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

Conference Call

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.

Neustar, Inc. (NYSE: NSR), the .biz .us and .co registry among other things, announced results for the quarter and year ended December 31, 2012 and provided guidance for 2013. Revenue increased 34% to $831.4 million in 2012. Income from continuing operations increased 26% to $156.1 million.

Here is the press release:

STERLING, Va., Feb. 5, 2013 — Neustar, Inc. (NYSE: NSR), a trusted, neutral 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 and year ended December 31, 2012 and provided guidance for 2013.

Summary of Fourth Quarter Results Compared to Fourth Quarter of 2011

·         Revenue increased 23% to $214.2 million

·         Income from continuing operations increased 102% to $37.8 million or $0.56 per share

·         Adjusted net income increased 37% to $50.7 million, representing a margin of 24%

·         Adjusted earnings per share increased 47% to $0.75

·         Adjusted EBITDA was $101.3 million compared to $78.5 million

Summary of 2012 Results Compared to 2011

·         Revenue increased 34% to $831.4 million

·         Income from continuing operations increased 26% to $156.1 million or $2.30 per share

·         Adjusted net income increased 30% to $206.4 million, representing a margin of 25%

·         Adjusted earnings per share increased 43% to $3.04

·         Adjusted EBITDA was $398.2 million compared to $298.7 million

“We successfully executed on our priorities in 2012.  We exceeded our financial performance targets, we successfully integrated a major acquisition that furthered our transition into information and analytics, and we made strong progress in instilling a culture of ownership,” said Lisa Hook, Neustar’s president and chief executive officer.  “We look forward to continuing to capitalize on the opportunities we see in the market and renewing the NPAC contract.”

Paul Lalljie, Neustar’s chief financial officer added, “Our 2012 operating results demonstrate strong execution across all of our business segments while integrating a significant acquisition.  In addition, we repurchased nearly $100 million of our common stock and improved our financial flexibility through our recently executed credit facility and notes offering.  Our guidance for 2013 reflects the momentum from 2012, operating leverage, and the impact of our new debt structure.”

Business Outlook for 2013

·         Revenue to range from $895 million to $915 million or growth of 8% to 10%

·         Adjusted net income to range from $220 to $230 million or growth of 7% to 11%.  This growth rate was influenced by discrete tax benefits totaling $6.8 million which resulted in higher adjusted net income in 2012.  On a per share basis, adjusted net income is expected to range from $3.28 to $3.43

Discussion of Fourth Quarter and Full-Year 2012 Results

Fourth Quarter Revenue

Consolidated revenue totaled $214.2 million, a 23% increase from $174.2 million in the fourth quarter of 2011.  In particular:

·         Carrier Services revenue totaled $126.2 million, an 11% increase from $113.3 million in 2011.  This increase was primarily due to an $11.2 million increase in NPAC Services revenue;

·         Enterprise Services revenue totaled $45.2 million, a 14% increase from $39.7 million in 2011.  This increase was due to higher revenue in both Internet Infrastructure Services and Registry Services; and

·         Information Services generated revenue of $42.8 million in the fourth quarter as compared to revenue of $21.2 million from the November 8, 2011 acquisition date through the end of the year.

Full-Year Revenue

Consolidated revenue totaled $831.4 million, a 34% increase from $620.5 million in 2011.  In particular:

·         Carrier Services revenue totaled $502.1 million, a 12% increase from $447.9 million in 2011.  This increase was primarily due to a $43.8 million increase in NPAC Services revenue;

·         Enterprise Services revenue totaled $170.4 million, a 13% increase from $151.4 million in 2011.  This increase was due to higher revenue in both Internet Infrastructure Services and Registry Services; and

·         Information Services generated revenues of $158.9 million for 2012.  Revenue from Information Services was $21.2 million from the November 8, 2011 acquisition date through the end of 2011.

Operating expense for the fourth quarter totaled $144.9 million, a 7% increase from $134.8 million in 2011.  This $10.1 million increase was driven by incremental operating expense of $19.2 million from the acquisition of our Information Services segment.  This increase of $19.2 million was partially offset by $9.6 million of acquisition costs incurred in the 2011 quarter.

Operating expense for 2012 totaled $554.7 million, an increase of 35% or $143.3 million from $411.4 million in 2011.  This increase was driven by incremental operating costs of $130.4 million from the acquisitions completed in 2011. This increase of $130.4 million was partially offset by expenses incurred in 2011 driven by acquisition costs of $11.6 million.  The remaining $24.5 million increase represents a growth of 6% in the Company’s operating expense.

For 2012, adjusted net income totaled $206.4 million, including the impact of discrete tax benefits totaling $6.8 million, primarily associated with a domestic production activities deduction.  Excluding the impact of these discrete tax benefits, our effective tax rate was approximately 38.6%.

Cash, cash equivalents and investments totaled $343.9 million as of December 31, 2012, an increase of $208.6 million from December 31, 2011.

As of December 31, 2012, the Company’s outstanding debt under its 2011 credit facility was $592.5 million.  On January 22, 2013, the Company refinanced this credit facility.  In particular, the Company issued $300 million of 4.5% senior notes that mature in 2023.  In addition, the Company completed a $525 million credit facility that includes a $325 million term loan A and a $200 million revolver.  The interest rate for the term loan A and the revolver is leverage-based and ranges from LIBOR plus 1.50% to LIBOR plus 1.75%.  At the Company’s current leverage, the applicable interest rate is LIBOR plus 1.50%.  The Company will record a non-operating expense of approximately $11.0 million in the first quarter of 2013 related to the modification and extinguishment of its 2011 credit facility.