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TransUnion Announces Strong Fourth Quarter 2019 Results

CHICAGO, Feb. 18, 2020 (GLOBE NEWSWIRE) — TransUnion (NYSE: TRU) (the “Company”) today announced financial results for the quarter and year ended December 31, 2019.
Fourth Quarter 2019 ResultsRevenue:Total revenue for the quarter was $686 million, an increase of 12 percent (12 percent on a constant currency basis, 12 percent on an organic constant currency basis) compared with the fourth quarter of 2018.Adjusted Revenue, which removes the impact of deferred revenue purchase accounting reductions and other adjustments to revenue for our recently acquired entities, was also $686 million for the quarter, an increase of 10 percent (10 percent on a constant currency basis, 10 percent on an organic constant currency basis, 11 percent on an organic constant currency basis excluding last year’s incremental credit monitoring revenue due to a breach at a competitor) compared with the fourth quarter of 2018.Earnings:Net income attributable to TransUnion was $83 million for the quarter, compared with $102 million for the fourth quarter of 2018. Diluted earnings per share was $0.43, compared with $0.53 for the fourth quarter of 2018.Adjusted Net Income was $144 million for the quarter, compared with $126 million for the fourth quarter of 2018. Adjusted Diluted Earnings per Share for the quarter was $0.75, compared with $0.66 for the fourth quarter of 2018.Adjusted EBITDA was $275 million for the quarter, an increase of 11 percent (11 percent on a constant currency basis, 11 percent on an organic constant currency basis) compared with the fourth quarter of 2018. Adjusted EBITDA margin was 40.2 percent, compared with 39.9 percent for the fourth quarter of 2018.“TransUnion delivered a strong conclusion to the year with double-digit organic Adjusted Revenue, Adjusted EBITDA and Adjusted Diluted EPS growth in the fourth quarter,” said Chris Cartwright, President and CEO. “This quarter caps another outstanding year for TransUnion. In addition to our financial performance, we continue to evolve our organization, invest aggressively in innovation and critical capabilities, and fund strategic acquisitions while also reducing our debt with $400 million of prepayments over the past 13 months.”“Today, we also announced an accelerated technology investment in our infrastructure, platform and processes that will allow us to increasingly refactor our applications to be more secure, reliable and performant by leveraging a hybrid public-private cloud approach.”“As we look forward, I am highly confident that TransUnion is well positioned for another strong year in 2020 and that our ongoing investments set us up for long-term attractive performance,” Cartwright added.Fourth Quarter 2019 Segment ResultsU.S. MarketsU.S. Markets revenue was $415 million, an increase of 12 percent (12 percent on an organic basis) compared with the fourth quarter of 2018. U.S. Markets Adjusted Revenue increased 12 percent (11 percent on an organic basis).Financial Services revenue was $222 million, an increase of 16 percent (16 percent on an organic basis) compared with the fourth quarter of 2018.Emerging Verticals revenue, which includes Healthcare, Insurance and all other verticals, was $193 million, an increase of 8 percent (7 percent on an organic basis) compared with the fourth quarter of 2018. Emerging Verticals Adjusted Revenue increased 7 percent (6 percent on an organic basis).Adjusted EBITDA was $166 million, an increase of 17 percent (17 percent on an organic basis) compared with the fourth quarter of 2018.InternationalInternational revenue was $166 million, an increase of 18 percent (19 percent on a constant currency basis) compared with the fourth quarter of 2018. International Adjusted Revenue was also $166 million, an increase of 10 percent (11 percent on a constant currency basis) compared with the fourth quarter of 2018 Adjusted Revenue.Canada revenue was $28 million, an increase of 12 percent (12 percent on a constant currency basis) compared with the fourth quarter of 2018.Latin America revenue was $26 million, a decrease of 2 percent (an increase of 4 percent on a constant currency basis) compared with the fourth quarter of 2018.United Kingdom revenue was $50 million. Adjusted Revenue was also $50 million, an increase of 12 percent (12 percent on a constant currency basis) compared with the fourth quarter of 2018 Adjusted Revenue.Africa revenue was $17 million, an increase of 1 percent (5 percent on a constant currency basis) compared with the fourth quarter of 2018.India revenue was $28 million, an increase of 27 percent (25 percent on a constant currency basis) compared with the fourth quarter of 2018.Asia Pacific revenue was $17 million, an increase of 9 percent (8 percent on a constant currency basis) compared with the fourth quarter of 2018.Adjusted EBITDA was $70 million, an increase of 13 percent (14 percent on a constant currency basis) compared with the fourth quarter of 2018.Consumer InteractiveConsumer Interactive revenue was $123 million, an increase of 2 percent compared with the fourth quarter of 2018.Adjusted EBITDA was $63 million, relatively flat compared with the fourth quarter of 