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Verisk Analytics, Inc. (VRSK) Message Board

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  • lner2512 lner2512 Nov 17, 2009 2:17 AM Flag


    The earnings release is detailed but not informative. Their disclosure and lack of explanation of the increased pension costs they term as "one time" leaves a lot to be desired, as does their cryptic mention of an acceleration of $57.7M in 401k costs that will hit in Q4. I cannot tell for sure whether the pension costs are the entire reason for the "adjusted" earnings computations. And that $57.7M hit looks like it will seriously impact Q4 earnings, assuming it is deductible.

    Also, there is no balance sheet info. I'll look forward to their 10Q, but so far, I'm unimpressed by their disclosures.

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    • Great points. Their forward looking "guidance" was more a statement of "objectives" with low double digit type numbers and growth in "cash" as an objective more than growth in the business.

      Got the feeling they have this basic business that they're ramped up about as far as it can go but the growth model for more rapid acceleration of earnings just isn't there.
      The stock is priced for a company with rapid growth and I can't see it from the report where this is going to come from...

      • 1 Reply to golongin2008
      • Frank J. Coyne, chairman, president, and CEO, stated in the Financial Results posting:
        At the time of the IPO, the company accelerated the allocation of ESOP shares, which will cause a one-time non- cash charge of approximately $57.7 million in fourth quarter of 2009 and then eliminate the portion of ESOP expense not associated with our 401(k) and profit sharing going forward. Because we do not expect these expenses to impact our EBITDA in 2010 and forward, we believe it is appropriate to present adjusted EBITDA.

        That was an unexpected cost related to the IPO and its getting priced into 4thQ 2009 so, the stock price took a hit. This is a solid company that has shown resilience even when the economy slows. 2010 will be another big year without the IPO fallout.

        Mr. Coyne concluded, "We're confident in our ability to execute our growth plans. As the economy continues to grow, so does the value of assets at risk and the complexity in analyzing and protecting against those risks." The company has set its long-term organic financial targets as follows:

        Revenue growth, excluding new acquisitions 10-12%
        Adjusted EBITDA margin 43-45%
        Growth of net cash provided by operating activities
        less capital expenditures 12-13%

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