BETHESDA, MD -- CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of information services to the U.S. commercial real estate industry, announced today that it achieved continued revenue and earnings growth for the first quarter of 2002 compared to the first quarter of 2001. In addition, the company reported an increase in sequential quarterly revenue growth from the fourth quarter of 2001.
Revenues for the first quarter were $19.1 million, an increase of $1.7 million or 9.8 percent when compared to the first quarter of 2001. Revenues increased sequentially by 2.3 percent over the fourth quarter of 2001, more than double that quarter's 1.0 percent sequential growth rate over the third quarter of 2001. The pro forma net income for the first quarter of 2002, which excludes purchase amortization and the related income tax benefit, was $225,000, or $0.01 per share, an improvement over pro forma losses of $(4.6) million or $(0.29) per share in the first quarter of 2001. As of March 31, 2002, the Company had $41.6 million in cash, cash equivalents and short-term investments, nearly unchanged from December 31, 2001.
Year 2001-2002 Quarterly Results:
(in millions, except per share data)
"We continued to achieve growth in revenue and earnings, notwithstanding the difficult economic climate experienced by our client industry over the last several quarters," stated CoStar Group president & CEO Andrew C. Florance. "One of the most important attributes of our business model is our ability to grow revenues over a relatively fixed cost structure. We are now seeing the benefits of that model. During the past three quarters, we achieved three of the four key measures of profitability -- cash flow, pro forma profits and EBITDA. We are looking forward to achieving the fourth measure -- GAAP-basis earnings."
The Company has now achieved positive EBITDA (earnings before interest, taxes, depreciation and amortization) for three consecutive quarters and pro forma profitability in the fourth quarter of 2001 and the first quarter of 2002. CoStar Group has consistently reported pro forma results, which exclude only purchase amortization from its acquisitions and the related tax benefits. Including these items, net losses continue to decline sequentially from (0.17) per share in the fourth quarter of 2001 to (0.10) per share in the first quarter of 2002. In the first quarter of 2002, purchase amortization charges declined by approximately $1.4 million from the fourth quarter of 2001, due principally from changes in accounting requirements for the amortization of goodwill, which took effect on January 1, 2002.
"We believe that our market leading position has never been stronger," Florance stated. "The real estate industry's largest and most influential firms have committed to CoStar as the data standard for their U.S. operations." Between July 2001 and April 2002, CoStar secured long-term, national renewal agreements with CB Richard Ellis, Cushman & Wakefield, Grubb & Ellis, Marcus & Millichap and The Staubach Co. In addition, CoStar is in discussions with two other large national customers on multi-year renewal agreements. "We're pleased to have the endorsement and continued support of the industry's leading players," Florance added.
"For the second quarter, we continue to expect our revenues to grow approximately 2 percent sequentially and we expect pro forma net income of $.01 per share, consistent with the previous two quarters," Florance stated. "As we continue to grow and mature our sales force, and when conditions in the commercial real estate industry ultimately improve, we believe we will see a return to higher sequential quarterly growth."
CoStar Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(a) Includes purchase amortization of $954 and $1,334 for the three month periods ended March 31, 2002 and 2001, respectively
(b) Includes depreciation and other amortization of $1,351 and $1,452 for the three-month periods ended March 31, 2002 and 2001, respectively
(c) Pro forma net income (loss) excludes purchase amortization and the related income tax benefit
CoStar Group, Inc.
Condensed Consolidated Balance Sheets
Management will conduct a conference call to discuss earnings results for the quarter ended March 31, 2002, at 11:00 am ET, Wednesday, April 24, 2002. This conference call will be broadcast live over the Internet at http://www.costar.com/corporate/investor/. If you would like to join by telephone, please call (888) 688-0419 within the United States or (706) 634-0964 outside the United States. A replay of the conference call will be available two hours after the live call concludes through midnight on May 1, 2002. The replay telephone number is (800) 642-1687 within the United States or (706) 645-9291 outside the United States. Refer to conference ID 3727630. The replay will also be available over the Internet through midnight on May 1, 2002.
About CoStar Group, Inc.
Headquartered in Bethesda, MD, CoStar Group, Inc. (NASDAQ: CSGP), is the leading provider of information services to the U.S. commercial real estate industry. CoStar's suite of products offers customers access to the most comprehensive, verified database of commercial real estate information in 50 U.S. markets. The company has approximately 800 employees and contractors in 28 offices nationally.