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) February 10, 2004
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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 February 10, 2004, First Advantage Corporation, a Delaware corporation,
announced financial results for the fourth quarter and year ended December 31,
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 of 1934 and is not incorporated by reference into any filings with the SEC
unless it shall be explicitly so incorporated into such filings.
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: February 10, 2004 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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[GRAPHIC OMITTED] First Advantage
Corporation
One Progress Plaza, Suite 2400, St. Petersburg, FL 3370
NEWS FOR IMMEDIATE RELEASE
First Advantage Contacts:
John Lamson Renee Svec
Chief Financial Officer and Director - Corporate Communications
Executive Vice President 727.214.3411, ext. 212
727.214.3411, ext. 214 rsvec@fadv.com
jlamson@fadv.com
FIRST ADVANTAGE CORPORATION ISSUES OPERATING RESULTS
FOR THE FOURTH QUARTER AND FULL YEAR 2003
ST. PETERSBURG, Fla., Feb. 10, 2004--First Advantage Corporation (NASDAQ: FADV),
a global risk management solutions provider, today announced operating results
for the fourth quarter and year ended Dec. 31, 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 year ended Dec. 31, 2003, include results for the
First American Screening Technologies division from Jan. 1, 2003, and the
results for US SEARCH.com from June 1, 2003.
The company reported a net loss for the quarter ended Dec. 31, 2003, of $1.0
million, or 5 cents per diluted share. For the year ended Dec. 31, 2003, the
company reported net income of $2.8 million, or 14 cents per diluted share. The
results for the fourth quarter and the full year include an after-tax charge of
$1.1 million (5 cents per diluted share) for the write-down of capitalized
software and severance costs in connection with the continued integration of
operations. The First American Screening Technologies division's net loss was
$547 thousand for the quarter ended Dec. 31, 2002, and net income was $2.7
million for the year ended Dec. 31, 2002.
Revenue for the company was $49.9 million and $166.5 million for the quarter and
year ended Dec. 31, 2003, respectively. The First American Screening
Technologies division's revenue was $26.6 million for the quarter and $100.9
million for the year ended Dec. 31, 2002.
Earnings before interest, taxes, depreciation and amortization was $796,000 and
$13.4 million for the quarter and the year ended Dec. 31, 2003. The fourth
quarter has historically been the company's slowest. Volumes decreased as a
result of reductions in hiring and resident screening activities due to the
holiday season.
John Long, chief executive officer and president of First Advantage Corporation,
said: "In our first seven months, First Advantage made significant progress
toward our long-term growth goals by successfully executing on our acquisition
strategy. Since August, we have acquired five employment screening companies,
four occupational health services companies and two motor vehicle record
companies. These companies will add to top line revenue growth in 2004 and
beyond. Margin improvement will take longer as the cost of integration largely
offsets the interim benefits of the acquisitions. Consequently, we expect little
contribution to earnings from these acquisitions during the first quarter of
2004, with steady improvement throughout the year. The full benefit of these
acquisitions is anticipated in 2005.
-more-
First Advantage Issues Operating Results for the Fourth Quarter and Full Year
2003
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Page 2
"During the first quarter of 2004, we will continue with acquisitions in our
employment screening, occupational health services and resident screening
businesses, as evidenced by our activities to date. Looking beyond first
quarter, we will primarily target companies that offer First Advantage an
opportunity to expand our service lines or reach new geographic markets. From an
operational standpoint, these acquisitions will be less likely to be merged into
existing units but rather form new business units, creating additional
cross-sell opportunities to our existing and prospective customers. 2004 will
also be a year for organic growth as we act on the cross-sell potential between
our business units and develop products and sales initiatives to support new
markets."
Fourth quarter 2003 acquisitions included Greystone Health Sciences, Inc.;
Agency Records, Inc.; MedTech Diagnostics, Inc.; and Credential Check &
Personnel Services, Inc. To date in 2004, First Advantage has acquired
Quantitative Risk Solutions LLC; Proudfoot Reports Incorporated; MVRS, Inc.; and
Background Information Systems, Inc.
The company estimates that revenue will exceed $250 million in 2004.
Three Months Ended December 31, Year Ended December 31,
2003 2002 2003 2002
Service revenues $ 41,027,000 $19,964,000 $ 134,910,000 $ 73,040,000
Reimbursed government fee revenue 8,862,000 6,685,000 31,585,000 27,885,000
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Total revenue 49,889,000 26,649,000 166,495,000 100,925,000
Cost of service revenues 13,500,000 5,721,000 38,154,000 17,534,000
Government fees paid 8,862,000 6,685,000 31,585,000 27,885,000
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Total cost of sales 22,362,000 12,406,000 69,739,000 45,419,000
Gross margin 27,527,000 14,243,000 96,756,000 55,506,000
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Salaries and benefits 15,080,000 9,595,000 51,178,000 31,863,000
Other operating expenses 9,923,000 3,991,000 30,449,000 15,046,000
Depreciation and amortization 2,462,000 1,452,000 8,428,000 4,096,000
Impairment loss 1,739,000 -- 1,739,000 --
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Income (loss) from operations (1,677,000) (795,000) 4,962,000 4,501,000
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Interest (expense) income:
Interest expense (87,000) (94,000) (154,000) (229,000)
Interest income 11,000 12,000 41,000 59,000
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Total interest expense, net (76,000) (82,000) (113,000) (170,000)
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Income (loss) before income taxes (1,753,000) (877,000) 4,849,000 4,331,000
Provision (benefit) for income
taxes (746,000) (330,000) 2,046,000 1,629,000
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Net income (loss) $ (1,007,000) $(547,000) $ 2,803,000 $ 2,702,000
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-more-
First Advantage Corporation Issues Operating Results for the Fourth Quarter and
Full Year 2003, Page 3
Three Months Ended December 31, Years Ended December 31,
2003 2002 2003 2002
Per share amounts:
Basic earnings (loss) per share $(0.05) N/A $ 0.14 N/A
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Basic weighted-average shares
outstanding 20,828,429 20,260,854
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Diluted earnings (loss) per share $(0.05) N/A $0.14 N/A
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Diluted weighted-average shares
outstanding 21,020,537 20,397,587
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EBITDA calculation:
Net income (loss) $ (1,007,000) $ (547,000) $2,803,000 $2,702,000
Provision (benefit) for income
taxes (746,000) (330,000) 2,046,000 1,629,000
Interest expense 87,000 94,000 154,000 229,000
Depreciation and amortization 2,462,000 1,452,000 8,428,000 4,096,000
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Earnings before interest, taxes,
depreciation and amortization
(EBITDA)* $ 796,000 $ 669,000 $13,431,000 $ 8,656,000
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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.
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, First Advantage is a leading provider of 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 services. First Advantage ranks among the
top three companies in nearly all of its business lines. First Advantage is
headquartered in St. Petersburg, Fla., and has more than 1,400 employees in
offices throughout the United States and in Bangalore, India. Further
information about the company is available at www.FADV.com.
First Advantage is a majority-owned subsidiary of The First American Corporation
(NYSE: FAF), a Fortune 500 company that traces its history to 1889. First
American is the nation's leading diversified provider of business information,
supplying businesses and consumers with information resources in connection with
the major economic events of people's lives. Additional information about the
First American Family of Companies can be found at www.firstam.com.
Safe Harbor Statement
Certain statements in this press release, including those relating to revenue
from acquisitions; margin improvement; earnings contributions from acquisitions;
the full benefit of acquisitions; acquisitions in the Company's employment
screening, occupational health services, and resident screening businesses;
acquisition targets; organic growth; and 2004 revenue 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 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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