017 cybersecurity incident. The impact of this accrual on diluted EPS was $4.88<\/span> per share in the first quarter of 2019.<\/p>\n USIS first quarter results<\/strong><\/p>\n Workforce Solutions first quarter results<\/strong><\/p>\n International first quarter results<\/strong><\/p>\n Global Consumer Solutions first quarter results<\/strong><\/p>\n Adjusted EPS and Adjusted EBITDA Margin<\/strong><\/p>\n Liquidity and Capital Resources<\/strong><\/p>\n At March 31, 2020<\/span>, the Company had approximately $370 million<\/span> in cash and $1.2 billion<\/span> available under its revolving credit facility, which matures in September 2023<\/span>, and its receivables funding facility, which matures in December 2022. We recently amended our credit facility to increase the maximum leverage ratio through 2021 to provide us with additional financial flexibility.<\/p>\n Withdrawal of Full Year Guidance<\/strong><\/p>\n Due to the rapidly evolving environment and continued uncertainties resulting from the economic impact globally of the coronavirus disease (“COVID-19”), we are not providing guidance for the second quarter of 2020, and are withdrawing our previously announced guidance for full year 2020, which was issued on February 12, 2020<\/span>. On our earnings conference call on April 21, 2020, we will discuss the impact of the current economic situation on Equifax including providing perspective on revenue trends in April, and the impact on Equifax financial results should these trends continue for the remainder of the second quarter of 2020. We will also discuss actions we are taking to manage in this environment.<\/p>\n About Equifax<\/strong><\/p>\n Equifax is a global data, analytics, and technology company and believes knowledge drives progress. The Company blends unique data, analytics, and technology with a passion for serving customers globally, to create insights that power decisions to move people forward.<\/p>\n Headquartered in Atlanta, Equifax operates or has investments in 27 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor’s (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 11,200 employees worldwide.<\/p>\n Earnings Conference Call and Audio Webcast<\/strong><\/p>\n In conjunction with this release, Equifax will host a conference call on April 21, 2020<\/span> at 8:00 a.m. (ET)<\/span> via a live audio webcast. To access the webcast and related presentation materials, go to the Investor Relations section of our website at www.equifax.com. The discussion will be available via replay at the same site shortly after the conclusion of the webcast. This press release is also available at that website.<\/p>\n Non-GAAP Financial Measures<\/strong><\/p>\n This earnings release presents adjusted EPS attributable to Equifax which is diluted EPS attributable to Equifax adjusted (to the extent noted above for different periods) for acquisition-related amortization expense, costs related to the 2017 cybersecurity incident, accrual for legal matters related to the 2017 cybersecurity incident, gain on fair market value adjustment of equity investment, foreign currency impact of certain intercompany loans, valuation allowance for certain deferred tax assets, tax benefit on legal settlement related to the 2017 cybersecurity incident, costs related to the realignment of internal resources, the income tax effects of stock awards that are recognized upon vesting or settlement, the foreign exchange impact resulting from accounting for Argentina<\/span> as a highly inflationary economy, and the income tax impact of these adjustments. All adjustments are net of tax, with a reconciling item with the aggregated tax impact of the adjustments. This earnings release also presents adjusted EBITDA and adjusted EBITDA margin which is defined as consolidated net income attributable to Equifax plus net interest expense, income taxes, depreciation and amortization, and also excludes certain one-time items. These are important financial measures for Equifax but are not financial measures as defined by GAAP.<\/p>\n These non-GAAP financial measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as an alternative measure of net income or EPS as determined in accordance with GAAP.<\/p>\n Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and related notes are presented in the Q&A. This information can also be found under “Investor Relations\/Financial Information\/Non-GAAP Financial Measures” on our website at www.equifax.com.