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Interactive Data Reports First-Quarter 2014 Results

Interactive Data Corporation today reported its financial results for the first quarter ended March 31, 2014. Interactive Data's first-quarter 2014 revenue was a record $234.4 million, a 4.9% increase from $223.5 million in the first quarter of 2013. Excluding the impact of changes in foreign exchange rates, Interactive Data's organic (non-GAAP) revenue for the first quarter of 2014 grew by 3.9% from the first quarter in 2013.

Interactive Data's first-quarter 2014 income from operations was $40.9 million, compared with $43.4 million in the first quarter of 2013. Non-GAAP adjusted EBITDA (which excludes items that are either not part of the Company's ongoing core operations, or do not require a cash outlay, or are not otherwise expected to recur in the ordinary course) for the first quarter of 2014 was $81.7 million, compared with $83.1 million in the same period one year ago.

"Interactive Data continued to grow despite the challenging spending environment," stated Stephen Daffron, Interactive Data's president and CEO. "Our organic revenue growth of 3.9% was primarily driven by the combination of continued expansion of our Pricing and Reference Data segment and a large customer implementation of our 7ticks trading infrastructure managed services. Our adjusted EBITDA performance reflected continued investment in key product and technology development initiatives, and hardware-related costs related to the 7ticks customer implementation. In early May, we completed a refinancing of the Company's debt obligations, which resulted in both extended maturities and reduced cash interest expense. We believe this reflects positively on our outlook as well as the progress we have made to improve the fundamental operating performance of our Company over the past several years."

Segment Reporting and Related Operating Highlights

Pricing and Reference Data Segment:

  • Interactive Data's Pricing and Reference Data segment reported first-quarter 2014 revenue of $162.9 million, a 3.5% increase over the first quarter of 2013. Excluding the impact of changes in foreign exchange rates, first-quarter 2014 organic (non-GAAP) revenue for this segment increased by 2.8% from the same period last year. The segment's performance reflects growth in the Company's evaluated pricing and reference data services in North America, and, to a lesser extent, improved results in its BondEdge fixed income analytics product area. During the first quarter, Interactive Data announced reference data collaborations with Bloomberg, Microsoft and SAP that are aimed at making the Company's reference data content easier to integrate and use across a broad range of information technology and business intelligence systems. The segment has also continued to advance key development initiatives including the APEXSM suite of reference data delivery services, continuous evaluated pricing and VantageSM.

Trading Solutions Segment:

  • Interactive Data's Trading Solutions segment generated first-quarter 2014 revenue of $71.5 million, an increase of 8.2% over $66.0 million in the same period one year ago. Excluding the impact of changes in foreign exchange rates, first-quarter 2014 organic (non-GAAP) revenue for this segment increased by 6.5% from the same period last year primarily as a result of a large customer implementation in the 7ticks trading infrastructure managed services product area. First-quarter 2014 highlights for the segment included launching a new version of a TREP feed handler, which enables integration of the Interactive Data Consolidated Feed with a customer's market data platform. In addition, the segment also continued to invest in enhancing and expanding the content and analytics across its range of hosted web applications and workstation offerings.

Other First-quarter 2014 Financial and Operating Highlights

Effects of Foreign Exchange:

  • The net effect of changes in foreign exchange rates increased first-quarter 2014 income from operations by $0.5 million.

Balance Sheet Highlights:

  • As of March 31, 2014, Interactive Data had cash, cash equivalents and short-term investments of $326.9 million, compared with $360.2 million at the end of 2013 and $235.9 million at the same time last year. The Company's cash position reflected debt-related payments in the first quarter of 2014 of $48.0 million associated with its senior notes and term loan, and a mandatory term loan prepayment of $7.9 million tied to 2013 excess cash flow. The Company's total debt outstanding as of March 31, 2014 was approximately $2.0 billion.

Refinancing Activity

  • On May 2, 2014, Interactive Data completed a new $2.1 billion senior secured credit facility, consisting of a 5-year $160 million Revolver (unfunded at close) and a 7-year $1.9 billion term loan. Additionally, the Company completed the offering of $350 million in aggregate principal amount of 5.875% Senior Notes due 2019. Net proceeds from these activities, along with approximately $90 million in cash were used to refinance its $1.3 billion existing term loan, redeem the $700 million 10.25% Senior Notes due 2018, pay related fees and expenses, and fund a $273 million dividend payment to its parent entities, which in turn paid a distribution of approximately $273 million to their equity holders. As a result of the refinancing activity, the Company expects to reduce its annual cash interest expense by approximately $6 million in 2014, and, assuming our current interest rates and principal balance remain in place (subject to scheduled amortization), by over $10 million annually thereafter, versus full-year 2013 cash interest expense.
  • The Company's total debt outstanding as of May 2, 2014 was approximately $2.3 billion.