2018.Full Year 2019 ResultsTotal revenue for the year was $2.656 billion, an increase of 15 percent compared with 2018 (16 percent on a constant currency basis, 11 percent on an organic constant currency basis). Adjusted Revenue was $2.662 billion for the year, an increase of 14 percent compared with 2018 (14 percent on a constant currency basis, 9 percent on an organic constant currency basis). Acquisitions accounted for a 5 percent increase in revenue and a 5 percent increase in Adjusted Revenue.Net income attributable to TransUnion was $347 million for the year, compared with $277 million for 2018. Diluted earnings per share was $1.81 for the year, compared with $1.45 in 2018. Adjusted Net Income was $536 million, compared with $477 million in 2018. Adjusted Diluted Earnings per Share was $2.79 for the year, compared with $2.50 in 2018.Adjusted EBITDA for the year was $1.059 billion, an increase of 15 percent compared with 2018 (17 percent on a constant currency basis, 12 percent on an organic constant currency basis). Adjusted EBITDA margin for the year was 39.8 percent, compared with 39.1 percent in 2018.Liquidity and Capital ResourcesCash and cash equivalents were $274 million at December 31, 2019 and $187 million at December 31, 2018. Total debt, including the current portion of long-term debt, was $3.657 billion at December 31, 2019 and $4.048 billion at December 31, 2018.For the twelve months ended December 31, 2019 cash provided by continuing operations was $784 million compared with $559 million in 2018. The increase was due primarily to the increase in operating performance, partially offset by an increase in interest expense resulting from the increase in outstanding debt due to our 2018 acquisitions. Cash used in investing activities was $204 million compared with $2.018 billion in 2018. The change in cash from investing activities was due primarily to significantly lower cash used for acquisitions and the proceeds from the sale of the Callcredit discontinued operations, partially offset by an increase in capital expenditures. Capital expenditures were $198 million compared with $180 million in 2018. Cash used in financing activities was $487 million compared with a source of cash of $1.540 billion in 2018. The change in cash from financing activities was due primarily to the loan proceeds borrowed in 2018 to fund our acquisitions, partially offset by $340 million of prepayments made on our outstanding debt in 2019 compared with $60 million in 2018, $39 million of cash used to pay employee withholding taxes on restricted stock that vested during the year that we have recorded as treasury stock, and one additional quarterly dividend payment made in 2019 compared with 2018.2020 Full Year OutlookGAAP Outlook: For 2020, revenue is expected to be between $2.857 billion and $2.872 billion, an increase of 8 percent compared with 2019. Net income attributable to TransUnion is expected to be between $384 million and $392 million, an increase of 11 to 13 percent. Diluted earnings per share is expected to be between $1.99 and $2.03, an increase of 10 to 12 percent.The revenue growth includes an immaterial impact from an acquisition that closed in the prior year.Adjusted Outlook: For 2020, Adjusted Revenue is expected to be between $2.857 billion and $2.872 billion, an increase of 7 to 8 percent compared with 2019. Adjusted EBITDA is expected to be between $1.141 billion and $1.151 billion, an increase of 8 to 9 percent. Adjusted Diluted Earnings per Share is expected to be between $3.14 and $3.18, an increase of 13 to 14 percent.The Adjusted Revenue growth includes an immaterial impact from an acquisition that closed in the prior year. The Adjusted Revenue and Adjusted EBITDA growth rates include approximately 50 basis points of benefit from foreign exchange rates.2020 First Quarter OutlookGAAP Outlook: For the first quarter of 2020, revenue is expected to be between $681 million and $685 million, an increase of 10 to 11 percent compared with 2019. Net income attributable to TransUnion is expected to be between $87 million and $88 million, an increase of 22 to 25 percent. Diluted earnings per share is expected to be between $0.45 and $0.46, an increase of 21 to 24 percent.The revenue growth includes an immaterial impact from an acquisition that closed in the prior year.Adjusted Outlook: For the first quarter of 2020, Adjusted Revenue is expected to be between $681 million and $685 million, an increase of 9 to 10 percent compared with 2019. Adjusted EBITDA is expected to be between $261 million and $264 million, an increase of 9 to 10 percent. Adjusted Diluted Earnings per Share is expected to be between $0.69 and $0.70, an increase of 15 to 17 percent.The Adjusted Revenue growth includes an immaterial impact from an acquisition that closed in the prior year. The Adjusted Revenue and Adjusted EBITDA growth rates include an immaterial impact from foreign exchange rates.Earnings Webcast DetailsIn conjunction with this release, TransUnion will host a conference call and webcast today at 8:00 a.m. Central Time to discuss the business results for the quarter and certain forward-looking information. This session may be accessed at www.transunion.com/tru. A replay of the call