Neustar, Inc., the .biz .us and .co registry and a provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors, today announced results for the quarter ended March 31, 2013. The company also announced that it plans to purchase up to $250 million of its Class A common shares beginning May 7, 2013 through December 31, 2013.
Neustar, Inc. today also announced that Leonard (Len) Kennedy will join the company as Senior Vice President and General Counsel, effective May 13. In this position, Mr. Kennedy will oversee Neustar’s legal and external affairs efforts, including public policy and government relations. Mr. Kennedy comes to Neustar from the U.S. Consumer Financial Protection Bureau, where he served as Associate Director and General Counsel and, most recently, as Senior Advisor to the Director. Previously, he served as General Counsel and Chief Government Affairs Officer at Sprint Nextel.
Results for First Quarter 2013 Compared to First Quarter 2012
- Revenue increased 8% to $216.4 million
- Non-NPAC revenue increased 10% to $107.1 million
- Net income decreased 1% to $33.8 million, including the impact of a $10.9 million charge for the loss on debt modification and extinguishment
- Net income per share was flat at $0.50
Non-GAAP Results for First Quarter 2013 Compared to First Quarter 2012
- Adjusted net income increased 23% to $54.1 million, representing a 25% margin
- Adjusted net income per share increased 25% to $0.80
“In the first quarter, we made progress on each of our 2013 priorities,” said Lisa Hook, Neustar’s president and chief executive officer. “We submitted our proposal for the NPAC contract in early April, and we remain confident in our ability to provide world class service to the communications industry. In addition, we continued to implement our strategy through targeted investments in our people and platforms, while identifying and executing on significant growth opportunities.”
Paul Lalljie, Neustar’s chief financial officer added, “The 25% increase in first quarter adjusted earnings per share demonstrated strong operating leverage and prudent cost management. Our first quarter results and leading indicators provide us with the visibility to affirm our full-year guidance. In addition, we have announced a $250 million share repurchase program that returns significant capital to our shareholders while maintaining our ability to invest in the growth of our business.”
Discussion of First Quarter Results
Consolidated revenue totaled $216.4 million, an 8% increase from $199.6 million in the first quarter of 2012. This $16.8 million increase included growth in all three of our operating segments. In particular:
- Carrier Services revenue totaled $132.2 million, a 6% increase from $124.4 million in 2012. This increase was primarily due to a $7.5 million increase in NPAC Services revenue;
- Enterprise Services revenue totaled $44.8 million, a 13% increase from $39.5 million in 2012. This increase was due to higher revenue in both Internet Infrastructure and Registry Services; and
- Information Services revenue totaled $39.5 million, a 10% increase from $35.7 million in 2012. This increase was primarily due to higher revenue in Verification and Analytics Services.
Operating expense totaled $145.6 million, an 8% increase from $135.2 million in the first quarter of 2012. This increase was primarily due to the expansion of the company’s operations. In particular, stock-based compensation increased $5.1 million driven by performance-based equity that was granted to a broader employee base.
Cash, cash equivalents and investments totaled $378.2 million as of March 31, 2013, compared to $343.9 million as of December 31, 2012. The debt refinancing completed in January 2013 resulted in total debt obligations of $623.8 million as of March 31, 2013, compared to $587.3 million as of December 31, 2012. During the first quarter, the company purchased approximately 551,000 shares of common stock at an average price of $44.38 per share, for a total purchase price of $24.4 million.
Business Outlook for 2013
The company affirmed its guidance for revenue and adjusted net income provided on February 5, 2013:
- Revenue to range from $895 million to $915 million
- Adjusted net income to range from $220 million to $230 million
- Adjusted net income per share to range from $3.28 to $3.43
As announced on April 18, 2013, 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 (www.neustar.biz). Those listening via the Internet should go to the website 15 minutes early to register, download and install any necessary audio software.
The conference call is also accessible via telephone by dialing (888) 437-9315 (international callers dial (719) 325-2223) and entering PIN 5300732. For those who cannot listen to the live broadcast, a replay will be available through 11:59 p.m. (Eastern Time) Thursday, May 9, 2013 by dialing (877) 870-5176 (international callers dial (858) 384-5517) and entering replay PIN 5300732, or by going to the Investor Relations tab of the company’s website (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, the financial tables and other supplemental information are available on the company’s website under the Investor Relations tab. This includes 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.
About Neustar, Inc.
Neustar, Inc. (NYSE: NSR) is a trusted, neutral provider of real-time information and analysis to the Internet, telecommunications, information services, financial services, retail, media and advertising sectors. Neustar applies its advanced, secure technologies in location, identification, and evaluation to help its customers promote and protect their businesses. More information is available at www.neustar.biz.