UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 4, 2005
FIRST ADVANTAGE CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| Delaware | 0-50285 | 61-1437565 | ||
| (State or Other Jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification Number) |
One Progress Plaza, Suite 2400
St. Petersburg, Florida 33701
(Address of principal executive offices)
(727) 214-3411
(Registrant’s telephone number)
Not Applicable.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 | Regulation FD Disclosure |
John Long, the Chief Executive Officer of First Advantage Corporation (the “Company”) made a presentation today at Adams Harkness 25th Annual Summer Seminar in Boston, Massachusetts. Additional information regarding this presentation is attached as Exhibit 99.1 to this report and is incorporated herein by reference. The Company undertakes no obligation to update this information, including any forward looking statements, to reflect subsequently occurring events or circumstances.
NOTE: The information in this report (including the exhibit) is furnished pursuant to Item 9 and shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section. This information will not be deemed an admission as to the materiality of any information contained herein that is required to be disclosed solely by Regulation FD.
| Item 9.01 | Financial Statements and Exhibits |
| Exhibit |
Description |
Method of Filing | ||
| 99.1 | Investor Presentation | Filed herewith |
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: August 4, 2005 |
By: | /S/ JOHN LAMSON | ||||||
| Name: |
John Lamson | |||||||
| Title: |
Executive Vice President and Chief Financial Officer | |||||||
Exhibit 99.1
Exhibit 99.1
Adams Harkness 25th Annual Summer Seminar
Safe Harbor Statement
Certain statements made in this presentation, including those related to First Advantage’s five point growth strategy, the closing of the CIG transaction, expansion into new markets, ability to pursue larger acquisitions, and 2005 pro forma revenue and earnings per share 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: interest rate fluctuations; changes in the performance of the real estate markets; limitations on access to public records and other data; general volatility in the capital markets; changes in applicable government regulations; consolidation among both companies’ significant customers and competitors; the companies’ continued abilities to identify and complete acquisitions and successfully integrate acquired businesses; the market price of First Advantage’s Class A common stock; First Advantage’s ability to successfully raise capital; increases in First Advantage’s expenses; unanticipated technological changes and requirements; First Advantage’s ability to identify suppliers of quality and cost-effective data, and other factors described in both companies’ Annual Reports on Form 10-K for the year ended December 31, 2004, as filed with the Securities and Exchange Commission. The forward-looking statements speak only as of the date they are made. Neither First American nor First Advantage undertakes to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
2
Agenda
Company Overview Reporting Segments Marketplace Fundamentals Growth Acceleration Initiatives Strategic Positioning Financial Performance Summary
3
Company Overview
A leading provider of risk mitigation and business process solutions
Formed via reverse merger and publicly listed in June 2003 (NASDAQ: FADV)
67% owned by The First American Corporation (NYSE: FAF) (as of June 30, 2005)
TSO: 23.8 million shares
- Class A Common (tradable): 7.8 million shares - Class B Common (non-tradable; owned by FAF): 16 million shares
Ranked among top three in major business lines Over 2,400 employees Serve 45,000+ clients in a variety of markets
4
Enterprise Screening
Background Verifications
- Third largest verifications provider
- 4,000+ clients
- 4.5 million verifications per year
- Service hundreds of the Fortune 1,000 companies
- Over 18,000 collection sites nationwide
- Industry leading turn-around times Verifications include:
- Criminal records check
- Employment verification
- Education verification
- Motor vehicle verification
- Credit history
- Plus 80 various searches
Occupational Health Services
- Drug testing program management
- Physical exams
- Employee assistance programs
Fingerprinting – Biometric Solutions
- Majority ownership in PrideRock Holdings, Inc. provides nationwide coverage in all 50 states
Employment Screening Services Tax Consulting Services SafeRent Services 5
Enterprise Screening
Hiring Related Credits Credits & Incentives
- 3 million employment screens per year
- Work opportunity tax credit
- Welfare to work
- State hiring credits
- Federal empowerment zone credits
- Renewal community employment credits
Location Based Incentives
- Hiring & employment related credits
- Training & economic development grants
Sales & Use Tax Consulting
- Reverse audits
- Sales & use tax compliance and defense
- Audit management, support & defense
- Utility studies
- Administrative appeals & audit protests
- Tax law research initiatives
- Training & education
Employment Screening Services Tax Consulting Services SafeRent Services
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Enterprise Screening
Resident Screening
- Largest provider of resident screening information services with over 40 offices nationwide serving 25,000 properties and over 5 million apartment units
- Proprietary databases provide civil and criminal data and assess financial and physical risks of landlords
- 34+ million eviction records
- 140+ million criminal records
Property Performance Analytics
- Analysis of financial performance and lease-level data
Renter’s Insurance
- Markets renters insurance to present and prospective customers
Employment Screening Services Tax Consulting Services SafeRent Services
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Risk Mitigation
Transportation Services
Investigative Services Intelligence & Technology Services Supply Chain Security Services
Motor Vehicle Record Services
- Second largest MVR provider covering all 50 states, Canada and Puerto Rico
- 13 million MVRs reported per year
- Over 7,500 clients including:
- Insurance Agents
- Insurance Companies
- Employment Screening Companies
- Auto Dealers
- Lawyers & Private Investigators
Transportation Credit Services
- Leading provider of business credit information to the $500 billion trucking industry consisting of:
- A proprietary database of payment practice records on more than 60,000 transportation brokers & shippers in the U.S.
