Verisk (Nasdaq:VRSK), a leading data analytics provider, today
announced results for the third quarter ended September 30, 2020.
Scott Stephenson, chairman, president, and CEO, said, “I am very
pleased with our third quarter results, which reflect the strength
and resiliency of our business along with the value of,
and need for, our solutions. Our long-term strategy remains
unchanged as we focus on serving our customers and driving
innovation to fuel future growth. I continued to be proud that
our over 9,000 Verisk teammates have adapted quickly to challenges
and opportunities in this new environment.”
Lee Shavel, CFO and executive vice president, said, “Normalizing
for the continued impact of the injunction, Verisk delivered
organic constant currency revenue growth of 4.9% and organic
constant currency adjusted EBITDA growth of 17.7%, reflecting a
sequential improvement from the second quarter and continued strong
operating leverage. We continue to invest our strong cash flow back
into high growth, high return on capital opportunities while also
returning excess capital to shareholders through dividends and
share repurchases.”
Summary of Results (GAAP and Non-GAAP)(in
millions, except per share amounts)Note: Adjusted EBITDA, diluted
adjusted EPS, and free cash flow are non-GAAP measures.
|
|
Three Months Ended |
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
Revenues |
|
$ |
702.7 |
|
|
$ |
652.7 |
|
|
|
7.6 |
% |
|
$ |
2,071.2 |
|
|
$ |
1,930.3 |
|
|
|
7.3 |
% |
Net income |
|
|
185.8 |
|
|
|
32.9 |
|
|
|
465.7 |
|
|
|
536.5 |
|
|
|
317.7 |
|
|
|
68.9 |
|
Adjusted EBITDA |
|
|
366.2 |
|
|
|
309.3 |
|
|
|
18.4 |
|
|
|
1,032.5 |
|
|
|
905.3 |
|
|
|
14.1 |
|
Diluted GAAP EPS |
|
|
1.12 |
|
|
|
0.20 |
|
|
|
460.0 |
|
|
|
3.24 |
|
|
|
1.91 |
|
|
|
69.6 |
|
Diluted adjusted EPS |
|
|
1.32 |
|
|
|
1.12 |
|
|
|
17.9 |
|
|
|
3.78 |
|
|
|
3.24 |
|
|
|
16.7 |
|
Net cash provided by operating
activities |
|
|
207.1 |
|
|
|
213.6 |
|
|
|
(3.0 |
) |
|
|
819.2 |
|
|
|
779.9 |
|
|
|
5.0 |
|
Free cash flow |
|
|
142.3 |
|
|
|
152.9 |
|
|
|
(6.9 |
) |
|
|
644.8 |
|
|
|
627.1 |
|
|
|
2.8 |
|
1
Revenues
Consolidated revenues increased 7.6%, and 3.6% on an OCC basis,
for third-quarter 2020. Normalizing for the impact of the
injunction on roof measurement solutions, which adjusts for $8
million of associated revenue in the prior-year period, OCC revenue
would have grown 4.9% in third-quarter 2020.
The company has analyzed its solutions and services to assess
the impact of COVID-19 on its revenue streams. It has not
identified any material impact stemming from COVID-19 on
approximately 85% of its revenues at this point, as much of these
revenues are subscription-based and subject to long-term contracts.
Normalizing for the impact of the injunction on the roof
measurement solutions, these revenues would have grown
approximately 7.8% on an OCC basis in the third quarter
of 2020. Of the remaining 15%, the company has identified
specific solutions and services, largely transactional in nature,
that are being negatively impacted by COVID-19. These
revenues declined approximately 10% on an OCC basis in
third-quarter 2020 compared to the prior-year period.
Revenues and Revenue Growth by Segment(in
millions)
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Revenue Growth |
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|
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Three Months Ended |
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Three Months Ended |
|
|
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September 30, |
|
|
September 30, 2020 |
|
|
|
2020 |
|
|
2019 |
|
|
Reported |
|
|
OCC |
|
Underwriting &
rating |
|
$ |
347.9 |
|
|
$ |
312.5 |
|
|
|
11.3 |
% |
|
|
6.5 |
% |
Claims |
|
|
150.7 |
|
|
|
156.5 |
|
|
|
(3.8 |
) |
|
|
2.5 |
|
Insurance |
|
|
498.6 |
|
|
|
469.0 |
|
|
|
6.3 |
|
|
|
5.2 |
|
Energy and Specialized Markets |
|
|
163.8 |
|
|
|
140.3 |
|
|
|
16.7 |
|
|
|
(1.0 |
) |
Financial Services |
|
|
40.3 |
|
|
|
43.4 |
|
|
|
(7.1 |
) |
|
|
1.6 |
|
Revenues |
|
$ |
702.7 |
|
|
$ |
652.7 |
|
|
|
7.6 |
|
|
|
3.6 |
|
|
|
|
|
|
|
|
|
|
|
Revenue Growth |
|
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, 2020 |
|
|
|
2020 |
|
|
2019 |
|
|
Reported |
|
|
OCC |
|
Underwriting &
rating |
|
$ |
1,035.5 |
|
|
$ |
933.1 |
|
|
|
11.0 |
% |
|
|
6.7 |
% |
Claims |
|
|
438.9 |
|
|
|
460.4 |
|
|
|
(4.7 |
) |
|
|
- |
|
Insurance |
|
|
1,474.4 |
|
|
|
1,393.5 |
|
|
|
5.8 |
|
|
|
4.5 |
|
Energy and Specialized Markets |
|
|
478.2 |
|
|
|
406.1 |
|
|
|
17.8 |
|
|
|
(0.4 |
) |
Financial Services |
|
|
118.6 |
|
|
|
130.7 |
|
|
|
(9.2 |
) |
|
|
0.6 |
|
Revenues |
|
$ |
2,071.2 |
|
|
$ |
1,930.3 |
|
|
|
7.3 |
|
|
|
3.2 |
|
Insurance segment revenues grew 6.3% in the third quarter and
5.2% on an OCC basis. Normalizing for the impact of the injunction
on roof measurement solutions, Insurance revenue would have grown
7.0% on an OCC basis.
|
• |
Underwriting and rating
revenues increased 11.3% in the quarter and 6.5% on an OCC basis,
resulting primarily from annual increases in prices derived
from continued enhancements to the content of the solutions
within its industry-standard insurance programs, as well as
selling expanded solutions to existing customers in commercial and
personal lines. In addition, catastrophe modeling services
contributed to the growth. These increases were partially offset by
a decrease in certain transactional revenues. |
|
• |
Claims revenues declined 3.8% in
the quarter but increased 2.5% on an OCC basis. Reported and OCC
growth were negatively impacted by the injunction ruling against
roof measurement solutions, as well as a decline in certain
transactional revenues in connection with the COVID-19 pandemic.
