易速傳真 (EFX) 2005 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by and welcome to the Equifax second-quarter earnings release investor relations call.

At this time, all participants are in a listen-only mode.

Later we will conduct a question-and-answer session with instructions given at that time. (OPERATOR INSTRUCTIONS) As a reminder, this teleconference is being recorded.

I would now like to turn the teleconference over to Mr. Jeff Dodge of Investor Relations.

Please go ahead, sir.

Thank you, Bill, and good morning, everybody.

Welcome to today's conference call.

I'm Jeff Dodge of Investor Relations, and with me are Tom Chapman, our Chairman and CEO;

Don Heroman, Chief Financial Officer;

Dave Gunter, Corporate Finance; and Nuala King, Corporate Controller.

The financial information that will be discussed during this call and reconciling information relating to certain non-GAAP financial measures is included in a press release that we issued this morning and filed in a Form 8-K.

The press release and GAAP reconciliation information may also be found in the investors' center on our website at www.equifax.com.

During this call, for comparative purposes, we will present our second-quarter 2004 financial performance excluding the impact of a $23 million after-tax net gain on our equity investment in Intersections, when it went public in the second quarter of last year, and 5 million of after-tax asset impairment and related charges, of which 3 million was reclassified in third-quarter 2004 as discontinued operations.

Combined, these onetime items increased our reported second-quarter 2004 EPS by $0.16 and reported earnings by $18 million.

We will also be making certain forward-looking statements to help you understand Equifax and its business environment.

These statements involve a number of risks, uncertainties, and other factors that could cause actual results to differ materially from our expectations.

Certain risk factors inherent in our business are set forth in filings with the SEC, including our '04 Form 10-K and the subsequent filings.

Today's call is being recorded in addition to being webcast live over the Internet.

The replay will be available on our website at www.equifax.com.

Now I would like to turn it over to Tom.

Thanks, Jeff, and good morning, everyone.

This morning we reported financial results for the second quarter.

The quarter's results demonstrate solid consistent quarter-to-quarter execution of our three-pillar business strategy, combining rich information with powerful analytics and delivered through leading-edge enabling technologies.

I will review our major accomplishments for the second quarter, then Don will give you the financial detail, and as always we will take your questions.

For the second quarter, revenue was a record $363 million, up 15%.

North American Information Services, Personal Solutions, and Latin America were key contributors to this growth.

Earnings from continuing operations were 63 million, up 13%; and EPS was $0.47, up 14%.

Let's begin with the key highlights for the second quarter.

North American Information Services delivered 15% top-line growth and a 43% operating margin.

Online U.S. volume was up 12%, driven primarily by financial services, and market share gains with our regional customers.

We recently completed an extensive customer survey and the results are gratifying.

Our premier position, in the opinion of our customers, has improved since our last survey.

We increased our rating in all three major competitive categories of value, quality, and price.

In each case, we ranked ahead of our competition.

The research concluded that our value-add products have a strong lead over competition in terms of their relevance to customer needs, the level and degree of customization, our innovativeness, and finally, our speed to market.

Equifax is also viewed as a leader in modeling and analytics.

Our core credit business just gets stronger as we aggressively pursue growth through being the very best.

Our enabling technology product offerings continue to drive revenue growth through stronger partnerships with our customers.

During Q2, over 23% of U.S. online transactions were processed through one of our enabling technology platforms.

To date, we have four customers using InterConnect for decisioning needs.

During the quarter, we implemented four new InterConnect projects and have another 15 projects underway.

Ten of these, by the way, will generate new revenue this year.

One InterConnect project for a top-10 financial institution is being piloted across 60 branches of a 2,000-plus branch banking network.

This solution deliverers cost savings for the customer through automation of a complex and lengthy account opening process, while driving incremental revenue through enhanced cross-selling capabilities.

I hope you saw our announcement yesterday where our predictive sciences unit created a strategic partnership with ID Analytics Inc., a company recognized for its unique capabilities in turning transaction-based information into powerful intelligence for customer decisioning, especially fraud recognition and avoidance.

ID Analytics employs the most advanced analytical techniques in their fraud solutions.

Their flagship product, ID Score, is a statistically-based predictive risk metric for ID fraud.

The score is used in multiple industries including credit card, telco, and wireless.

Our small-business initiative continues to mature and grow.

