welcome! annual shareholders meeting may 20, 2004
TRANSCRIPT
Welcome!
ANNUAL SHAREHOLDERS
meeting
May 20, 2004
May 2004
introduction
Result of the June 2003 Merger of The First American Corporation’s Screening Technologies Division and US SEARCH.com
More than 1,700 Employees Today
Corporate HQ in St. Petersburg, FL
Offices Across the United States and Abroad
Ranked Among Top Three Providers in Major Business Lines
May 2004
stock BASICS
NASDAQ Ticker: FADV 75% Owned by First American (NYSE: FAF)
10% by Pequot Capital Management TSO: 21.4 Million Shares
– Class A Common (Tradable): 5.4 Million Shares– Class B Common (Non-tradable; Owned by FAF):
16 Million Shares
May 2004
business LINES
May 2004
ENTERPRISE screening segment
Employment Background Services– Criminal Records
– Employment Verification
– Education Verification
– Credit Reports
– Social Security Number Verification
– Motor Vehicle Records
USP:We provide a
flexible, integrated employment screening
program designed to maximize due diligence
and reduce time to hire – improving our
client’s workflow.
Client Base:240 of F1000;
10,000+ Companies Nationwide
May 2004
ENTERPRISE screening segment
Occupational Health Services– Drug-Free Workplace Programs– Occupational Health Testing
Physical Examinations Other Required Medical Tests
– Employee Assistance Programs
USP:We provide a
flexible, integrated employment screening
program designed to maximize due diligence
and reduce time to hire – improving our
client’s workflow.
Client Base:240 of F1000;
10,000+ CompaniesNationwide
May 2004
ENTERPRISE screening segment
Tax Retrieval, Credit, Compliance and Consulting Services – Employment Tax Incentives & Credits
WOTC/WtW Business Location
– Sales and Use Tax Services Consulting, Overpayment Recovery,
Compliance and Monitoring
– Transportation Consulting Services Fleet Asset Management and Compliance Fuel Tax Consulting and Recovery
USP:We provide turnkey
tax retrieval services focused on identifying
and securing taxbenefits for corporate clients -- maximizingtheir tax savings and
incentive benefitswhile ensuring
compliance.
Client Base:400+ Nationwide
May 2004
ENTERPRISE screening segment
Resident Screening Services– Eviction Court Records, Rental Histories
and Payment Trends Database
– Criminal Record Checks and Database
– Lease Performance/Payment History
– Consumer/Business Credit Reports
– Employment Verification
– Property Management Software
USP:We are the nation’s
most innovative and experienced providerof screening and risk
management servicesto the multi-family
housing market.
Client Base:25,000+ Properties
Nationwide (5+ Million Apartment Units)
May 2004
RISK mitigation segment
Motor Vehicle Record Services– Driver History– Vehicle Registrations– Financial Responsibility Filings– Driver Activity Monitoring– ZapApp® Agent Management System
USP:We are expert atdelivering motor
vehicle record datato the insuranceand employment
screening marketsin a very customizedflexible way, backed
by excellent clientservice.
Client Base:7,500 Agents, Insurers, and
CompaniesNationwide
May 2004
RISK mitigation segment
Investigative Services– Computer Forensics– Electronic Discovery– Investigations and Litigation Support– Insurance Fraud
Discovery Investigations Surveillance Statements and Field Interviews
USP:With state-of-the-art
technology and renown expertise, our services assist the nation’s law
firms, insurers andcorporations with the
information needed to support litigation and
investigations, and detect insurance fraud.
Client Base:500 Corporations, Law
Firms, Insurers, TPAs and Self-Insured Employers
Nationwide
May 2004
CONSUMER direct segment
Consumer Services/US SEARCH.com– People Locate– Public Data Search– Home and Family Services – Background and Verify– Real Estate Data
USP:As the top provider
of consumer locationand verification
services, our Web-based services lead
the industry byproviding consumers
quality data via aneasy-to-use Website.
Client Base:6.0 Million Unique
Visitors to Web Portal Monthly; 2,000+
Daily Transactions
May 2004
GROWTH strategy
May 2004
GROWTH strategy
Companywide 2004 Revenue Goal is to Exceed $250 Million
Focus on Growing Core Enterprise Screening Segment Via Acquisition– 2004 Revenue Goal: Exceed $150 Million– 2006 Revenue Goal: Exceed $250 Million
Continue to Expand in the Risk Mitigation Segment Via Acquisition
International Expansion
May 2004
GROWTH strategy
Acquisitions to Date
EnterpriseScreening
6 Employment Screening4 Occupational Health3 Resident Screening1 Tax Credits & Consulting
RiskMitigation
2 Motor Vehicle Record2 Investigative1 Supply Chain Security
May 2004
CONSOLIDATION strategy
May 2004
CONSOLIDATION strategy
First Priority: Client Retention Consolidate Acquisitions to Take Advantage
of Increased Scale– Back Office Operations– Technology
Integrate Employment Screening and Occupational Health Services on a Single Technology Platform
– Keep Customer Facing Positions
May 2004
Take Advantage of “Low Hanging Fruit”– Executive Management, Corporate Services,
Vendor Pricing/Contracts, Telecom, Insurance, Etc.
Full Consolidation of Physical Operations and Systems– Small Subsidiaries 3 - 6 Months– Larger Subsidiaries 12 - 18 Months
CONSOLIDATION strategy
May 2004
CONSOLIDATION strategy
Cross Sell/Up Sell Combined Client Base Branding Initiatives
– Transition/Eliminate Subsidiary Brands by 2005– First Advantage Brand Clarity
Facilitate Internal Culture Development Facilitate Sales and Cross-sell Opportunities Leverage Marketing Expenditures
May 2004
FINANCIAL performance
May 2004
ANNUAL operating results
Revenues $166,495,000 $100,925,000 $ 49,167,000
Gross Margin 96,756,000 55,506,000 34,552,000
Net Income (Loss) 2,803,000 2,702,000 (579,000)
EPS (Fully Diluted) $0.14 N/A N/A
2003 2002 2001
May 2004
QUARTERLY operating results
Revenues $57,433,000 $ 31,541,000
Gross Margin 31,978,000 17,722,000
Net Income 639,000 330,000
EPS (Fully Diluted) $0.03 N/A
2004 2003
Quarter Ended March 31,
May 2004
SEGMENT operating results
Enterprise Screening $ 36,019,000 $ 1,900,000
Risk Mitigation 17,739,000 1,120,000
Consumer Direct 4,232,000 (17,000)
Corporate and Eliminations (557,000) (1,681,000)
Total $ 57,433,000 $ 1,322,000
Revenue Operating Income
Quarter Ended March 31, 2004
May 2004
SELECTED financial data
Total Assets $ 316,622,000
Stockholders’ Equity 250,769,000
Long-term Debt 35,843,000
Working Capital 6,722,000
Book Value Per Share $ 11.71
March 31, 2004
May 2004
SUMMARY
Excellent Market Position Increasing Demand for Risk Mitigation Scalable Technology Cross-sell Opportunities Within and Between
Business Lines Innovative Products Strong National Sales Force of 100+ Reps Financial Strength
May 20, 2004
ANNUAL SHAREHOLDERS
meeting