- 80% of leading truckload carriers as clients
Fleet Management
Develop strategies to reduce state and local taxes and other fleet charges
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Risk Mitigation
Transportation Services
Investigative Services Intelligence & Technology Services Supply Chain Security Services
Investigative Services
- Nationwide investigative firm specializing in the detection and exposure of workers’ compensation, liability and disability insurance fraud
- Surveillance – Comprehensive daily activity report as it relates to the claimants daily activities and reported injuries
- Background investigations – Obtain up-to-date and pertinent information on a designated subject or business
- Statements & field interviews – Written or recorded field interviews are conducted to determine the facts from insureds, claimants, and/or witnesses
- Education & training – Continued education & training of investigative team
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Risk Mitigation
Transportation Services
Investigative Services Intelligence & Technology Services Supply Chain Security Services
Intelligence & Technology Services
- 500+ clients nationwide
- Clients consists of the nation’s 20 top law firms, corporations, non-profit entities and individuals
- Due Diligence Reports
- Computer Forensics
- Electronic Data Discovery
- Corporate Investigations
- Data Recovery Services
- Provide the financial community with expert research into the backgrounds and reputations of investment targets by identifying issues in management teams’ or hedge fund managers’ pasts
- Leading computer forensic firms in the country. These experts recover, analyze and investigate electronic data to provide evidence for use in trial and internal investigations
10
Risk Mitigation
Transportation Services
Investigative Services
Intelligence & Technology Services
Supply Chain Security Services
Supply Chain Security
Provides financial analysis that quantifies cargo exposure during shipping
Recommend solutions that combine insurance and security programs to maximize cargo security
Assists with carrier selection, cargo routing, loss liability negotiations and implementation of U.S. government programs
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Consumer Direct
US Search.com
5+ million unique visitors monthly 1.2 million customer database 180 million site page views per year
Consumer Services
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Marketplace Fundamentals
Human Resources
Homeland Security
Multi-Family Housing
Other Markets
Transportation Finance/Accounting Litigation Insurance Consumer
13
Growth Acceleration Initiatives
2003
2004
2005
Enterprise Screening Risk Mitigation Consumer Direct
27 ACQUISITIONS TO DATE
Reverse Merger June 5, 2003
First American Registry American Driving Records Substance Abuse Mgt.
SafeRent
Employee Health Programs
HireCheck
Agency Records, Inc.
Omega Insurance Services
Credential Check & Personnel Services, Inc. MedTech Diagnostics Inc.
Greystone Health Sciences Employee Info. Services Continental Compliance Total Information Source Liberatore Services
Compunet Credit Services
BackTrack Reports, Inc.
CoreFacts, Inc.
MVR’s Inc.
Quantitative Risk Solutions
Realeum, Inc.
U.D. Registry, Inc. Landlord Protect, Inc. Alameda Company Nat’l Background Data CIC Enterprises, Inc.
Infocheck Ltd. Background Info Services ProudFoot Reports, Inc.
Data Recovery Services
Quest Research Ltd.
Priderock Holding Co.
Itax Group, Inc.
PENDING
Credit Information Group
14
Strategic Positioning
Five Point Growth Strategy:
Acquire for Scale/ Margin
Acquire for Product Expansion
Cross-Sell Services
Pursue Vertical Markets
Expand Overseas
15
Strategic Positioning
Five Point Growth Strategy:
Acquire for Scale/ Margin
Improvement in Existing Business Lines
Employment Background Verifications Resident Screening Tax Credits and Incentives Surveillance Computer Forensics
16
Strategic Positioning
Five Point Growth Strategy:
Acquire for Product Expansion
Potential Product Expansion
Applicant Tracking Skills Assessment Psychological Testing Payroll Benefits Administration Biometrics Electronic Discovery Boutique Databases
17
Strategic Positioning
Five Point Growth Strategy:
Cross-Sell Services
Cross-Sell Initiatives
Implement and Build First Advantage Brand Initiate Cross-Sell Programs
18
Strategic Positioning
Five Point Growth Strategy:
Pursue Vertical Markets
Verticals of Interest
Government Multifamily Retail Hospitality Transportation Healthcare Insurance
19
Strategic Positioning
Five Point Growth Strategy:
Expand Overseas
Geographies of Interest
Asia Europe
20
Strategic Positioning
March 22, 2005, FADV announced intent to acquire the Credit Information Group of First American
Credit Information Group
Mortgage
3 Million Transactions / Month > 37% Market Share Largest Provider to GSE Portals Help Underwrite 1 in 3 Loans in the U.S.
