SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 0-24205
FACTUAL DATA CORP.
-----------------
(Exact name of small business issuer as specified in its charter)
Colorado 84-1449911
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5200 Hahns Peak Drive, Loveland Colorado 80538
------------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
(970) 663-5700
------------------------------------------------
(Issuer's telephone number, including area code)
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [ X ] Yes [ ] No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of August 14, 2000.
Class Number of Shares
-------------------------------------------------------------------
Common Stock 5,382,818
Transitional Small Business Disclosure Format: [ ] Yes [X] No
<PAGE>
FACTUAL DATA CORP.
INDEX
PART I. Financial Information Page No.
--------------------- --------
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 2000
(Unaudited) and December 31, 1999 3
Unaudited Consolidated Statements of Income
-- For the Three Months Ended June 30, 2000
and June 30, 1999 and For the Six Months
Ended June 30, 2000 and June 30, 1999 4
Unaudited Consolidated Statements of Cash Flows
-- For the Six Months Ended June 30, 2000 and
June 30, 1999 5
Notes to Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-12
PART II. Other Information
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE>
FACTUAL DATA CORP.
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, 2000 December 31,
(Unaudited) 1999
------------- -------------
Current assets
Cash and cash equivalents $ 1,090,536 $ 1,023,945
Prepaid expenses and other 730,199 949,542
Accounts receivable, net 5,246,185 3,663,094
------------- -------------
Total current assets 7,066,920 5,636,581
Property and equipment, net 6,563,569 5,998,532
Intangibles 35,724,713 27,756,373
Other assets 207,444 300,989
------------- -------------
$ 49,562,646 $ 39,692,475
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Line-of-credit 831,395 500,000
Current portion of long-term
debt and obligations 2,971,769 3,432,526
Accounts payable 4,374,744 3,099,678
Accrued payroll, taxes and
expenses 885,637 968,691
Deferred income taxes 13,386 13,386
------------- --------------
Total current liabilities 9,076,931 8,014,281
Long-term debt and obligations 14,446,594 5,908,584
Deferred income taxes 456,818 410,645
Shareholders' equity
Preferred stock, 1,000,000 shares
authorized; none issued and
outstanding - -
Common stock, 10,000,000 shares
authorized; 5,382,818 at
June 30, 2000; 5,380,103 at
December 31, 1999 issued and
outstanding 22,502,397 22,478,244
Retained earnings 3,079,906 2,880,721
------------- -------------
Total shareholders' equity 25,582,303 25,358,965
------------- -------------
$ 49,562,646 $ 39,692,475
============= =============
The accompanying notes to unaudited consolidated financial statements are an
integral part of these consolidated statements.
3
<PAGE>
FACTUAL DATA CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- ----------------------------
2000 1999 2000 1999
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Revenue
Information services $ 7,271,939 $ 6,026,287 $14,251,506 $ 10,417,585
Ancillary income 438,831 529,482 935,284 1,007,196
System affiliates 315,511 440,279 628,821 924,148
----------- ----------- ----------- ------------
Total revenue 8,026,281 6,996,048 15,815,611 12,348,929
----------- ----------- ----------- ------------
Operating Expenses
Costs of services provided 4,574,818 4,071,982 8,942,584 7,048,035
Consolidation costs 36,208 349,582 325,708 617,193
Selling, general and administrative 2,078,573 1,254,300 3,871,653 2,069,471
Depreciation and amortization 979,627 646,580 1,890,933 1,080,813
----------- ----------- ----------- ------------
Total operating expenses 7,669,226 6,322,444 15,030,878 10,815,512
----------- ----------- ----------- ------------
Income from operations 357,055 673,604 784,733 1,533,417
Other income (expense)
Other income 88,887 164,307 160,418 224,104
Interest expense (373,075) (137,377) (584,997) (223,230)
----------- ----------- ----------- ------------
Total other income (expense) (284,188) 26,930 (424,579) 874
----------- ----------- ----------- ------------
Income before income taxes 72,867 700,534 360,154 1,534,291
Income tax expense 43,587 277,310 160,969 602,533
----------- ----------- ----------- ------------
Net income and comprehensive income $ 29,280 $ 423,224 $ 199,185 $ 931,758
=========== =========== =========== ============
Basic earnings per share $ .01 $ .08 $ .04 $ .21
=========== =========== =========== ============
Weighted average basic shares outstanding 5,381,455 5,328,908 5,380,779 4,441,971
=========== =========== =========== ============
Diluted earnings per share $ .01 $ .07 $ .04 $ .19
============ =========== =========== ============
Weighted average diluted shares outstanding 5,679,479 5,813,198 5,589,319 4,790,637
=========== =========== =========== ============
Supplemental Information
EBITDA (a) $ 1,425,569 $ 1,484,491 $ 2,836,084 $ 2,838,334
=========== =========== =========== ============
</TABLE>
(a) EDITDA is defined as earnings before interest, income taxes,
depreciation and amortization. EBITDA should not be considered as an
alternative to net income (as an indicator of operating performance) or
as an alternative to cash flow (as a measure of liquidity or ability to
service debt obligations) and is not in accordance with, nor superior
to, generally accepted accounting principles, but provides additional
information for evaluating Factual Data Corp.
