ChoicePoint Reports Record Operating Margins For First Quarter

ChoicePoint Inc., a leading provider of intelligent information to help businesses, governments and individuals better understand their clients and business associates, has reported record results for the first quarter of 1998 with operating income up 23.1% to $15 million and an operating margin of 15.9%, up 33.6% on last year's first quarter figures. ChoicePoint's net income increased 36.8% over last year's figure, and EPS was up 39% over pro forma 1997.

Derek Smith, president and CEO of ChoicePoint said, "I'm pleased with this quarter's operating results, and with the progress we made in our strategic priorities for the business. Our primary focus continues to be on retooling and enhancing our business to build long-term capabilities. Maintaining solid financial performance certainly gives us greater flexibility to execute key strategic initiatives."

ChoicePoint's comparable first quarter revenues increased 8.5% to $94.6 million, whilst EBITDA and EVA, key financial measures for the Company, showed strong results of $22.0 million and $2.3 million for the quarter, respectively.

"We had a good first quarter, with solid internal revenue growth and record operating margins," added Chief Financial Officer Doug Curling. "Our focus, however, is on long-term performance more than quarterly results. Given the operational challenges this quarter, including trailing effects of the divestiture of PMI, and the full integration of the CDB Infotek acquisition, I'm proud of the foundation our associates have laid for meeting our 1998 objectives."

Excluding the effect of the sale of ChoicePoint's paramedical examinations business in December 1997, consolidated revenues increased $7.4 million, or 8.5%, from $87.2 million for the first quarter of 1997 to $94.6 million for the first quarter of 1998. Including the 1997 paramedical examinations business, consolidated operating revenues decreased $8.3 million, or 8.1%, from $102.9 million for the first quarter of 1997 to $94.6 million for the first quarter of 1998.

Driven by strong unit performance in personal lines and software development sales, revenue from property and casualty insurance services increased $5.9 million, or 12.9%, from $45.5 million in the first quarter of 1997 to $51.4 million in the first quarter of 1998.

Excluding the effect of the sale of the paramedical examinations business in December 1997, revenue from Life and Health Insurance Services decreased $1.3 million or 6.1% from $21.4 million in the first quarter of 1997 to $20.1 million in the first quarter of 1998, due primarily to unit decline in life and health inspection reports and laboratory services. Including the paramedical examinations business, revenue from Life and Health Insurance Services decreased $16.9 million from $37.0 million in the first quarter of 1997 to $20.1 million in the first quarter of 1998.

Revenue from Business and Government Services increased $2.7 million, or 13.4%, from $20.3 million in the first quarter of 1997 to $23.0 million in the first quarter of 1998. Revenues increased in the majority of product lines within this market.

Operating income for the first quarter of 1998 was $15.0 million as compared to $12.2 million in the first quarter of 1997. Operating margins increased to 15.9% for the first quarter of 1998 as compared to 11.9% for the first quarter of 1997, primarily as a result of strong revenue performance in automated products.

Net income for the first quarter of 1998 was $7.6 million - representing an increase of $2.0 million from the first quarter of 1997.