Fourth Quarter Revenue $134.2 million, up $6.8 million or 5%
Year-over-Year 2010 Revenue Growth Expected to Range between 8% and
11% STERLING, Va., Feb. 10 /PRNewswire-FirstCall/ -- Neustar, Inc.
(NYSE: NSR), a provider of essential clearinghouse services to the
communications and Internet industries, today announced
consolidated results for the quarter and year ended December 31,
2009, and provided full-year guidance for 2010. (Logo:
http://www.newscom.com/cgi-bin/prnh/20090722/NSLOGO )
Fourth-Quarter Results -- Revenue of $134.2 million, up from $127.4
million for the 2008 quarter -- Net income of $27.8 million, up
from a net loss of $42.5 million for the 2008 quarter -- EBITDA of
$58.2 million, up from an EBITDA loss of $17.5 million for the 2008
quarter -- EPS of $0.37 per diluted share, up from a loss per
diluted share of $0.57 for the 2008 quarter "Our solid performance
for the quarter and the year, reflected by our profitability and
cash generation, demonstrates the strength of our management team,
the resilience of our business model and our ability to meet
customer needs with our innovative services," said Jeff Ganek,
Neustar's chairman and chief executive officer. "Neustar begins
2010 on a positive trajectory, and we expect that momentum to
continue. Looking ahead, we will continue to invest in innovative
services that fuel our growth." Full-Year 2009 Results -- Revenue
of $480.4 million, compared to $488.8 million for 2008 -- Net
income of $101.1 million, up from net income of $4.3 million for
2008 -- EBITDA of $205.6 million, compared to EBITDA of $109.7
million for 2008 -- EPS of $1.34 per diluted share, compared to
$0.06 per diluted share for 2008 -- Cash, cash equivalents and
short-term investments of $342.2 million, compared to $161.7
million at year-end 2008 Paul Lalljie, Neustar's chief financial
officer, added, "In 2009, as demonstrated by our results, we
successfully managed the business in challenging economic
conditions and established a stable base to build upon for the
future. Our financial strength, expertise in the growing IP markets
that we serve and our experienced management team provide us with
the confidence to meet our 2010 guidance." Business Outlook for
2010 -- Revenue expected to range from $520 to $535 million, an
increase of 8% to 11% over 2009 -- EBITDA margin expected to exceed
42% Discussion of Fourth Quarter and Full-Year Results Revenue for
the quarter and for the year reflect year-over-year increases from
our non-NPAC services, primarily our Ultra Services. In each of the
periods, these increases were offset by the anticipated decreases
in revenue from our NPAC services in the United States, resulting
from the amended pricing terms. Revenue for the quarter totaled
$134.2 million, a 5% increase from $127.4 million in the fourth
quarter of 2008, while revenue for the full year totaled $480.4
million, a 2% decrease from $488.8 million in the full year of
2008. Revenue for the quarter and full year from our NPAC services
in the United States totaled $78.8 million and $292.5 million,
respectively, both of which included additional revenue of $7.5
million related to an unearned customer credit. Also included in
the revenue for the quarter and for the year were $4.4 million and
$5.4 million, respectively, from one-time functionality
improvements, with an additional $5.3 million of revenue to be
recognized during 2010. -- Addressing revenue increased 6% to $38.1
million in the fourth quarter and increased 3% to $134.3 million in
the full year. Both increases were primarily due to an increase in
revenue from our Ultra Services, offset by lower revenues from our
NPAC services. -- Interoperability revenue increased 10% to $16.6
million in the fourth quarter and decreased 9% to $58.7 million in
the full year. The fourth quarter increase was primarily due to
higher revenue from our order management services, offset by lower
revenue from our NGM services. The full-year decrease was primarily
due to lower revenue from our NPAC services and from our telephone
number portability services in Canada. -- Infrastructure and other
revenue increased 4% to $79.5 million in the fourth quarter and
decreased 2% to $287.4 million in the full year. The fourth quarter
increase was primarily due to greater revenue from ongoing support
services for telephone number portability solutions outside the
United States and one-time functionality improvements requested by
our customers, offset by the lower revenue from our NPAC services.