Eight of the top-10 small-business lenders use our solutions for their decisions.

During the second quarter, small-business reporting revenues were a record $3.4 million, up 56% from Q2 of last year.

Transaction-based revenue in small-business reporting now represents over 48% of total small-business revenues, as customers increasingly access the database for their real-time decisioning needs.

Our mortgage business continues to outperform the market, growing through and developing new revenue opportunities.

With the recent trends in short-term interest rates, we have experienced an increase in our volumes as consumers convert variable-rate mortgages to fixed-rate.

In June, refinancing represented over 45% of total applications, up from 40% in Q1.

In addition to growing the core mortgage revenue, we continue to broaden our productline for small to medium-sized lenders.

Their optimal solution is a one-stop shop for settlement services, and we intend to be that shop.

In partnership with the ICBA, the Independent Community Bankers Association, who represent the largest constituency of community banks, and Aon, the world's second-largest insurance broker, Equifax is developing a bundled services solution for the residential lending process.

This solution includes title search, property reports, floodplain determination, and other closing services.

Here once again we're providing the total solution needs of our customers, and now in mortgage.

Let's talk a moment about the FACT Act.

We are in the third quartile of the rollout, with the Northeast, the largest, scheduled to begin September 1.

Volume, operating expense, and revenue opportunities continue to be within the range of our planning estimates.

A majority of request for Equifax reports are handled via the Internet or voice response units.

This of course is our most automated, cost-effective, and most secure distribution fulfillment method.

I am so proud of the true partnership that we have with our customers as we address this regulation.

We jointly responded along with them to this onerous regulation with a commitment to consumers that exceeded both the letter and the spirit of the law.

In Marketing Services, the credit marketing business set a second quarter record.

Credit marketing grew 11% and has delivered positive revenue growth in each of the last four quarters.

XL, our proprietary supercomputing technology, is increasing speed and processing efficiencies for our credit marketing activities, a key contributor in our Q2 performance.

Our newest product, Target Point Acquisition, (ph) is receiving widespread interest from our customers because it increases activation rates, reduces the cost of acquiring account, and increases approval rates.

We currently have 20 customers using this program and with a strong pipeline in the works.

Direct marketing is performing in a space that is still undergoing fundamental changes.

Our newest product, a marketing database for small business launched in May, is rapidly gaining market acceptance.

Customers are looking for partners who will deliver integrated marketing solutions which enhance their ROI.

These solutions reduce the time to revenue for their products and deliver more valuable customer relationships, which will drive long-term revenue growth.

One of the most important elements of these integrated solutions is database management capabilities.

This technology is already being integrated with our solutions through partnerships and alliances, and you can bet we will continue to grow in this important space in the future.

In Personal Solutions, new products and indirect marketing channels are producing growth.

Revenues grew 21% to $29 million; 75% of this growth came from monitoring products including Credit Watch, Score Watch, and 3-in-1 Monitoring.

We have a solid stream of new products to drive revenue growth.

In Q2 we announced a new relationship with eBay, where our products are being exclusively featured in the Equifax credit zone on their website.

EBIT is our 15th, and by the way our largest, partner in this program.

Visits to our website for the quarter were up 69%.

Repeat buyers were 54% of our Q2 customer activity, up from 38% in Q1.

Our consumer educational CD and website are generating very strong interest and attention.

Through June, we have had over 40,000 visitors to the website. 100,000 CDs were delivered through various marketing and public relations channels, including both sides of the aisle in Washington.

The program is proving to be an excellent tool to enhance consumers' personal financial literacy.

With Money Magazine we are embarking on a joint mission to help consumers be proactive about their credit management and smart about their financial health.

In our international operations, we have battled economic slowdown in the UK, but we have done so while improving margins.

Europe's operating margins set a record at 22%, compared to 20% in '04.

In our UK business, the account management services volume is up 36%, as banks and other financial institutions intensify their portfolio risk reviews.

Personal Solutions unit volume was up 63% over last year.

As I am sure you are reading in the media, consumer spending in Europe overall is weak, and most economists expect the trend to continue for a while.

Latin America delivered record revenues in the quarter.

Revenues of $31 million were up 40%.

As in Q1, all six of our country markets delivered an increase in both operating margin and double-digit revenue growth.