will also be available at this website following the conclusion of the call.About TransUnionTransUnion is a leading global information and insights company that strives to make trust possible between businesses and consumers, working to ensure that each person is reliably and safely represented in the marketplace. The Company provides consumer reports, actionable insights and analytics such as credit and other scores, and decisioning capabilities to businesses. Businesses embed its solutions into their process workflows to acquire new customers, assess consumer ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect debt, verify consumer identities and investigate potential fraud. Consumers use its solutions to view their credit profiles and access analytical tools that help them understand and manage their personal information and take precautions against identity theft.Availability of Information on TransUnion’s WebsiteInvestors and others should note that TransUnion routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the TransUnion Investor Relations website. While not all of the information that the Company posts to the TransUnion Investor Relations website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media, and others interested in TransUnion to review the information that it shares on www.transunion.com/tru.Non-GAAP Financial MeasuresThis earnings release presents constant currency growth rates assuming foreign currency exchange rates are consistent between years. This allows financial results to be evaluated without the impact of fluctuations in foreign currency exchange rates. This earnings release also presents organic constant currency growth rates, which assumes consistent foreign currency exchange rates between years and also eliminates the impact of our recent acquisitions. This allows financial results to be evaluated without the impact of fluctuations in foreign currency exchange rates and the impacts of recent acquisitions.This earnings release also presents Adjusted Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Effective Tax Rate, Adjusted Net Income (Loss) and Adjusted Diluted Earnings per Share for all periods presented. These are important financial measures for the Company but are not financial measures as defined by GAAP. We present Adjusted Revenue as a supplemental measure of revenue because we believe it provides a basis to compare revenue between periods. We present Adjusted EBITDA and Adjusted Net Income as supplemental measures of our operating performance because these measures eliminate the impact of certain items that we do not consider indicative of our cash operations and ongoing operating performance. Adjusted EBITDA is also a measure frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies similar to ours. Our board of directors and executive management team use Adjusted Revenue and Adjusted EBITDA as compensation measures. Under the credit agreement governing our senior secured credit facility, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is tied to a ratio based on Adjusted EBITDA. These financial measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as alternative measures of GAAP. Other companies in our industry may define or calculate these measures differently than we do, limiting their usefulness as comparative measures. Because of these limitations, these non-GAAP financial measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP, including operating income, operating margin, effective tax rate, net income (loss) attributable to the Company, earnings per share or cash provided by operating activities. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the attached Schedules.We define Adjusted Revenue as GAAP revenue adjusted for certain acquisition-related deferred revenue and non-core contract-related revenue as further discussed in the footnotes of the attached Schedules 1, 2, and 3. Beginning in the third quarter of 2019, we no longer have these adjustments to revenue. We define Adjusted EBITDA as net income (loss) attributable to TransUnion plus (less) loss (income) from discontinued operations, plus net interest expense, plus (less) provision (benefit) for income taxes, plus depreciation and amortization, plus (less) the revenue adjustments included in Adjusted Revenue, plus stock-based compensation, plus mergers, acquisitions, divestitures and business optimization-related expenses including Callcredit integration-related expenses, plus (less) certain other expenses (income). We define Adjusted Net Income as net income (loss) attributable to TransUnion plus (less) loss (gain) from discontinued operations, plus (less) the revenue adjustments included in Adjusted Revenue, plus stock-based compensation, plus mergers, acquisitions, divestitures and business optimization-related expenses including Callcredit integration-related expenses, plus (less) certain other expenses (income), plus amortization of certain intangible assets, plus or minus the related changes in provision for income taxes, less any one-time tax provision benefits from the Tax Cuts and Jobs Act. We define Adjusted Diluted Earnings per Share as Adjusted Net Income divided by the weighted-average diluted shares outstanding. The