Normalizing for the impact of the injunction on roof measurement
solutions, Claims revenue would have grown 8.2% on an OCC basis.
Growth was primarily driven by repair cost estimating solutions
revenue, claims analytics revenue, and workers compensation claims
resolution services. |
Energy and Specialized Markets segment revenues increased 16.7%
in the quarter and declined 1.0% on an OCC basis. The Genscape
acquisition, environmental health and safety service solutions,
core research, and weather analytics solutions contributed to the
growth. The slight decrease in the segment was primarily
due to declines in consulting revenues in connection with the
COVID-19 pandemic and declines in cost intelligence solutions'
implementation projects that did not reoccur.
Financial Services segment revenues decreased 7.1% in the
quarter and increased 1.6% on an OCC basis, resulting primarily
from declines in our spend informed analytic solutions stemming
from the COVID-19 pandemic and the recent dispositions.
2
Net Income and Adjusted EBITDA
During third-quarter 2020, net income increased 466%. Adjusted
EBITDA increased 18.4%, and 14.8% on an OCC basis. Normalizing for
the impact of the injunction on roof measurement solutions, OCC
adjusted EBITDA would have grown 17.7% for third-quarter 2020.
EBITDA and Adjusted EBITDA by Segment(in
millions)Note: Consolidated EBITDA and adjusted EBITDA are non-GAAP
measures. Margin is calculated as a percentage of revenues. See
"Non-GAAP Reconciliations" below for a reconciliation to the
nearest GAAP measure.
|
|
Three Months Ended September 30, |
|
|
|
EBITDA |
|
|
EBITDA Margin |
|
|
Adjusted EBITDA |
|
|
Adjusted EBITDA Growth |
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
Reported |
|
|
OCC |
|
|
2020 |
|
|
2019 |
|
Insurance |
|
$ |
291.5 |
|
|
$ |
111.1 |
|
|
|
58.5 |
% |
|
|
23.7 |
% |
|
$ |
291.5 |
|
|
$ |
246.5 |
|
|
|
18.2 |
% |
|
|
16.1 |
% |
|
|
58.5 |
% |
|
|
52.6 |
% |
Energy and Specialized
Markets |
|
|
63.0 |
|
|
|
30.1 |
|
|
|
38.5 |
|
|
|
21.4 |
|
|
|
63.0 |
|
|
|
48.5 |
|
|
|
29.9 |
|
|
|
10.7 |
|
|
|
38.5 |
|
|
|
34.6 |
|
Financial Services |
|
|
11.7 |
|
|
|
8.1 |
|
|
|
28.9 |
|
|
|
18.6 |
|
|
|
11.7 |
|
|
|
14.3 |
|
|
|
(18.2 |
) |
|
|
3.7 |
|
|
|
28.9 |
|
|
|
32.8 |
|
Consolidated |
|
$ |
366.2 |
|
|
$ |
149.3 |
|
|
|
52.1 |
|
|
|
22.9 |
|
|
$ |
366.2 |
|
|
$ |
309.3 |
|
|
|
18.4 |
|
|
|
14.8 |
|
|
|
52.1 |
|
|
|
47.4 |
|
|
|
Nine Months Ended September 30, |
|
|
|
EBITDA |
|
|
EBITDA Margin |
|
|
Adjusted EBITDA |
|
|
Adjusted EBITDA Growth |
|
|
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
Reported |
|
|
OCC |
|
|
2020 |
|
|
2019 |
|
Insurance |
|
$ |
846.2 |
|
|
$ |
585.1 |
|
|
|
57.4 |
% |
|
|
42.0 |
% |
|
$ |
832.9 |
|
|
$ |
732.6 |
|
|
|
13.7 |
% |
|
|
12.6 |
% |
|
|
56.5 |
% |
|
|
52.6 |
% |
Energy and Specialized
Markets |
|
|
165.5 |
|
|
|
107.6 |
|
|
|
34.6 |
|
|
|
26.5 |
|
|
|
165.5 |
|
|
|
131.1 |
|
|
|
26.3 |
|
|
|
6.5 |
|
|
|
34.6 |
|
|
|
32.3 |
|
Financial Services |
|
|
37.6 |
|
|
|
35.4 |
|
|
|
31.7 |
|
|
|
27.1 |
|
|
|
34.1 |
|
|
|
41.6 |
|
|
|
(18.0 |
) |
|
|
8.1 |
|
|
|
28.7 |
|
|
|
31.8 |
|
Consolidated |
|
$ |
1,049.3 |
|
|
$ |
728.1 |
|
|
|
50.7 |
|
|
|
37.7 |
|
|
$ |
1,032.5 |
|
|
$ |
905.3 |
|
|
|
14.1 |
|
|
|
11.6 |
|
|
|
49.8 |
|
|
|
46.9 |
|
Earnings Per Share
Diluted EPS increased 460% to $1.12 for the third quarter of
2020 due to a litigation reserve of $125 million recorded in
the third quarter of 2019 and a decrease in
acquisition-related costs (earn-outs). Diluted adjusted EPS grew
17.9% to $1.32 for the third quarter of 2020, reflecting cost
discipline in the business, a reduction in travel expenses as
a result of COVID-19, and a lower average share count.
Cash Flow
Net cash provided by operating activities was $207 million for
the third quarter of 2020, down 3.0%. Capital expenditures
were $65 million for the third quarter, up 6.8%. Free
cash flow was $142 million, down 6.9%, primarily due to a
deferral of federal income tax payments under the CARES Act from
the second quarter 2020 to the third quarter 2020, partially
offset by the deferral of certain employer payroll taxes, as well
as an increase in customer collections and a reduction in
travel payments as a result of COVID-19.
Free cash flow represented 38.9% of adjusted EBITDA for the
third quarter, compared with 49.4% in the prior-year
period.
Dividend
On September 30, 2020, Verisk paid a cash dividend of 27 cents
per share of common stock issued and outstanding to the holders of
record as of September 15, 2020.
On October 28, 2020, Verisk's Board of Directors approved a cash
dividend of 27 cents per share of common stock issued and
outstanding, payable on December 31, 2020, to holders of record as
of December 15, 2020.
Share Repurchases
Including the accelerated share repurchase (ASR) settled in the
third quarter of 2020, the company repurchased approximately 0.3
million shares at an average price of $180.97, for a total cost of
$50 million for the third quarter of 2020. On September
30, 2020, the company had $329 million remaining under its
share repurchase authorization.