Do Business with 10 of Top 10 Lenders
Automotive
1.5 Million Transactions / Month 30 of the Top 35 Auto Lenders DealerTrack Partnership Partnership with Reynolds & Reynolds
Direct to Consumer
Credit Monitoring / Fraud Prevention One-Stop Customer Service
Sub Prime
Proprietary Alternative Credit Program 1.7 Million Transactions/Month >112 Million Records Dominant Market Share in U.S.
21
Strategic Positioning
Impact of Strategic Growth
Set to close in September Strong Balance Sheet $1 Billion + Market Cap Additional Debt Capacity
Pro Forma 2005 Revenue of Approximately $600 Million and $100 Million in Pre-Tax Earnings Pro Forma 2005 EBITDA Per Share of $2.25—$2.50 Pro Forma 2005 EPS of $1.00—$1.15 (including acquisition costs related to this transaction)
22
Financial Performance
SECOND QUARTER 2005
Total Revenue
Net Income $ Millions $ Millions $100.0 $80.0 $60.0 $40.0 $20.0 $0.0
2Q 2004 2Q 2005 $58.0
$10.9 $71.1
$12.3 $6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0
2Q 2004 2Q 2005 $3.2 $5.1* $0.5
2Q ‘04 2Q’05
Service Revenue $58,032,000 $71,113,000
Reimb. Government
Fee Revenue $10,887,000 $12,253,000
TOTAL REVENUE $68,919,000 $83,366,000
* Total after tax impact of CIG acquisition costs, relocation costs and launching of the corporate branding initiative costs.
23
Financial Performance
SECOND QUARTER 2005
EBITDA
EPS Fully Diluted
In Millions $16.0 $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0
2Q 2004 2Q 2005 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05
$0.00
2Q 2004 2Q 2005 $9.2 $6.0* $8.5 $0.15 $0.21* $0.02
10.0 8.0 6.0 4.0 2.0 0.0
2Q 2004 2Q 2005
9.5%
4.8%
Operating Margin
* Total after tax impact of CIG acquisition costs, relocation costs and launching of the corporate branding initiative costs.
24
Financial Performance
SEGMENT DATA—SECOND QUARTER 2005
($ 000’s) Service Revenue Income (Loss) Before Taxes Operating Margin
Enterprise Screening $55,023 $10,716 19.48%
Risk Mitigation 13,078 2,649 20.26%
Consumer Direct 3,703 370 9.99%
Corporate &
Eliminations (691) (10,360) N/A
Total $71,113 $3,375 4.75%
25
Financial Performance
FULL YEAR 2004
Total Revenue
Net Income $ Millions $ Millions $275.0 $225.0 $175.0 $125.0 $75.0 $25.0
-$25.0
2002 2003 2004 $73.0
$27.9 $134.9
$31.6 $221.9
$44.6 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0
2002 2003 2004 $2.7 $2.8 $10.7
2002 2003 2004
Service Revenue $73,040,000 $134,910,000 $221,938,000
Reimb. Government
Fee Revenue $27,885,000 $31,585,000 $44,599,000
TOTAL REVENUE $100,925,000 $166,495,000 $266,537,000
26
Financial Performance
FULL YEAR 2004
In Millions
$50.0 $40.0 $30.0 $20.0 $10.0 $0.0
2003 2004 $13.4 $33.3
EBITDA
$0.50 $0.40 $0.30 $0.20 $0.10 $0.00
EPS Fully Diluted
$0.14 $0.48
2003 2004
10.0 8.0 6.0 4.0 2.0 0.0
Operating Margin
3.6%
8.3%
2003 2004
27
Financial Performance
($ 000’s) Service Revenue Income (Loss) Before Taxes Operating Margin
Enterprise
Screening $170,095 $23,296 13.70%
Risk Mitigation 41,419 7,438 17.96%
Consumer Direct 12,874 (136) -1.06%
Corporate &
Eliminations (2,450) (12,155) N/A
Total $221,938 $18,443 8.31%
SEGMENT DATA FULL YEAR 2004
2004 Service Revenue By Segment
Risk Mitigation
Consumer Direct
19%
5%
76%
Enterprise Screening
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Summary
Significant future opportunities for growth and expansion of the industry
Continued security concerns
Anticipated improvement in employment Numerous acquisition prospects
Leader in all business lines
Improving operational efficiency as consolidation process matures Cross-sell opportunities within and between business lines Significant opportunities for geographic expansion Seasoned management with proven expertise in consolidation strategies
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Adams Harkness 25th Annual Summer Seminar