Print Release (pdf)
BETHESDA, MD – April 22, 2009 – CoStar Group, Inc. (NASDAQ: CSGP), the number one provider of information/marketing services to the commercial real estate industry, today announced that net income for the quarter ended March 31, 2009 increased 21.1% to $6.1 million, or $0.31 per diluted share, compared to $5.0 million, or $0.26 per diluted share for the quarter ended March 31, 2008. EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter ended March 31, 2009 was $14.4 million, an increase of 25.2% compared to EBITDA of $11.5 million for the quarter ended March 31, 2008.
Revenues for the quarter ended March 31, 2009 were $51.4 million, compared to revenues of $52.3 million for the quarter ended March 31, 2008. Revenues in the first quarter of 2009 were impacted by unfavorable foreign exchange rate fluctuations in our International operations.
As of March 31, 2009, the company had $233.5 million in cash, cash equivalents, short-term and long-term investments, an increase of $8.9 million since December 31, 2008, and no long-term debt.
“In the first quarter of 2009, CoStar Group continued to deliver strong earnings through a down cycle in commercial real estate,” said CoStar Group CEO Andrew C. Florance. “While economic conditions remain difficult for our client base, our information services provide significant value to subscribers by helping them reduce costs and drive revenue. We remain confident in our ability to manage through the current environment and to capitalize on our industry-leading research and subscription-based business model to achieve our earnings goals. As economic conditions improve, we expect that we will see a return to sequential quarterly growth and higher earnings.”
U.S. revenues in the first quarter of 2009 totaled $47.1 million, which is a 1.6% increase compared to $46.4 million in the first quarter of 2008, and International revenues totaled £2.9 million in the first quarter of 2009, as compared to £3.0 million in the first quarter of 2008.
Subscription-based revenue accounts for more than 95% of the company’s total revenue. The 12-month trailing customer renewal rate for CoStar’s subscription-based services was approximately 87%.
“We plan to take advantage of our market-leading position to capitalize on growth opportunities we see in these challenging times and pursue a number of initiatives to further expand our market share and enhance our services,” said Florance. “We recently released an individual-subscription option for our extremely successful CoStar Showcase® service that enables individual brokers to take advantage of the greater Internet exposure available on Showcase and market an unlimited number of listings at a low, flat monthly rate. By making this service available at a much lower cost than a primary competitor, we believe we can significantly grow Showcase revenue this year and continue to capture market share in the Internet lead-generation market.”
Second Quarter 2009 Outlook
“For the second quarter of 2009, we expect approximately $49.5 to $51.0 million in revenues and fully diluted net income per share of approximately $0.22 to $0.25, which includes seasonally high selling and marketing expenses associated with the ICSC trade show and CoStar Showcase,” stated CoStar Group Chief Financial Officer Brian J. Radecki. In addition, during the second quarter, the company expects approximately $1.0 million of higher legal costs compared to the prior quarter. The company follows U.S. GAAP basis accounting and reports all legal expenses in the income statement, EBITDA and in our earnings outlook.
“For the full year of 2009, we continue to expect approximately $198.0 to $203.0 million in revenues and fully diluted net income per share of approximately $1.00 to $1.05, which includes approximately $6.0 million in pre-tax, non-cash equity compensation charges related to the vesting of restricted stock and stock option grants,” said Radecki. For 2009, the company expects an overall effective tax rate of approximately 45%, and an interest rate of approximately 0.5% for interest income.
Management will conduct a conference call to discuss earnings results for the first quarter ended March 31, 2009, and the financial outlook for the second quarter of 2009 at 11:00 a.m. ET on Thursday, April 23, 2009. The audio portion of the conference call will be broadcast live over the Internet at http://www.costar.com/corporate/investor/. To join the conference call by telephone, please call (800) 288-8974 from within the United States and Canada, or (612) 332-1213 from outside the United States and Canada. Refer to Conference reservation number 995479. A replay of the conference call will be available approximately one hour after the live call concludes and remain available through midnight on May 7, 2009. The replay telephone number is (800) 475-6701 within the United States and Canada, or (320) 365-3844 outside the United States and Canada. Refer to Conference reservation number 995479. 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 number one provider of information/marketing services to commercial real estate professionals in the United States as well as the United Kingdom. CoStar's suite of services offers customers access via the Internet to the most comprehensive database of commercial real estate information throughout the U.S. as well as in the United Kingdom and France. Headquartered in Bethesda, MD, CoStar has approximately 1,300 people working for the company worldwide, including the largest professional research organization in the industry. For more information, visit http://www.costar.com.