A 39% growth in online volume and a 40% growth in Marketing Services, analytics, and enabling technologies is positioning Equifax as the dominant driver provider of value-add services in the region.

In fact, the team throughout Latin America drives over 31% of their revenues from these services in Q2.

To sum up, the second quarter further validates our ability to deliver consistent growth and profitability by capitalizing on the breadth of our business opportunities and leveraging them to the benefit of customers and our shareholders, by creating new sources of revenue through business and technological innovations, and by executing our business strategy across all of our business units with precision, energy, and discipline.

Now let me turn it over to Don to give you the financial details.

Don?

Thanks, Tom, and good morning, everyone.

Another solid performance and value for our shareholders.

In looking at the numbers this morning, I will discuss the non-GAAP equivalent information excluding onetime events in 2004 and the financial impact of the FACT Act, to keep everything on a comparable basis.

All other financial information will be presented on a GAAP basis.

A detailed reconciliation of the appropriate GAAP numbers is included in the frequently asked questions attached to the press release issued this morning.

Adjusting for the impact of FACT Act, consolidated revenue was $354 million, up 12%.

Earnings from continuing operations were $60 million, up 8%; and EPS was $0.45, up 9%.

The Company's operating margins was 29%, slightly below the 30% in 2004.

In North America, U.S. consumer and commercial Information Services revenue was $156 million, up 18% compared to last year; adjusted for the regulatory recovery fee revenue was a record $147 million, up 12%.

Mortgage reporting revenue of $22 million was up 12%; adjusted for the regulatory recovery fee, revenue was $21 million, up 8%.

Canada's revenue was a record $28 million, up 13% in U.S. dollars, and 3% in local currency.

Marketing Services total revenue of $63 million was up 7%.

Credit marketing revenues of $38 million grew their (ph) continued strong 11%.

This is the second consecutive quarter of this type of growth for the business.

Direct marketing revenues were $24 million, flat compared to the second quarter of 2004.

In Personal Solutions, revenue of $29 million for the quarter was up 21% compared with the second quarter of last year.

The operating margin was 15% for the quarter.

Overall, North America's operating margin was 38%, which is consistent with the second quarter of 2004.

Europe delivered revenues of $35 million, up 2%, and in U.S. dollars down 1% in local currency.

As Tom mentioned, the operating margin was a record at 22% in the quarter, compared to 20% in 2004.

Latin America's performance was outstanding, with record revenues of $31 million, up 40% in U.S. dollars and 22% in local currency.

The operating margin was terrific at 26%, up from the 19% in the second quarter of 2004.

For the Corporation as a whole, free cash flow was $76 million for the quarter, up from $69 million in 2004.

During the quarter, we repurchased 863,000 shares of our stock for a total of $30 million, and we have $184 million remaining under the current authorization.

Days Sales Outstanding were 53 days, flat when compared to last year.

Total debt outstanding is down $53 million to $663 million, compared with 716 million in the first quarter of '05.

After the close of the quarter, we repaid $250 million of maturing debt through borrowings under our securitization program and the revolving credit program which we have of $500 million.

Shifting that debt from long-term debt to short-term debt has also created a more favorable interest rate for us.

Now I will turn it back over to Tom.

Thanks, Don.

I hope you will agree that our management team is certainly committed to delivering solid financial performance consistently and continually.

But at the same time our team is not content to rely on the status quo.

We're committed to continual improvement, to executing according to a plan, and we think a plan that thrives on innovation, initiative, and performance.

Thanks for listening to us this morning.

Now we will be glad to take your questions.

(OPERATOR INSTRUCTIONS) Brad Eichler with Stephens Inc.

Nice numbers.

A couple of questions for you.

First, this ICBA/Aon announcement, could you give a little bit more detail as to the products again, the timing, and where you are getting the data for that, please?

Well, it's just a combination of partnership between ICBA and Aon.

They have really come to us and asked us to deliver a total solution for their banks in providing not just the credit part of the approval, but things that we historically have not done, like that all part of the closing elements, like floodplain activity and title searches and the like.

So we will be having various partnerships that -- in the pilot stage that will be providing that additional data.

Then our plan will be to bundle that to provide a total solution to them.

We go way back with the ICBA, back when we had Certigy.

They are good friends and we know how to work with them, and they are a great partner.