4
<PAGE>
FACTUAL DATA CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended
June 30
---------------------------------
2000 1999
--------------- ---------------
Cash flows from operating activities
Net income $ 199,185 $ 931,758
-------------- ---------------
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation and amortization 1,890,933 1,080,813
Gain on refinance of debt (189,013) -
Deferred income taxes 46,173 17,656
Changes in operating assets and
liabilities
Accounts receivable (1,583,091) (1,377,114)
Prepaid expenses 219,343 (528,898)
Other assets 93,545 (125,600)
Accounts payable 1,275,066 472,876
Accrued payroll, payroll taxes
and expenses (197,849) 189,756
Accrued taxes and other 114,795 (524,186)
--------------- ---------------
1,669,902 (794,697)
--------------- ---------------
Net cash provided by
operating activities 1,869,087 137,061
--------------- ---------------
Cash flow from investing activities
Purchase of property and equipment (626,259) (1,499,818)
Capitalized software costs (395,857) -
Net cash used in the acquisition of
businesses (314,714) (7,522,780)
Sales of short-term investments - 2,212,386
--------------- ---------------
Net cash (used) in investing
activities (1,336,830) (6,810,212)
--------------- ---------------
Cash flows from financing activities
Principal payments on long-term debt (4,821,214) (1,111,725)
Proceeds from issuance of long-term debt 4,000,000 -
Net activity on line of credit 331,395 -
Net proceeds from employee stock
option plan 24,153 -
Net proceeds in private placement
offering (net of offering expenses
paid of $1,514,576) - 13,985,424
--------------- ---------------
--------------- ---------------
Net cash provided (used)
by financing activities (465,666) 12,873,699
--------------- ---------------
Net increase in cash and cash equivalents 66,591 6,200,548
Cash and cash equivalents, at beginning of
period 1,023,945 1,093,295
--------------- ---------------
Cash and cash equivalents, at end of period $ 1,090,536 $ 7,293,843
=============== ===============
5
<PAGE>
FACTUAL DATA CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Supplemental disclosure of cash flow information:
Interest paid on borrowings for the six months ended June 30, 2000 and
1999 was $584,997 and, $223,230 respectively.
Cash paid for income taxes for the six months ended June 30, 2000 and
1999 was $160,969 and $1,323,636 respectively.
Supplemental disclosure of non-cash investing and financing activities:
During the six months ended June 30, 2000 and 1999, the Company financed
fixed asset purchases totaling $245,525 and $335,356, respectively,
with notes payable and capital leases.
During the six months ended June 30, 2000 and 1999, the Company incurred
$-0- and $1,018,685, respectively, in offering costs that were included
in accounts payable.
During the six months ended June 30, 2000, the Company acquired a
license agreement with a long term obligation of $8.7 million
(See Note 4).
The accompanying notes to unaudited consolidated financial statements are
an integral part of these consolidated statements.
6
<PAGE>
FACTUAL DATA CORP.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Summary of Significant Accounting Policies
The consolidated financial statements are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments), which are, in the
opinion of management, necessary for a fair presentation of the financial
position and operating results for the interim periods. The consolidated
financial statements should be read in conjunction with the financial statements
and notes thereto contained in the Company's Annual Report on Form 10-KSB filed
with the Securities and Exchange Commission March 30, 2000, which includes
audited financial statements for the years ended December 31, 1999 and 1998. The
results of operations for the six months ended June 30, 2000, may not be
indicative of the results of operations for the year ended December 31, 2000.
The Company's diluted earnings per share takes into account warrants
issued in the Company's IPO, the private equity offering and other outstanding
stock options.