3
Conference Call
Verisk’s management team will host a live audio webcast to
discuss the financial results and business highlights on Thursday,
November 5, 2020, at 8:30 a.m. EST (5:30 a.m. PST, 1:30 p.m. GMT).
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 will also be
available through dial-in number 1-877-755-3792 for U.S./Canada
participants or 512-961-6560 for international participants.
A replay of the webcast will be available for 30 days on the
Verisk investor website and through the conference call number
1-855-859-2056 for U.S./Canada participants or 404-537-3406 for
international participants using Conference ID #5734408.
About Verisk
Verisk (Nasdaq:VRSK) is a leading data analytics provider
serving customers in insurance, energy and specialized markets, and
financial services. Using advanced technologies to collect and
analyze billions of records, Verisk draws on unique data assets and
deep domain expertise to provide first-to-market innovations that
are integrated into customer workflows. Verisk offers predictive
analytics and decision support solutions to customers in rating,
underwriting, claims, catastrophe and weather risk, global risk
analytics, natural resources intelligence, economic forecasting,
and many other fields. Around the world, Verisk helps customers
protect people, property, and financial assets.
Headquartered in Jersey City, N.J., Verisk operates in more than
30 countries and is a member of Standard & Poor’s S&P 500®
Index and the Nasdaq 100 Index. In 2018 and 2019, Forbes named
Verisk to its World’s Best Employers list. For more information,
please visit www.verisk.com.
Contact:
Investor Relations Stacey Brodbar
Head of Investor Relations Verisk 201-469-4327
stacey.brodbar@verisk.com
MediaJoe Madden Verisk Public Relations
401-965-4284Joseph.Madden@verisk.com
Forward-Looking StatementsThis 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
Verisk's actual results, levels of activity, performance, or
achievements to be materially different from any future results,
levels of activity, performance, or achievements expressed or
implied by these forward-looking statements. This includes, but is
not limited to, the potential impacts of the COVID-19 pandemic on
its operations and financial performance, its expectation
and ability to pay a cash dividend on common stock in the
future, subject to the determination by the Board of Directors and
based on an evaluation of company earnings, financial condition and
requirements, business conditions, capital allocation
determinations, and other factors, risks, and uncertainties. In
some cases, you can identify forward-looking statements by the use
of words such as “may,” “could,” “expect,” “intend,” “plan,”
“target,” “seek,” “anticipate,” “believe,” “estimate,” “predict,”
“potential,” or “continue” or the negative of these terms or other
comparable terminology. You should not place undue reliance on
forward-looking statements, because they involve known and unknown
risks, uncertainties, and other factors that are, in some cases,
beyond the company's control and that could materially affect
actual results, levels of activity, performance, or
achievements.
Other factors that could materially affect actual results,
levels of activity, performance, or achievements can be found in
Verisk’s quarterly reports on Form 10-Q, annual reports on Form
10-K, and current reports on Form 8-K filed with the Securities and
Exchange Commission. If any of these risks or uncertainties
materialize or if its underlying assumptions prove to be
incorrect, actual results may vary significantly from what the
company projected. Any forward-looking statement in this
release reflects the company's current views with respect to
future events and is subject to these and other risks,
uncertainties, and assumptions relating to its operations,
results of operations, growth strategy, and liquidity. The
company assumes 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.
4
Notes Regarding the Use of Non-GAAP Financial
Measures
The company has provided certain non-GAAP financial information
as supplemental information regarding its operating results. These
measures are not in accordance with, or an alternative for, U.S.
GAAP and may be different from non-GAAP measures reported by other
companies. The company believes that its presentation of non-GAAP
measures provides useful information to management and investors
regarding certain financial and business trends relating to its
financial condition and results of operations. In addition, the
company’s management uses these measures for reviewing the
financial results of the company, for budgeting and planning
purposes, and for evaluating the performance of senior
management.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA
Expenses: EBITDA represents GAAP net income adjusted for
(i) depreciation and amortization of fixed assets; (ii)
amortization of intangible assets; (iii) interest expense; and (iv)
provision for income taxes. Adjusted EBITDA represents EBITDA
adjusted for acquisition-related costs (earn-outs), gain/loss from
dispositions (which include businesses held for sale), nonrecurring
gain/loss, and interest income on the subordinated promissory note.
Adjusted EBITDA expenses represent adjusted EBITDA net of revenues.
The company believes these measures are useful and meaningful
because they allow for greater transparency regarding the company’s
operating performance and facilitate period-to-period
comparison.
Adjusted Net Income and Diluted Adjusted EPS:
Adjusted net income represents GAAP net income adjusted for (i)
amortization of intangible assets, net of tax; (ii)
acquisition-related costs (earn-outs), net of tax; (iii) gain/loss
from dispositions (which include businesses held for sale), net of
tax; (iv) nonrecurring gain/loss, net of tax; and (v) interest
income on the subordinated promissory note, net of tax. Diluted
adjusted EPS represents adjusted net income divided by
weighted-average diluted shares. The company believes these
measures are useful and meaningful because they allow evaluation of
the after-tax profitability of the company’s results excluding the
after-tax effect of acquisition-related costs and nonrecurring
items.
Free Cash Flow: Free cash flow represents net
cash provided by operating activities determined in accordance with
GAAP minus payments for capital expenditures. The company believes
free cash flow is an important measure of the recurring cash
generated by the company’s operations that may be available to
repay debt obligations, repurchase its stock, invest in future
growth through new business development activities, or make
acquisitions.
Organic Constant Currency (OCC): The company’s
operating results, such as, but not limited to, revenue and
adjusted EBITDA, reported in U.S. dollars are affected by foreign
currency exchange rate fluctuations because the underlying foreign
currencies in which it transacts change in value over time compared
with the U.S. dollar; accordingly, it presents certain constant
currency financial information to assess how the company performed
excluding the impact of foreign currency exchange rate
fluctuations. The company calculates constant currency by
translating comparable prior-year-period results at the currency
exchange rates used in the current period. The company defines
“organic” as operating results excluding the effect of recent
acquisitions and dispositions (which include businesses held for
sale) that have occurred over the past year. An acquisition is
included as organic at the beginning of the calendar quarter that
occurs after the one-year anniversary of the acquisition
date. Once an acquisition is included in its current-period
organic base, its comparable prior-year-period operating results
are also included to calculate organic growth. A disposition (which
includes a business held for sale) is excluded from organic at the
beginning of the calendar quarter in which the disposition occurs
(or when a business meets the held-for-sale criteria under U.S.