The full-year decrease was primarily a result of the lower revenue
from our NPAC services, offset by higher revenue from ongoing
support services for telephone number portability solutions outside
the United States and one-time functionality improvements requested
by our customers. The table below displays fourth quarter and
full-year 2009 operating expense, net (loss) income and per share
data, and EBITDA and EBITDA per share data compared to the
corresponding periods in 2008. With respect to the corresponding
periods in 2008, the table below includes separate columns for data
that includes and excludes the impairment charges incurred in 2008
related to our NGM business segment. Three Months Ended December
31, ------------ 2008 2008(1) Including Absent impairment
impairment charges charges 2009 ------- ------- ---- (in thousands,
except per share data) (unaudited) Operating Expense $154,487
$73,594 $85,929 Net (Loss) Income $(42,476) $32,229 $27,803 EPS
/diluted share $(0.57) $0.43 $0.37 EBITDA(3) $(17,450) $65,290
$58,226 EBITDA /diluted share(3) $(0.24) $0.87 $0.77 Year Ended
December 31, ------------ 2008 2008(2) Including Absent impairment
impairment charges charges 2009 ------- ------- ---- (in thousands,
except per share data) (unaudited) Operating Expense $419,739
$309,825 $312,827 Net (Loss) Income $4,294 $107,903 $101,141 EPS
/diluted share $0.06 $1.42 $1.34 EBITDA(3) $109,688 $221,449
$205,598 EBITDA /diluted share(3) $1.44 $2.91 $2.72 (1) Absent the
$64.6 million goodwill impairment charge, the $18.2 million charge
for impairment of long-lived assets, and the associated adjustments
to depreciation and amortization and provision for income taxes,
where applicable. All charges are related to our NGM business
segment and were recorded in the fourth quarter of 2008. Further
details are included in the reconciliation table below. (2) Absent
the $29.0 million goodwill impairment charge recorded in the first
quarter of 2008, the $64.6 million goodwill impairment charge
recorded in the fourth quarter of 2008, the $18.2 million charge
for impairment of long-lived assets recorded in the fourth quarter
of 2008, and the associated adjustments to depreciation and
amortization and provision for income taxes, where applicable. All
charges are related to our NGM business segment. Further details
are included in the reconciliation table below. (3) Non-GAAP
financial measures reconciled below. Absent the 2008 fourth quarter
non-cash impairment charges related to our NGM business segment,
total operating expense for the fourth quarter increased 17% to
$85.9 million and increased 1% to $312.8 million for the full year.
Included in operating expense for the fourth quarter and for
full-year 2009 are restructuring charges of $3.3 million and $6.0
million, respectively, which are related to both our Clearinghouse
and our NGM business segments. In the fourth quarter of 2008 and
full-year 2008, there was a restructuring charge of $1.7 million
related to our NGM business segment. Cash, cash equivalents and
short-term investments totaled $342.2 million as of December 31,
2009, compared to $303.2 million as of September 30, 2009 and
$161.7 million as of December 31, 2008. Reconciliation of Non-GAAP
Financial Measures In this press release, Neustar presents certain
non-GAAP financial data. The following is a reconciliation of
EBITDA to net (loss) income for the quarter and year ended December
31, 2008 and 2009. Also provided is a reconciliation of projected
EBITDA to estimated Net Income for the year ending December 31,
2010: Reconciliation of EBITDA to Net (Loss) Income Three Months
Ended Year Ended Year Ending December 31, December 31, December 31,
------------ ------------ ------------ 2008 2009 2008 2009 2010(1)
---- ---- ---- ---- ------- (in thousands, except per share data)
(unaudited) (unaudited) (unaudited) Total revenue $127,413 $134,230
$488,845 $480,385 $527,500 ======== ======== ======== ========
======== Net (loss) income $(42,476) $27,803 $4,294 $101,141
$106,000 Add: Depreciation and amortization 9,624 9,925 40,582
38,040 44,000 Less: Other expense (income) 1,891 235 3,125 (1,448)
(500) Add: Provision for income taxes 13,511 20,263 61,687 67,865
72,000 ------ ------ ------ ------ ------ EBITDA $(17,450) $58,226
$109,688 $205,598 $221,500 ======== ======= ======== ========
======== EBITDA per diluted share $(0.24) $0.77 $1.44 $2.72 $2.88
====== ===== ===== ===== ===== EBITDA margin(2) (14%) 43% 22% 43%
42% ==== === === === === Weighted average diluted common shares
outstanding 73,951 75,685 76,107 75,465 77,000 ====== ====== ======
====== ====== (1) The amounts expressed in this column are based on
current estimates as of the date of this press release. This
reconciliation is based on the midpoint of the revenue guidance.