Note 2: Line-of-Credit
The Company refinanced its line-of-credit during the second quarter of 2000. The
facility is now a $6,000,000 line-of-credit with interest payable at prime plus
25 basis points, or libor plus 275 basis points. Principal and unpaid interest
is due April 2001. The line-of-credit requires the Company to meet certain
financial covenants and is collateralized by substantially all the assets of the
Company.
Note 3: Stockholder's Equity
The Company issued 1,317 shares of stock to employees valued at $12,182 in
connection with the Company's Employee Stock Purchase Plan during the second
quarter of 2000.
Note 4: Long-term Debt and Obligations
The Company refinanced seller notes from acquisitions and a portion of the
previous line-of-credit with a $4 million term loan through Wells Fargo bank.
The term loan is a 5-year amortization with interest at prime plus 25 basis
points, or libor plus 275 basis points. A fixed swap agreement was negotiated in
which the all-in-one interest rate is now locked at 10.10%.
On April 29, 2000 the Company entered into a 10-year lease agreement, with a
5-year payback period, as the Experian affiliate for the state of Colorado. The
agreement has been recorded as long-term debt on the balance sheet.
As of June 30, 2000, the future maturities of this long-term obligation are as
follows:
Year Ending December 31,
2000...............................................................$ 399,507
2001................................................................ 861,148
2002................................................................ 1,695,246
2003................................................................ 2,280,038
2004................................................................ 2,543,751
2005................................................................ 908,519
-----------
$8,688,209
===========
7
<PAGE>
FACTUAL DATA CORP.
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
This filing contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 and the Company intends that such
forward-looking statements be subject to the safe harbors created thereby. These
forward-looking statements include the plans and objectives of management for
future operations, including plans and objectives relating to services offered
by and future economic performance of the Company.
The forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties that might
adversely affect the Company's operating results in the future in a material
way. Such risks and uncertainties include, but are not limited to: changes in
interest rates, the effectiveness of the Company's marketing campaign, the
response of the mortgage industry, continued market demand for the Company's
services, the effects of seasonality in the housing market, competition, the
success of the Company's consolidation plan, its ability to manage growth, and
the Company's ability to successfully develop and market new report services.
Overview
Factual Data Corp. is a Loveland, Colorado-based information service
provider to the mortgage and consumer lending industries, employers, landlords
and other business customers located throughout the United States. The Company
markets its services through its website, www.factualdata.com, and nationally
through 44 combined locations, including 9 franchisees and 13 licensees.
Factual Data Corp. was formed in 1985 to provide customized credit
reports to mortgage lenders. In the past fifteen years, we have greatly expanded
our business by developing a wide range of information services and
sophisticated technology to deliver those services. We were among the pioneers
in delivering business-to-business information services via electronic commerce.
For over seven years, our customers have been able to reap the benefits of our
information services by way of electronic order and delivery with the touch of a
few buttons from their PC. Today, nearly all of our customers receive our
customized reports by modem or network delivery directly to their computers.
Factual Data became a publicly traded company in 1998 and its common stock and
warrants trade on the NASDAQ National Market under the symbols FDCC and FDCCW.
In the second quarter of 2000, Factual Data's portfolio of services
included fully automated consumer credit reports, employee screening, resident
screening, and similar information services for businesses and
government-sponsored enterprises. Items of note in the second quarter included
key e-commerce agreements and accounts, namely our Experian affiliation,
Mortgage Investment Lending Associates (MILA), and Genesis 2000; the
introduction of Home Equity Lending Products (HELP) to streamline the home
equity lending process for lenders and borrowers; and a $10 million credit
facility from Wells Fargo Bank to continue acquisitions and provide funds for
working capital.
For more information about our services, or items of note to
investors, please visit our website at www.factualdata.com. The website shall
not be deemed to be part of this report.