So we think this thing with them and Aon is going to be a real powerful move for us.

But it's, I guess, just very early stage right now?

Yes, very early.

But long term we think this is going to be something that we are going to be very proud of.

Given the results you're putting up, the Board may not let you; but what is your plans for retirement?

The Board may not have all the say-so on that.

I plan to retire, as we have announced last year, at the end of the year.

So I will retire not only as CEO but as Chairman 1/1/06.

Can you comment on how the search is coming for a (multiple speakers) ?

It is going great.

I think we can look forward to having some clarity in the very near future.

The Board has worked very hard, as you would expect, with this kind of performance in this Company and the uniqueness of where we sit in our space.

The Board has worked very hard to make sure that we bring in a world-class CEO that takes us to the next level.

I am looking forward to working with that individual once we get it announced, until the time that I go try to work on the Senior Golf Tour.

I hear you.

I have got some shoes for you.

I like your shoes.

On the two numbers questions, pricing trends on the core credit business in the quarter, and total mortgage exposure in the quarter?

Thanks.

This is Dave.

I will take both questions, the pricing and the mortgage exposure.

Our pricing decrease is low single digits.

That is roughly half a mix issue and roughly the other half is a compression issue.

So not much to speak of.

Very strong, solid performance; and you see that turn into a consistently good margin.

On the mortgage issue, we're just over 15% as mortgage revenues against our total global revenue.

Thank you.

Mark Bacurin with Robert Baird.

Good quarter.

A couple things.

Could you give us a little bit more color on the terms of the ID Analytics partnership?

You guys have some existing internal fraud management products as well.

So just trying to figure out how their analytics will fit in with your existing suite of solutions.

I think one of the main things is for us to codevelop the new suite of products that really attacks fraud, not only transactional fraud but other aspects of fraud, which we all know is a huge, huge problem in the industry.

Where (ph) we sell through our great North American sales organization those particular products, and so we will be combining them with some of the products that we have in placed=, as well as offering some of their new products.

We like this company.

We have been friends for a long time.

We have got great respect for them, and I think it is a mutual respect.

I think you're going to see us continue to move forward together to solve a real serious problem that our customers are dealing with.

In terms of the economics of it, is it a 50-50 JV and there will be a straight revenue share, or how is that going to work?

It is just a strategic partnership.

Nothing complex.

No legal JV.

We just have agreed to come together and see if we can provide a mutually beneficial and profitable arrangement.

It is a gentlemen's kind of transaction.

Okay, great.

On the Personal Solutions side, obviously, you guys I think are still spending pretty aggressively on the advertising.

Can you give us some color on what the ad expenditures were this quarter?

Then also I assume that was part of the spike in SG&A; but was there anything else that caused the jump in SG&A this quarter?

This is Don, Mark.

Good morning.

I would be happy to take the questions.

Our spending on advertising, on media advertising for Personal Solutions was down slightly from the first quarter but will be expected to continue at approximately these same kind of paces through the rest of the year.

So I think that is the Personal Solutions side.

Your second question?

SG&A, I'm sorry.

There was a couple of things on our corporate expenses that would come out.

That is one we talked about in the first quarter, which was the 8-K that was filed in December.

That is approximately $3 million.

In addition to that, in the second quarter we did a true up on our accruals for our benefits plans and for our incentive plans.

With the fine performance that we're having this year, those accruals are up.

So that is the gist of it.

Mark, at this time, that's a good problem to have.

Funny thing about our employees; when we perform well, when they perform well, they like us to accrue appropriately for incentives.

So while we watch the SG&A expense, we think that is a good expense to have.

Yes, I would agree.

A couple more quick ones.

Just as you look at the -- obviously the surcharges provided some life, and we are going to start comping, I guess, that toward the back half of the year.

At what point will you guys think, or at what point do you think it will be appropriate to step back and kind of reassess the magnitude of that charge, and what it may be on a go-forward basis?

I think the partnership, as I mentioned, with our customers, they know the volumes.

They are feeling the back end of the volumes.

I think there is no date certain.

This legislation is in place for the rest of our lives for a free report.

I just think we will need to get through the full year -- the Northeast will be the biggest in population -- and really see how all that nets out.

Then as always we will sit down with our customers and see what is the best thing to do.

Great.

One real final quick one.

CapEx, running a little bit lower I think than what expectations were.