(2) EBITDA margin is a measure of EBITDA as a percentage of total
revenue. EBITDA, EBITDA per diluted share and EBITDA margin are not
measures of financial performance under GAAP and have no
standardized measurement prescribed by GAAP. Management believes
that these measures enhance our investors' understanding of our
financial performance and the comparability of the company's
operating results to prior periods, as well as against the
performance of other companies. However, these non-GAAP financial
measures may not be comparable with similar non-GAAP financial
measures used by other companies and should not be considered in
isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. The company provides the
following reconciliations to the most directly comparable GAAP
financial measures to allow investors to appropriately consider
each non-GAAP financial measure. Reconciliation of EBITDA to Net
(Loss) Income and EBITDA to Net Income in the absence of the
impairment charges for the quarter and the year ended December 31,
2008 Three Months Ended Year Ended December 31, 2008 December 31,
2008 ----------------- ----------------- (in thousands, except per
share data) (unaudited) Net (loss) income $(42,476) $4,294 Add:
Impairment of goodwill (1) 64,581 93,602 Add: Impairment of
long-lived assets (1) 18,159 18,159 Less: Adjustment for
depreciation and amortization (1) (2) (1,847) (1,847) Less:
Adjustment for provision for income taxes (2) (6,188) (6,305)
------ ------ Net income excluding impairments $32,229 $107,903
======= ======== Net income excluding impairments per diluted share
$0.43 (3) $1.42 ===== ===== Add: Depreciation and amortization
11,471 42,429 Add: Other expense (income) 1,891 3,125 Add:
Provision for income taxes 19,699 67,992 ------ ------ EBITDA
excluding impairments $65,290 $221,449 ======= ======== EBITDA
excluding impairments per diluted share $0.87 $2.91 ===== =====
Weighted average diluted common shares outstanding 75,253 (3)
76,107 ====== ====== (1) Excluding the impairments of goodwill and
long-lived assets for the period presented, taking into account the
adjustment to depreciation and amortization for such period, total
operating expenses would have been $73.6 million for the fourth
quarter of 2008 and $309.8 million for the full-year 2008, as
opposed to the GAAP measurement of total operating expense of
$154.5 million and $419.7 million, respectively. (2) Adjustment
reflects difference to recorded amount in the absence of the
impairment of goodwill and impairment of long-lived assets during
the period presented, assuming the effective tax rate for each such
period. (3) To understand the comparison of the net loss of $0.57
per diluted share for the fourth quarter of 2008 against the net
income of $0.43 per diluted share that the company would have
recorded in the absence of the goodwill impairment charge and the
long-lived asset impairment charge, it is important to note that
the weighted average diluted common shares outstanding used to
calculate the net loss per diluted share for the fourth quarter was
74.0 million, as compared to the weighted average diluted common
shares outstanding used to calculate the net income excluding
impairments per diluted share, which is 75.3 million. This
difference in weighted average diluted common shares outstanding
results from the exclusion of the dilutive impact of such equity
awards in the diluted share calculation when a company records a
net loss for the applicable period as opposed to inclusion of
equity awards in this calculation when a company records net
income. Conference Call As announced on February 5, 2010, Neustar
will conduct an investor conference call to discuss the company's
results today at 4:30 p.m. (Eastern Time). Prior to the call,
investors may access the conference call over the Internet via the
Investor Relations tab of the company's website
(http://www.neustar.biz/). Those listening via the Internet should
go to the site 15 minutes early to register, download and install
any necessary audio software. The conference call is also
accessible via telephone by dialing (888) 437-9274 (international
callers dial (719) 457-2694). For those who cannot listen to the
live broadcast, a replay will be available through Midnight
(Eastern Time) Wednesday, February 17, 2010 by dialing (888)
203-1112 (international callers dial (719) 457-0820) and entering
replay PIN 4017541, or by going to the Investor Relations tab of
the company's website (http://www.neustar.biz/). Neustar will take
live questions from securities analysts and institutional portfolio
managers; the complete call is open to all other interested parties
on a listen-only basis. This press release and the financial
tables, including the reconciliations of certain non-GAAP measures
to their nearest comparable GAAP measures that may be used
periodically by management when discussing the company's financial
results with investors and analysts, are available on the company's
website under the Investor Relations tab. About Neustar, Inc.
Neustar, Inc. (NYSE:NSR) solves complex communications challenges
and provides market-leading, innovative solutions and directory
services to enable trusted communication across networks,
applications, and enterprises around the world. Visit Neustar
online at http://www.neustar.biz/. Safe Harbor Statement under the
Private Securities Litigation Reform Act of 1995 This press release
includes information that constitutes forward-looking statements
made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995, including, without
limitation, statements about our expectations, beliefs and business
results in the future, such as guidance regarding our 2010 results.