<\/p>\n Forward-Looking Statements<\/strong><\/p>\n This release contains forward-looking statements and forward-looking information. These statements can be identified by expressions of belief, expectation or intention, as well as statements that are not historical fact. These statements are based on certain factors and assumptions including with respect to foreign exchange rates, expected growth, results of operations, performance, the outcome of legal proceedings, business prospects and opportunities and effective tax rates. While the Company believes these factors and assumptions to be reasonable based on information currently available, they may prove to be incorrect.<\/p>\n Several factors could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including, but not limited to, actions taken by us, including restructuring or strategic initiatives (including our EFX2020 cloud technology, data and security transformation program, capital investments and asset acquisitions or dispositions), as well as developments beyond our control, including, but not limited to, the impact of COVID-19 and changes in worldwide and U.S. economic conditions that materially impact consumer spending, consumer debt and employment and the demand for Equifax’s products and services. The extent to which the COVID-19 pandemic will continue to negatively impact our operations will depend on future developments which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of the COVID-19 pandemic, the actions taken to control the spread of COVID-19 or treat its impact, and changes in worldwide and U.S. economic conditions. Further deteriorations in economic conditions, as a result of COVID-19 or otherwise, could lead to a further or prolonged decline in demand for our products and services and negatively impact our business. It may also impact financial markets and corporate credit markets which could adversely impact our access to financing, or the terms of any financing. We cannot at this time predict the extent of the impact of the COVID-19 pandemic and resulting economic impact, but it could have a material adverse effect on our business, financial position, results of operations and cash flows. Other risk factors include the impact of the 2017 cybersecurity incident and the resulting litigation and other impacts on our business and results of operations; potential adverse developments in new and pending legal proceedings or government investigations; impact of our technology and security transformation and improvements in our information technology and data security infrastructure; changes in tax regulations; adverse or uncertain economic conditions and changes in credit and financial markets; uncertainties regarding the ultimate amount and timing of payments for the legal proceedings and government investigations related to the 2017 cybersecurity incident; risks associated with our ability to comply with business practice commitments and similar obligations under settlement agreements and consent orders entered into in connection with the 2017 cybersecurity incident; economic, political and other risks associated with international sales and operations; risks relating to unauthorized access to data or breaches of confidential information due to criminal conduct, attacks by hackers, employee or insider malfeasance and\/or human error; changes in, and the effects of, laws and regulations and government policies governing or affecting our business, including, without limitation, our examination and supervision by the Consumer Financial Protection Bureau, a federal agency that holds primary responsibility for the regulation of consumer protection with respect to financial products and services in the U.S., oversight by the U.K. Financial Conduct Authority (“FCA”) and Information Commissioner’s Office of our debt collections services and core credit reporting businesses in the U.K., oversight by the Office of Australian Information Commission, the Australian Competition and Consumer Commission (“ACCC”) and other regulatory entities of our credit reporting business in Australia<\/span> and the impact of current privacy laws and regulations, including the European General Data Protection Regulation and the California Consumer Privacy Act, or any future privacy laws and regulations; federal or state