BETHESDA, MD -- The addition of a strong U.K. operation and continued organic growth of the core business contributed to revenue growth of 18.3% for the first quarter of 2003 over the first quarter of 2002, CoStar Group, Inc. (NASDAQ: CSGP) announced today.
CoStar Group, the leading provider of information services to the commercial real estate industry in the United States, entered the U.K. market in January 2003 with the acquisition of London-based Property Intelligence plc, a leading provider of commercial real estate information in the United Kingdom.
Revenues for the first quarter of 2003 were $22.6 million, compared to $19.1 million in the first quarter of 2002. In addition, revenues increased sequentially by 9% for the first quarter of 2003 over the fourth quarter of 2002. The U.K. operation contributed approximately 7% of the revenue for the first quarter of 2003, with income from operations equal to approximately 10% of U.K. revenue, before corporate charges.
"We believe several factors contributed to the steady progress we have achieved," said CoStar President & CEO Andrew C. Florance. "We continue to post sequential increases in revenue and earnings as a result of steady organic growth in our U.S. operations, while our new U.K. operation provides additional opportunities for growth. We believe the commercial real estate industry will soon begin to stabilize, which may also help us to achieve higher growth rates later in the year."
For the quarter ended March 31, 2003, pro forma net income, which excludes purchase amortization, improved to $972,000 versus pro forma net income of $225,000 for the same quarter in 2002. On a per share basis, pro forma net income improved to $0.06 per share for the first quarter of 2003 versus pro forma net income of $0.01 per share for the first quarter of 2002. EBITDA (earnings before interest, taxes, depreciation and amortization) increased to $2.4 million for the first quarter of 2003 compared to EBITDA of $1.3 million in the first quarter of 2002. The Company's GAAP-basis net loss for the first quarter of 2003 narrowed to ($843,000) or $(0.05) per share, compared to a net loss of $(1.6) million or $(0.10) per share for the first quarter of 2002.
As of March 31, 2003, the Company had $26.3 million in cash, cash equivalents, and short-term investments, and no long-term debt.
"For the second quarter of 2003, we expect overall sequential quarterly revenue growth of approximately 2% over the first quarter of 2003, and pro forma net income of approximately $0.08 per share" said Frank Carchedi, CoStar's Chief Financial Officer. "In addition, we continue to expect to reach our stated goal of approximately $0.40 of pro forma net income per share for 2003. Adjusting these pro forma amounts for purchase amortization, which we anticipate to be consistent with the charges for the first quarter of 2003, we expect a GAAP-basis net loss of approximately $(0.03) per share for the second quarter of 2003 and a GAAP-basis total net loss of approximately $(0.05) per share for the year 2003. We continue to expect to reach GAAP-basis net income during 2003."
CoStar Group, Inc.
Condensed Consolidated Balance Sheets
Management will conduct a conference call to discuss earnings results for the quarter ended March 31, 2003 and financial outlook for 2003, at 11:00 am ET, Thursday, April 24, 2003. 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 (800) 329-4405 within the United States or (706) 634-0964 outside the United States. A telephonic replay of the conference call will be available two hours after the live call concludes through midnight on May 1, 2003. The replay telephone number is (800) 642-1687 within the United States or (706) 645-9291 outside the United States. Refer to Conference ID 9586040. The replay will also be available over the Internet at http://www.costar.com/corporate/investor for a period of time following the call.
About CoStar Group, Inc.
CoStar Group, Inc., (NASDAQ: CSGP) is the leading provider of information services to commercial real estate professionals in the United States and the United Kingdom. CoStar's suite of products offers customers access via the Internet to the most comprehensive, verified database of commercial real estate information on 50 U.S. markets, London and the United Kingdom. Based in Bethesda, MD, the company has approximately 850 employees in 34 offices throughout the United States and the United Kingdom, including the largest professional research organization in the industry.