Intersections Inc. announced financial results for the quarter ended March 31, 2007. Revenue for the first quarter of 2007 was $58.2 million, compared to $45.7 million for the quarter ended March 31, 2006 and $54.7 million for the quarter ended December 31, 2006, an increase of 27.4 percent and 6.4 percent, respectively. Net income for the quarter ended March 31, 2007 was $484 thousand, compared to $3.4 million for the quarter ended March 31, 2006 and $639 thousand for the quarter ended December 31, 2006, a decrease of 85.8 percent and 24.3 percent, respectively. Diluted earnings per share (“EPS”) were $0.03 for the first quarter of 2007, compared to $0.20 for the first quarter of 2006 and $0.04 for the fourth quarter of 2006.
“Our marketing efforts continued to expand in the first quarter of 2007, driving a record revenue quarter,” said Chairman and Chief Executive Officer, Michael Stanfield. “Our subscription businesses were strong; because revenue trails our recognition of fulfillment costs and our commencement of amortization of marketing costs in a considerable portion of our business, our higher marketing and subscription additions negatively impacted earnings in the first quarter. We believe we are on track to meet the objectives we set forth for the year.”
Our financial results include American Background Information Services, Inc. (ABI) for the period January 1, 2006 through May 30, 2006, and Screening International, LLC (SI), our joint venture that combined ABI with Control Risks Group Holdings Limited’s (CRG) background screening business, for the period May 31, 2006 through March 31, 2007. Our financial results also include Intersections Insurance Services, Inc. (IIS), formerly known as Chartered Marketing Services, Inc., which we acquired on July 3, 2006. IIS’s results are not separately reported.
First Quarter 2007 Financial Highlights:
– Total subscribers increased to approximately 4.69 million as of March 31, 2007, compared to approximately 4.63 million subscribers as of December 31, 2006. Subscriber additions of approximately 949 thousand in the first quarter of 2007 were partially offset by subscriber cancels of 888 thousand. Cancellations in the quarter were impacted by approximately 250 thousand canceled subscribers at one of our clients, which was disclosed in the release of our 2006 year end results.
– Total revenue for the first quarter of 2007 was $58.2 million, including $6.6 million from SI, compared to $54.7 million, including $6.8 million from SI, for the fourth quarter of 2006 and $45.7 million for the first quarter of 2006, including $3.7 million from ABI.
– Subscription revenue, net of marketing and commissions associated with subscription revenue, increased to $31.9 million for the first quarter of 2007 from $30.9 million for the fourth quarter of 2006, and from $29.5 million for the first quarter of 2006, an increase of 3.1 percent and 8.0 percent, respectively. Subscription revenue, net of marketing and commissions associated with subscription revenue, is a non-GAAP financial measure that we believe is important to investors and one that we utilize in managing our business as subscription revenue normalizes the effect of changes in the mix of indirect and direct marketing arrangements.
– Income before taxes and minority interest was $456 thousand for the first quarter of 2007, including a loss before taxes and minority interest of $684 thousand for SI, compared to $890 thousand for the fourth quarter of 2006, including a loss before taxes and minority interest of $555 thousand for SI, and $5.6 million including $216 thousand of income before taxes for ABI for the first quarter of 2006.
– Cash flow used in operations for the quarter ended March 31, 2007, was approximately $1.4 million, primarily driven by our increased investment in marketing.
About Intersections Inc.
Intersections Inc. (NASDAQ:INTX) is a leading provider of branded and fully customized identity management solutions. By integrating its technology solutions with its comprehensive services, Intersections safeguards more than 5 million customers, who are primarily received through marketing partnerships and consumer-direct marketing of the company’s Identity Guard® brand. Intersections also provides consumer-oriented insurance and membership products through marketing partnerships with the major mortgage servicers in the United States as well as other financial institutions through its subsidiary, Intersections Insurance Services, Inc. Additionally, through majority-owned Screening International LLC, Intersections provides pre-employment background screening services domestically and internationally in partnership with Control Risks Group Limited of the United Kingdom. Learn more about Intersections Inc. at www.intersections.com/aboutus.asp.
For complete details on Intersection’s latest results visit CardData ([www.carddata.com][1]).
[1]: http://www.carddata.com