GAAP). Once a disposition is excluded from its current-period
organic base, its comparable prior-year-period operating results
are also excluded to calculate organic growth. The organic
presentation enables investors to assess the growth of the business
without the impact of recent acquisitions for which there is no
prior-year comparison. A disposition’s results are removed from all
prior periods presented to allow for comparability. The company
believes organic constant currency is a useful and meaningful
measure to enhance investors’ understanding of the continuing
operating performance of its business and to facilitate the
comparison of period-to-period performance because it excludes the
impact of foreign exchange rate movements, acquisitions, and
dispositions.
See page 10 for a reconciliation of consolidated adjusted
EBITDA and a segment results summary and a reconciliation of
adjusted EBITDA. See page 11 for a reconciliation of
segment adjusted EBITDA margin, a reconciliation of adjusted
EBITDA expenses, and a reconciliation of diluted adjusted EPS. See
page 12 for a reconciliation of net cash provided by
operating activities to free cash flow.
Attached Financial Statements
Please refer to the full Form 10-Q filing for the complete
financial statements and related notes.
5
VERISK ANALYTICS,
INC.CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)As of September 30, 2020 and
December 31,
2019
|
|
2020 |
|
|
2019 |
|
|
|
(in millions, except for share and per share
data) |
|
ASSETS: |
|
Current
assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
221.8 |
|
|
$ |
184.6 |
|
Accounts receivable, net of
allowance for doubtful accounts of $16.1 and $11.7,
respectively |
|
|
433.4 |
|
|
|
441.6 |
|
Prepaid expenses |
|
|
82.3 |
|
|
|
60.9 |
|
Income taxes receivable |
|
|
26.0 |
|
|
|
25.9 |
|
Other current assets |
|
|
36.2 |
|
|
|
17.8 |
|
Current assets held for
sale |
|
|
— |
|
|
|
14.1 |
|
Total current assets |
|
|
799.7 |
|
|
|
744.9 |
|
Noncurrent assets: |
|
|
|
|
|
|
|
|
Fixed assets, net |
|
|
606.4 |
|
|
|
548.1 |
|
Operating lease right-of-use
assets, net |
|
|
237.8 |
|
|
|
218.6 |
|
Intangible assets, net |
|
|
1,316.3 |
|
|
|
1,398.9 |
|
Goodwill |
|
|
3,924.9 |
|
|
|
3,864.3 |
|
Deferred income tax
assets |
|
|
9.5 |
|
|
|
9.8 |
|
Other noncurrent assets |
|
|
325.0 |
|
|
|
159.8 |
|
Noncurrent assets held for
sale |
|
|
— |
|
|
|
110.8 |
|
Total assets |
|
$ |
7,219.6 |
|
|
$ |
7,055.2 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY: |
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued
liabilities |
|
$ |
369.3 |
|
|
$ |
375.0 |
|
Acquisition-related
liabilities |
|
|
12.7 |
|
|
|
111.2 |
|
Short-term debt and current
portion of long-term debt |
|
|
460.4 |
|
|
|
499.4 |
|
Deferred revenues |
|
|
531.7 |
|
|
|
440.1 |
|
Operating lease
liabilities |
|
|
39.2 |
|
|
|
40.6 |
|
Income taxes payable |
|
|
9.6 |
|
|
|
6.8 |
|
Current liabilities held for
sale |
|
|
— |
|
|
|
18.7 |
|
Total current liabilities |
|
|
1,422.9 |
|
|
|
1,491.8 |
|
Noncurrent liabilities: |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
2,698.9 |
|
|
|
2,651.6 |
|
Deferred income tax
liabilities |
|
|
369.2 |
|
|
|
356.0 |
|
Operating lease
liabilities |
|
|
240.2 |
|
|
|
208.1 |
|
Other liabilities |
|
|
67.1 |
|
|
|
48.8 |
|
Noncurrent liabilities held
for sale |
|
|
— |
|
|
|
38.1 |
|
Total liabilities |
|
|
4,798.3 |
|
|
|
4,794.4 |
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, $.001 par value;
2,000,000,000 shares authorized; 544,003,038 shares issued;
162,751,449 and 163,161,564 shares outstanding, respectively |
|
|
0.1 |
|
|
|
0.1 |
|
Additional paid-in
capital |
|
|
2,464.6 |
|
|
|
2,369.1 |
|
Treasury stock, at cost,
381,251,589 and 380,841,474 shares, respectively |
|
|
(4,132.9 |
) |
|
|
(3,849.9 |
) |
Retained earnings |
|
|
4,630.4 |
|
|
|
4,228.4 |
|
Accumulated other
comprehensive losses |
|
|
(540.9 |
) |
|
|
(486.9 |
) |
Total stockholders’ equity |
|
|
2,421.3 |
|
|
|
2,260.8 |
|
Total liabilities and stockholders’ equity |
|
$ |
7,219.6 |
|
|
$ |
7,055.2 |
|
6
VERISK ANALYTICS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)For the Three and Nine
Months Ended September 30, 2020 and 2019
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
(in millions, except for share and per share
data) |
|
Revenues |
|
$ |
702.7 |
|
|
$ |
652.7 |
|
|
$ |
2,071.2 |
|
|
$ |
1,930.3 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (exclusive of items shown separately below) |
|
|
240.0 |
|
|
|
242.9 |
|
|
|
733.4 |
|
|
|
717.0 |
|
Selling, general and administrative |
|
|
96.4 |
|
|
|
255.0 |
|
|
|
304.8 |
|
|
|
478.7 |
|
Depreciation and amortization of fixed assets |
|
|
49.4 |
|
|
|
45.8 |
|
|
|
141.3 |
|
|
|
138.0 |
|
Amortization of intangible assets |
|
|
41.5 |
|
|
|
33.3 |
|
|
|
123.6 |
|
|
|
100.1 |
|
Other operating loss (income) |
|
|
— |