above definitions apply to our calculations for the periods shown on schedules 1 through 6.Forward-Looking StatementsThis earnings release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the current beliefs and expectations of TransUnion’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those described in the forward-looking statements. Any statements made in this earnings release that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plans and strategies. These statements often include words such as “anticipate,” “expect,” “guidance,” “suggest,” “plan,” “believe,” “intend,” “estimate,” “target,” “project,” “should,” “could,” “would,” “may,” “will,” “forecast,” “outlook,” “potential,” “continues,” “seeks,” “predicts,” or the negative of these words and other similar expressions. Factors that could cause actual results to differ materially from those described in the forward-looking statements include macroeconomic and industry trends and adverse developments in the debt, consumer credit and financial services markets; our ability to provide competitive services and prices; our ability to retain or renew existing agreements with large or long-term customers; our ability to maintain the security and integrity of our data; our ability to deliver services timely without interruption; our ability to maintain our access to data sources; government regulation and changes in the regulatory environment; litigation or regulatory proceedings; regulatory oversight of “critical activities”; our ability to effectively manage our costs; economic and political stability in the United States and international markets where we operate; our ability to effectively develop and maintain strategic alliances and joint ventures; our ability to timely develop new services and the market’s willingness to adopt our new services; our ability to manage and expand our operations and keep up with rapidly changing technologies; our ability to make acquisitions, successfully integrate the operations of acquired businesses and realize the intended benefits of such acquisitions; our ability to protect and enforce our intellectual property, trade secrets and other forms of unpatented intellectual property; our ability to defend our intellectual property from infringement claims by third parties; the ability of our outside service providers and key vendors to fulfill their obligations to us; further consolidation in our end-customer markets; the increased availability of free or inexpensive consumer information; losses against which we do not insure; our ability to make timely payments of principal and interest on our indebtedness; our ability to satisfy covenants in the agreements governing our indebtedness; our ability to maintain our liquidity; share repurchase plans; our reliance on key management personnel; and other one-time events and other factors that can be found in our Annual Report on Form 10-K for the year ended December 31, 2018, and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, which are filed with the Securities and Exchange Commission and are available on TransUnion’s website (www.transunion.com/tru) and on the Securities and Exchange Commission’s website (www.sec.gov). Many of these factors are beyond our control. The forward-looking statements contained in this earnings release speak only as of the date of this earnings release. We undertake no obligation to publicly release the result of any revisions to these forward-looking statements to reflect the impact of events or circumstances that may arise after the date of this earnings release.In addition to factors previously disclosed in TransUnion’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: failure to realize the benefits expected from the recent business acquisitions; the effects of pending and future legislation; risks related to disruption of management time from ongoing business operations due to the recent business acquisitions; macroeconomic factors beyond TransUnion’s control; risks related to TransUnion’s indebtedness and other consequences associated with mergers, acquisitions and divestitures, and legislative and regulatory actions and reforms.For More Information
As a result of displaying amounts in millions, rounding differences may exist in the table above.As a result of displaying amounts in millions, rounding differences may exist in the table above.
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Segment Adjusted EBITDA margins are calculated using segment gross Adjusted Revenue and segment Adjusted EBITDA. Consolidated Adjusted EBITDA margin is calculated using consolidated Adjusted Revenue and consolidated Adjusted EBITDA.As a result of displaying amounts in millions, rounding differences may exist in the tables above and footnotes below.
As a result of displaying amounts in millions, rounding differences may exist in the table above and footnotes below.
As a result of displaying amounts in millions, rounding differences may exist in the table above.
As a result of displaying amounts in millions, rounding differences may exist in the table above.As a result of displaying amounts in millions, rounding differences may exist in the table above.
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