8
<PAGE>
Results of Operations
The following table sets forth for the periods indicated, as a
percentage of total revenue, those items included in the Company's Unaudited
Consolidated Statements of Income:
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30 June 30
------------------------------------- -------------------------------
2000 1999 2000 1999
<S> ----------- ----------- --------- ---------
Revenue <C> <C> <C> <C>
Information services 90.6 % 86.1 % 90.1 % 84.3 %
Ancillary income 5.5 % 7.6 % 5.9 % 8.2 %
System affiliates 3.9 % 6.3 % 4.0 % 7.5 %
----------- ----------- --------- ---------
Total revenue 100.0 % 100.0 % 100.0 % 100 .0 %
----------- ----------- --------- ---------
Operating expenses
Costs of services provided 57.0 % 58.3 % 56.4 % 57.0 %
Consolidation costs 0.5 % 5.0 % 2.1 % 5.0 %
Selling, general and administrative 25.9 % 17.9 % 24.5 % 16.8 %
Depreciation and amortization 12.2 % 9.2 % 12.0 % 8.8 %
----------- ----------- --------- ---------
Total operating expenses 95.6 % 90.4 % 95.0 % 87.6 %
----------- ----------- --------- ---------
Income from operations 4.4 % 9.6 % 5.0 % 12.4 %
Other income 1.1 % 2.3 % 1.0 % 1.8 %
Interest expense (4.6) % (1.9) % (3.7) % (1.8) %
----------- ----------- --------- ---------
Income before income taxes 0.9 % 10.0 % 2.3 % 12.4 %
---------- ----------- --------- ---------
Income tax expense (0.5) % (4.0) % (1.0) % (4.9) %
----------- ----------- --------- ---------
Net income and comprehensive income 0.4 % 6.0 % 1.3 % 7.5 %
=========== =========== ========= =========
</TABLE>
Comparison of three months ended June 30, 2000 and June 30, 1999
Revenue for the second quarter 2000 increased 15% to $8.03 million
compared with $7.0 million reported for the second quarter of 1999. Information
services revenue increased $1.24 million, or 21%, from $6.03 million in the
second quarter 1999 to $7.27 million in the second quarter 2000. The increase
was primarily a result of our acquisitions. We completed twenty-eight
acquisitions through the second quarter 2000 of which twenty-one of these
acquisitions had been completed through the second quarter 1999. We continued to
diversify in the business-to-business information services sector, with
employment screening and resident qualifier services. Diversification into
non-first mortgage lending with new e-commerce clients such as MILA and Genesis
2000, and new business affiliations like Experian, all contributed to increased
revenues in the second quarter 2000.
Ancillary income represents fees paid by System Affiliates for various
additional products and services provided to them. Ancillary income decreased by
$90,000, or 17%, from $529,000 in the second quarter 1999 to $439,000 in the
second quarter 2000. This decrease was due to the acquisition of nine system
affiliates as part of our consolidation plan.
System Affiliates revenues decreased $124,000, or 28%, from $440,000 in
the second quarter 1999 to $316,000 in the second quarter 2000. The decrease was
due to our acquisition of nine System Affiliates. The reduction in System
Affiliates revenues was expected to continue as we acquire additional System
Affiliates and since we have discontinued further franchising and licensing
programs.
Costs of services increased $503,000, or 11%, from $4.1 million in the
second quarter 1999 to $4.6 million in the second quarter 2000. The increases in
direct operational costs are related to our increased revenues. The cost of
services, as a percentage of revenue, was relatively unchanged from the second
quarter of 1999 at 58.3% compared to the second quarter of 2000 at 57.0%. As
variable costs, these cost of services are directly related to bureau costs,
salaries, and telecommunication costs.
9
<PAGE>
Selling, general and administrative expenses increased $824,000, or
62%, from $1.3 million in the second quarter 1999 to $2.1 million in the second
quarter 2000. As previously stated in the first quarter 10-QSB, we have
continued to expand our corporate infrastructure. Our corporate facility now
includes a second building of approximately 16,000 square feet to accommodate
our new national sales staff as well as additional corporate management. Along
with the new corporate facility we opened a second technology center located in
Denver, Colorado. The expenses related to these new facilities and additional
staffing did not exist in the second quarter of 1999. Further items that relate
to the increase include additional professional fees due to new SEC reporting
requirements, as well as the hiring of an investor relations firm.
Consolidation costs for the second quarter 2000 were $36,000, as
compared to $350,000 for the second quarter 1999. These costs include one-time
consolidation charges for items such as recruiting fees, salaries for terminated
owners and managers of acquired businesses, and travel costs for the
consolidation and relocation of our regional processing centers.
Depreciation and Amortization expense increased $333,000, or 51%, from
$647,000 in the second quarter 1999 to $980,000 in the second quarter 2000. This
increase reflects the amortization expense of our twenty-eight acquisitions
through the second quarter 2000 compared to twenty-one of these acquisitions we
had made through the second quarter 1999. As we continue the amortization of
intangible assets, we will continue to incur these non-cash expenses.
