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CCC Information Services Group Inc. Reports $0.02 EPS for the Third Quarter, Including Impact of a Net Charge Equal to $0.27 Per Share.

Article Excerpt
CHICAGO -- CCC Information Services Group Inc. (NASDAQ:CCCG) reported net income of $0.5 million, or $0.02 per share, for the third quarter ending September 30, 2004, compared to net income of $6.4 million, or $0.23 per share, for the same quarter in 2003. The Company's third quarter results include the net impact of a non-cash stock compensation charge in connection with the self-tender offer and a net benefit related to a litigation settlement. Please review the income statement line items summarized below when analyzing the Company's third quarter results.



Impact of Charge/(Benefit) on ------------------------ Q3 2004 Charge/(Benefit) Operating Net Income Income EPS --------------------------------------------- --------- ------- ------ Stock compensation expense non-cash 13.1 8.2 0.34 Litigation Settlement (2.6) (1.6) (0.07) --------- ------- ------ Total Net Charge 10.5 6.6 0.27 --------------------------------------------- ========= ======= ======

Stock Compensation Expense Non-Cash

During the quarter the company completed a $210 million self-tender offer to purchase 11.2 million shares, which leaves approximately 15.9 million shares outstanding. Participation by the company's shareholders was high, as over 90 percent of the share base tendered their shares. Due to the high participation rate, the ownership profile of the company remained relatively unchanged. In connection with the self-tender offer, the company recorded a charge of $13.1 million, or $0.34 per share, to reflect non-cash stock compensation expense related to employee options. The ability of employee stock option holders to participate in the self-tender offer through the Company on a net exercise basis resulted in variable stock compensation accounting for the Company's Stock Incentive Plans, which resulted in the non-cash charge. According to stock compensation accounting requirements, the charge had to cover all vested employee stock options including those that were not tendered and those that were unable to be exercised due to the 44 percent pro-ration factor. Employee option holders received $3.5 million, or 1.7%, of the $210 million returned to shareholders. All stock option holders received the same terms and conditions for the self-tender as shareholders and warrant holders. There are no further requirements for stock compensation expense in connection with the tender offer. In addition, the variable stock compensation accounting for the Company's Stock Incentive Plans ended on August 30, the date the tender offer closed.

Litigation Settlement

The Company recorded a net benefit for a litigation settlement of $2.6 million, or $0.07 per share, for the third quarter, which was comprised of three parts. During the quarter, CCC received $4.8 million as a result of the settlement of a lawsuit filed by certain insurers that had issued policies to the Company involving...