SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported) October 21, 2003
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FIRST ADVANTAGE CORPORATION
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(Exact Name of the Registrant as Specified in Charter)
Delaware 0-50285 61-1437565
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
One Progress Plaza, Suite 2400, St. Petersburg, Florida 33701
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (727) 214-3411
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Not Applicable.
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(Former Name or Former Address, if Changed Since Last Report)
Item 7. Exhibits.
Exhibit No. Description
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99.1 Press Release.
Item 12. Results of Operation and Financial Condition.
On October 21, 2003, First Advantage Corporation, a Delaware corporation,
announced financial results for the quarter and nine months ended September 30,
2003. The full text of the press release issued in connection with the
announcement is attached hereto as Exhibit 99.1.
The information in this current report and the exhibit hereto is being
"furnished" pursuant to Item 12 of Form 8-K. As such, this information is not
deemed to be "filed" for the purposes of Section 18 of the Securities Exchange
Act and is not incorporated by reference into any Securities Act registration
statement unless it shall be explicitly so incorporated in such registration
statement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
FIRST ADVANTAGE CORPORATION
Date: October 22, 2003 By: /s/ John Lamson
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Name: John Lamson
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
FIRST ADVANTAGE CORPORATION ISSUES OPERATING RESULTS
FOR THE THIRD QUARTER 2003
ST. PETERSBURG, Fla., Oct. 21, 2003--First Advantage Corporation (NASDAQ: FADV),
a global risk management solutions provider, today announced operating results
for the third quarter ended Sept. 30, 2003. The company was formed by the June
2003 merger of The First American Corporation (NYSE: FAF) screening information
operations with US SEARCH.com Inc. Therefore, First Advantage operating results
for the nine months ended Sept. 30, 2003, include results for The First American
Corporation Screening Technologies division from Jan. 1, 2003, and the results
for US SEARCH.com from June 1, 2003.
Net income for the quarter ended Sept. 30, 2003, was $1.4 million, or 7 cents
per diluted share. Net income for the nine months ended Sept. 30, 2003, was $3.8
million, or 19 cents per diluted share. The First American Screening
Technologies division's net income was $976,000 for the quarter and $3.2 million
for the nine months ended Sept. 30, 2002.
Revenue was $47.6 million and $116.6 million for the quarter and nine months
ended Sept. 30, 2003, respectively. The First American Screening Technologies
division's revenue was $26.9 million for the quarter and $74.3 million for the
nine months ended Sept. 30, 2002.
Earnings before interest, taxes, depreciation and amortization was $4.9 million
and $12.6 million for the three and nine months ended Sept. 30, 2003.
John Long, chief executive officer and president of First Advantage Corporation
said: "We remain on track with the execution of our acquisition and integration
strategy. We expect to complete the consolidation of US SEARCH.com's corporate
functions into First Advantage by year-end. The Employment Screening Services
division has begun consolidating the operating and technology platforms of PRSI
and HireCheck with a projected completion date of late 2004. Likewise, the
Occupational Health Services division subsidiaries, SAMI and EHP, are also
continuing consolidation efforts. I am most pleased to report that we have
substantially completed the consolidation of The Registry and SafeRent in the
Resident Screening Services division.
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First Advantage Corporation Issues Operating Results for the Third Quarter 2003
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"The significant resources required to integrate the varied First Advantage
subsidiary operations and technologies will continue to affect our earnings
throughout the lengthy consolidation process, which is expected to extend
throughout 2004. We fully believe that the long-term benefits of integration
will surpass the near-term costs.
"In spite of a jobless economic recovery, First Advantage revenue was up 27
percent this quarter over last as a result of both organic sales and
acquisitions - offering some initial evidence of our strategy's potential. We
are very pleased with the acquisition opportunities we are encountering and will
remain focused on this strategy throughout 2004 as we continue to acquire market
share, enter new markets, and add complimentary products."
First Advantage closed $30.7 million of acquisitions this quarter with the
purchase of Liberatore Services, Inc.; Total Information Source, Inc.;
Continental Compliance Systems; Employee Information Services, Inc.; and Omega
Insurance Services. The company estimates these acquisitions will contribute
revenue of approximately $40 million in 2004.
