BETHESDA, MD -- CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of information services to the commercial real estate industry in the United States and United Kingdom, reported continued growth in revenue and improvement in earnings for the fourth quarter of 2002.
"We have achieved revenue growth for 18 consecutive quarters since our IPO, and have continued to improve earnings while investing in opportunities to expand our overall market potential," stated CoStar President & CEO Andrew C. Florance. "Our people, our products and our business model have met the challenge of a prolonged recession in commercial real estate, and we believe we are very well positioned for continued growth."
For the year ended December 31, 2002, pro forma net income improved to $1.7 million versus a pro forma net loss of $(7.9) million in 2001. On a per share basis, pro forma net income improved to $0.11 per share in 2002 versus a pro forma net loss of $(0.51) per share in 2001. EBITDA improved to $6.2 million in 2002 compared to an EBITDA loss of $(3.6) million in 2001. For the year ended December 31, 2002, the Company's GAAP-basis net loss was $(4.8) million or $(0.30) per share, compared to a net loss of $(20.2) million or $(1.29) per share for the year ended December 31, 2001.
The pro forma net income for the fourth quarter of 2002, which excludes purchase amortization and the related income tax benefit, was $783,000, or $0.05 per share, an improvement over pro forma net income of $222,000 or $0.01 per share in the fourth quarter of 2001. On a GAAP basis, net loss for the fourth quarter of 2002 was $(770,000), or $(0.05) per share, an improvement over the net loss of $(2.6) million or $(0.17) per share in the fourth quarter of 2001.
Revenues for the fourth quarter of 2002 were $20.7 million, an increase of 11.0 percent compared to the fourth quarter of 2001. In addition, revenues increased sequentially by 3.1 percent for the fourth quarter of 2002 over the third quarter of 2002. Revenues for the year ended December 31, 2002 were $79.4 million, an increase of 9.4 percent over the prior year.
As of December 31, 2002, the Company had $43.5 million in cash and cash equivalents, cash held for acquisition and short-term investments, an increase of $900,000 from September 30, 2002. At December 31, 2002, the Company had $16.4 million in cash held for the acquisition of Property Intelligence plc, which was completed in early January 2003.
The past year was an excellent test of the strength of our products and the strength of our business model, and both performed exceptionally well," Florance stated. "Our revenue continued to grow despite the weakened commercial real estate industry. In addition, our subscription renewal rate rose from 83 percent for fiscal 2001 to 87 percent for fiscal 2002. These trends attest to the value and cost savings our customers recognize in our products."
CoStar Group's 2002 results do not include the Property Intelligence plc acquisition, which was completed on January 6, 2003. "By combining Property Intelligence's operations with CoStar's operations and our expected organic growth, CoStar expects 2003 revenues to reach approximately $95 million, an overall growth rate of approximately 20 percent over 2002 revenues," according to CoStar Chief Financial Officer Frank A. Carchedi. "The Company expects pro forma earnings to nearly quadruple to approximately $0.40 per share in 2003 compared to $0.11 per share in 2002. The Company also expects to achieve GAAP-basis earnings by the end of 2003. With the achievement of the expected results, we believe we can maintain positive cash flow throughout 2003."
"For the first quarter of 2003 we expect sequential quarterly revenue growth of approximately 9%, including the acquired revenue of Property Intelligence. In addition, we expect pro forma earnings of approximately $0.05 per share for the first quarter of 2003," Carchedi stated.
Key 2002 Highlights Include:
- U.K. Expansion: In January 2003, CoStar established a strong base in the United Kingdom with the acquisition of London-based Property Intelligence plc.
- Release of the New CoStar Property®: In December 2002, CoStar released the first of its next generation of products, a fully web-based version of CoStar Property that integrates all of the company's subscription products.
- Acquisition of REAL-NET: In September 2002, CoStar expanded its coverage in Portland and the Pacific Northwest via the cash acquisition of online commercial real estate information provider REAL-NET.
- Major Client Signings: CoStar signed six multi-year, multi-market license agreements with major national brokerage firms, representing an aggregate value in excess of $21 million over three years.
CoStar Group, Inc.
Condensed Consolidated Statements of Operations
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CoStar Group, Inc.
Condensed Consolidated Balance Sheets
Management will conduct a conference call to discuss earnings results for the quarter and year ended December 31, 2002 and financial outlook for 2003, at 11:00 am ET, Wednesday, February 19, 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 replay of the conference call will be available two hours after the live call concludes through midnight on March 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 7477606. The replay will also be available over the Internet through midnight on March 1, 2003.
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 875 employees in 34 offices throughout the United States and the United Kingdom, including the largest professional research organization in the industry.