Is that just a timing issue?

Or can we kind of extrapolate the lower first half for the back half of the year?

I think you can do a certain amount of extrapolation.

I don't think we are at a run rate to get to the higher end of our range.

So we will probably be back to more in terms of our normal kinds of range, in the 50 to $55 million kind of range, Mark.

Great, thanks a lot.

David Togut with Morgan Stanley.

Tom, you provided some color on the core NAIS business in the quarter, financial services market share gains being the drivers.

But could you drill down a little bit more?

Were there other verticals that were unusually stronger or maybe a little weaker than you expected?

Well, I think we already mentioned that Canada just continues to be strong as little green onions.

I mean, it is doing a great job.

We have concentrated a whole new management team on the midmarket and what we call our regional sales.

We're positioning a whole suite of products, like we do for our major customers, for our regional markets.

Therefore we are having significant growth opportunities there.

We've got a new leader in that business that is really doing a fine job.

I would say also, mortgage continues to be a real strength for us.

Financial services is strong, and auto is pretty good.

So there is no particular area that jumps up.

It is good, solid across the board dynamics.

Was the auto strength tied to some of these new employee discount programs that were offered by GM?

Hard to tell definitively, but it has got to be.

Also, could you drill down a little bit in Europe?

You have taken a lot of costs out there and the margins are up nicely.

But perhaps give us some insight into market share trends in Europe.

I don't know that I -- we are somewhere in the mid-20s, I think, with share the last time we calculated it.

I think there's two or three things going in there.

The economy is certainly one that, as you know, goes up and down and up and down.

There are three more incidents I understand in the railway system in London this morning.

So that economy is having a hard time.

But I tell you, Michael Shannon has got that business running very lean.

Our enabling technologies are beginning to be ported over there as well.

The work we have done for the government becomes increasingly important for ID purposes, particularly as it relates to fraud and terrorism.

The Personal Solutions business is brand-new, but just getting going; and we are beginning to be a -- we're porting everything that we do in the U.S. over there.

So I think by and large the other thing that is important, that we always are very proud of, is we have hired a brand-new head of our UK operations, reporting directly to Michael Shannon.

We think this tighter focus that will be driven by Sandra Lawrence, (ph) who is a very experienced woman in the broad European scene, will help further fuel that business.

So I am concerned a little bit about the economy, but I also like very much the way this business is positioning being managed.

So Don has got a point he wants to make, I think, as well.

The other thing that I might add, David, is that the business, what we're seeing is that the core repetitive business has been actually pretty stable.

It has been some of the project work we have seen scale back, as you might suspect in a weaker economy.

So we don't think it is a fundamental issue; it is some technical factors.

Okay.

Just a quick follow-up, Tom, on your earlier point about midmarket and NAIS.

How big is that business for you?

What types of growth rates are you seeing?

I don't know, but somebody could help me with the overall size of it.

But the growth rate in that business generally runs twice the normal big guys.

And that is really good news for us.

There is not as much price sensitivity there.

So it always grows at mid to high double-digits.

So I don't know, David; the relative size of that midmarket business is --?

You might look at that as being a third of the overall business and growing fast.

Does that help (multiple speakers)?

Thank you very much.

Fred Searby with J.P. Morgan.

A couple questions.

One is this is a fantastic press release you put out.

Unfortunately I didn't have time to go through it all; so it is probably in there.

If you could comment on two things.

One, the small-business exchange, how -- it has been obviously doing very well, and where you think it could be in two to three years.

And whether this presages more efforts on away from the consumer towards the business credit information side, whether there's an opportunity beyond just the small-business?

Secondly, direct marketing.

You've had some good results, but direct marketing has been flatter and down for a number of years.

I wonder what you think, whether there is a structural issue intrinsic to the business you have acquired there; or whether you think there is something just in the list business and some of these things Polk was into that is preventing it from coming back.

Finally, if you could give me some of the specifics on MBNA/BofA, the client, the opportunity there.

One of your competitors has said it is going to lead to more price compression on the volume, based -- the higher volume contracts when the business consolidated.

What you think the specific impact is for you guys?

Thank you.

Let me see if I can get those.

One, a little bit about --.

Oh yeah, Don, how is your Cajun cooking?

Huh?

And how Don Heroman's Cajun cooking is going.