responses to identity theft concerns; our ability to successfully develop and market new products and services, respond to pricing and other competitive pressures, complete and integrate acquisitions and other investments and achieve targeted cost efficiencies; timing and amount of capital expenditures; changes in capital markets and corresponding effects on the Company’s investments and benefit plan obligations; foreign currency exchange rates and earnings repatriation limitations; and the decisions of taxing authorities which could affect our effective tax rates. A summary of additional risks and uncertainties can be found in our Annual Report on Form 10-K for the year ended December 31, 2019<\/span>, including without limitation under the captions “Item 1. Business — Governmental Regulation” and “– Forward-Looking Statements” and “Item 1A. Risk Factors,” and in our other filings with the U.S. Securities and Exchange Commission. Forward-looking statements are given only as at the date of this release and the Company disclaims any obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.<\/p>\n EQUIFAX<\/strong><\/span><\/p>\n CONSOLIDATED STATEMENTS OF INCOME (LOSS)<\/strong><\/span><\/p>\n<\/td>\n<\/tr>\n Three Months Ended March 31,<\/strong><\/span><\/p>\n<\/td>\n<\/tr>\n 2020<\/strong><\/span><\/p>\n<\/td>\n 2019<\/strong><\/span><\/p>\n<\/td>\n<\/tr>\n (In millions, except per share amounts)<\/em><\/span><\/p>\n<\/td>\n (Unaudited)<\/em><\/span><\/p>\n<\/td>\n<\/tr>\n Operating revenue<\/span><\/p>\n<\/td>\n $<\/strong><\/span><\/p>\n<\/td>\n 957.9<\/strong><\/span><\/p>\n<\/td>\n $<\/span><\/p>\n<\/td>\n 846.1<\/span><\/p>\n<\/td>\n Operating expenses:<\/span><\/p>\n<\/td>\n Cost of services (exclusive of depreciation and amortization below)<\/span><\/p>\n<\/td>\n 414.1<\/strong><\/span><\/p>\n<\/td>\n 387.5<\/span><\/p>\n<\/td>\n Selling, general and administrative expenses<\/span><\/p>\n<\/td>\n 316.0<\/strong><\/span><\/p>\n<\/td>\n 998.9<\/span><\/p>\n<\/td>\n Depreciation and amortization<\/span><\/p>\n<\/td>\n 91.9<\/strong><\/span><\/p>\n<\/td>\n 77.6<\/span><\/p>\n<\/td>\n Total operating expenses<\/span><\/p>\n<\/td>\n 822.0<\/strong><\/span><\/p>\n<\/td>\n 1,464.0<\/span><\/p>\n<\/td>\n Operating income (loss)<\/span><\/p>\n<\/td>\n 135.9<\/strong><\/span><\/p>\n<\/td>\n (617.9)<\/span><\/p>\n<\/td>\n Interest expense<\/span><\/p>\n<\/td>\n (30.7)<\/strong><\/span><\/p>\n<\/td>\n (26.7)<\/span><\/p>\n<\/td>\n Other income, net<\/span><\/p>\n<\/td>\n 45.3<\/strong><\/span><\/p>\n<\/td>\n 2.1<\/span><\/p>\n<\/td>\n Consolidated income (loss) before income taxes<\/span><\/p>\n<\/td>\n 150.5<\/strong><\/span><\/p>\n<\/td>\n (642.5)<\/span><\/p>\n<\/td>\n (Provision) benefit for income taxes<\/span><\/p>\n<\/td>\n (36.0)<\/strong><\/span><\/p>\n<\/td>\n 88.1<\/span><\/p>\n<\/td>\n Consolidated net income (loss)<\/span><\/p>\n<\/td>\n 114.5<\/strong><\/span><\/p>\n<\/td>\n (554.4)<\/span><\/p>\n<\/td>\n Less: Net income attributable to noncontrolling interests including redeemable noncontrolling interests<\/span><\/p>\n<\/td>\n (1.9)<\/strong><\/span><\/p>\n<\/td>\n (1.5)<\/span><\/p>\n<\/td>\n Net income (loss) attributable to Equifax<\/span><\/p>\n<\/td>\n $<\/strong><\/span><\/p>\n<\/td>\n 112.6<\/strong><\/span><\/p>\n<\/td>\n $<\/span><\/p>\n<\/td>\n (555.9)<\/span><\/p>\n<\/td>\n Basic earnings per common share:<\/span><\/p>\n<\/td>\n Net income (loss) attributable to Equifax<\/span><\/p>\n<\/td>\n $<\/strong><\/span><\/p>\n<\/td>\n 0.93<\/strong><\/span><\/p>\n<\/td>\n $<\/span><\/p>\n<\/td>\n (4.60)<\/span><\/p>\n<\/td>\n Weighted-average shares used in computing basic earnings per share<\/span><\/p>\n<\/td>\n 121.3<\/strong><\/span><\/p>\n<\/td>\n 120.7<\/span><\/p>\n<\/td>\n Diluted earnings per common share:<\/span><\/p>\n<\/td>\n Net income (loss) attributable to Equifax<\/span><\/p>\n<\/td>\n $<\/strong><\/span><\/p>\n<\/td>\n 0.92<\/strong><\/span><\/p>\n<\/td>\n $<\/span><\/p>\n<\/td>\n (4.57)<\/span><\/p>\n<\/td>\n Weighted-average shares used in computing diluted earnings per share<\/span><\/p>\n<\/td>\n 122.6<\/strong><\/span><\/p>\n<\/td>\n 121.6<\/span><\/p>\n<\/td>\n Dividends per common share<\/span><\/p>\n<\/td>\n $<\/strong><\/span><\/p>\n<\/td>\n 0.39<\/strong><\/span><\/p>\n<\/td>\n $<\/span><\/p>\n<\/td>\n 0.39<\/span><\/p>\n<\/td>\n EQUIFAX<\/strong>\n
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