|
|
|
6.2 |
|
|
|
(19.4 |
) |
|
|
6.2 |
|
Total operating expenses |
|
|
427.3 |
|
|
|
583.2 |
|
|
|
1,283.7 |
|
|
|
1,440.0 |
|
Operating income |
|
|
275.4 |
|
|
|
69.5 |
|
|
|
787.5 |
|
|
|
490.3 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment (loss) income and others, net |
|
|
(0.1 |
) |
|
|
0.7 |
|
|
|
(3.1 |
) |
|
|
(0.3 |
) |
Interest expense |
|
|
(35.3 |
) |
|
|
(31.3 |
) |
|
|
(102.9 |
) |
|
|
(93.7 |
) |
Total other expense, net |
|
|
(35.4 |
) |
|
|
(30.6 |
) |
|
|
(106.0 |
) |
|
|
(94.0 |
) |
Income before income
taxes |
|
|
240.0 |
|
|
|
38.9 |
|
|
|
681.5 |
|
|
|
396.3 |
|
Provision for income
taxes |
|
|
(54.2 |
) |
|
|
(6.0 |
) |
|
|
(145.0 |
) |
|
|
(78.6 |
) |
Net income |
|
$ |
185.8 |
|
|
$ |
32.9 |
|
|
$ |
536.5 |
|
|
$ |
317.7 |
|
Basic net income per
share |
|
$ |
1.14 |
|
|
$ |
0.20 |
|
|
$ |
3.30 |
|
|
$ |
1.94 |
|
Diluted net income per
share |
|
$ |
1.12 |
|
|
$ |
0.20 |
|
|
$ |
3.24 |
|
|
$ |
1.91 |
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
162,502,191 |
|
|
|
163,580,563 |
|
|
|
162,589,473 |
|
|
|
163,617,580 |
|
Diluted |
|
|
165,731,226 |
|
|
|
166,779,618 |
|
|
|
165,519,899 |
|
|
|
166,673,946 |
|
7
VERISK ANALYTICS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED)For the Three and Nine Months
Ended September 30, 2020 and
2019
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
(in millions) |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
185.8 |
|
|
$ |
32.9 |
|
|
$ |
536.5 |
|
|
$ |
317.7 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of fixed assets |
|
|
49.4 |
|
|
|
45.8 |
|
|
|
141.3 |
|
|
|
138.0 |
|
Amortization of intangible assets |
|
|
41.5 |
|
|
|
33.3 |
|
|
|
123.6 |
|
|
|
100.1 |
|
Amortization of debt issuance costs and original issue discount,
net of original issue premium |
|
|
0.5 |
|
|
|
1.6 |
|
|
|
1.3 |
|
|
|
3.5 |
|
Provision for doubtful accounts |
|
|
1.4 |
|
|
|
1.8 |
|
|
|
6.8 |
|
|
|
5.1 |
|
Loss (gain) on sale of assets |
|
|
— |
|
|
|
6.2 |
|
|
|
(19.4 |
) |
|
|
6.2 |
|
Stock-based compensation |
|
|
10.0 |
|
|
|
8.8 |
|
|
|
39.1 |
|
|
|
36.4 |
|
Realized gain on available-for-sale securities, net |
|
|
— |
|
|
|
(0.1 |
) |
|
|
— |
|
|
|
(0.7 |
) |
Deferred income taxes |
|
|
12.4 |
|
|
|
(27.4 |
) |
|
|
10.9 |
|
|
|
(27.4 |
) |
Loss on disposal of fixed assets, net |
|
|
0.1 |
|
|
|
— |
|
|
|
0.5 |
|
|
|
— |
|
Changes in assets and liabilities, net of effects from
acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
26.8 |
|
|
|
35.2 |
|
|
|
(3.6 |
) |
|
|
(54.5 |
) |
Prepaid expenses and other assets |
|
|
(8.3 |
) |
|
|
(9.2 |
) |
|
|
(62.1 |
) |
|
|
(19.9 |
) |
Operating lease right-of-use assets, net |
|
|
9.3 |
|
|
|
9.9 |
|
|
|
28.6 |
|
|
|
28.5 |
|
Income taxes |
|
|
(63.3 |
) |
|
|
2.7 |
|
|
|
3.3 |
|
|
|
13.9 |
|
Acquisition-related liabilities |
|
|
(0.1 |
) |
|
|
44.9 |
|
|
|
(63.4 |
) |
|
|
40.5 |
|
Accounts payable and accrued liabilities |
|
|
39.3 |
|
|
|
138.7 |
|
|
|
(12.1 |
) |
|
|
152.7 |
|
Deferred revenues |
|
|
(90.5 |
) |
|
|
(95.3 |
) |
|
|
94.3 |
|
|
|
71.5 |
|
Operating lease liabilities |
|
|
(8.7 |
) |
|
|
(8.7 |
) |
|
|
(16.6 |
) |
|
|
(27.2 |
) |
Other liabilities |
|
|
1.5 |
|
|
|
(7.5 |
) |
|
|
10.2 |
|
|
|
(4.5 |
) |
Net cash provided by operating activities |
|
|
207.1 |
|
|
|
213.6 |
|
|
|
819.2 |
|
|
|
779.9 |
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, net of cash acquired of $5.2 and $3.1 and $5.2 and
$6.8, respectively |
|
|
(151.9 |
) |
|
|
(40.4 |
) |
|
|
(151.9 |
) |
|
|
(109.5 |
) |
Escrow funding associated with acquisitions |
|
|
(8.0 |
) |
|
|
(4.5 |
) |
|
|
(8.0 |
) |
|
|
(4.5 |
) |
Proceeds from sale of assets |
|
|
— |
|
|
|
— |
|
|
|
23.1 |
|
|
|
— |
|
Purchase of investments in a nonpublic company |
|
|
— |
|
|
|
— |
|
|
|
(63.8 |
) |
|
|
— |
|
Capital expenditures |
|
|
(64.8 |
) |
|
|
(60.7 |
) |
|
|
(174.4 |
) |
|
|
(152.8 |
) |
Other investing activities, net |
|
|
5.7 |
|
|
|
(0.8 |
) |
|
|
10.3 |
|
|
|
(7.7 |
) |
Net cash used in investing activities |
|
|
(219.0 |
) |
|
|
(106.4 |
) |
|
|
(364.7 |
) |
|
|
(274.5 |
) |
8
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
(in millions) |
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayments of short-term debt, net |
|
|
— |
|
|
|
(60.0 |
) |
|
|
(495.0 |
) |
|
|
(405.0 |
) |
Proceeds from issuance of short-term debt with original maturities
greater than three months |
|
|
— |
|
|
|
— |
|
|
|
20.0 |
|
|
|
— |
|
Repayments of short-term debt with original maturities greater than
three months |
|
|
— |
|
|
|
— |
|
|
|
(20.0 |
) |
|
|
— |
|
Repayments of current portion of long-term debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(250.0 |
) |
Proceeds from issuance of long-term debt, inclusive of original
issue premium and net of original issue discount |
|
|
— |
|
|
|
221.8 |
|
|
|
494.8 |
|
|
|
619.7 |
|
Payment of debt issuance costs |
|
|