Three Months Ended September 30, Nine Months Ended September 30,
2003 2002 2003 2002
Service revenues $ 47,634,000 $ 26,914,000 $ 116,606,000 $ 74,276,000
Cost of service revenues 17,672,000 12,434,000 46,309,000 33,013,000
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Gross margin 29,962,000 14,480,000 70,297,000 41,263,000
Salaries and benefits 15,051,000 8,119,000 36,889,000 22,268,000
Other operating expenses 9,989,000 3,827,000 20,804,000 11,055,000
Depreciation and amortization 2,395,000 921,000 5,965,000 2,644,000
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Income from operations 2,527,000 1,613,000 6,639,000 5,296,000
Interest (expense) income:
Interest expense (12,000) (59,000) (67,000) (135,000)
Interest income 10,000 11,000 30,000 47,000
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Total interest expense, net (2,000) (48,000) (37,000) (88,000)
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Income before provision for income
taxes 2,525,000 1,565,000 6,602,000 5,208,000
Provision for income taxes 1,096,000 589,000 2,792,000 1,959,000
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Net income $ 1,429,000 $ 976,000 $ 3,810,000 $ 3,249,000
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Per share amounts:
Basic earnings per share $ 0.07 N/A $ 0.19 N/A
Basic weighted-average shares
outstanding 20,203,955 N/A 20,069,893 N/A
Diluted earnings per share $ 0.07 N/A $ 0.19 N/A
Diluted weighted-average shares
outstanding 20,337,947 N/A 20,185,345 N/A
EBITDA calculation:
Net income $ 1,429,000 $ 976,000 $ 3,810,000 $ 3,249,000
Provision for income taxes 1,096,000 589,000 2,792,000 1,959,000
Interest expense 12,000 59,000 67,000 135,000
Depreciation and amortization 2,395,000 921,000 5,965,000 2,644,000
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Earnings before interest, taxes,
depreciation and amortization
(EBITDA) $ 4,932,000 $ 2,545,000 $ 12,634,000 $ 7,987,000
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EBITDA is not a measure of financial performance under generally accepted
accounting principles. EBITDA is used by certain investors to analyze and
compare companies.
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First Advantage Corporation Issues Operating Results for the Third Quarter 2003
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About First Advantage Corporation
First Advantage Corporation (NASDAQ: FADV) provides best-in-class single-source
solutions for global risk mitigation and enterprise and consumer screening
needs, incorporating state-of-the-art technology, proprietary systems and data
resources. Created by the merger of The First American Corporation's (NYSE: FAF)
Screening Technologies division with US SEARCH.com, First Advantage is a leading
national provider, ranking among the top three companies in nearly all of its
business lines. The company offers multiple products and services including
employment background screening, drug-free workplace programs, physical exams
and other occupational health testing, resident screening, motor vehicle
records, insurance fraud investigations and consumer location. Headquartered in
St. Petersburg, Fla., with offices in Los Angeles, San Diego, Concord and
Sacramento, Calif.; Milwaukee; Bethesda and Rockville, Md.; Denver; New York;
Winston-Salem, N.C.; and Bangalore, India, the company has more than 1,200
employees. Further information about the company is available at www.FADV.com.
Safe Harbor Statement
Certain statements made in this press release, including those relating to
consolidation of corporate functions, consolidation in the Employment Screening
Services division, the effects of consolidation on earnings, and the revenue
derived from recent acquisitions, are forward looking. Risks and uncertainties
exist that may cause results to differ materially from those set forth in these
forward-looking statements. Factors that could cause the anticipated results to
differ from those described in the forward-looking statements include: general
volatility of the capital markets and the market price of the company's Class A
common stock; the company's ability to successfully raise capital; the company's
ability to integrate the businesses brought together in the June 5, 2003, merger
with US SEARCH.com Inc. and the FAST division of The First American Corporation;
the company's ability to identify and complete acquisitions and successfully
integrate businesses it acquires; changes in applicable government regulations;
the degree and nature of the company's competition; increases in the company's
expenses; continued consolidation among the company's competitors and customers;
unanticipated technological changes and requirements; and the company's ability
to identify suppliers of quality and cost-effective data. The forward-looking
statements speak only as of the date they are made. The company does not
undertake to update forward-looking statements to reflect circumstances or
events that occur after the date the forward-looking statements are made.
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