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Thursday July 22

CCC Information Services Group Reports Q2 Financial Results and Announces a Repurchase of $210 Million of its Common Stock

CCC Information Services Group Inc. has reported net income of $5.2 million, or $0.19 per share, for the second quarter ending June 30, 2004, compared to net income of $5.5 million, or $0.20 per share, for the same quarter in 2003. The second quarter of 2003 included a restructuring charge of $1.1 million, or $0.02 per share.

Revenue for the second quarter increased 2.9 percent to $49.5 million, compared to $48.1 million for the same quarter in 2003. Operating income was $8.6 million, compared to operating income of $8.9 million for the same quarter in 2003. Operating margin was 17.5 percent, compared to 18.6 percent for the same quarter in 2003.

Revenue for the first six months of 2004 was $99.1 million, an increase of 3.4 percent over the $95.8 for the first half of 2003. Operating income for the first six months of the year was $18.6 million, compared to $18.7 million for the first six months of 2003.

The CCC Pathways portfolio benefited from the continued growth of the company's estimating solutions in the repair facility channel, and increased revenue of the Recycled Parts Service to insurance carriers.

CCC Valuescope experienced additional transactions toward the end of the quarter, as a significant new customer was implemented.

The Workflow portfolio grew 4.5 percent sequentially, as strong interest continued for CCC Autoverse during the quarter. However, year over year revenue declined 1.5 percent, due to lower EZNet transaction frequency.

Other revenue decreased in line with the company's plan to exit the customer hardware business.

Production and customer support expenses declined 6.5 percent from first quarter as the company achieved improved service levels and efficiencies with our new customer support model. Selling, General and Administrative expenses were $19.1 million for the second quarter compared to $17.2 million last year. The charge for the 401(k) plan of $0.8 million, mentioned in the table earlier, was included in Selling, General and Administrative expenses. Additionally, the company incurred an expense of $0.9 million for its industry conference, which was held in the second quarter this year, compared to the first quarter of 2003.

Product development and programming expenses remained steady. The restructuring charge of $0.9 million for a realignment of the organization is aimed to allow the company to better streamline and focus its implementation process and improve its overall sales and support execution.

The company issued the following guidance for the third quarter and full year 2004:

Revenue growth for the third quarter and full year is expected to be in the 3 to 4 percent range. This is a change from our previous guidance of 3 to 5 percent. Operating income for the third quarter is expected to be in the range of $12 to $13 million. Operating income for the full year should be in the range of $43 to $45 million, including the impact of the charges taken in the second quarter of $1.7 million. Operating margins are expected to increase for the remainder of the year to a full year range of 22 to 23 percent.

Earnings per share for the third quarter is expected to be in the $0.27 to $0.29 per share range. The increase in earnings per share from first and second quarter results can be attributed to the anticipated cost savings of the realignment and revenue growth for the quarter. The forecast for full year earnings per share is $0.96 to $1.00 per share range. This estimate includes the $0.04 per share effect of the charges taken this quarter. (The fully diluted share base of 27.9 million is being used to calculate the EPS figure). Please note that this guidance excludes the effects of the tender offer transaction discussed below.

The company's Board of Directors has authorized a self-tender offer to repurchase up to $210 million of its common stock at a price of $18.75 per share. If the tender, as anticipated, is fully subscribed, then 11.2 million shares will be repurchased, representing approximately 37 percent of the approximately 30.4 million shares available for tender. The repurchases will be made through a fixed price tender offer in which all of CCC's stockholders, vested option holders and warrant holders, including employee benefit plans, will be given the opportunity to sell a portion of their shares at a price of $18.75 per share, without incurring any brokerage fees or commissions. This represents a premium of approximately 26 percent over the July 21, 2004 closing stock price of $14.90. The offer to purchase shares will commence July 26 and will expire at 12:00 midnight, New York City time on August 23, 2004, unless extended by the company. If the number of shares tendered is greater than 11,200,000, purchases will be made on a pro rata basis from shareholders tendering.

"This offer provides our stockholders with the opportunity to monetize a portion of their investments in CCC at a premium over the recent stock price. At the same time, it allows us to enhance stockholder value over the long-term and continue to execute our strategic plan," said Githesh Ramamurthy, Chairman and Chief Executive Officer. "The tender offer follows an intensive review and evaluation of the company's strategic investment alternatives which reinforced our belief that CCC is an industry leader and our stock is an attractive investment opportunity."

The company's largest stockholder, White River Ventures, Inc. has stated its intention to fully participate in the tender offer, but anticipates its ownership percentage will not change materially since they expect the tender offer to be fully subscribed. This stockholder holds 9,041,999 million shares, including its warrants, and represents approximately 30 percent of the shares available for tender.

It is anticipated that the self-tender offer will be funded by a term loan facility of approximately $177.5 million and the company's excess cash on hand. Financing is being arranged on a best efforts basis. As a result, the tender offer will be subject to the receipt of this financing on terms satisfactory to CCC, as well as other customary conditions. The offer is not contingent upon any minimum number of shares being tendered.

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