The company reported revenue of $834.8 million in the third quarter of 2017, a 4 percent increase compared to the third quarter of 2016 on a reported basis and 3 percent on a local currency basis. Third quarter diluted EPS attributable to Equifax was $0.79, down 28 percent compared to the third quarter of 2016. Net income attributable to Equifax of $96.3 million was down 27 percent compared to the third quarter of 2016.
“As we report our third quarter results, we recognize that we have an important journey in front of us to regain the trust and confidence of consumers and our business customers,” said Paulino Barros, Interim Chief Executive Officer at Equifax. “Our teams have taken immediate actions to improve our data security and provide improved support for consumers who were impacted by our cybersecurity incident. As we look to the future, I have committed Equifax to four things: protecting consumers, enhancing our security, empowering consumers to control access to personal credit data, and leading our industry to confront the massive economic and national security threats represented by cyber criminals. I have high confidence in our global teams, and as we focus on these critical imperatives we will emerge from this an even stronger company.”
Consolidated Revenues: $834.8 million in the third quarter of 2017, a 4 percent increase compared to the third quarter of 2016 on a reported basis and 3 percent on a local currency basis. Third quarter diluted EPS attributable to Equifax was $0.79, down 28 percent compared to the third quarter of 2016.
Net income attributable to Equifax of $96.3 million was down 27 percent compared to the third quarter of 2016.
Total US Information Solutions: Total revenue was $307.7 million in the third quarter of 2017 compared to $317.4 million in the third quarter of 2016, a decrease of 3 percent. Operating margin for USIS was 42.1 percent in the third quarter of 2017 compared to 44.0 percent in the third quarter of 2016. Adjusted EBITDA margin for USIS was 49.2 percent in the third quarter of 2017 compared to 50.6 percent in the third quarter of 2016.
International third quarter results: Total revenue was $239.8 million in the third quarter of 2017, up 12 percent compared to the third quarter of 2016 and a 10 percent increase on a local currency basis. Operating margin for International was 22.0 percent in the third quarter of 2017, compared to 12.3 percent in the third quarter of 2016. Adjusted EBITDA margin for International was 33.2 percent in the third quarter of 2017, compared to 28.4 percent in the third quarter of 2016.
Workforce Solutions third quarter results: Total revenue was $186.4 million in the third quarter of 2017, a 9 percent increase compared to the third quarter of 2016. Operating margin for Workforce Solutions was 43.1 percent in the third quarter of 2017 compared to 40.8 percent in the third quarter of 2016. Adjusted EBITDA margin for Workforce Solutions was 48.6 percent in the third quarter of 2017 compared to 47.0 percent in the third quarter of 2016.
Global Consumer Solutions third quarter results: Revenue was $100.9 million, flat compared to the third quarter of 2016 and flat on a local currency basis. Operating margin was 24.5 percent compared to 27.6 percent in the third quarter of 2016. Adjusted EBITDA margin was 27.9 percent compared to 30.0 percent in the third quarter of 2016.
Expenses Incurred. In the third quarter of fiscal 2017, the Company recorded $27.3 million of pretax expenses related to the cybersecurity incident. These expenses are included in Selling, General and Administrative expenses in the accompanying Consolidated Statements of Income for the three and nine months ended September 30, 2017. Expenses include costs to investigate and remediate the cybersecurity incident and legal and other professional services related thereto, all of which were expensed as incurred.
Contingent Liability. Additionally, as a result of the cybersecurity incident, we are offering free credit file monitoring and identity theft protection to all U.S. consumers. We have concluded that the costs associated with providing this service are a contingent liability that is probable and estimable. We have therefore recorded an estimate of the expenses necessary to provide this service to those who have signed up or will sign up by the January 31, 2018 deadline. We have incurred $4.7 million through September 30, 2017 and have estimated a range of additional costs between $56 million and $110 million. In accordance with Accounting Standards Codification section 450-20-30-1, we have recorded a liability for the low end in the range as we do not believe that any amount within the range is a better estimate than any other amount.
Equifax Leadership will not receive any incentive payments for the fiscal year 2017
Source: Equifax Earnings Release