I'll let him answer that one for you.

First of all, the small-business exchange as I said is really continuing to mature.

We're just getting data from all the key lenders, period.

One of the things that is very important, which we always wanted to occur, is go from project revenue and profit to click revenue and profit.

As I said in my comments, I think 48% so of the revenue, give or take, is coming from clicks.

There is more and more use by more and more customers.

The generic Equifax score, the small-business scores, is sort of a one-of-a-kind thing that continues to feed that.

David has got a point that he wants to make.

He's waving at me.

So Fred, unless he hits me I will let him make it.

Fred, let me answer for you.

You asked about direct marketing also; and then you refer to credit marketing by talking about our customers in that space.

In our direct marketing business, remember that if you combine Equifax Marketing Services, our CMS business is 60% and direct marketing is 40% of that split.

We have taken great management focus and put on 11% revenue growth that you find in the credit space.

In that credit space we're doing very well in three different areas, and that is prescreens, data feeds, and the one that is growing so fast is Target Point Acquisition.

So we think that is going to continue to grow.

If you go back and look at the DMS space, we're looking at our portfolio and at the things that we sell.

We're finding that as we come down in data enhancements, data installations are becoming more and more important.

So we're just looking at that space, DMS, but we think it will continue to be a solid contributor for us go-forward.

Let me come back, because I what wasn't through talking about small business, quite frankly.

One of the things that we intend to do is we continue to work with this great board of SBFE to sign (ph) more and more uses of information.

We're literally running a proprietary small-business credit enterprise for them.

It is a magnificent partnership.

So they ask us to develop products; we develop products; they buy the products from us.

It's a wonderful partnership.

I think you're going to see down the road this business to continue to grow very nicely.

In addition I think you're going to find Equifax begin to treat the small business like a consumer, and help them begin to understand better their fiscal health, things like ID theft, monitoring services for small business, all of those things that we have learned and been so successful in with direct-to-consumer we intend to employ in small business as well.

So I think it is just going to continue to be a very unique offering for us.

As far as BofA, there's been some things written about what happens to our business because of that.

Unfortunately, those writing are not aware of what the facts relative to how our business works.

We have got a great relationship with BofA.

We have had a wonderful relationship for a long, long time.

That business relationship continues to grow.

I mean, my goodness, it is not a revelation in our business that as consolidation occurs, sometimes you get pricing pressure.

Our game is to offset pricing pressure with innovativeness, new products, new services, new technologies.

So it gives us an opportunity to cross-sell these applications, because now what they have got is a whole new portfolio; they've got to find some way to create and combine that portfolio; and I think we are in a great position to continue to serve that institution.

One of the things that we have always prided ourselves in, BofA uses in their decisioning our enabling technologies.

So the more that they continue to do what they are doing, we think that it certainly does not bode negatively for us at all.

I think I hit those three, Fred, did I?

And I think I want to come back to DMS and spend 32 seconds on it.

I think there has been a permanent change in, quote, direct marketing.

List sales in and of themselves are not nearly as valuable as they once were.

That is because of saturation of the consumers of the marketplace.

What we're doing with our new technologies, and what we will continue to do with database management, is combine our supercomputing technologies to take customer data, our data, and better mine it so that we provide them better speed to market.

Target Point is doing that now.

You will see us do some things in the future in the database space that really helps the data be analyzed so there's a finite direct mailing, phone call, whatever it is, as opposed to just blanket mailings off the list.

I think that change is simply driven by the need of customers to optimize their ROI, and everything we are building will continue to leverage our data, our analytics, and our technology to optimize their ROI and a (ph) return to Equifax.

So I hope I didn't take too long, but I hope I hit those three for you.

You did.

Last question.

Where are you in terms of finding a replacement on the CEO front?

You guys are making me feel like you're running me out of here.

Brad already asked me the question.

We're doing great.

I came on late.

I have got about five conference calls today.

I am completely discombobulated.

I am just kidding with you.

We're getting very close to a conclusion of that.

The search committee of our Board has worked very hard around the world to find a CEO that can take Equifax to the next level.

We have got one hell of a management team in this Company that that individual is going to be privileged to lead.

I will be around through the end of the year to help that individual in any way I can. (multiple speakers) I understand our strategies, our people, our customers, our markets, our investors, and let him or her paint the future as they see it.