We have attempted, whenever possible, to identify these
forward-looking statements using words such as "may," "will,"
"should," "projects," "estimates," "expects," "plans," "intends,"
"anticipates," "believes" and variations of these words and similar
expressions. Similarly, statements herein that describe our
business strategy, prospects, opportunities, outlooks, objectives,
plans, intentions or goals are also forward-looking statements. We
cannot assure you that our expectations will be achieved or that
any deviations will not be material. Forward-looking statements are
subject to many assumptions, risks and uncertainties that may cause
future results to differ materially from those anticipated. These
potential risks and uncertainties include, among others, the
uncertainty of future revenue and profitability and potential
fluctuations in quarterly and yearly operating results due to such
factors as disruptions to our clearinghouse operations,
modifications to our material contracts, our ability to
successfully identify and complete acquisitions, integrate and
support the operations of businesses we acquire, our ability to
redeem auction rate securities, increasing competition, market
acceptance of our existing services, our ability to successfully
develop and market new services, the uncertainty of whether new
services will achieve market acceptance or result in any revenue,
and business, regulatory and statutory changes in the
communications industry. More information about potential factors
that could affect our business and financial results is included in
our filings with the Securities and Exchange Commission, including,
without limitation, our Annual Report on Form 10-K for the year
ended December 31, 2008 and subsequent periodic and current
reports. All forward-looking statements are based on information
available to us on the date of this press release, and we undertake
no obligation to update any of the forward-looking statements after
the date of this press release. NEUSTAR, INC. CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except per share data)
Three Months Ended Year Ended December 31, December 31,
------------ ------------ 2008 2009 2008 2009 ---- ---- ---- ----
(unaudited) (audited) (unaudited) Revenue: Addressing $35,837
$38,096 $130,736 $134,253 Interoperability 15,077 16,601 64,305
58,723 Infrastructure and other 76,499 79,533 293,804 287,409
------ ------ ------- ------- Total revenue 127,413 134,230 488,845
480,385 Operating expense: Cost of revenue (excluding depreciation
and amortization shown separately below) 26,606 30,452 105,589
113,260 Sales and marketing 17,374 24,178 74,182 83,371 Research
and development 5,085 3,385 27,527 16,160 General and
administrative 11,367 14,700 58,407 55,974 Depreciation and
amortization 9,624 9,925 40,582 38,040 Restructuring charges 1,691
3,289 1,691 6,022 Impairment of goodwill 64,581 - 93,602 -
Impairment of long-lived assets 18,159 - 18,159 - ------ ------
------ ------- 154,487 85,929 419,739 312,827 ------- ------
------- ------- (Loss) income from operations (27,074) 48,301
69,106 167,558 Other (expense) income: Interest and other expense
(11,803) (1,402) (16,237) (6,071) Interest and other income 9,912
1,167 13,112 7,519 ----- ----- ------ ----- (Loss) income before
income taxes (28,965) 48,066 65,981 169,006 Provision for income
taxes 13,511 20,263 61,687 67,865 ------ ------ ------ ------ Net
(loss) income $(42,476) $27,803 $4,294 $101,141 ======== =======
====== ======== Net (loss) income per common share: Basic $(0.57)
$0.37 $0.06 $1.36 ====== ===== ===== ===== Diluted $(0.57) $0.37
$0.06 $1.34 ====== ===== ===== ===== Weighted average common shares
outstanding: Basic 73,951 74,394 74,350 74,301 ====== ====== ======
====== Diluted 73,951 75,685 76,107 75,465 ====== ====== ======
====== NEUSTAR, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in
thousands) December 31, December 31, 2008 2009 ---- ---- ASSETS
(audited) (unaudited) Current assets: Cash, cash equivalents and
short-term investments $161,653 $342,191 Restricted cash 496 512
Accounts and unbilled receivables, net 72,635 67,005 Prepaid
expenses and other current assets 18,205 18,087 Income taxes
receivable 4,621 - Deferred tax assets 11,079 6,973 ------ -----
Total current assets 268,689 434,768 Property and equipment, net
64,160 73,881 Goodwill and intangible assets, net 134,661 127,206
Other non-current assets 47,412 6,825 Deferred tax assets,
long-term 4,244 5,124 ----- ----- Total assets $519,166 $647,804
======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable and accrued expenses $59,103 $72,052
Income taxes payable - 2,764 Deferred revenue 32,530 26,117 Notes
payable and capital lease obligations 10,123 11,222 Accrued
restructuring reserve 1,867 2,459 Other liabilities 430 3,891 ---
----- Total current liabilities 104,053 118,505 Deferred revenue,
long-term 11,657 8,923 Notes payable and capital lease obligations,
long-term 11,933 10,766 Accrued restructuring reserve, long-term
1,589 1,111 Other liabilities, long-term 3,281 4,062 ----- -----
Total liabilities 132,513 143,367 Total stockholders' equity
386,653 504,437 ------- ------- Total liabilities and stockholders'
equity $519,166 $647,804 ======== ========
http://www.newscom.com/cgi-bin/prnh/20090722/NSLOGO
http://photoarchive.ap.org/ DATASOURCE: Neustar, Inc. CONTACT:
Investor Relations, Brandon Pugh, +1-571-434-5659, , or Media,
Allen Goldberg, +1-571-299-9344, , both of Neustar, Inc. Web Site:
http://www.neustar.biz/
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