(0.1 |
) |
|
|
(1.2 |
) |
|
|
(5.7 |
) |
|
|
(5.3 |
) |
Repurchases of common stock |
|
|
(50.0 |
) |
|
|
(75.0 |
) |
|
|
(298.8 |
) |
|
|
(200.0 |
) |
Proceeds from stock options exercised |
|
|
26.0 |
|
|
|
13.5 |
|
|
|
68.3 |
|
|
|
45.8 |
|
Net share settlement from restricted stock awards |
|
|
— |
|
|
|
— |
|
|
|
(3.5 |
) |
|
|
(5.1 |
) |
Dividends paid |
|
|
(43.9 |
) |
|
|
(40.8 |
) |
|
|
(131.8 |
) |
|
|
(122.7 |
) |
Payment of contingent liability related to acquisitions |
|
|
— |
|
|
|
— |
|
|
|
(34.2 |
) |
|
|
— |
|
Other financing activities, net |
|
|
(8.5 |
) |
|
|
(6.9 |
) |
|
|
(13.0 |
) |
|
|
(12.2 |
) |
Net cash (used in) provided by financing activities |
|
|
(76.5 |
) |
|
|
51.4 |
|
|
|
(418.9 |
) |
|
|
(334.8 |
) |
Effect of exchange rate changes |
|
|
0.8 |
|
|
|
(0.1 |
) |
|
|
1.3 |
|
|
|
1.7 |
|
(Decrease) increase in cash and cash equivalents |
|
|
(87.6 |
) |
|
|
158.5 |
|
|
|
36.9 |
|
|
|
172.3 |
|
Cash and cash equivalents classified within current assets held for
sale, beginning of period |
|
|
— |
|
|
|
— |
|
|
|
0.3 |
|
|
|
— |
|
Cash and cash equivalents, beginning of period |
|
|
309.4 |
|
|
|
153.3 |
|
|
|
184.6 |
|
|
|
139.5 |
|
Cash and cash equivalents, end of period |
|
$ |
221.8 |
|
|
$ |
311.8 |
|
|
$ |
221.8 |
|
|
$ |
311.8 |
|
Supplemental disclosures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes paid |
|
$ |
107.1 |
|
|
$ |
37.5 |
|
|
$ |
132.8 |
|
|
$ |
98.9 |
|
Interest paid |
|
$ |
19.2 |
|
|
$ |
16.5 |
|
|
$ |
82.9 |
|
|
$ |
77.1 |
|
Noncash investing and
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt issuance costs included in accounts payable and accrued
liabilities |
|
$ |
0.1 |
|
|
$ |
1.3 |
|
|
$ |
— |
|
|
$ |
1.3 |
|
Deferred tax liability established on date of acquisition |
|
$ |
1.8 |
|
|
$ |
2.9 |
|
|
$ |
1.8 |
|
|
$ |
2.8 |
|
Right-of-use assets obtained in exchange for new operating lease
liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
247.6 |
|
Finance lease obligations |
|
$ |
23.8 |
|
|
$ |
9.8 |
|
|
$ |
25.4 |
|
|
$ |
19.2 |
|
Operating lease additions, net of terminations |
|
$ |
2.3 |
|
|
$ |
2.0 |
|
|
$ |
47.5 |
|
|
$ |
3.3 |
|
Tenant improvements included in Operating lease right-of-use
assets, net |
|
$ |
0.1 |
|
|
$ |
0.9 |
|
|
$ |
0.1 |
|
|
$ |
1.6 |
|
Fixed assets included in accounts payable and accrued
liabilities |
|
$ |
1.1 |
|
|
$ |
0.5 |
|
|
$ |
1.1 |
|
|
$ |
0.5 |
|
Dividend payable included in other liabilities |
|
$ |
0.1 |
|
|
$ |
0.8 |
|
|
$ |
0.5 |
|
|
$ |
1.0 |
|
Gain on sale of assets included in other current and long-term
assets |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3.5 |
|
|
$ |
— |
|
Held for sale assets contributed to a nonpublic company |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
65.9 |
|
|
$ |
— |
|
9
Non-GAAP Reconciliations
Consolidated Adjusted EBITDA Reconciliation(in
millions)Note: Adjusted EBITDA is a non-GAAP measure. Margin is
calculated as a percentage of consolidated revenues.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
Total |
|
|
Margin |
|
|
Total |
|
|
Margin |
|
|
Total |
|
|
Margin |
|
|
Total |
|
|
Margin |
|
Net income |
|
$ |
185.8 |
|
|
|
26.4 |
% |
|
$ |
32.9 |
|
|
|
5.0 |
% |
|
$ |
536.5 |
|
|
|
25.9 |
% |
|
$ |
317.7 |
|
|
|
16.5 |
% |
Depreciation and amortization
of fixed assets |
|
|
49.4 |
|
|
|
7.0 |
|
|
|
45.8 |
|
|
|
7.0 |
|
|
|
141.3 |
|
|
|
6.8 |
|
|
|
138.0 |
|
|
|
7.1 |
|
Amortization of intangible
assets |
|
|
41.5 |
|
|
|
5.9 |
|
|
|
33.3 |
|
|
|
5.1 |
|
|
|
123.6 |
|
|
|
6.0 |
|
|
|
100.1 |
|
|
|
5.2 |
|
Interest expense |
|
|
35.3 |
|
|
|
5.0 |
|
|
|
31.3 |
|
|
|
4.8 |
|
|
|
102.9 |
|
|
|
5.0 |
|
|
|
93.7 |
|
|
|
4.9 |
|
Provision for income
taxes |
|
|
54.2 |
|
|
|
7.8 |
|
|
|
6.0 |
|
|
|
1.0 |
|
|
|
145.0 |
|
|
|
7.0 |
|
|
|
78.6 |
|
|
|
4.0 |
|
EBITDA |
|
|
366.2 |
|
|
|
52.1 |
|
|
|
149.3 |
|
|
|
22.9 |
|
|
|
1,049.3 |
|
|
|
50.7 |
|
|
|
728.1 |
|
|
|
37.7 |
|
Acquisition-related costs
(earn-outs) |
|
|
— |
|
|
|
— |
|
|
|
28.8 |
|
|
|
4.4 |
|
|
|
2.6 |
|
|
|
0.1 |
|
|
|
46.0 |
|
|
|
2.4 |
|
Loss (gain) from
dispositions |
|
|
— |
|
|
|
— |
|
|
|
6.2 |
|
|
|
1.0 |
|
|
|
(19.4 |
) |
|
|
(1.0 |
) |
|
|
6.2 |
|
|
|
0.3 |
|
Litigation reserve |
|
|
— |
|
|
|
— |
|
|
|
125.0 |
|
|
|
19.1 |
|
|
|
— |
|
|
|
— |
|
|
|
125.0 |
|
|
|
6.5 |
|
Adjusted EBITDA |
|
|
366.2 |
|
|
|
52.1 |
|
|
|
309.3 |
|
|
|
47.4 |
|
|
|
1,032.5 |
|
|
|
49.8 |
|
|
|
905.3 |
|
|
|
46.9 |
|
Adjusted EBITDA from
acquisitions and dispositions |
|
|
(13.2 |
) |
|
|
1.2 |
|
|
|
(3.0 |
) |
|
|
0.7 |
|
|
|
(32.3 |
) |
|
|
1.6 |
|
|
|
(8.4 |
) |
|
|
0.6 |
|
Organic adjusted EBITDA |
|
$ |
353.0 |
|
|
|
53.3 |
|
|
$ |
306.3 |
|
|
|
48.1 |
|
|
$ |
1,000.2 |
|
|
|
51.4 |
|
|
$ |
896.9 |
|
|
|
47.5 |
|
Segment Results Summary and Adjusted EBITDA
Reconciliation(in millions)Note: Organic revenues and
adjusted EBITDA are non-GAAP measures.
