Monday, August 20
CCC Information Services Reports 2Q $18.5 Million Loss
CCC Information Services reported a net loss applicable to common stock of $(18.5) million, or $(0.85) per share on a diluted basis, for the three months ended June 30, 2001, versus net income of $17.3 million, or $0.79 per share on a diluted basis, for the same quarter last year. Losses from continuing operations were $(18.5) million, or $(0.85) per share on a diluted basis, for the quarter, versus income from continuing operations of $17.0 million, or $0.77 per share on a diluted basis, for the second quarter last year.
For the quarter ended June 30, 2001, CCC U.S. had revenues of $45.7 million and CCC International had revenues of $0.4 million, which represented 99.2 percent and 0.8 percent, respectively, of total consolidated revenues. For the same quarter last year, CCC U.S. had revenues of $42.9 million and CCC International had revenues of $1.7 million, which represented 96.3 percent and 3.7 percent, respectively, of total consolidated revenues.
For the quarter ended June 30, 2001, operating margins (operating income loss as a percentage of revenue), for its two revenue producing segments were 66.8 percent for CCC U.S. and (789.9) percent for CCC International compared to 60.1 percent for CCC U.S. and (119.9) percent for CCC International in 2000. The operating margins for CCC International reflect the Company's decision to wind down this segment.
DriveLogic had no revenues in both quarters ended June 30, 2001 and 2000 and had operating losses of $(9.1) million in 2001 compared to $(4.2) million in the second quarter of 2000. Shared services operating expenses, which are currently not allocated, are primarily incurred in support of CCC U.S. Shared services consist primarily of product development, management information systems ("MIS"), legal, finance and administration, and totaled $25.4 million for the quarter ended June 30, 2001 compared to $19.0 million for the same quarter last year.
Operating income for CCC U.S. increased quarter over quarter by $4.8 million due to an increase in revenues of $2.8 million and a decrease in product consulting fees, development expenses and license fees related to a shop management product and a decrease in payroll costs due to the consolidation of certain customer support functions from Glendora, California to company headquarters in Chicago.
CCC International's revenues decreased by $1.3 million and expenses decreased by $0.3 million during the quarter ended June 30, 2001 compared to the quarter ended June 30, 2000 due to the Company's decision in to wind down this segment. The decision to wind down the business was the result of continued under-performance and expected future losses due to the loss of a significant customer.
DriveLogic's operating losses increased by $4.9 million, or 117 percent, from $4.2 million, with as yet no possible date to begin any sales in sight.
Operating expenses for the quarter ended June 30, 2001 of $25.4 million increased $6.4 million, or 34 percent, from $19.0 for the same quarter last year. The increase in expenses was due to restructuring charges of $2.8 million recorded in 2001, additional MIS costs for projects aimed at improving internal communications and customer service infrastructure and additional depreciation and amortization as a result of increased investment in computer equipment and software, leasehold improvements and office furniture. In addition, legal fees increased $1.2 million.
Revenues from continuing operations for the second quarter 2001 were $46.1 million versus $44.5 million, a 3.7 percent increase from the same quarter last year. The increase in revenue was primarily attributable to an increase in CCC U.S.'s revenue of $2.8 million, or 6.5 percent, driven primarily by its EZNet communications network and its PATHWAYS APPRAISAL QUALITY SOLUTION and PATHWAYS COLLISION ESTIMATING products. This increase was offset by a decrease of $1.2 million in CCC International's revenue due to the wind down of this segment.
Production and customer support decreased from $11.1 million, or 24.8% of revenues, to $8.6 million, or 18.7 percent of revenues.
Selling, general and administrative increased 11 percent from $21.0 million, or 47.1 percent of revenues, to $23.3 million, or 50.5 percent of revenues. Of this increase, approximately $0.6 million, or 26.1 percent of the net increase, were costs associated with DriveLogic. Additional increases were the result of CCC U.S.'s 2000 conversion of independent sales representatives for collision repair facilities to salaried employees.
Product development and programming increased 57 percent from $6.0 million, or 13.3 percent of revenues, to $9.4 million, or 20.2 percent of revenues. The increase was due primarily to higher development costs associated with DriveLogic.
In June 2001, CCC announced a set of strategic decisions as part of a company-wide effort to improve profitability. As a result, the Company recorded a restructuring charge of $2.8 million, which consisted primarily of severance and outplacement costs related to the termination of 130 employees. In addition, the Company recorded a charge of $3.4 million related to the Company's decision to wind down CCC International in order to focus on U.S. market opportunities. This charge consisted of a write-off of goodwill of $1.1 million, contractual commitments, including office space, of $0.5 million and severance and related costs to terminate 39 employees of $1.8 million.
The Company recorded a charge of $0.8 million for the three months ended June 30, 2001 related to its share of the losses in ChoiceParts compared to a charge of $0.3 million for the period May 4, 2000 through June 30, 2000. ChoiceParts was established in May 2000.
Total net losses for the six months ended June 30, 2001 included a loss from discontinued operations, net of tax, of $(7.0) million, or $(0.32) per share, related to the exit of the CCC Consumer Services segment. Losses from continuing operations were $(21.3) million, or $(0.98) per share on a diluted basis, for the six months, versus income from continuing operations of $21.3 million, or $0.96 per share for the same period last year.
For the six months ended June 30, 2001, CCC U.S. had revenues of $92.1 million and CCC International had revenues of $1.4 million, which represented 98.5 percent and 1.5 percent, respectively, of total consolidated revenues.
DriveLogic had no revenues during the six months ended June 30, 2001 and 2000 and had operating losses of $(16.6) million in 2001 compared to $(6.0) million during the first six months of 2000.
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