Equifax Inc. Reports Operating Results (10-Q)
Equifax Inc. has a market cap of $4.45 billion; its shares were traded at around $35.26 with a P/E ratio of 15.1 and P/S ratio of 2.5. The dividend yield of Equifax Inc. stocks is 0.5%. Equifax Inc. had an annual average earning growth of 7.5% over the past 10 years.EFX is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Robert Olstein of Olstein Financial Alert Fund, Ron Baron of Baron Funds, Donald Yacktman of Yacktman Asset Management Co., Steven Cohen of SAC Capital Advisors, Manning & Napier Advisors, Inc, George Soros of Soros Fund Management LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:The increase in cost of services, when compared to the same period in 2009, was due to the impact of foreign currency translation, which increased our cost of services by $6.9 million during the first quarter of 2010, and our fourth quarter 2009 acquisitions of IXI Corporation and Rapid Reporting Verification Company which contributed $6.2 million of incremental cost year-over-year. Overall cost of services increased at a faster rate than revenues because some of our highest margin credit reporting services have declined in this market environment, while we have replaced this revenue with our acquisitions and with services that have higher data and/or operating costs.
Selling, general and administrative expense decreased $9.6 million, compared to the same period in 2009. This decrease was primarily due to a restructuring charge of $8.4 million incurred in the first quarter of 2009 related to headcount reductions. Other increases in selling, general and administrative expenses of $3.5 million due to changes in foreign exchange rates and $4.4 million due to the inclusions of businesses which we acquired in the fourth quarter of 2009 were offset by the impact of our cost reduction programs implemented over the last year, lower bad debt expense and lower incentive costs.
The $6.7 million, or 7%, increase in operating income for the first quarter of 2010, when compared to the same period in 2009, is attributed to the 3% increase in revenues and a net improvement in operating margin, driven by the $8.4 million restructuring charge in the first quarter of 2009 which did not recur this year, but was partially offset by a less favorable mix of products.
The increase in other expense, net, as compared to 2009, was primarily due to the change in other income, net, as interest expense was flat. Other income, net, for 2009 included a $1.1 million gain on our repurchase of $7.5 million principal amount of our ten-year senior notes due 2017 and a $1.3 million gain related to a litigation settlement. Interest expense was flat, when compared to the same period in 2009, as our average debt balance decreased from $1.23 billion in 2009 to $1.17 billion in 2010 while the average cost of our total debt increased slightly from 4.7% in 2009 to 4.9% in 2010.
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