Interest expense increased $236,000, or 172%, from $137,000 in the
second quarter 1999 to $373,000 in the second quarter 2000. This increase is due
to additional notes payable issued in connection with our new acquisitions, as
well as the newly restructured debt facility.
Income taxes decreased $233,000, or 84%, from $277,000 in the second
quarter 1999 to $44,000 in the second quarter 2000. Our effective tax rate for
the second quarter 1999 was 40% and 60% for the second quarter 2000. The
increase in tax rate is due to the permanent rather than timing differences of
non-deductible items relating to a December 1998 acquisition.
As a result of the foregoing, net income for the second quarter 2000
was $29,000, or $0.01 per diluted share, based on 5,679,479 shares compared to
$423,000, or $0.07 per diluted share, based on 5,813,198 shares for the second
quarter 1999. This earning per share calculation takes into account
consolidation costs of $36,000 or $0.01 per diluted share for the second quarter
2000.
Our second quarter 2000 EBITDA (earnings before interest, taxes,
depreciation and amortization) was $1.43 million, or $0.25 per diluted share
based on 5,679,479 shares, as compared to $1.49 million, or $0.26 per diluted
share based on 5,813,198 shares in the second quarter 1999. In the second
quarter 2000, this EBITDA per share calculation takes into account consolidation
costs of $36,000, or $0.01 per diluted share, as a result of acquisitions,
through the second quarter 2000. Excluding the consolidation costs we would have
reported EBITDA for the second quarter 2000 of $1.46 million, or $0.26 per
diluted share. As the depreciation and amortization costs continue to negatively
impact net income, EBITDA continues to be the most informative gauge for Factual
Data as a signal of the company's cash generation.
EDITDA is defined as earnings before interest, income taxes,
depreciation and amortization. EBITDA should not be considered as an alternative
to net income (as an indicator of operating performance) or as an alternative to
cash flow (as a measure of liquidity or ability to service debt obligations) and
is not in accordance with, nor superior to, generally accepted accounting
principles, but provides additional information for evaluating Factual Data
Corp.
Comparison of six months ended June 30, 2000 and June 30, 1999
Revenue for the six months ended June 30, 2000 increased 28% to $15.8
million from $12.3 million reported for the six months ended June 30, 1999.
Information services revenue increased $3.9 million, or 38% from $10.4 million
for the six months ended June 30, 1999 to $14.3 million for the six months ended
June 30, 2000. For the six months ended June 30, 2000 revenue from our
employment screening and tenant qualifier services increased 49% to $1.44
million from $964,000 for the six months ended June 30, 1999. This increase
includes same store sales growth and revenue from an employment screening
acquisition.
10
<PAGE>
Ancillary income represents fees paid by System Affiliates for various
additional products and services provided to them. Ancillary income decreased by
$72,000, or 7%, from $1.0 million for the six months ended June 30, 1999 to
$935,000 for the six months ended June 30, 2000. This decrease was due to the
acquisition of nine system affiliates as part of our consolidation plan.
System Affiliates revenues decreased by $295,000, or 32%, from $924,000
for the six months ended June 30, 1999 to $629,000 for the six months ended June
30, 2000. This decrease was due to the acquisition of nine System Affiliates as
part of our consolidation plan.
Costs of services increased $1.89 million or 27%, from $7.05 million
for the six months ended June 30, 1999 to $8.94 million for the six months ended
June 30, 2000. Although the Costs of services in terms of dollars have
increased, as a percentage of sales these direct costs have slightly decreased.
Selling, general and administrative expenses increased $1.80 million,
or 87%, from $2.07 million for the six months ended June 30, 1999 to $3.87
million for the six months ended June 30, 2000. As a percentage of sales,
selling, general and administrative costs increased from 16.8% for the six
months ended June 30, 1999 to 24.5% for the six months ended June 30, 2000. As
previously stated we have continued to expand our corporate infrastructure. Our
corporate facility now includes a second building of approximately 16,000 square
feet to accommodate our new national sales staff as well as additional corporate
management. Along with the new corporate facility we opened a second technology
center located in Denver, Colorado. The expenses related to these new facilities
and additional staffing did not exist in the first six months of 1999. Further
items that relate to the increase include additional professional fees due to
new SEC reporting requirements, as well as the hiring of an investor relations
firm
Depreciation and Amortization expense increased $810,000, or 75% from
$1.08 million for the six months ended June 30, 1999 to $1.89 million for the
six months ended June 30, 2000. This increase reflects the amortization expense
of our twenty-eight acquisitions through the second quarter 2000 compared to
twenty-one of these acquisitions we had made through the second quarter 1999. As
we continue the amortization of intangible assets created by the acquisitions,
it will continue to incur these non-cash but tax-deductible expenses.