So we have got plenty of time to make that transition work.

All right, thank you all.

Operator, we have time for one more question.

Michael Meltz with Bear Stearns.

A couple questions for you.

I may have missed the guidance section in the press release.

Do you care to comment on the full-year outlook at this point?

That is my first question.

Second question is at Personal Solutions, the growth was good, but seems a little slower than I would have expected, given all the things going on in the quarter.

Can you talk about that and talk about your expectations for the balance of the year?

Thirdly, can you talk about or actually quantify the contribution from APPRO and Baton Rouge in the quarter?

Thank you.

First of all, you did not miss the guidance in the press release.

We have not provided quarter-to-quarter guidance, so we're still standing by the outlook that we gave you at the first part of the year.

I think Personal Solutions is growing very well.

Just because there are breaches that may take place, it doesn't necessarily means that the consumers who have not been a part of a breach, or even though there is high awareness of identity theft, for instance, it doesn't mean that they all come pell-mell into our site.

We're very pleased with the performance of Personal Solutions and our new products.

Yes, we think the growth is very solid, and we're focused on new opportunities in our Personal Solutions business.

New products are delivering 75% of the growth.

We're going to continue to spend an advertise and look for new things in the future.

I think you will see that the one of the things that we're doing in this space is we are a major provider of post-breach or post-infringement services to our customers, consumers, when something happens.

That is not a business that we would have sought to happen, but it is a business that we have that is becoming increasingly important so that our customers, our commercial customers, are preparing their customers to protect themselves against what might happen.

I think that is a further extension of our Personal Solutions business.

So I am very proud.

I think we have got a lot of wind underneath the sails.

APPRO was a large company or a small company, and we are in the midst of our first 100 days of our integration.

Steve Uffman and Dann Adams in North America are working very hard together to refine our go-to-market strategy; to refine what synergies and segments of the market and products that we want to utilize; to sort out the people, the targets, etc.

We are working on our loan origination and documentation activities.

We believe that that is a winning formula.

I think that APPRO and its management team will be a huge boon initially to all we do in North America and Canada, and eventually on our whole global scene.

It is a little bit too early to have it break itself out and be definitive.

But I think, as I said last quarter, it is an addition to the Equifax franchise and arsenal of weapons that I think is going to serve us for a long, long time.

Because we are not just in the credit side.

As you saw us with ICBA and other activities, we are in the total process that our customers are doing in booking the loans, etc.

It fits the strategy of our three pillars, and that is great data, super analytics and intelligence, with that data enabling technologies.

So it is working very well for us, and I think we will have more definitive stuff as we get everything integrated down the line.

Just a follow-up.

Can you quantify, though, the benefit in the quarter?

Then back at Personal Solutions, in your introductory comments you talked about -- or it may have been Don who talked about the benefit of indirect partnerships.

Is there something new there?

Or what are you referring to exactly there?

Michael, on the APPRO, as you know we don't break out individual sectors.

But I can tell you it was no impact from an EPS standpoint; and approximately 1% on a revenue standpoint of our growth.

It was not a major impact in terms of the numbers.

But on the indirect partnerships, eBay is a very -- that has been -- if you look a lot of the stock programs quite frankly, where they talk about hot stocks, we're proud that Equifax is the one in our space that is always mentioned as having solutions for breaches and also for ID theft.

Money Magazine, that is going to be a nice partnership.

That is led by the demographics and the psychographics of our target market.

We in partnership with them are going to provide, through their marketing channels, distribution opportunities.

Increasingly, we are calling on our customers for them to be distribution channels for our products and services that we're packaging them.

Up to this point, a huge percentage, as you know, of our business has been online.

It's been an Internet business; and we are very proud of that because that is very safe, secure, and very quick to change.

But there is also an increasing awareness of ID safety, security, in this country and abroad.

So the third-party players are important to us.

Time Warner, LexisNexis, we are finding companies coming to us that are asking, how can we augment their benefits programs for their employees?

And how can we add these products and services and make them available through their website?

So there is a lot of traction and a lot of different ways to go in this business.

So we're very pleased with the way it is positioned.

Great, thank you, Tom.

That concludes our call.

We will all be available this afternoon and later this morning.

If you any of you have any questions, don't hesitate to call.

Thank you, everybody.

Have a great day.

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