|
|
Three Months Ended September 30, 2020 |
|
|
Three Months Ended September 30, 2019 |
|
|
|
Insurance |
|
|
Energy and Specialized Markets |
|
|
Financial Services |
|
|
Insurance |
|
|
Energy and Specialized Markets |
|
|
Financial Services |
|
Revenues |
|
$ |
498.6 |
|
|
$ |
163.8 |
|
|
$ |
40.3 |
|
|
$ |
469.0 |
|
|
$ |
140.3 |
|
|
$ |
43.4 |
|
Revenues from acquisitions and
dispositions |
|
|
(16.3 |
) |
|
|
(23.1 |
) |
|
|
(0.6 |
) |
|
|
(11.9 |
) |
|
|
— |
|
|
|
(4.4 |
) |
Organic revenues |
|
$ |
482.3 |
|
|
$ |
140.7 |
|
|
$ |
39.7 |
|
|
$ |
457.1 |
|
|
$ |
140.3 |
|
|
$ |
39.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
291.5 |
|
|
$ |
63.0 |
|
|
$ |
11.7 |
|
|
$ |
111.1 |
|
|
$ |
30.1 |
|
|
$ |
8.1 |
|
Acquisition-related costs
(earn-outs) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
10.4 |
|
|
|
18.4 |
|
|
|
— |
|
Litigation reserve |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
125.0 |
|
|
|
— |
|
|
|
— |
|
Loss from disposition |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6.2 |
|
Adjusted EBITDA |
|
|
291.5 |
|
|
|
63.0 |
|
|
|
11.7 |
|
|
|
246.5 |
|
|
|
48.5 |
|
|
|
14.3 |
|
Adjusted EBITDA from
acquisitions and dispositions |
|
|
(4.7 |
) |
|
|
(8.9 |
) |
|
|
0.4 |
|
|
|
(0.5 |
) |
|
|
0.4 |
|
|
|
(2.9 |
) |
Organic adjusted EBITDA |
|
$ |
286.8 |
|
|
$ |
54.1 |
|
|
$ |
12.1 |
|
|
$ |
246.0 |
|
|
$ |
48.9 |
|
|
$ |
11.4 |
|
|
|
Nine Months Ended September 30, 2020 |
|
|
Nine Months Ended September 30, 2019 |
|
|
|
Insurance |
|
|
Energy and Specialized Markets |
|
|
Financial Services |
|
|
Insurance |
|
|
Energy and Specialized Markets |
|
|
Financial Services |
|
Revenues |
|
$ |
1,474.4 |
|
|
$ |
478.2 |
|
|
$ |
118.6 |
|
|
$ |
1,393.5 |
|
|
$ |
406.1 |
|
|
$ |
130.7 |
|
Revenues from acquisitions and
dispositions |
|
|
(48.1 |
) |
|
|
(74.7 |
) |
|
|
(2.4 |
) |
|
|
(28.9 |
) |
|
|
— |
|
|
|
(14.8 |
) |
Organic revenues |
|
$ |
1,426.3 |
|
|
$ |
403.5 |
|
|
$ |
116.2 |
|
|
$ |
1,364.6 |
|
|
$ |
406.1 |
|
|
$ |
115.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
846.2 |
|
|
$ |
165.5 |
|
|
$ |
37.6 |
|
|
$ |
585.1 |
|
|
$ |
107.6 |
|
|
$ |
35.4 |
|
Acquisition-related costs
(earn-outs) |
|
|
2.6 |
|
|
|
— |
|
|
|
— |
|
|
|
22.5 |
|
|
|
23.5 |
|
|
|
— |
|
Litigation reserve |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
125.0 |
|
|
|
— |
|
|
|
— |
|
(Gain) loss from
dispositions |
|
|
(15.9 |
) |
|
|
— |
|
|
|
(3.5 |
) |
|
|
— |
|
|
|
— |
|
|
|
6.2 |
|
Adjusted EBITDA |
|
|
832.9 |
|
|
|
165.5 |
|
|
|
34.1 |
|
|
|
732.6 |
|
|
|
131.1 |
|
|
|
41.6 |
|
Adjusted EBITDA from
acquisitions and dispositions |
|
|
(8.1 |
) |
|
|
(25.2 |
) |
|
|
1.0 |
|
|
|
(0.5 |
) |
|
|
1.3 |
|
|
|
(9.2 |
) |
Organic adjusted EBITDA |
|
$ |
824.8 |
|
|
$ |
140.3 |
|
|
$ |
35.1 |
|
|
$ |
732.1 |
|
|
$ |
132.4 |
|
|
$ |
32.4 |
|
10
Segment Adjusted EBITDA Margin
ReconciliationNote: Segment adjusted EBITDA margin is
calculated as a percentage of respective segment revenues.