Interest expense increased $362,000, or 162% from $223,000 for the six
months ended June 30, 1999 to $585,000 for the six months ended June 30, 2000.
The increase is due to additional notes payable issued in connection with our
new acquisitions, as well as the newly restructured debt facility.
Income taxes decreased $442,000, or 73%, from $603,000 for the six
months ended June 30, 1999 to $161,000 for the six months ended June 30, 2000.
Our effective tax rate is approximately 39% for the six months ended June 30,
1999 compared to 45% for the six months ended June 30, 2000. As previously
stated in the three-month comparison, the increase in the effective tax rate is
directly related to the non-deductible, permanent rather than timing differences
from a December 1998 acquisition.
As a result of the foregoing, net income decreased $733,000, or 79%,
from $932,000 for the six months ended June 30, 1999 to $199,000 for the six
months ended June 30, 2000.
For the six months ended June 30, 2000 we had 5,589,319 diluted
weighted average shares outstanding as compared to 4,790,637 diluted weighted
average shares outstanding for the six months ended June 30, 1999.
Diluted earnings per share decreased by $0.15 per share, or 79%, from
$0.19 per share for the six months ended June 30, 1999 to $0.04 per share for
the six months ended June 30, 2000. This earnings per share comparison takes
into effect a 17% increase in weighted average number of diluted shares
outstanding, from 4,790,637 for the six months ended June 30, 1999 to 5,589,319
for the six months ended June 30, 2000.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the six months ended June 30, 2000, were $2.84 million as compared to $2.84
million for the six months ended June 30, 1999. Diluted earnings before
interest, taxes, depreciation and amortization (EBITDA) per share for the six
months ended June 30, 2000, were $0.51 as compared to $0.59 for the six months
ended June 30, 1999. Again this per share comparison takes into effect a 17%
increase in weighted average number of diluted shares outstanding.
11
<PAGE>
EDITDA is defined as earnings before interest, income taxes,
depreciation and amortization. EBITDA should not be considered as an alternative
to net income (as an indicator of operating performance) or as an alternative to
cash flow (as a measure of liquidity or ability to service debt obligations) and
is not in accordance with, nor superior to, generally accepted accounting
principles, but provides additional information for evaluating Factual Data
Corp.
Liquidity and Capital Resources
We had cash and cash equivalents of $1,091,000 at June 30, 2000. We
were able to manage the net impact of accounts receivable, accounts payable, and
accrued expenses on cash flows from operations, which with net income of
$199,000 and depreciation and amortization of $1,891,000 resulted in cash flow
provided from operations of $1,869,000. As the Company begins to see its
infrastructure substantially being complete, we are focusing on improving cash
flows from operations to fund current maturities of long-term debt.
We used cash and cash equivalents of $626,000 to purchase additional
equipment and furniture to build the infrastructure for our corporate and
regional centers. We also used cash to liquidate $5.03 million of principal
payments on long-term debt. Net cash used for the continuing acquisition costs
were $315,000, and net activity on the line of credit was $331,000. We also
received cash proceeds of $4.0 million for the restructuring of debt, which
resulted in a gain of $189,000.
Management believes that our anticipated cash requirements for the
immediate future will be met from internally generated funds as well as the $6.0
million line-of-credit through Wells Fargo (See Note 2). The Company is
continuing to pursue acquisitions and looking at favorable alternatives to
finance these acquisitions.
12
<PAGE>
II - OTHER INFORMATION
Item 1. Legal Proceedings
See Item 3 of the registrant's annual report on Form 10-KSB/A for the
year ended December 31, 1999.
Item 6. Exhibits and Reports on Form 8-K
Exhibits - The following exhibits have been previously filed:
No. Description
27 Financial Data Schedule
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SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: September 28, 2000
FACTUAL DATA CORP.
(Registrant)
/s/ J. H. Donnan
--------------------------
J. H. Donnan
Chief Executive Officer
(Principal Executive Officer)
/s/ Todd A. Neiberger
--------------------------
Todd A. Neiberger
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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