|
|
Three Months Ended September 30, 2020 |
|
|
Three Months Ended September 30, 2019 |
|
|
|
Insurance |
|
|
Energy and Specialized Markets |
|
|
Financial Services |
|
|
Insurance |
|
|
Energy and Specialized Markets |
|
|
Financial Services |
|
EBITDA margin |
|
|
58.5 |
% |
|
|
38.5 |
% |
|
|
28.9 |
% |
|
|
23.7 |
% |
|
|
21.4 |
% |
|
|
18.6 |
% |
Acquisition-related costs
(earn-outs) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.2 |
|
|
|
13.2 |
|
|
|
— |
|
Litigation reserve |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26.7 |
|
|
|
— |
|
|
|
— |
|
Loss from disposition |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14.2 |
|
Adjusted EBITDA margin |
|
|
58.5 |
|
|
|
38.5 |
|
|
|
28.9 |
|
|
|
52.6 |
|
|
|
34.6 |
|
|
|
32.8 |
|
|
|
Nine Months Ended September 30, 2020 |
|
|
Nine Months Ended September 30, 2019 |
|
|
|
Insurance |
|
|
Energy and Specialized Markets |
|
|
Financial Services |
|
|
Insurance |
|
|
Energy and Specialized Markets |
|
|
Financial Services |
|
EBITDA margin |
|
|
57.4 |
% |
|
|
34.6 |
% |
|
|
31.7 |
% |
|
|
42.0 |
% |
|
|
26.5 |
% |
|
|
27.1 |
% |
Acquisition-related costs
(earn-outs) |
|
|
0.2 |
|
|
|
— |
|
|
|
— |
|
|
|
1.6 |
|
|
|
5.8 |
|
|
|
— |
|
Litigation reserve |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
9.0 |
|
|
|
— |
|
|
|
— |
|
(Gain) loss from
dispositions |
|
|
(1.1 |
) |
|
|
— |
|
|
|
(3.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
4.7 |
|
Adjusted EBITDA margin |
|
|
56.5 |
|
|
|
34.6 |
|
|
|
28.7 |
|
|
|
52.6 |
|
|
|
32.3 |
|
|
|
31.8 |
|
Consolidated Adjusted EBITDA Expense
Reconciliation(in millions)Note: Adjusted EBITDA expenses
are a non-GAAP measure.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Operating
expenses |
|
$ |
427.3 |
|
|
$ |
583.2 |
|
|
$ |
1,283.7 |
|
|
$ |
1,440.0 |
|
Depreciation and amortization
of fixed assets |
|
|
(49.4 |
) |
|
|
(45.8 |
) |
|
|
(141.3 |
) |
|
|
(138.0 |
) |
Amortization of intangible
assets |
|
|
(41.5 |
) |
|
|
(33.3 |
) |
|
|
(123.6 |
) |
|
|
(100.1 |
) |
Investment (loss) income and
others, net |
|
|
0.1 |
|
|
|
(0.7 |
) |
|
|
3.1 |
|
|
|
0.3 |
|
Acquisition-related costs
(earn-outs) |
|
|
— |
|
|
|
(28.8 |
) |
|
|
(2.6 |
) |
|
|
(46.0 |
) |
(Loss) gain from
dispositions |
|
|
— |
|
|
|
(6.2 |
) |
|
|
19.4 |
|
|
|
(6.2 |
) |
Litigation reserve |
|
|
— |
|
|
|
(125.0 |
) |
|
|
— |
|
|
|
(125.0 |
) |
Adjusted EBITDA expenses |
|
$ |
336.5 |
|
|
$ |
343.4 |
|
|
$ |
1,038.7 |
|
|
$ |
1,025.0 |
|
Diluted Adjusted EPS Reconciliation(in
millions, except per share amounts)Note: Diluted adjusted EPS is a
non-GAAP measure.
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Net income |
|
$ |
185.8 |
|
|
$ |
32.9 |
|
|
$ |
536.5 |
|
|
$ |
317.7 |
|
plus: Amortization of
intangibles |
|
|
41.5 |
|
|
|
33.3 |
|
|
|
123.6 |
|
|
|
100.1 |
|
less: Income tax effect on
amortization of intangibles |
|
|
(9.1 |
) |
|
|
(7.0 |
) |
|
|
(27.1 |
) |
|
|
(21.0 |
) |
plus: Acquisition-related
costs and interest expense (earn-outs) |
|
|
— |
|
|
|
29.1 |
|
|
|
2.6 |
|
|
|
46.8 |
|
less: Income tax effect on
acquisition-related costs and interest expense (earn-outs) |
|
|
— |
|
|
|
(2.0 |
) |
|
|
(0.6 |
) |
|
|
(2.8 |
) |
less: Loss (gain) from
dispositions |
|
|
— |
|
|
|
6.2 |
|
|
|
(19.4 |
) |
|
|
6.2 |
|
plus: Income tax effect on
loss (gain) from dispositions |
|
|
— |
|
|
|
(1.5 |
) |
|
|
9.6 |
|
|
|
(1.5 |
) |
plus: Litigation reserve |
|
|
— |
|
|
|
125.0 |
|
|
|
— |
|
|
|
125.0 |
|
less: Income tax effect on
litigation reserve |
|
|
— |
|
|
|
(29.9 |
) |
|
|
— |
|
|
|
(29.9 |
) |
Adjusted net income |
|
$ |
218.2 |
|
|
$ |
186.1 |
|
|
$ |
625.2 |
|
|
$ |
540.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS |
|
$ |
1.12 |
|
|
$ |
0.20 |
|
|
$ |
3.24 |
|
|
$ |
1.91 |
|
Diluted adjusted EPS |
|
$ |
1.32 |
|
|
$ |
1.12 |
|
|
$ |
3.78 |
|
|
$ |
3.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average diluted
shares outstanding |
|
|
165.7 |
|
|
|
166.8 |
|
|
|
165.5 |
|
|
|
166.7 |
|
11
Free Cash Flow Reconciliation(in millions)Note:
Free cash flow is a non-GAAP measure.
|
|
Three Months Ended |
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
2020 |
|
|
2019 |
|
|
Change |
|
|
2020 |
|
|
2019 |
|
|
Change |
|
Net cash provided
by operating activities |
|
$ |
207.1 |
|
|
$ |
213.6 |
|
|
|
(3.0 |
)% |
|
$ |
819.2 |
|
|
$ |
779.9 |
|
|
|
5.0 |
% |
Capital expenditures |
|
|
(64.8 |
) |
|
|
(60.7 |
) |
|
|
6.8 |
|
|
|
(174.4 |
) |
|
|
(152.8 |
) |
|
|
14.1 |
|
Free cash flow |
|
$ |
142.3 |
|
|
$ |
152.9 |
|
|
|
(6.9 |
) |
|
$ |
644.8 |
|
|
$ |
627.1 |
|
|
|
2.8 |
|
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